Calhoun Test 2 - Assignment Essays

question

Which of the following observations was made famous by Adam smith in his book The Wealth of Nations?

answer

Households and firms interacting in markets are guided by an "invisible hand" that leads them to desirable market outcomes.

question

According to the invisible hand principle, competitive markets generally

answer

Bring in self interest of individuals into harmony with the efficient allocation of resources, even though centralized planning of economic activities is absent

question

Which of the following is necessary for the invisible hand of market prices to work properly

answer

competition and property rights that are well-defined and enforced

question

The demand for Chocolate Chip Cookie Dough ice cream is likely quite elastic because

answer

other flavors of ice cream are good substitutes for this particular flavor.

question

price elasticity of demand for a commodity is determined primarily by the

answer

Attractiveness of the substitutes for the good

question

Other things equal, the demand for a good tends to be more inelastic when

answer

there are fewer available substitutes.

question

If the demand is inelastic, and increase in the price of a good will cause total expenditures on the good to

answer

Rise

question

Suppose IBM announces it is cutting the prices of some of its software titles (mainly games) by 25 percent. Assuming that IBM is seeking to increase revenues, it must believe that the elasticity of demand for these products is

answer

Elastic

question

The price of an airline ticket rises as the amount of time between purchase and flight departure gets smaller. The airlines base the policy on the assumption that

answer

consumer demand becomes more inelastic as departure time approaches.

question

A recent study on enrollment at a liberal arts college concluded that demand elasticity is 0.65 The administration is considering a tuition increase to help balance the budget. The revenue-maximizing decision is to

answer

increase tuition, which would generate more revenue.

question

If people buy less flowers at every price when their income fall, then

answer

Flowers are a normal good

question

If a 10 percent in income induced s group of consumers to reduce their yearly purchases of eggs by 5 percent for these consumers

answer

Eggs are an inferior good

question

When economists say the price elasticity of supply is inelastic, they mean that

answer

suppliers are willing to produce only a small amount more of their good.

question

The costs of a firm indicate that desire of consumers for

answer

Other goods that might have been produced with the same resources

question

Which of the following about costs is true?

answer

The difference between the ATC and AVC curves will decline as output expands.

question

If average fixed cost equal $60 and average total costs equal $120 when output is 100, the total variable cost must be

answer

$6,000

question

Jonathan notes that if he produces 10 pairs of shoes per day, his average fixed cost (AFC) is $14 and his marginal cost (MC) is $8; if he produces 20 pairs of shoes per day, his MC IS $15. What is his AFC when output is 20 pairs of shoes per day?

answer

question

Use the table be,it to Asher the following question, what is the marginal cost of producing the third unit of output

answer

$44

question

When the marginal product of labor diminishes

answer

marginal cost rises

question

Which of the following must be true if average total cost are declining

answer

Marginal cost is less than average average total cost

question

Which of the following explains most accurately why the firms short run marginal cost curve will eventually rise?

answer

When diminishing marginal returns set in, it will take ever-larger quantities of the variable resources to produce an additional unit of output.

question

The minimum points of the average variable cost and average total cost curves occur where

answer

the marginal cost curve intersects those curves.

question

In the short run the firms average fixed costs

answer

always decline as output increases.

question

As output rises, marginal product eventually diminishes and

answer

marginal cost increases

1 of 24

question

Which of the following observations was made famous by Adam smith in his book The Wealth of Nations?

answer

Households and firms interacting in markets are guided by an "invisible hand" that leads them to desirable market outcomes.

question

According to the invisible hand principle, competitive markets generally

answer

Bring in self interest of individuals into harmony with the efficient allocation of resources, even though centralized planning of economic activities is absent

question

Which of the following is necessary for the invisible hand of market prices to work properly

answer

competition and property rights that are well-defined and enforced

question

The demand for Chocolate Chip Cookie Dough ice cream is likely quite elastic because

answer

other flavors of ice cream are good substitutes for this particular flavor.

question

price elasticity of demand for a commodity is determined primarily by the

answer

Attractiveness of the substitutes for the good

question

Other things equal, the demand for a good tends to be more inelastic when

answer

there are fewer available substitutes.

question

If the demand is inelastic, and increase in the price of a good will cause total expenditures on the good to

answer

Rise

question

answer

Elastic

question

The price of an airline ticket rises as the amount of time between purchase and flight departure gets smaller. The airlines base the policy on the assumption that

answer

consumer demand becomes more inelastic as departure time approaches.

question

answer

increase tuition, which would generate more revenue.

question

If people buy less flowers at every price when their income fall, then

answer

Flowers are a normal good

question

If a 10 percent in income induced s group of consumers to reduce their yearly purchases of eggs by 5 percent for these consumers

answer

Eggs are an inferior good

question

When economists say the price elasticity of supply is inelastic, they mean that

answer

suppliers are willing to produce only a small amount more of their good.

question

The costs of a firm indicate that desire of consumers for

answer

Other goods that might have been produced with the same resources

question

Which of the following about costs is true?

answer

The difference between the ATC and AVC curves will decline as output expands.

question

If average fixed cost equal $60 and average total costs equal $120 when output is 100, the total variable cost must be

answer

$6,000

question

answer

question

Use the table be,it to Asher the following question, what is the marginal cost of producing the third unit of output

answer

$44

question

When the marginal product of labor diminishes

answer

marginal cost rises

question

Which of the following must be true if average total cost are declining

answer

Marginal cost is less than average average total cost

question

Which of the following explains most accurately why the firms short run marginal cost curve will eventually rise?

answer

When diminishing marginal returns set in, it will take ever-larger quantities of the variable resources to produce an additional unit of output.

question

The minimum points of the average variable cost and average total cost curves occur where

answer

the marginal cost curve intersects those curves.

question

In the short run the firms average fixed costs

answer

always decline as output increases.

question

As output rises, marginal product eventually diminishes and

answer

marginal cost increases

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