question
Economies is the study if how?
answer
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?
answer
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?
answer
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?
answer
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?
answer
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 ?
answer
equilibrium quantity to rise and equilibrium price to fall
question
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 ?
answer
Tax the good
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According to the Coase theorem, private parties can solve the problem of externalities if?
answer
There are no transaction costs
question
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
question
tradable pollution permits?
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Set the quantity of pollution
question
The MP of labor from 1 --> 2 workers? CHART
answer
17
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The production process described above exhibits? CHART
answer
diminishing marginal product of labor
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The efficient scale of production is the quantity of output that minimizes ?
answer
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..?
answer
MR=MC
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The long- run market supply curve?
answer
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
answer
3 workers
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A decrease in the demand for fish ? CHART
answer
VMPL decreases, wage decreases, labor decreases
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An increase in the supply of labor?
answer
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....
answer
ALL OF THE ABOVE
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If income and prices were both double, the budget line would?
answer
stay the same
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If leisure is a normal good, an increase in the wage?
answer
Will increase the amount of labor supplied of the substitution effect outweighs the income effect
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