micro econ final
You are considering renting a city apartment with 1,000 square feet for $1,300 per month. The monthly rent on a larger, 1,500-square-foot city apartment is $1,850. The marginal cost of renting an apartment with 500 additional square feet is ______________ per square foot per month. (Round your response to two decimal places.)
$1.1 how to solve: 1850-1300=550, 550/500=1.1
For two goods that are complements, the cross-price elasticity of demand will be ___________
negative
Which of the following statements would NOT be considered a positive statement? -The statement that the U.S. government should increase carbon taxes to reduce carbon emissions that cause global warming is ___________.
-Production in the automobile industry is still low and should be subsidized by the government. -a normative statement, since it describes what ought to be done and is therefore not possible to confirm with data.
Economics is divided into two broad fields of study: microeconomics and macroeconomics. Microeconomics studies _________, while macroeconomics studies _________. Policy decisions made by the government are analyzed by _________. A policy such as those limiting a firm's monopoly powers would be studied under _________________ since it deals with a small part of the overall economy .
-a small piece of the overall economy; the economy as a whole -both microeconomics and macroeconomics. -microeconomics
As a firm produces more of a good, the cost of producing each additional unit ____________. This implies that the marginal cost of producing a good _____________ as you make more of that good. The supply curve represents ___________.
1. increases 2. increases 3. the minimum price sellers are willing to accept to sell an extra unit of a good.
Salmon fishing in Alaska is a seasonal business; May through September is the best time to bait salmon and halibut. Toland Fisheries, a small commercial fishery, recorded its highest ever catch last year. They started this year's fishing season with the same number of workers and equipment. With the new season also starting well, Toland has increased hiring substantially. However, the fishery did not make any additional investment in trawlers and other fishing equipment. Other things remaining unchanged, what is likely to happen to the marginal product of each new worker in the short run? In the long run, if Toland Fisheries would like to increase the productivity of its workers, it will need to ____________.
It will be increasing at a decreasing rate, meaning each additional worker will have a lower marginal product of labor than the previous one hired Increase its amount of capital and equipment.
Social surplus is the ____________. Social surplus is maximized when the __________
-sum of the consumer surplus and producer surplus ALL OF THE ABOOOVEEEE DDD competitive market is in equilibrium. highest-value buyers are making a purchase and the lowest-cost sellers are selling. buyers and sellers as distinct groups are doing as well as they possibly can. all of the above
What is meant by comparative statics? Explain with an example.
A change in an outcome, such as consumption, that results from a change in a factor, such as the price.
In the diagram on the right, the consumer surplus in the market is represented by area _______
C
Which of the following is not one of the three conditions that characterizes a perfectly competitive market?
Firms have pricing power and can set their prices freely.
How does microeconomics differ from macroeconomics? Which of the following is not an item studied under macroeconomics?
Microeconomics is the study of how individuals, households, firms, and governments make choices, while macroeconomics is the study of the economy as a whole. *cigarette taxes
A consumer's budget set refers to the collection of all possible bundles that ___________. a decrease in a consumer's income causes her budget set to encompass ______ bundles.
a consumer can purchase with her income fewer
Consider the following pair of figures where the light blue line is the original budget line for a consumer and the dark blue line is the new one. In Figure A, the change shown was caused by _________. In Figure B, the change shown was caused by _________.
a decrease in the price of good Y. a decrease in theconsumer's income.
In a perfectly competitive market, a seller _______ choose to raise the price of its good since all sellers in the market produce ____________, so raising the price would result in ____________ All firms in a perfectly competitive market are said to be __________
cannot identical goods losing all its customers price takers
For economists, the "buyer's problem" refers to __________.
how consumers arrive at a choice as to what to purchase.
In the long run, which of the following factors of production is fixed for a firm? For a firm, diseconomies of scale occur when the ________ for the firm __________ as the quantity produced increases. The long-run average total cost curve is __________ and is found by using the ___________.
none of the above ATC, rises U-shaped; minimum point across all possible ATC curves for a given quantity.
