Economics week 2

From an economic context, select the correct definition of a market. a place where groceries and other household items are bought and sold an institution where stocks or bonds are purchased the process of using advertising to convince potential buyers to purchase a product an institution that brings together buyers and sellers of goods or services Select all examples of a market. the free‑agent signing period in the NFL where players hoping to sign with a team interact with teams looking for additional players a local farmer's market the new york stock exchange Trader joes grocery store frequented by foodie types.

1) an institution that brings together buyers and sellers of goods or services 2) all of them.

Order each of the statements with regard to whether the economic activities in each statement are more market oriented (laissez-faire) or command oriented (centrally planned). Market orientated activities.

Buyers and sellers make all production and consumption decisions. The government attempts to produce certain production and consumption decisions using monetary incentives. The government regulates some production and consumption decisions. The government makes all production and consumption decisions.

Maynard, Alex, Geddy, and Sheila are trying to form a band. They each have some basic skills on most instruments, so their current plan is for each of them to rotate among vocals, guitar, bass, and drums. After a year of practice and rehearsals the band still sounds awful. Maynard cannot keep a steady beat when on bass or drums, Geddy sounds terrible on everything except the bass, nobody except Alex can remember all the chords on guitar, and even Sheila's own mother thinks her singing sounds like a dying cow. At their current rate, they expect it will be several years before they are good enough to land their first paid performance. None of them have enough money saved up to last that long. They all know you are taking economics and ask your advice. What would you say to them? Continue with the current plan, as economies of scale should eventually kick in. Invest their remaining savings in new instruments, as they are at a point where the marginal product of capital exceeds the marginal product of labor. Have each member specialize in the role that they are best in to take advantage of benefits from specialization. Change the rotation to be random rather than equal to take advantage of heteroskedasticity. Abandon the band, as continued practice is doomed to suffer diminishing marginal returns.

Have each member specialize in the role that they are best in to take advantage of benefits from specialization.

Let's say that you are in the market to purchase an already built house. Sort the items below into the correct bin based on whether the statement reflects something you need to know in order to purchase a house. Things you don't need to know:

How to place anchor bolts into the foundation How to make the kitchen plumbing work How to wire the house for electricity How to keep the living rooms color from clashing with the bathrooms

My Attempt Joon lives in North Korea and manages a yarn shop. Under this command, or centrally planned, economy, he is told to make 1000 skeins of yarn that weigh 100 grams each day. a. What is Joon least likely to do to reach his quota? Joon may only allow the factory to make yarn in a super bulky weight with the heaviest and largest diameter strands currently available. make the factory create a variety of yarns to satisfy the various types of people and organizations that need yarn. decide the factory only makes blue acrylic yarn. b. Assume that Joon and his employees do not meet their daily quota and that their factory is the only yarn‑producing factory in North Korea.

Industries that need yarn as an input will be unable to fill their quotas.

Classify the examples according to whether they are a characteristic of a market system. Characteristics of the market system.

People have the freedom to invest their money and time as they wish. Profits motivate firms to produce goods at the lowest possible costs. The government chooses a lassie faire approach.

Peter lived in the Union of Soviet Socialist Republics (USSR). In 1987, he ran the finest pirozhki shop in Leningrad. The USSR was a command economy at the time, so the government mandated a daily production quota of 500 pirozhki. Each day, Peter would make the allotted pirozhki, close the shop, bring the pirozhki to the local government market, and claim his government wages. The demand for his pirozhki was always greater than his supply, so the 500 pirozhki would sell out within 15min. Which statements are valid reasons why Peter did not make more pirozhki to meet demand? Valid reasons Peter did not make more pirozhki

Peter reached his daily production goal, so he had no incentive to make more pirozhki. The government planners did not provide any incentive for peter to produce more than his quota, even if he knew there was a demand for them. Peter did not have freedom of enterprise or freedom of choice. A commend economy system is not focused on maximizing profits.

Which is NOT an example of a behavior exhibited in a market economy? The president of the European country of Semolina decrees that pasta must be consumed at all meals in an effort to help domestic pasta makers. Nettoyer decides to introduce a soap scent, Pomegranate, in response to Schoon's new soap scent, Blood Orange, and Sauber's award-winning scent, Tangerine. For their wedding, Alex and Erika choose Matte Photography instead of Pro Finish Photography, since Matte Photography is cheaper. Despite the advice of its business partners, Puna discontinues its most popular lines of clothing, and chooses instead to produce retro jean jackets and purple sweatpants, thinking that jean jackets and sweatpants are bound to make a fashion comeback.

The president of the European country of Semolina decrees that pasta must be consumed at all meals in an effort to help domestic pasta makers.

Classify the examples according to whether they are a characteristic of a market system. Not a characteristic of the market system.

There is relatively little private property, as resources are owned by everyone collectively. Exchanges that make one person better off at the expense of another are common.

Please label the circular diagram

Top left: Super dollar market buys a lot on which to build their next store. -->Jack makes a decent living pruning bean stalks --->Michel buys toaster to make toast each month---->JC nickel has record quarter selling Black trench coats.

Let's say that you are in the market to purchase an already built house. Sort the items below into the correct bin based on whether the statement reflects something you need to know in order to purchase a house. Things you need to know:

Your monthly income, savings, and expenses. The price of the house.

In circular flow diagram, payments

always go from buyer to seller.

Joon lives in North Korea and manages a yarn shop. Under this command, or centrally planned, economy, he is told to make 1000 skeins of yarn that weigh 100 grams each day. a. What is Joon least likely to do to reach his quota? Joon may only allow the factory to make yarn in a super bulky weight with the heaviest and largest diameter strands currently available. make the factory create a variety of yarns to satisfy the various types of people and organizations that need yarn. decide the factory only makes blue acrylic yarn.

make the factory create a variety of yarns to satisfy the various types of people and organizations that need yarn.

Daniel is a baker who has decided to create his own brand of chain restaurants, Short and Sweet. He negotiates with three suppliers for weeks and ultimately signs contracts with these suppliers. Francis, who owns a new sugar plantation, agrees to sell Daniel freshly refined sugar on the condition that Daniel helps him advertise his brand of sugar. Diana runs an orchard and provides Daniel with fruit. She enters into the partnership knowing that she can dramatically increase her profits if she can sell fruit to Daniel. Lastly, Ryan, who owns a mill, decides to purchase a new piece of machinery so that he can sell Daniel flour at a lower price than his competitor. The end result of Daniel's interactions with his suppliers is that folks in his neighborhood have a chance to buy delicious baked goods at reasonable prices. Daniel's situation with his suppliers is an example of the invisible hand. market failure. A rescission a command economy

the invisible hand.

In an interconnected market economy, households operate as suppliers, demanders, or both. Classify each market according to whether households are demanders or suppliers in that particular market. Then, answer the multiple choice question. Households are suppliers in.

the labor market the financial capital market

In an interconnected market economy, households operate as suppliers, demanders, or both. Classify each market according to whether households are demanders or suppliers in that particular market. Then, answer the multiple choice question. Households are demanders in

the market for goods and services.