Econ chapter 4

Block's sells 500 bottles of perfume a month when the price is $7. A huge increase in resource costs causes price to rise to $9 and Block's only manages to sell 460 bottles of perfume. The price elasticity of demand is:

0.33 and inelastic

And explicit cost is:

A money payment made for resources not owned by the firm itself

Which of the following is the best example of market failure?

Alex and others in a community want a new outdoor soccer field and are willing to pay to use it, but no private business is willing to build it.

The federal gasoline tax is assessed On a pre-gallon basis and the proceeds are use for highway maintenance and improvements. this tax is consistent with the

Benefits received principle of taxation

When the price of a product is increased 10%, the quantity demand decreases 15%. In this range of prices, and demand for the product is:

Elastic

Supposed to do business incurred implicit cost of $200,000 and explicit costs of $1 million in a specific year. If the firm sold 4000 units of its output at $300 per unit, it's accounting profit's were

Hundred thousand dollars in its economic profits were zero

Economists, the main difference between the short run in the long run is that

In the long run all resources are variable, while in the short run at least one resource is fixed

Marginal product is

Increase in total output attributable to the employment of one more worker

if the price elasticity of demand for a good is .75, the demand for the good can be described as:

Inelastic

Private firms cannot profitably produce a public good because of:

Nonrivalry and nonexcludability

Assume that you pay $10,000 of tax on a taxable income of $50,000 if your taxable income were $150,000, your tax payment would be $25,000. This tax structure is:

Regressive

The price elasticity of demand is a measure of the:

Responsiveness of quantity demand to a change in price

The ability to pay principle of taxation

Suggests that the tax burden should very directly with peoples income and wealth

Entry fees at national parks and monuments are examples of

The benefits received principle of taxation

Implicit and explicit costs are different in that:

The former refer to nonexpenditure costs and the latter to out of pocket costs

The short run is characterized by:

at least one fixed resource

Accounting profits are typically

greater than economic profits because the former do not take implicit costs into account.

Private goods are characterized by:

rivalry and excludability

"Excludability" means that:

sellers can restrict the benefits of a good to those who pay for it.

Market failures occur when

the competitive market system under-or overallocates resources to production of goods.

Which is not a characteristic of a product with relatively inelastic demand?

there are a large number of good substitute for the good

"Rivalry" in consumption means that:

when one person buys a good, it is not available for another person to buy.