Producer surplus is the difference between the ____________and the _______________ The graph on the right depicts the supply and demand curves for a market in competitive equilibrium. 1.) Using the triangle drawing tool, highlight the area on the graph that represents producer surplus. Label this area 'PS'. Using your graph, calculate the producer surplus in this market. Producer surplus is___________
price consumers pay supply curve 4.5: (5-2)x3x(1/2)
Which of the following is true about how a firm in a competitive market decides what level of output to produce in order to maximize its profit?
produce unitl marginal revenue = marginal cost
In equilibrium, everyone ___________.
simultaneously optimizes, so that nobody benefits by changing his or her own behavior.
Suppose one firm accounts for 55 percent of the global market share for a product, while 147 other firms account for the remaining 45 percent of the market. With such a large number of buyers and sellers, is this market likely to be competitive?
No, even though there are many firms in the market, there is one firm large enough to influence the market price.
The three principles of economics include optimization, equilibrium, and empiricism. Optimization describes a situation where _________________ Equilibrium describes a situation where ________________ Empiricism describes a situation where _____________________
-people weigh costs and benefits when making a decision. -no one would benefit from changing his or her behavior. -economists use data to analyze what is happening in the world.
The concept of diminishing marginal benefits means that __________. The concept of diminishing marginal benefits ____________for goods that you like a lot. Suppose you have a flashlight that takes three batteries to power it. If you buy the batteries one at a time, for which purchase will diminishing benefits set in?
1. each additional unit consumed is worth less to you than the previous one. 2. holds true 3. When you buy the fourth battery.
1. Market demand is derived by __________. 2. Does the shape of the market demand curve differ from the shape of an individual demand curve?
1. fixing the price and adding up the quantities that each buyer demands. 2. No, they both tend to be downward-sloping curves
In which of the following areas will taking an economics course help benefit you throughout your life?
DDDDDD. ALL OF THE ABOVE A.It will give you the logic behind using cost-benefit analysis when evaluating decisions. B. It will instill the concept that what activity is given up by a decision plays an important role when making choices. C. It will help you analyze and predict human behavior in a variety of situations. D. All of the above.
Consumers in a competitive market are considered to be price takers because the purchases made by each _______________ have an effect on the market as a whole
will not
You are taking two courses this semester, biology and chemistry. You have quizzes coming up in both classes. The table below shows your grade on each quiz for different numbers of hours studying for each quiz. For instance, the second row implies that one hour of studying for Chemistry will generate an expected grade of 67 on Chemistry, whereas one hour of studying for Biology will generate an expected grade of 68 on Biology *Your goal is to maximize your average grade on the two quizzes. Use the idea of optimization in differences to decide how much time you would spend studying for each quiz if you had a total of 1, 2, or 3 hours to prepare for each exam. If you had 1 hour, you should study _______________. If you had 2 hours, then you should study _______ hour(s) for chemistry and___________ hour(s) for biology. (Enter your responses as integers.) If you had 3 hours, then you should study ______ hour(s) for chemistry and ___________ hour(s) for biology. (Enter your responses as integers.)
1. CHEM (subtract the grades for one hour of study minus the 0 hour of study: 67-60 and 68-62, and whichever number is bigger is the answer 2. 1 for chem and 1 for bio (since theres two just give one hour for each class) 3. 2 for chem, 1 for bio (subtract values from 2 to 0 and whichever has bigger value is the 2 hours and the other is the 1 hour)
Land in Sonoma, California, can be used to either grow grapes for pinot noir wine or to grow Gravenstein apples. Given this information, what is the relationship between pinot noir wine and Gravenstein apples? -if the demand for pinot noir suddenly shifts sharply to the right, we would expect to see ______________ in the demand for land in Sonoma, which would ____________ the equilibrium price of land. Assume that a sharp increase in demand for pinot noir leads to an increase in the price for land. Graph the impact of this price increase for land on the market for Gravenstein apples. 1.) Using the 4-point curve drawing tool, depict the effect of the increased price of land in Sonoma on the market for Gravenstein apples. Draw either a shift in the supply or demand curve for Gravenstein apples. Label your curve. 2.) Using the point drawing tool, plot the equilibrium point. Carefully follow the instructions above and only draw the required objects. Since both pinot noir wine and Gravenstein apples use the same land in Sonoma, California, a sharp increase in demand for pinot noir wine will result in a ____________ price for Gravenstein apples and a ___________ equilibrium quantity.
