final - Assignment Essays

question

The reason that opportunity costs arise is that

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resources are scarce

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inflation and unemployment

answer

are a focus of positive macroeconomics

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if someone has a comparative advantage in growing pineapples

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they can grown pineapples at a lower opportunity cost than other pineapple growers

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if the unemployment rate increases from 10% to 14%, the economy will

answer

move away from the ppt toward the origin

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opportunity cost

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the loss of potential gain from other alternatives when one alternative is chosen

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comparative advantage

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the ability of an individual or group to carry out a particular economic activity

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production possibility frontier

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is a curve depicting all maximum output possibilities for two goods, given a set of inputs consisting of resources and other factors

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law of diminishing returns

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used to refer to a point at which the level of profits or benefits gained is less than the amount of money or energy invested

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marginal utility

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is the additional satisfaction a consumer gains from consuming one more unit of a good or service

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average product

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is one of two measures derived from total product

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if the income of a consumer increases, then his/her budget constraint will

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shift in an outward direction

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if the MUx/Px = 4 and the MUy/Py=2, then the consumer could increase satisfaction by

answer

decreasing the consumption of good X but increasing the consumption of good Y

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market power

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he ability of a firm (or group of firms) to raise and maintain price above the level that would prevail under competition is referred to as market or monopoly power

question

tacit collusion

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occurs where firms undergo actions that are likely to minimise a response from another firm

question

social costs of monopoly

answer

called a deadweight loss, because some consumers who would be willing to pay for the product up to its marginal cost (MC), are not served

question

game theory

answer

players only worry about themselves which leaves them worst off

question

for a monopolist,

answer

price is greater than marginal revenue

question

relative to a competitively organized industry, a monopoly is more likely to produce

answer

less output, charges higher price, and earns economic profit

question

the major distinguishing characteristic of oligopoly is that

answer

firms are independent

question

is a group of firms colluding to make price and output decisions

answer

a cartel

question

industry has relatively small number of firms that dominate a market

answer

concentrated

question

rent control laws are imposed when the city officials believe landlords have been exploiting tenants. which of the following criteria are city officials using to guide their actions

answer

equity

question

an economy in which central authority draws up a plan that establishes what will be produced and when, sets goals, and makes for distribution is a

answer

command economy

question

economics growth will cause the

answer

ppf to shift outward

question

someone has a comparative advantage in producing a good if they can produce that good

answer

at a lower opportunity cost

question

unemployment insurance because it discourages people from working hard

answer

normative statement

question

demand for good X goes down when the price of good Y goes up. Hence, X and Y must be substitutes

answer

complements

question

when there is a shortage of a product in an unregulated market, there is tendency for

answer

price to rise

question

when supply is fixed or the product is unique, then price is

answer

demand determined

question

cross-price elasticity of demand measures the response in the

answer

quantity of one good demanded to a change in the price of another good

question

budget constraint

answer

when a consumer is limited in consumption patterns by a certain income

question

decreasing returns of sale

answer

scale of production goes up and average cost also go up

question

marginal revenue

answer

the additional revenue that will be generated by increasing product sales by one unit

question

when a big amount of output is produced per unit of the input, the input exhibits

answer

high productivity

question

if the price of an input increases, each individual firms marginal cost curve shifts _____ and the industry supply curve_____

answer

up, shift to the left

question

a firm is earning an economic profit. In the short run the firm should ______ in the long run the firm should probably ______

answer

produce where MC = MR; expand

question

under constant returs to scale, a____in a firms scale of production leads to _____ average total cost

answer

decrease, no change in

question

if a pet grooming salon hires additional groomer, that worker can groom 6 additional pets per day. The average grooming fee is $20. The most the salon would be willing to that groomer is

answer

$120 per day

question

clearly explain what will happen to the budget constraint if the income of the consumer decreases.

answer

if the income of a consumer decreases the budget constraint will shift inward and down. this will change the amount of money a consumer can spend. it will be less money

question

average fixed costs

answer

fall as outputs rises

question

if marginal cost is above average variable cost, then

answer

average variable cost is increasing

question

the sweet success bakery sells 400 cakes at a price of $10 per cake. It's to total economic cost for producing 400 cakes are $500. the sweet success bakery economic profit are

answer

$3,500

question

ellen is spreading her entire income on goods X and Y. Her marginal utility from the last units of X and Y that she consumes is 25. Ellen's utility is only maximized of

answer

the prices of X and Y are the same

question

assume dell computer company operates in a perfectly competitive market producing 5,000 computers per day. At this output level, price exceeds this firms marginal cost. it follows that producing one computer will cause this firm

answer

profits to increase

question

a government wants to reduce electricity consumption by 10%. the price elasticity of demand for electricity is -2. the government must ____ the price of electricity by ____

answer

raise, 5.0%

question

if the price of corn decreases by 10%, corn farmers expect the quantity demanded of corn to increase by 20%. Given this info, the price elasticity of corn is ____ and the total revenue of corn farmers after that decrease in the price of corn will _____

answer

elastic, increase

question

consumer surplus

answer

is the difference between the maximum a person is willing to pay and current market price

