Microeconomics part 1
If consumers' surplus is $30 and the price paid for the good is $50, then the maximum price a buyer is willing and able to pay for the good is
$80.
Suppose you are eating buffalo wings at a local happy hour. The total utils from doing so after the fourth, fifth, sixth, and seventh wings are 80, 116, 136, 146, respectively. The marginal utility of the seventh wing is __________ utils.
10
You won a free ticket to see a Katy Perry concert (which has no resale value). Ed Sheeran is performing on the same night and is your most attractive alternative. Tickets to see Ed cost $40, but you are willing to pay up to $50 to see him. Assume there are no other costs to see either performer. Based on this information, what is the opportunity cost of seeing Katy Perry?
10
If price is on the vertical axis and quantity demanded is on the horizontal axis, why is a demand curve downward sloping (left to right)?
Because a demand curve is the graphical representation of the law of demand, which specifies an inverse relationship between price and quantity demanded, ceteris paribus.
True or False: If someone gives you a free ticket to the movies, then there is no opportunity cost involved with going to the movies.
False
True or False: The higher the opportunity cost of doing something, the more likely it will be done.
False
True or False: When countries engage in specialization and international trade, every individual person in those countries will gain.
False
If the government is successful in reducing cocaine supply, then, ceteris paribus, the equilibrium price of cocaine should?
Increase
The synonym economists commonly use for additional is
Marginal
Price Floor
Minimum wage cant get lower
Consumer Surplus
Money left over.. Puppy cost 50 but you bring 250 so you have 200 left. The difference between the buyers values and the price or the total of what's left when you subtract the price from what the maximum you're willing to pay.
Opportunity cost
NET value of the NEXT best alternative
Scarcity
Not enough stuff around. Available resources are insufficient to satisfy wants. Implies choice.
The Law of demand
Price goes up the quantity demand goes down
Sarah can make 5 sandcastles in an hour, or 10 ice cream cones. Shirley can make 8 sandcastles or 4 ice cream cones. If they specialize according to comparative advantage, who should do what?
Sarah: Ice cream, Shirley: sandcastle
What are the two agents
Scarcity and rational
microeconomics
The branch of economics that studies the decisions of individuals and firms is called
Marginal utility
The change in utility from getting or losing one unit of something
Producer surplus
The difference between the price and what sellers is willing to sell something for
How are changes in opportunity cost predicted to affect behavior
The higher the opportunity cost of doing X, the less likely X will be done.
Rational
They act in some optimal way to achieve their goals, according to their incentives.
Complement
Things you get with something. Dvd player and Dvd. If that goes up then you will less likely get the other thing. P goes up D goes down
True or False: A surplus will occur in a market when the price of the product is above the equilibrium price.
True
True or False: Mutually beneficial trade between buyers and sellers drives a market to equilibrium.
True
In all cases, normative economics deals with
What it should be
Normal good
When you get more money the more you do this... steak dinners
inferior good
When you get more money you do this less.. Bus ride
When buying 6 units of X and 2 units of Y, Billy finds that MUx=12, MUy=16, Px=3 and Py=4. Is Billy maximizing his utility?
Yes
Which of the following will not shift a supply curve?
a change in the good's own price
A rightward shift in the demand curve for tennis balls could be caused by
a fall in the price of tennis rackets.
Positive economics is concerned with
cause-effect relationships. what is
Planned economy
control market
how to move supply
cost of input, alternative uses, technology, expectation, natural events, number of sellers
An increase in the number of sellers of a good will, ceteris paribus, __________________ for that good.
decrease equilibrium price and increase equilibrium quantity
Good Y is an inferior good. If the average income of those who buy good Y rises, the _____________ curve for good Y will shift ____________ resulting in a(n) _____________ in the equilibrium price of Y and a(n) ____________ in the equilibrium quantity of Y.
demand; leftward; decrease; decrease
Resource X is necessary to the production of good Y. If the price of resource X falls, the equilibrium price of Y will ______________ and the equilibrium quantity of Y will
fall; rise.
The __________ the opportunity cost of doing something, the __________ likely a person will do that something.
higher; less
A decrease in the expected price of corn would likely do the following to the current supply and demand for corn:
increase the supply, but decrease the demand.
A market is said to be in disequilibrium if
it exhibits either a surplus or a shortage.
Free market
less information
Price ceiling
lowering price and shortage in supply and loss or shortage in surplus
On a supply-and-demand diagram, quantity demanded equals quantity supplied
only at the single equilibrium price.
Negative statement
opinionated
Oil producers expect that oil prices next year will be lower than oil prices this year. As a result, oil producers are most likely to
place more oil on the market this year, thus shifting the present supply curve of oil rightward.
how to move demand
preference, income, other goods, price, expectation, demographics
The law of demand states that price and ______________ are _____________ related, ceteris paribus.
quantity demanded; inversely
The marginal rate of substitution is illustrated by the
slope of the indifference curve.
Macroeconomics
studying performance of one or many economics as a whole often studies national and global economics
Marginal Benefit
the benefits of an increase in activity in an activity, usually measured as one additional unit or the next unit
Opportunity cost is the net value of
the best (or most highly valued) forfeited alternative.
Absolute advantage trade
the best does it
Which of the following issues is most unlikely to be addressed by an economist practicing positive economics?
the desirability of a minimum wage increase
Demand
the different quantities of a good people are willing and able to buy at different prices.
The law of diminishing marginal utility
the marginal utility gained by consuming equal successive units of a good will decline as the amount consumed increases
When an economist talks about utility, she is talking about
the satisfaction that results from the consumption of a good
Economic
the study of how agents (individual, firm, government, etc.) make choices, interact and respond to incentives
Comparative advantage trade
who ever gives up the least