ECON STUDY GUIDE

a right shift in the supply curve will lead to

a decrease in equilibrium price, and an increase in the quantity

which of the following leads to a increase in demand for apples

a fall in the price of apples

A nasty fungus begins to grow on oranges. What will happen to the equilibrium price and quantity of both orange juice and apple juice as a result of this event

a leftward shift due to a decrease in quantity

When the price of wine is $ 15 per, Cam buys 45 bottles per month, the gov. introduces a 50% tax on wine, so he reduces his consumptipn to only 30 bottles. whats his arc elasticity

-1

Four major factors that shift the supply curve

1) the number of sellers in a market, 2) the level of technology used in a good's production, 3) the prices of inputs used to produce a good, 4) the amount of government regulation

If the pre-tax equilibrium price of Good X was $5 and the price that sellers receive after the imposition of a tax of $3 is $4, the incidence of the taxation on sellers is approximately ________.

33% the increase from 3 to 4 is 33% of 3

if the sellers reservation value for a good is 10 and the price at which the gold was sold was 15, the producer surplus is

5

Suppose the market for labor consists of three workers. The wage rate is 50 dollars, Alex supplies 12, Anna 15, and Jim 23, whats the market supply of labor per week

50

The total cost of a firm is 60 dollars, the avc is $6 and the afc is $4, how many units of output does the firm produce?

6 units

What's an example of capital? a. savings and cash b. a television set purchased by a family c. a tractor used by a farmer for plowing his field

A tractor used by a farmer to plow

Suppose the university is trying to determine the most efficient way to allocate the rooms such that those who value the rooms the most get them, which of the following would you suggest as the most efficient?

Auction the rooms off to the highest bidder to get the best possible price

If the demand and supply curve for a commodity shift to the left by the same amount, then iin company to the initial equilibrium, the new equilibrium will be a

a lower quantity and the same price

necessary ingredients to the buyers problem

Consumers tastes and preferences Amount of money the consumer has to spend Prices of goods and services

if the opp cost is $40 per hour, and the individual spends 20 hours in commuting every month, their opportunity cost of time is a. $200 dollars per month b. 80 dollars per month c. 40 dollars per month d. $800 per month

d

The supply curve represents..

THE MINIMUM PRICE SELLERS ARE WILLING TO ACCEPT TO SELL AN EXTRA UNIT OF A GOOD

When one of the four major factors change, causing an increase in supply, the supply curve shifts...

RIGHT

The short run of a supply curve is

The portion of its MC curve that lies below its average cost curve

the social surplus is $60, if another agent enters the market that the MC he incurs is 10 and the marginal benefit is 6 then what is true about this statement

The social surplus will drop by the marginal benefit received

which of these is considered the free rider problem a. a pledge sitting out on lineups but still gets initiated b. a benchwarmer on the hockey team wins a championship

a

The free rider problem is

a burden on a shared resource that is created by its use or overuse of people who dont pay fair share or anything at all

People not listening to the rules expected of them in nature is called

The tradgedy of the commons

what will happen to the apple juice market due to the oranges quantity decrease

Their will be a higher demand for the apple juice, causing the curve to move to the right

Which of the following is a common pool resource a. tuckermans b. a toll road c. a high way

a

Their is a massive increase in August in Maine for Lobster , a right shift in the supply curve would indicate...

an increase in quantity of lobsters

Coffee and Tea are likely substitutes because

an increase in the price of coffee increases the demand for tea

60 bucks to spend. apples are 5 dollars a pound, and berries are 3 dollars a pound for a pie fester. what combos would satisy his needs a. 4 apple 2 berry b. 6 apple, 10 berry c. 7 apple, 5 berry

b

Which statement is a positive economic statement a. gov. should add strict wealth tax laws to decrease the uneven dist. of wealth b. House prices reduce once the interest rates on loans get higher c. Import duties should be increased on goods coming from nations with humble human rights records

b

if a job pays $60 per hour, but has has a non wage cost valued at 43$ per house, the net benefit of taking the job equals... a. $20 per hour b. $17 per hour c. $26 per hour

b

Which of the following is an normative economic stmnt. a. increase in income is accompanied by increase in consumption b. Increase in $ supply leads to increase in the inflation rate c. Increase in government expenditure will lead to an will lead to an increase in well being

c

If a good has a price elasticity of demand equal to 1

elasticity of demand is unitary, quantity changes at the same rate as price

if price is greater than the cost of production than firms will

enter the market

in one hour, sienna can bake 20 cookies or lay drywall in 2 rooms, in one hour ethan can bake 100 cookies or lay the drywall for three rooms

ethan has the absolute and comparative advantage at baking cookies

Demand is perfectly elastic, if the price is changed at all it will...

fall to zero because other competitors will have the price at equilibrium, making nobody buy the original product

competitve market equilibrium

has no unexploited gains from trade

if price is less than the cost of production, firms will

leave the market

Exit of firms causes a

leftward shift in the supply curve

In a regressive tax system

low income households pay a higher percentage of their income as taxes

A price floor is the

lower limit on the price of a good

what is the key two words for normative economic statements?

should, ought to, will

The marginal cost curve intesects...

the average variable cost curve and the average total cost curve at their minimum

if the price of a good increases,

the budget constraint shifts to the left

a tax incidence on buyers is higher if

the elasticity of the market supply curve is higher than the merket demand curve

Suppose the price of apples increases and the demand for plums increases this means...

these two must be substitutes

Average variable cost=

total variable cost/output

A nation should specialize in products that

we have a high comparative advantage for