1 of 47

question

The reason that opportunity costs arise is that

answer

resources are scarce

question

inflation and unemployment

answer

are a focus of positive macroeconomics

question

if someone has a comparative advantage in growing pineapples

answer

they can grown pineapples at a lower opportunity cost than other pineapple growers

question

if the unemployment rate increases from 10% to 14%, the economy will

answer

move away from the ppt toward the origin

question

opportunity cost

answer

the loss of potential gain from other alternatives when one alternative is chosen

question

comparative advantage

answer

the ability of an individual or group to carry out a particular economic activity

question

production possibility frontier

answer

is a curve depicting all maximum output possibilities for two goods, given a set of inputs consisting of resources and other factors

question

law of diminishing returns

answer

used to refer to a point at which the level of profits or benefits gained is less than the amount of money or energy invested

question

marginal utility

answer

is the additional satisfaction a consumer gains from consuming one more unit of a good or service

question

average product

answer

is one of two measures derived from total product

question

if the income of a consumer increases, then his/her budget constraint will

answer

shift in an outward direction

question

if the MUx/Px = 4 and the MUy/Py=2, then the consumer could increase satisfaction by

answer

decreasing the consumption of good X but increasing the consumption of good Y

question

market power

answer

he ability of a firm (or group of firms) to raise and maintain price above the level that would prevail under competition is referred to as market or monopoly power

question

tacit collusion

answer

occurs where firms undergo actions that are likely to minimise a response from another firm

question

social costs of monopoly

answer

called a deadweight loss, because some consumers who would be willing to pay for the product up to its marginal cost (MC), are not served

question

game theory

answer

players only worry about themselves which leaves them worst off

question

for a monopolist,

answer

price is greater than marginal revenue

question

relative to a competitively organized industry, a monopoly is more likely to produce

answer

less output, charges higher price, and earns economic profit

question

the major distinguishing characteristic of oligopoly is that

answer

firms are independent

question

is a group of firms colluding to make price and output decisions

answer

a cartel

question

industry has relatively small number of firms that dominate a market

answer

concentrated

question

rent control laws are imposed when the city officials believe landlords have been exploiting tenants. which of the following criteria are city officials using to guide their actions

answer

equity

question

an economy in which central authority draws up a plan that establishes what will be produced and when, sets goals, and makes for distribution is a

answer

command economy

question

economics growth will cause the

answer

ppf to shift outward

question

someone has a comparative advantage in producing a good if they can produce that good

answer

at a lower opportunity cost

question

unemployment insurance because it discourages people from working hard

answer

normative statement

question

demand for good X goes down when the price of good Y goes up. Hence, X and Y must be substitutes

answer

complements

question

when there is a shortage of a product in an unregulated market, there is tendency for

answer

price to rise

question

when supply is fixed or the product is unique, then price is

answer

demand determined

question

cross-price elasticity of demand measures the response in the

answer

quantity of one good demanded to a change in the price of another good

question

budget constraint

answer

when a consumer is limited in consumption patterns by a certain income

question

decreasing returns of sale

answer

scale of production goes up and average cost also go up

question

marginal revenue

answer

the additional revenue that will be generated by increasing product sales by one unit

question

when a big amount of output is produced per unit of the input, the input exhibits

answer

high productivity

question

if the price of an input increases, each individual firms marginal cost curve shifts _____ and the industry supply curve_____

answer

up, shift to the left

question

a firm is earning an economic profit. In the short run the firm should ______ in the long run the firm should probably ______

answer

produce where MC = MR; expand

question

under constant returs to scale, a____in a firms scale of production leads to _____ average total cost

answer

decrease, no change in

question

if a pet grooming salon hires additional groomer, that worker can groom 6 additional pets per day. The average grooming fee is $20. The most the salon would be willing to that groomer is

answer

$120 per day

question

clearly explain what will happen to the budget constraint if the income of the consumer decreases.

answer

if the income of a consumer decreases the budget constraint will shift inward and down. this will change the amount of money a consumer can spend. it will be less money

question

average fixed costs

answer

fall as outputs rises

question

if marginal cost is above average variable cost, then

answer

average variable cost is increasing

question

the sweet success bakery sells 400 cakes at a price of $10 per cake. It's to total economic cost for producing 400 cakes are $500. the sweet success bakery economic profit are

answer

$3,500

question

ellen is spreading her entire income on goods X and Y. Her marginal utility from the last units of X and Y that she consumes is 25. Ellen's utility is only maximized of

answer

the prices of X and Y are the same

question

answer

profits to increase

question

a government wants to reduce electricity consumption by 10%. the price elasticity of demand for electricity is -2. the government must ____ the price of electricity by ____

answer

raise, 5.0%

question

answer

elastic, increase

question

consumer surplus

answer

is the difference between the maximum a person is willing to pay and current market price

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