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Economies is the study if how?
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society manages its scarce resources
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Which of the following statements is true about a market economy?
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market participants act as if guided by an "invisible hand" to produce outcomes that promote general economic well-being
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Points on production possibilities frontier are?
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efficient
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Economic growth is depicted by?
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a shift in the production possibilities frontier outward
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According to the principle of comparative advantage?
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countries should specialize in the production of goods for which they have lower opportunity cost of production than their trading partners
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Which of the following statements of comparative advantage is true?
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Australia has a comparative advantage in the production of food while Korea has the comparative advantage in the production of electronics
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Which of the following situations describes the greatest market power?
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Microsoft's impact on the price of desktop system
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All of the following shift the supply of watches to the right except?
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An increase in the price of watches
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An increase (rightward shift) in the demand for a good will tend to cause?
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Increase in the equilibrium price and quantity
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Increase in supply curve more than demand curve. Suppose there is an increase in both the supply and demand for personal computers. Furthermore, suppose the supply of personal computers increases more than the demand for personal computers. In the market for personal computers we would expect ?
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equilibrium quantity to rise and equilibrium price to fall
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An externality is?
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the uncompensated impact if one person's actions on the well-being of a bystander
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To internalize a negative externality , an appropriate public policy response would be to ?
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Tax the good
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According to the Coase theorem, private parties can solve the problem of externalities if?
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There are no transaction costs
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Bob and Tom in a university dorm. Bob values playing loud music at the value of $100. Tom values quiet at a value of $150. Which of the following is true?
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it is efficient for Bob needs to stop playing loud music regardless of who had the property rights
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tradable pollution permits?
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Set the quantity of pollution
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The MP of labor from 1 --> 2 workers? CHART
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17
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The production process described above exhibits? CHART
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diminishing marginal product of labor
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The efficient scale of production is the quantity of output that minimizes ?
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average total cost
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How to maximize profit in a competitive market?
The competitive form maximizes profit when it produces output up to a point where..?
The competitive form maximizes profit when it produces output up to a point where..?
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MR=MC
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The long- run market supply curve?
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always more elastic than the short-run supply curve
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The long-run, some firms will exit the market if the
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P<ATC (average total cost)
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Compared to a perfectly competitive industry, a monopoly market would usually generate ?
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higher prices and lower output
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The purpose of antitrust laws are to?
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to increase competition by preventing mergers and breaking up large firms
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Which of the following statements about price discrimination is not true?
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Perfect price discrimination generates no deadweight loss
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If the profit-maximizing firm sells its output for $3/unit and $8 /hour ,,? CHART
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3 workers
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A decrease in the demand for fish ? CHART
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VMPL decreases, wage decreases, labor decreases
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An increase in the supply of labor?
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Value of MPL will decrease, wage will decrease
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Which of the following is true about the consumer optimum consumption bundle? At the optimum....
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ALL OF THE ABOVE
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If income and prices were both double, the budget line would?
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stay the same
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If leisure is a normal good, an increase in the wage?
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Will increase the amount of labor supplied of the substitution effect outweighs the income effect