Agricultural Microeconomics - Assignment Essays

question

Economics is primarily the study of

answer

how agents choose to allocate scarce resources and how choices affect society

question

An increase in government expenditure will lead to an increase in well-being. Positive or Normative

answer

Normative

question

John has to choose between two jobs one that offers him $50 per hour and $35 per hour. The opportunity cost of choosing the job that offers him $50 per hour is

answer

$35 per hour

question

The term "free riders" refers to people who:

answer

Don't contribute but still benefit from others' actions

question

True or False: Testing with data is essential to develop a good theory?

answer

True

question

_________ is the study of how individuals, households, governments, and firms and make choices and how those choices affect prices, the allocation of resources, and well-being of other agents.

answer

Microeconomics

question

What is a key property of models?

answer

All economic models begin with assumptions

question

Scenario: A model is based on an assumption that an additional year of education increases a student's future wage by 20%. The hypothesis of this model is that:

answer

College graduates will earn 107 percent more than high school graduates

question

Causation occurs when:

answer

Change in one variable is the reason for the change in another variable

question

When two variables move in opposite directions, they are said to be:

answer

Negatively correlated

question

A research on the effect of air pollution on lung disorders by observing the health conditions of people who stay close to industrial areas and those who stay away from industries is and example of

answer

Natural Experiment

question

Which of the following is a property of a good economic question

answer

A good economic question can be answered.

question

Gary has to decide between attending a two-day art workshop and a four-day art workshop. If he evaluates only the change in net benefit when he switches between the two options, he is using the technique of:

answer

optimizations in differences.

question

If an individual's opportunity cost of commute is $300 per month and his monthly commuting time is 60 hours, his opportunity cost of time is

answer

$5 per hour

question

Among a set of alternatives with the same total costs, an individual is said to optimize if she chooses an alternative that has the;

answer

Highest total benefit

question

In a marketplace, prices

answer

act as incentives which allow for the efficient allocation of resources

question

A seller who is a price-taker charges:

answer

the market price

question

The demand schedule for a commodity illustrates how the consumption of a commodity changes with changes in:

answer

Its price

question

The law of demand states that

answer

The quantity demanded a commodity varies inversely with the price of the commodity

question

which factors is expected to cause the demand curve for coffee to shift to the right

answer

A higher tax on the sale of tea, a substitute for coffee

question

The __________ plots the relationship between prices and the quantity producers are willing to sell.

answer

Supply curve

question

P or N. A fall in incomes will lead to a rise in demand for private-label (great value) supermarket foods.

answer

Positive

question

If the government raises the tax on beer, this will lead to a fall in profits of the brewers.

answer

Positive

question

Pollution is the most serious economic problem

answer

Normative

question

Unemployment is more harmful than inflation

answer

Normative

question

The rising of crude oil on world markets will lead to an increase in cycling to work.

answer

Positive

question

The retirement age should be raised to 70 to combat the effects of our ageing population

answer

Normative

question

A reduction in income tax will improve the incentives of the unemployed to find work.

answer

Positive

question

Higher interest rates will reduce house prices

answer

Positive

question

The government is right to introduce a ban on smoking in public places

answer

Normative

question

Resources are best allocated by allowing the market mechanism to work freely.

answer

Normative

question

Economics

answer

is the study of people's choices

question

1st principle optimize

answer

try to choose the best available option with given information

question

2nd principle equilibrium

answer

situation where no one benefits by changing his or her behavior

question

3rd principle empiricism

answer

analysis that uses data

question

Economic Agent

answer

Any group or individual that makes choices, such as consumers, firms, parents, and politicians

question

Scarce

answer

not about having enough but about allocating. Satisfying people's wants

question

economics

answer

Studies how agents make choices among scarce resources and how those choices affect society

question

Positive Economics

answer

Analysis that generates objective descriptions or predictions about the world that can be verified with data

question

Normative Economics

answer

analysis that prescribes what an individual or society ought to do

question

Microeconomics

answer

the study of individuals, firms, and government

question

Macroeconomics

answer

The study of whole economy

question

Free Rider Problem

answer

Exists when an individual or group is able to enjoy the benefits of situation without incurring the costs

question

Model is

answer

simplified description of reality

question

Scientific method is composed of two steps

answer

1. Developing models that explain some part of the world
2. Testing those models using data to see how closely the model matches what we actual observed

question

Causation is

answer

when one thing directly effects another

question

Correlation is

answer

when two things are related f

question

Positive Correlation

answer

they both change is same direction

question

Negative Correlation

answer

They both change in opposite directions

question

Controlled Experiments

answer

Subjects are randomly put into treatment (something happens) and control (nothing happens) groups by the researcher.

question

Natural Experiments

answer

Subjects end up in treatment or control groups due to something that is not purposefully determined by the researcher.