1. They share a common input. 2. an increase, increase 3. higher, lower
Lobsters are plentiful and easy to catch in August but scarce and difficult to catch in November. In addition, vacationers shift the demand for lobsters further to the right in August than in any other month. Given this information, we know that _________ is/are higher in August than in other months. -On the right is a graph of the supply and demand for lobsters in August. Compare the equilibrium price and quantity of lobsters in August to the equilibrium price and quantity of lobsters in November. 1.) Using the line drawing tool, depict the supply and demand for lobsters in November. Label the new demand curve 'DN' and label the new supply curve 'SN'. 2.) Using the point drawing tool, depict the equilibrium price and quantity of lobsters in November. Label your point 'N'. When comparing the equilibriums in the lobster market for August and November, the equilibrium quantity is ______ in November than in August, while the equilibrium price is ______.
1. both supply and demand. 2. lower; higher, lower, or unchanged
Given the supply and demand curves on the right, when the price of the good is $20, we say that the market is in __________________. At this price, we know that the quantity supplied is _____________ the quantity demanded. Using the graph on the right, illustrate the impact of an increase in the price of the good from $20 per unit to $30 per unit, assuming everything else in the economy remains the same. 1.) Using the point drawing tool, place a point at the quantity supplied when the price is $30 per unit. Label this point 'A'. 2.) Using the point drawing tool, place a point at the quantity demanded when the price is $30 per unit. Label this point 'B'. If the only change in the market was that the price increased to $30, then we know that the quantity supplied will be _________ the quantity demanded, resulting in ______________, which is also known as a ____________. Suppose instead that the price of the good dropped below the competitive equilibrium price to a price of $15 per unit. If this were to occur, then the quantity supplied would be ____________ the quantity demanded, resulting in an _____________, which is also known as a ___________.
1. competitive equilibrium 2. equal to 1.greater than 2.an excess supply 3. surplus 1. less than 2. excess demand 3. shortage
The statement that the United States should legalize same−sex marriage is a __________ statement since it describes what people _______________ The statement that the United States saw the unemployment rate peak at 10 percent in 2009 is a __________ statement since it describes what people _______________ The ethical implications of a hotly debated government policy would best be considered a _________.
1. normative, ought to do 2. positive, actually do 3. normative question, since it deals with a subjective issue based on personal preferences.
The Law of Demand states that as the price of a good increases, ceteris paribus, the ___________________ decreases. This can be shown graphically with a _________________ demand curve or numerically in a table using a ___________________ The relationship that exists between these two variables can be described as _________________
1. quantity demanded 2. downward sloping 3. demand schedule 4. negatively related
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 ____________. *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?
1. quantity demanded would exceed the quantity supplied, resulting in a shortage. 2.Auctioning the rooms to the highest bidders.
Suppose the price of bananas increases and the demand for grapes increases. You determine that these goods must be ____________ . A nasty fungus sharply reduces the supply of flour for bread. What will happen to the equilibrium price and quantity of both and as a result of this event? 1.) Using the line drawing tool, illustrate the impact of the reduced supply of on the market for by either drawing a new supply or demand curve. Label the new curve either '' or ''. 2.) Using the point drawing tool, illustrate the new equilibrium in the market. Label this point 'A'. Given that and are and that the previous graph illustrated how the nasty fungus led to an increase in the price of , graph the following: 1.) Using the line drawing tool, illustrate the impact of the increase in the price of on the market for by either drawing a new supply or demand curve. Label the new curve either '' or ''. 2.) Using the point drawing tool, illustrate the new equilibrium in the market. Label this point 'B'.
