Econ Final

when a corporation issues a bond, it is

borrowing funds from the initial buyer of the bond

megan used to work at the local pizzeria for 15,000 per year but quit in order to start her own dell. to buy the necessary equipment, she withdrew 20,000 from her inheritance, (which paid 8 % interest). last year she paid 25,000 and 500 per month rent. she asked her dad the accountant and her mom the economist to calculate her cost for her.

dad says her cost is 51,000 and mom says her cost is 67,600

ruby knows that the demand for her clothing is quite price elastic. if she increases her price by even a small percentage, her total revenue will ______ because ______

decrease; the percentage change in quantity demanded will exceed the percentage change in price.

the long run average total cost curve of a natural monopolist

falls continuously as more output is produced

which of the following contains the two sectors whose percentage contribution to the real GDP has declined

farming and manufacturing

which of the following is most likely an inferior good

generic vitamins

a labor intensive production process is one that

has a low ratio of capital to labor

when a producer can control the market price for the good it sells, the producer

has market power

typical goals of a labor union in the United states includes

higher wages, better working conditions, and more job security

the labor supply curve starts to bend backward once the

income effect exceeds the substitution effect

marginal cost is the increase in total cost associated with a one unit

increase in production

in order to sell additional unity of their products, competitive firms must

increase output

profit

is the difference between total revenue and total cost

a firm's demand for labor is referred to as a derived demand because

it is derived from the demand for the product that the labor is producing

the williingness to work a certain amount of time at a given wage rate is known as

labor supply

the perfectly competitive market structure includes all of the following except

large advertising budgets

to maximize profit, a natural monopolist produces the level of output at which

marginal revenue equals marginal cost

in monopoly and perfect competition, a firm should expand production when

marginal revenue is above the marginal cost

regulation is appropriate if

market failure exists and the benefits of regulation exceed the costs.

the equilibrium wage rate is determined by

market labor supply and market labor demand

the most desirable rate of output for a firm is the output that

maximizes total profit

if there are many firms in an industry producing goods that are similar but slightly different, this is an example of

monopolistic competition

as long as interest earning opportunities exist, present dollars are worth

more than future dollars

market structure is determined by the

number and relative size of the firms in an industry.

market failure

occurs whenever an imperfection in the market mechanism prevents optimal outcome

which market structure is characterized by a few interdependent firms

oligopoly

if the quantity demanded of a good is greater than the quantity supplied of the good at the current price, then

price will increase until it reaches the equilibrium price

from an economic standpoint, the pursuit of a zero-pollution environment is

probably not in society's interest because of the high opportunity cost

the primary purpose of tradable pollution permits is to

reduce the cost of pollution control

which of the following is most likely a fixed cost

rent for a factory

external costs are the difference between

social costs and private cost

wide price swings in farm products are the result of

supply shifts and the relatively inelastic demand for food

the optimal rate of pollution occurs where

the marginal benefit equals the marginal cost of pollution abatement

from an economic standpoint, government intervention is justified when

the market mechanism fails to achieve the optimal mix of output

the equilibrium price in a market is found where

the market supply curve intersects the market demand curve

the term externalitiies refers to

the negative cost and positive benefits of a market activity borne by a third party

the fundamental problem of economics is

the scarcity of resources relative to human wants

the owners of a corporation are

the shareholders of the corporation's stock

the market mechanism may be best defined as

the use of market prices and sales to signal desired output

perfectly competitive firms cannot individually affect market price because

there are many firms, none of which has a significant share of total output

a consumer may be more willing to pay a higher price for a good if

they expect to have a high marginal utility from the good, and they have a high desire for the good.

if marginal utility is negative, then

total utility will decrease with additional consumption

the opportunity cost of working is the

value of leisure time that must be given up

opportunity cost is

what is given up in order to get something else

the best definition of GDP is

a dollar measure of final output produced during a given time period within a nation's borders

an instituion that makes savings available to investors is known as

a financial intermediary

assuming the entrepreneur does not pay herself, the 1000 she could earn as an employee elsewhere is considered

an implicit cost