question

Omitted Variables

answer

If we ignore something that contributes to cause and effect

question

Reverse causality

answer

When there is a cause and effect but it goes in the opposite direction as what we thought

question

Two properties of good economic question

answer

Relevant and important
Can be answered

question

When an economic agents chooses the best feasible option

answer

she is optimizing

question

Optimization in levels

answer

calculates the total net benefit of different alternatives and then chooses the best alternative
look at total benefit - total cost

question

Optimization in differences

answer

calculates the change in net benefits when a person switches from one alternative to another, and then uses these marginal comparisons to choose the best alternative

question

Optimization in levels and differences

answer

result in identical answers

question

Optimization in levels

answer

1. express all costs and benefits in the same unit
2. calculate total net benefit (benefit - costs) for each option
3. choose the best option with the highest net benefit

question

Principle of Optimization in Margin

answer

if an option is the best choice, you will be made better off as you move towards it, and worse off as you move away from it.

question

Optimizing in differences

answer

1. express all costs and benefits in same unit
2. calculate how the costs and benefits change as you move from one option to another
3. apply the principle of optimization at the margin. choose the option that makes you better off by moving towards it and worse off by moving away from it

question

the market price is

answer

the price at which buyers and sellers conduct transactions

question

Perfectly competitive market

answer

every buyer pays and every seller charges the same market price, and no buyer or seller is big enough to influence that market price and all sellers sell an identical good or service

question

Quantity Demand

answer

the amount of a good that buyers are willing to purchase at given price

question

Demand Schedule

answer

A table that reports the quantity demanded at different prices holding all else equal.

question

Demand Curve

answer

plots the quantity demand at different prices

question

Market Demand Curve

answer

sum of the individual demand curves of all the potential buyers

question

Shifts in demand curves are

answer

1. tastes and preferences
2. income and wealth
3. availability and prices of related goods
4. number and scale of buyers
5. buyer's expectations about the future

question

Quantity Supplied

answer

the amount of a good that sellers are willing to sell at a given price

question

Supply Schedule

answer

table that reports the quantity supplied at different prices

question

Supply Curve

answer

plots the quantity supplied at different price

question

Market supply curve

answer

plots the relationship between the total quantity supplied and the market price holding all else equal

question

Shifts in supply curve caused by

answer

1. input prices
2. technology
3. number and scales of sellers
4. seller's expectations about the future

question

Competitive equilibrium

answer

the point at which the market comes to an agreement about what the price will be and how much will be exchanged

question

Excess Demand

answer

occurs when consumers want more than suppliers provide and given price (shortage)

question

Excess Supply

answer

More than consumers want at given price (surplus)

question

Change in supply:

answer

a shift in the S curve
occurs when a non-price determinant of
supply changes (like technology or costs)

question

Change in the quantity supplied:

answer

a movement along a fixed S curve
occurs when P changes

question

Change in demand:

answer

a shift in the D curve
occurs when a non-price determinant of
demand changes (like income or # of buyers)

question

Change in the quantity demanded:

answer

a movement along a fixed D curve
occurs when P changes

1 of 80

question

Economics is primarily the study of

answer

how agents choose to allocate scarce resources and how choices affect society

question

An increase in government expenditure will lead to an increase in well-being. Positive or Normative

answer

Normative

question

John has to choose between two jobs one that offers him $50 per hour and $35 per hour. The opportunity cost of choosing the job that offers him $50 per hour is

answer

$35 per hour

question

The term "free riders" refers to people who:

answer

Don't contribute but still benefit from others' actions

question

True or False: Testing with data is essential to develop a good theory?

answer

True

question

_________ is the study of how individuals, households, governments, and firms and make choices and how those choices affect prices, the allocation of resources, and well-being of other agents.

answer

Microeconomics

question

What is a key property of models?

answer

All economic models begin with assumptions

question

Scenario: A model is based on an assumption that an additional year of education increases a student's future wage by 20%. The hypothesis of this model is that:

answer

College graduates will earn 107 percent more than high school graduates

question

Causation occurs when:

answer

Change in one variable is the reason for the change in another variable

question

When two variables move in opposite directions, they are said to be:

answer

Negatively correlated

question

A research on the effect of air pollution on lung disorders by observing the health conditions of people who stay close to industrial areas and those who stay away from industries is and example of

answer

Natural Experiment

question

Which of the following is a property of a good economic question

answer

A good economic question can be answered.

question

answer

optimizations in differences.

question

If an individual's opportunity cost of commute is $300 per month and his monthly commuting time is 60 hours, his opportunity cost of time is

answer

$5 per hour

question

Among a set of alternatives with the same total costs, an individual is said to optimize if she chooses an alternative that has the;

answer

Highest total benefit

question

In a marketplace, prices

answer

act as incentives which allow for the efficient allocation of resources

question

A seller who is a price-taker charges:

answer

the market price

question

The demand schedule for a commodity illustrates how the consumption of a commodity changes with changes in:

answer

Its price

question

The law of demand states that

answer

The quantity demanded a commodity varies inversely with the price of the commodity

question

which factors is expected to cause the demand curve for coffee to shift to the right

answer

A higher tax on the sale of tea, a substitute for coffee

question

The __________ plots the relationship between prices and the quantity producers are willing to sell.

answer

Supply curve

question

P or N. A fall in incomes will lead to a rise in demand for private-label (great value) supermarket foods.