1. substitutes 2.
Brazil is the world's largest coffee producer. There was a severe drought in Brazil in 2013-2014 that damaged Brazil's coffee crop. The price of coffee beans doubled during the first three months of 2014. Draw and discuss a supply and demand diagram to explain the increase in coffee prices. Consider the market for coffee illustrated in the figure on the right. Show the effect of the drought on the coffee market. 1.) Using the line drawing tool, graph either a new coffee demand curve (D2) or a new coffee supply curve (S2) that shows the effect of the drought. Label your curve appropriately. 2.) Using the point drawing tool, indicate the new market equilibrium price and quantity. Label your point 'e2.' Coffee and tea are likely ______________ because an increase in the price of coffee ____________ the demand for tea. What do you think the impact of this drought has been on the equilibrium price and quantity of tea? Draw a supply and demand diagram for the tea market to explain your answer. Consider the market for tea illustrated in the figure on the right. Show the effect of the drought on the tea market. 1.) Using the line drawing tool, graph either a new tea demand curve (D2) or a new tea supply curve (S2) that shows the effect of the drought. Label your curve appropriately. 2.) Using the point drawing tool, indicate the new market equilibrium price and quantity. Label your point 'e2.' Carefully follow the instructions above and only draw the required objects.
1. substitutes 2. increase
Consider the following three statements: Statement 1: You can either stand during a college football game or you can sit. You believe that you will see the game very well if you stand and others sit but that you will not be able to see at all if you sit and others stand. You therefore decide to stand. Statement 2: Your friend tells you that he expects many people to stand at football games. Statement 3: An economist studies photos of many college football games and estimates that 75 percent of all fans stand and 25 percent sit. Which of these statements deals with optimization, which deals with equilibrium, and which deals with empiricism? Explain. Statement 1 deals with ____________. Statement 2 deals with ____________. Statement 3 deals with ____________.
1: optimization, because you are choosing your best feasible option. 2: equilibrium, because your friend presumes everyone is behaving optimally. 3: empiricism, because it describes behavior using real-world data.
You are thinking about buying a house. You find one you like that costs $150,000. You learn that your bank will give you a mortgage for $120,000 and that you would have to use all of your savings to make the down payment of $30,000. You calculate that the mortgage payments, property taxes, insurance, maintenance, and utilities would total $ 720 per month. Which of the following is true regarding your calculation of the cost of owning the house? *Given the information above, if the interest rate on your savings account was 5 percent a year, then the yearly opportunity cost of using this money for a down payment would be equal to ____________
It should include the opportunity cost of the money used to make the down payment. This money could be earning interest in a bank. *1500
According to economists, the process of optimal decision making by consumers typically yields total benefits well above the amount paid for the goods. These market-created benefits are referred to as ___________, and using the graph to the right, are represented by area ___. Suppose now that the market price rises. According to the graph, the excess of total benefits over the total amount spent by consumers will ________________.
consumer surplus, A, decrease
If the income elasticity of demand for a good is positive, the good is ________
normal
Free riding occurs because _________.
people sometimes pursue their own private interests and don't contribute voluntarily to the public interest
The Law of Supply states that, in most cases, the quantity supplied of a good ___________ when the price of the good rises. This means we would expect a typical supply curve to be___________.
rises; upward-sloping.
The Bureau of Labor Statistics defines the labor-force participation rate as the number of people in the labor force (those that either have jobs or are actively looking for jobs) as a percentage of the working-age population. The Organization for Economic Cooperation and Development defines the total fertility rate in a specific year as the total number of children that would be born to each woman if she were to live to the end of her child-bearing years. Given the two definitions above, let's look at the relationship between the labor-force participation rate and the total fertility rate for highly educated women with high earning potential. *You would expect that the labor-force participation rate among highly educated women would be _________________, since the opportunity cost of not working for highly educated women is ____________ that of all women. *You would expect that the total fertility rate among highly educated women would be ______________ less educated women, since the opportunity cost of staying home to raise children is ___________ for highly educated women.
