ECO 202

Normative statement

Jacinda quit her job as a blackjack dealer where she made $42,000 per year to start her own florist business. Her business expenses are $14,000 per year on rent, $21,000 per year on supplies, and $9,000 per year on part time help. As for her personal expenses, her apartment costs her $12,000 per year and her personal bills are an extra $6,000 per year. What is Jacinda's opportunity cost of running the business?

According to the Application, the value of the federal tax credits equaled 30 percent of solar panel installation costs. If you purchase a rooftop solar panel for $20,000, then on the year you installed your solar panels, you should expect a decrease in your liabilities to the federal taxes by

According to the principle of diminishing returns, if all factors of production but one are held constant and if that one factor is doubled, then eventually output will most likely

To think at the margin means to consider

The market demand curve

One role government can play in addressing market failure is to:

Which of the following is not an example of a public good?

A change in quantity supplied of a product is the result of a change in

A specialized worker doesn't spend time switching from one task to another. This source of productivity increase is called

Landon demands more sushi as his income increases. From this we can conclude that, for Landon

Suppose that the income elasticity of demand for new clothes is positive. Other things being equal, which of the following statements is correct?

Suppose that the price of a laptop computer drops from $700 to $550. Quantity demanded for laptop computers will ________ and consumer surplus will ________

If the price elasticity of demand is 0.5, this means that a ________ increase in price causes a ________ decrease in quantity demanded

Refer to Table 5.3. After calculating the price elasticity of demand for computers, we can say the demand for computers is

Refer to Table 6.1. When quantity = 7, this market is ________ because ________

Suppose the price of a liter of soda is $2. If Sara is willing to pay $3 for that liter of soda, her consumer surplus when she buys the soda is

If the price elasticity of supply is elastic, which of the following could be a possible value of the elasticity?

Suppose that the price of a bottle of soda is $2. Vonda's marginal cost of production is $1.25 for the first bottle, Galiela's marginal cost of production is $1.50 for the second bottle, Gretchen's marginal cost of production is $1.75 for the third bottle, and Matt's marginal cost of production is $2 for the fourth bottle. Which producer gets no producer surplus?

In Figure 6.2, the price is $20 and the shaded area represents:

The supply curve for gasoline will be more elastic in

In the short run, ________ factors of production are fixed, while in the long run, ________ of them are.

In the short run, the marginal cost of producing the first unit of output is $50, the marginal cost of the second unit of output is $20, and the marginal cost of producing the third unit of output is $16. The firm's total cost of producing three units of output is

If the consumer gets 40 utils from consuming four CDs, 45 utils from consuming five CDs, and 48 utils from consuming six CDs, then the consumer's marginal utility from the fifth CD is

Figure 8.3 shows a firm's marginal cost, average total cost, and average variable cost curves. At Q = 50, the total cost is:

A consumer should increase his/her consumption of good Y relative to good X if

Average variable cost equals

Suppose that Kelly has a monthly fixed income of $ 1000 and has $200 of her income allocated to buy cookies and movies. Suppose that there is an increase in the price for movies but not in the price for cookies. This will

Refer to Figure 7.5. If the consumer is subject to present bias, he/she will consume ________ now and save ________ to maximize utility.

To maximize profits, the firm in Figure 10.3 will charge

A firm that can sell as much as it can produce at the market price is likely operating in

Which of the following is not a characteristic of a perfectly competitive market?

To maximize profits, the firm in Figure 10.3 will produce

Figure 9.1 shows the cost structure of a firm in a perfectly competitive market. If the market price is $40, the firm's profit maximizing output level is

When a firm is awarded a patent, it is given monopoly rights to the production of that product for ________ years

If the price a firm charges in a perfectly competitive industry is less than average total cost

Can a monopolist that can charge only one price maximize its profit at a quantity that is equal to the quantity produced if the industry were perfectly competitive?

A monopoly may arise due to:

If a firm is a price taker, the demand curve faced by the firm is:

When the government eliminates artificial barriers to entry

Which of the following is not a characteristic of a monopolistically competitive market?

Figure 11.2 shows demand and costs for a monopolistically competitive firm. At the profit maximizing output level, the firm's profit is

In general, firms in a cartel:

As compared to a perfectly competitive firm, a monopolistically competitive firm will

Consider Figure 12.5. The dominant strategy in the prisoners' dilemma is

The key feature of ________ is that firms act strategically

Compare two markets. In one market, the HHI is 500, in the other market the HHI is 1,500. What must be true of these two markets?

If a firm that makes $100 profit per pair of shoes pays LeBron James $2,000,000 to endorse their basketball shoes, then to make the endorsement pay off they must sell at least:

If a firm perceived that the other firm in an implicit pricing agreement dropped its price in response to a change in market conditions, then its most likely response would be to:

Exporting nations often agree to voluntary export restraints (VERs) in an attempt to

Which of the following statements is true

A firm that generates pollution is illustrated in Figure 16.1. If the government would like to induce this firm to abate, or reduce, its pollution by A1 tons, it will impose a pollution tax equal to

In order to achieve an efficient result a pollution tax must

The social cost of production is

If the tradeoff between the two goods is constant, the production possibilities curve is

Consider Figure 16.2, which depicts the supply and demand for coal. Assume coal production creates external costs. If PE and QE are the equilibrium price and quantity of coal without government regulation, a pollution tax on the production of coal would ________ the price of coal relative to PE and ________ the quantity of coal relative to QE

The rate at which nations will exchange goods and services is known as the

If the marginal benefit of reducing water pollution is constant at $10 per ton, then it is efficient to reduce water pollution