Economics 102 Final

if price is above min AC curve - if price is below min AC curve- if marginal is above average-

-profit >0 -profit<0 -"average" is increasing

what is rent seeking?

Using government coercion to seek benefits at the expense of other people

a strikebreaker is

a worker hired by a company to replace a union member who is striking

public choice economics

applies economic analysis to decision making

according to the public choice theory, policymakers

are likely to pursue their own self-interest, even if their self-interest conflicts with the public

What is likely to happen to the equilibrium wage and quantity of pilots if the government enforces a lower mandatory retirement age, say from 65 to 62?

the equilibrium wage rises and the equilibrium quantity of pilots falls

what is the difference between labor's marginal product and marginal revenue product?

the marginal product of labor is the additional labor's contribution to the firm's total output while the marginal revenue product is the additional labor's contribution to the firms total sales revenue

the marginal cost curve intersects

the minimum of the average variable cost and the average total cost curve

Difference between a firms marginal revenue and its marginal revenue product

marginal revenue is the change in sales revenue from selling one more unit of output while marginal revenue product is the change in total revenue from hiring one more worker

Kathy eats five slices of pizza on a Saturday night but admits each slice of pizza doesn't taste as good as the previous one. this suggests that for kathy

marginal utility of the slice of pizza is positive but decreasing

what is the voting paradox?

the observation that majority voting may not always result in consistent (transitive) choices

when there is a positive externality

the social benefit received by consumers is greater than the private beneit

the mercantilists promoted the idea that public interest existed separately from individual people. Which of the following ideas does this contradict?

Methodological individualism

Vertical difference between MPB and MSB in a positive externality case

SUBSIDY that gives us the "efficient" equilibrium

the vertical difference between MPC and MSC in a negative externality case

TAX that takes us to the "efficient" equilibrium

between 1980 and 2011, income inequality in the United States has increased in part due to rapid technological change. How does technological change contribute to income inequality?

Technology complements the skills of the well-educated while rendering redundant the labor services of unskilled and low-skilled workers. this causes a decline in the wages of low and unskilled workers relative to other workers

an increase in the wage rate causes

a decrease in the quantity of labor demanded

why is a typical person likely to gather more information when buying a new car than when voting for a member of congress?

because buying a new car affects a person more immediately and personally compared to voting for a member of congress; in the latter, a person's vote is only one of many voters and therefore, not likely to have a large impact on the outcome

a country opens up to trade and becomes an exporter of wheat. In the wheat market, domestic consumer surplus will ______, domestic producer surplus will _____, and total surplus will _______

decrease,increase, increase

rent controls have adverse effects, including

deterioration in the quality of existing rental units

in the long run when a perfectly competitive firm experiences negative economic profits

firms exit the industry,the market supply curve shifts leftward, and the market price rises

rational ignorance

helps to explain why rent seeking by special interest groups occur

government imposed price controls often lead to

illegal trades of the good

what is meant by the term "rational ignorance" in the context of public choice economics?

it means the lack an economic incentive for voters to become informed about the candidate of pending legislation

high skilled workers have

more human capital than do low killed workers

When Negative externality exists, the private market tends to produce

more than the economically efficient output level

as long as the marginal product of labor exceeds the average product of labor, the average product of labor

must rise

every point on the long-run average cost curve is

on a short run average total cost curve

which of the following is an element of a command economy?

production decisions are centralized

what is the term that explains why voters often lack knowledge of pending legislation, and lack knowledge of the views of candidates for office on a range of issues that affect their own(the voters') welfare?

rational ignorance

when MR<MC for a firm, the firm should

reduce its level of output

for a firm in a perfectly competitive industry

short-run economic profits may be positive, but long run economic profits must be zero

inelastic demand implies

that a one percent increase in price results in a smaller than one percent decrease in quantity demanded

if a union successfully restricts the supply of labor to the firm but the union has no effect on the demand for labor, then at the firm the

wage increases and employment decreases