*higher than average, higher than *lower than, higher
Suppose the price of X is $50, the price of Y is $60, and a consumer has income of $600. Using the line drawing tool, show the budget constraint for this consumer on the graph to the right. Label your line 'BC'. Carefully follow the instructions above and only draw the required object. The opportunity cost of buying one unit of good X is ___________ unit(s) of good Y. (Round your response to three decimal places.) -Which of the following combinations of X and Y will be represented by a point on the consumer's budget constraint?
-.833 (50/600-take off a 0) -6 units of x and 5 units of
The three principles of economics include optimization, equilibrium, and empiricism. Empiricism describes a situation where ________________________ Optimization describes a situation where __________________________ Equilibrium describes a situation where __________________________
-economists use data to analyze what is happening in the world -people weigh costs and benefits when making a decision -no one would benefit from changing his or her behavior
For a market to be in equilibrium, three conditions must hold. Fill in the blanks below to complete these conditions. The amount produced by sellers must be __________ the amount purchased by buyers. The costs of making a product must be __________ the final price at which the product sells. Buyers must place a value on the uses of the product that is ______________ the cost of buying the product.
-equal to -less than -greater than
A budget constraint represents _________. -Suppose you have a part-time job and earn $400 a month. Suppose you decide to spend your income buying new shoes and jeans. The chart below shows the possible combinations that could be purchased in a month. Assume jeans cost $50 each and shoes cost $100 each. The table above shows that for a given budget if you increase the amount of one type of good that you buy, you must ______________ the amount of the other good that you buy. Therefore, a budget constraint implies that the consumer faces ______________
-the bundles of goods or activities that a consumer can choose given her limited budget. -decrease, trade offs
The concept of opportunity cost is a measure of _________. Suppose there are three activities in which you could participate: 1. The opportunity cost of the first activity is missing 3 hours of work. 2. The opportunity cost of the second activity is missing a concert that you have tickets to. 3. The opportunity cost of the third activity is missing the afternoon nap that you take every day. Given this information, for which of these activities would you be able to compare opportunity costs? Which of the following would not be considered one of the possible opportunity costs of a recent high school graduate starting college right away
-the value of the best alternative use of a resource. -You can compare all the activities after you translate all the missed activities into dollar amounts. -All of these is a possible opportunity cost.
The opportunity cost of an activity is a measure of _______________ when you do that activity. Let's say that you are trying to decide what to do on Friday at 11 a.m. You rank your possible options from the one you value the most to the one that you value the least in the following order: going to class, sleeping in late, going to work early, getting lunch, going to the gym to exercise, and watching television. If you decide to go to class, then what do we know about the opportunity cost of your decision?
-what is given up -The opportunity cost would be sleeping in late, since it was your next-best option
You are a professor of economics at a university. You've been offered the position of serving as department head, which comes with an annual salary that is $9,500 higher than your current salary. However, the position will require you to work 200 additional hours per year. Suppose the next best use of your time is spending it with your family, which has value of $20 per hour. What is the difference in the net benefit from becoming the department head? The change in net benefit is ____________ (Enter your response as an integer.) To optimize, you ____________ become a department head.
1. 5500 how to solve: 200x20, then 9500-4000 2. SHOULD
Determine if the following statements better describe optimization in levels or optimization in differences. 1. John is attempting to decide on a movie. He determines that the new Batman movie provides him with $5 more of a net benefit than the new Spiderman movie. 2. Marcia finds that the net benefit of flying from Chicago to Honolulu on a non-stop United Airlines flight is $400, and the net benefit for the same trip flying on a one-stop American Airlines flight is $200. 3. Nikki decided to take the first available parking space as she entered the student lot. She felt that the first available space had a $5 premium compared with all other possible spaces since she did not want to risk being late for her exam. 4. Reagan determined that the net benefit of taking the combination of two lecture courses and an online lecture course was $100. The same three courses online gave her a net benefit of $80, and all three in a lecture-based format gave her a net benefit of $90.
