Econ 2000 Coombs

Aggregation consists of fixing the _______________________ and adding up the _____________________ by each firm.

1. price of the good 2.quantity supplied

Which of the following is not a characteristic of a​ market? A. Markets are physical locations where trading occurs B. Voluntary exchanges between economic agents C. Flexible prices D. There are rules and arrangements for trading

A. markets are physical locations where trading occurs.

In a perfectly competitive​ market, if one seller chooses to charge a price for its good that is slightly higher than the market​ price, then it will​ _________. A. lose all or almost all of its customers. B. see no change in its number of customers. C. see a small decrease in its number of customers. D. All of the above are equally likely.

A. lose all or almost all of its customers

Suppose a new​ off-campus university apartment complex could rent its rooms on the open market for​ $900 a month. ​If, instead, the university chooses to cap the price of rooms to​ $500 a month for​ students, the result would be that​ ____________. A. quantity demanded would exceed the quantity​ supplied, resulting in a shortage. B. quantity supplied would exceed the quantity​ demanded, resulting in a shortage. C. quantity supplied would exceed the quantity​ demanded, resulting in a surplus. D. quantity demanded would exceed the quantity​ supplied, resulting in a surplus.

A. quantity demanded would exceed the quantity supplied, resulting in a shortage.

What is the difference between marginal values and average​ values? A. Marginal values show the benefit or cost from consuming one unit of a​ good, while average values are the benefit or cost from consuming all units of a good. B. Marginal values show the additional benefit or cost from consuming an additional unit of a​ good, while average values are the benefit or cost per unit of a good. C. Marginal values show the total benefit or cost from consuming a​ good, while average values are the total benefit or cost from consuming a good divided by the amount of the good consumed. D. Marginal values show the ordinal benefit or cost from consuming an additional unit of a​ good, while average values are the cardinal benefit or cost from consuming an additional unit of a good. E. Marginal values show the benefit from consuming an additional unit of a​ good, while average values are the cost from consuming an additional unit of a good.

B. Marginal values show the additional benefit or cost from consuming an additional unit of a​ good, while average values are the benefit or cost per unit of a good.

The concept of opportunity cost is a measure of​ _________. A. the benefit that you receive from doing any activity. B. the value of the best alternative use of a resource. C. the dollar amount you must pay to do any activity. D. all the possible alternative uses of a resource.

B. The value of the best alternative use of a resource.

What is meant by holding all else equal and how is this concept used when discussing movements along the demand​ curve? A. All variables in the model are set to equal values. B. everything else in the economy is held​ constant, including the price of the good. C. All variables that can affect the demand for the good are held constant. D. All of the above.

C. All variables that can effect the demand for the good are held constant.

Are all markets perfectly​ competitive? A. ​No, in other types of​ markets, sellers offer identical goods and simply accept the market price. B. ​No, there are also command and control markets that are run by a central government. C. ​No, there are other market types where firms have considerable power to control the price. D. ​Yes, any economic system with a market structure is by definition perfectly competitive.

C. No, there are other market types where firms have considerable power to control the price.

Which of the following is not one of the four major factors that shifts the supply curve when it​ changes? A. The scale of sellers B. Sellers' beliefs about the future C. The income of consumers D. Technology used in production.

C. income of consumers

Supply Schedule

a table that reports the quantity supplied at different prices, holding all else equal.

Economic Agent

an individual or group that makes decisions. Consumers, parents, students, citizens, workers, etc.

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? A. Allocating rooms based on seniority. Seniors get first​ choice, then​ juniors, and so on. B. Allocating rooms based on​ grades, with students with the highest GPAs getting first choice. C. Auctioning the rooms to the highest bidders. D. Using a random lottery to allocate​ rooms, with each student having equal odds of receiving a room.

c. auctioning the rooms to the highest bidders

Positive economics

describes what people ACTUALLY do. Able to prove the statement.

We make the assumption of holding all else equal when considering demand curves since we want to focus on the changes in the quantity demanded that result from changes in________________________

only the price of a good.

Normative Economics

recommending choices that people or agents "should" make.

Budget Constraint

represents the goods or activities that a consumer can choose that exactly exhausts the entire budget.

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

rightward

Economics studies the allocation of ______________ _________________.

scarce resources

Suppose the price of apples increases and the demand for pears increases. You determine that these goods must be ____________________. .

substitutes

Marginal cost

the extra cost generated by moving from one feasible alternative to the next feasible alternative.

Aggregation

the process of adding up individual behaviors.

Equilibrium

the special situation in which everyone is simultaneously optimizing.

Economics

the study of how agents choose to allocate scarce resources and how those choices affect society

Scarce resources

things that people want where the quantity that people want exceeds the quantity that is available.

Optimization

trying to choose the best, feasible option given the available information.