answer

Positive

question

If the government raises the tax on beer, this will lead to a fall in profits of the brewers.

answer

Positive

question

Pollution is the most serious economic problem

answer

Normative

question

Unemployment is more harmful than inflation

answer

Normative

question

The rising of crude oil on world markets will lead to an increase in cycling to work.

answer

Positive

question

The retirement age should be raised to 70 to combat the effects of our ageing population

answer

Normative

question

A reduction in income tax will improve the incentives of the unemployed to find work.

answer

Positive

question

Higher interest rates will reduce house prices

answer

Positive

question

The government is right to introduce a ban on smoking in public places

answer

Normative

question

Resources are best allocated by allowing the market mechanism to work freely.

answer

Normative

question

Economics

answer

is the study of people's choices

question

1st principle optimize

answer

try to choose the best available option with given information

question

2nd principle equilibrium

answer

situation where no one benefits by changing his or her behavior

question

3rd principle empiricism

answer

analysis that uses data

question

Economic Agent

answer

Any group or individual that makes choices, such as consumers, firms, parents, and politicians

question

Scarce

answer

not about having enough but about allocating. Satisfying people's wants

question

economics

answer

Studies how agents make choices among scarce resources and how those choices affect society

question

Positive Economics

answer

Analysis that generates objective descriptions or predictions about the world that can be verified with data

question

Normative Economics

answer

analysis that prescribes what an individual or society ought to do

question

Microeconomics

answer

the study of individuals, firms, and government

question

Macroeconomics

answer

The study of whole economy

question

Free Rider Problem

answer

Exists when an individual or group is able to enjoy the benefits of situation without incurring the costs

question

Model is

answer

simplified description of reality

question

Scientific method is composed of two steps

answer

1. Developing models that explain some part of the world
2. Testing those models using data to see how closely the model matches what we actual observed

question

Causation is

answer

when one thing directly effects another

question

Correlation is

answer

when two things are related f

question

Positive Correlation

answer

they both change is same direction

question

Negative Correlation

answer

They both change in opposite directions

question

Controlled Experiments

answer

Subjects are randomly put into treatment (something happens) and control (nothing happens) groups by the researcher.

question

Natural Experiments

answer

Subjects end up in treatment or control groups due to something that is not purposefully determined by the researcher.

question

Omitted Variables

answer

If we ignore something that contributes to cause and effect

question

Reverse causality

answer

When there is a cause and effect but it goes in the opposite direction as what we thought

question

Two properties of good economic question

answer

Relevant and important
Can be answered

question

When an economic agents chooses the best feasible option

answer

she is optimizing

question

Optimization in levels

answer

calculates the total net benefit of different alternatives and then chooses the best alternative
look at total benefit - total cost

question

Optimization in differences

answer

calculates the change in net benefits when a person switches from one alternative to another, and then uses these marginal comparisons to choose the best alternative

question

Optimization in levels and differences

answer

result in identical answers

question

Optimization in levels

answer

1. express all costs and benefits in the same unit
2. calculate total net benefit (benefit - costs) for each option
3. choose the best option with the highest net benefit

question

Principle of Optimization in Margin

answer

if an option is the best choice, you will be made better off as you move towards it, and worse off as you move away from it.

question

Optimizing in differences

answer

question

the market price is

answer

the price at which buyers and sellers conduct transactions

question

Perfectly competitive market

answer

every buyer pays and every seller charges the same market price, and no buyer or seller is big enough to influence that market price and all sellers sell an identical good or service

question

Quantity Demand

answer

the amount of a good that buyers are willing to purchase at given price

question

Demand Schedule

answer

A table that reports the quantity demanded at different prices holding all else equal.

question

Demand Curve

answer

plots the quantity demand at different prices

question

Market Demand Curve

answer

sum of the individual demand curves of all the potential buyers

question

Shifts in demand curves are

answer

1. tastes and preferences
2. income and wealth
3. availability and prices of related goods
4. number and scale of buyers
5. buyer's expectations about the future

question

Quantity Supplied

answer

the amount of a good that sellers are willing to sell at a given price

question

Supply Schedule

answer

table that reports the quantity supplied at different prices

question

Supply Curve

answer

plots the quantity supplied at different price

question

Market supply curve

answer

plots the relationship between the total quantity supplied and the market price holding all else equal

question

Shifts in supply curve caused by

answer

1. input prices
2. technology
3. number and scales of sellers
4. seller's expectations about the future

question

Competitive equilibrium

answer

the point at which the market comes to an agreement about what the price will be and how much will be exchanged

question

Excess Demand

answer

occurs when consumers want more than suppliers provide and given price (shortage)

question

Excess Supply

answer

More than consumers want at given price (surplus)

question

Change in supply:

answer

a shift in the S curve
occurs when a non-price determinant of
supply changes (like technology or costs)

question

Change in the quantity supplied:

answer

a movement along a fixed S curve
occurs when P changes

question

Change in demand:

answer

a shift in the D curve
occurs when a non-price determinant of
demand changes (like income or # of buyers)

question

Change in the quantity demanded:

answer

a movement along a fixed D curve
occurs when P changes

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