1. Optimization in differences, since he is calculating the change in net benefits between alternatives. 2. Optimization in levels, since she is comparing the net benefits between alternatives. 3. Optimization in differences, since she is calculating the change in net benefits between alternatives. 4. Optimization in levels, since she is comparing the net benefits between alternatives.
1. In a perfectly competitive market, sellers _________ and buyers _________. 2. 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 _________.
1.cannot charge more than the market price; cannot pay less than the market price 2. lose all or almost all of its customers.
Consider a market with many firms that have different cost structures. Unless shutdown or exit is optimal, every firm expands production until ___________. To construct the supply curve in a market with many firms with different cost structures, the ___________. The equilibrium price is the ___________. In terms of economic profits, early market entrants earn ___________ economic profits and the last entrant earns __________ economic profits.
1.marginal revenue, marginal cost, and price are all equal (MR= MC =P). 2.individual supply curves for each firm are added together 3. long-run average total cost of the last entrant into the market. 4. positive, zero
An indifference curve is the set of bundles that ___________. Can two indifference curves intersect? Explain your answer.
1.provide an equal level of satisfaction for the consumer 2. No, intersecting indifference curves would imply that a consumer is indifferent between bundles that yield different total benefits.
The figure on the right displays the market for video game consoles, where nine buyers are interacting with nine sellers. According to this figure, the equilibrium price is _________, and at that price, the equilibrium quantity is ______ When the market is in equilibrium, social surplus is _________ If the number of consoles is restricted to two less than the equilibrium quantity, social surplus is ____________ Alternatively, if the government mandated that one more video game console than equilibrium be transacted, social surplus is now _____________ From this analysis, it can be concluded that a market in competitive equilibrium _____________ social surplus.
250 5 1000 900 900 maximizes ch. 7 # 4 hw
The diagram on the right shows the demand and supply for sneakers. Calculate consumer surplus, producer surplus, and social surplus in this market. Consumer surplus is _____________ Producer surplus is _____________________ Social surplus is _______________________ photo: 7 hw 1
800, 1200, 2000 how to find: for consumer and producer, just do base x heigth x (1/2) then for social you add both of those numbers together
How does a consumer's budget set differ from his budget constraint? For a consumer with a given level of income, the combinations of goods for the budget set will be ___________ than for the budget constraint.
A budget set refers to all of the possible bundles of goods and services a consumer can purchase, while a budget constraint is limited to the bundles he can purchase using all of his income higher
Which of the following statements is true?
A government is an example of an economic agent.
Which of the following areas are addressed in the study of economics? (Check all that apply.)
A.The benefits associated with a decision. B.Financial markets. C. Pollution reduction policies. D.Prices.
How would the introduction of legal or technical barriers to entry affect the long-run equilibrium in a perfectly competitive market?
It would reduce any downward pressure on prices from entry and allow economic profits in the long run.
Which of the following equations calculates the profits of a firm? When comparing the accounting profit with economic profit, it must be true that the accounting profit is ______________________ economic profit. The graph to the right shows the average total cost (ATC), average variable cost (AVC), marginal cost (MC), and marginal revenue (MR) curves for a firm in a perfectly competitive market. In order to maximize profits, this firm should produce approximately _________ units of output.
Total revenues-Total costs greater than or equal to 11
The costs of many food safety regulations can be calculated in dollars, but the benefits often are in terms of lives saved (mortality) or decreases in the incidence of a particular illness (morbidity). What does this imply about the cost-benefit analysis of food safety regulations?
We must first translate the mortality and morbidity data into dollars in order to compare it to the costs of the regulations.
A firm is experiencing economies of scale when its _______________ declines as more output is produced. Do firms 1 and 2 experience economies of scale? Or do they experience diseconomies of scale? Minimum efficient scale is the lowest level of output where long-run average total cost is minimized. Firm 3's minimum efficient scale occurs when the output is ______ unit(s).
average total cost Firm 1 is experiencing economies of scale, while firm 2 is experiencing diseconomies of scale 3.
Since optimization is used to analyze people's choices and help them improve the outcomes of their choices, its
both normative and positive.
Suppose there is a product that is being sold in a perfectly competitive market. If the market price of the product rises, producer surplus will _________ since this change results in a higher price, which means there is ________- area between the supply curve and the market price for the good.
increase, more
f firms in a perfectly competitive market are earning profits or incurring losses in the short run, then in the long run these profits or losses will either cause new firms to enter or existing firms to leave the market. This will result in a shift in the ______________ until profits are __________. Given the long-run adjustment process that takes place after a supply or demand shock, we know that the industry supply curve must be __________.
industry supply curve zero horizontal, since the supply curve shifts until price is back to its original level and profits are back to zero
Suppose the total benefit and total cost to society of various levels of pollution abatement are as follows: Complete column (4). (Enter your responses as integers.) -Using optimization in levels, if the U.S. Environmental Protection Agency (EPA) wants to maximize total net benefit, then it should require __________ unit(s) of pollution abatement. (Enter your response as an integer.) Complete columns (5) and (6), starting with the step from 0 to 1 unit of pollution abatement. (Enter your responses as integers.) -Using the Principle of Optimization at the Margin, if the EPA wants to maximize total net benefit, then it should require __________ unit(s) of pollution abatement. (Enter your response as an integer.)
*3 units of pollution-how to solve= subtract total benefit-total cost, and the biggest number is the answer how to find marginal benefit/cost: subtract the total benefit number on top from the one below it. *3 units of pollution
Calculate the price elasticity of supply in the following examples, then determine if supply is relatively elastic or inelastic, or perfectly elastic or inelastic. When the price of a pen increased from $3.00 to $4.00, the quantity supplied by a firm increased from 100 to 150 pens. The price elasticity of supply is ____________ (Round your response to two decimal places. When the price of bottled water increased from $3.00 to $4.00, the quantity supplied by a firm increased from 300 to 320 bottles. The price elasticity of supply is ____________ (Round your response to two decimal places.) In this case, the price elasticity of supply is _____________. Even though the price of an acre of land increased from $6,000 to $10,000, the quantity supplied did not change. The price elasticity of supply is _________. (Round your response to two decimal places.) In this case, the price elasticity of supply is _________
1.40 (use the pic I took of formula MEMORIZE IT), relatively elastic .23, relatively inelastic 0, perfectly inelastic
Click on the table icon LOADING... that shows the fixed costs, variable costs, and total costs for different output levels. Then use this data to help fill in the missing information in the table below. Average Fixed Cost Average Variable Cost Average Total Cost 0 1 $14.00 $5.00 $19.00 2 7.00 8.00 15.00 3 4.67 10.33 15.00 Using the same table what is the marginal cost of the third unit produced? The graph on the right shows the cost curves for a random firm competing in a perfectly competitive market. Given the shape of the curves, we know that curve A represents __________, curve B represents __________, and curve C represent
15, MC; ATC; AVC
Fixing up old houses requires plumbing and carpentry. Jack (who is a jack of all trades but is a master of none) is a decent carpenter and a decent plumber, but is not particularly good at either. He can fix up two houses in a year if he does all of the carpentry and plumbing himself. His wage is $80,000 per year. Jack's average total cost of fixing up two old houses is _____________________(Round your response to the nearest dollar.) George is an excellent plumber and Harriet is an excellent carpenter. George can do all of the plumbing and Harriet can do all of the carpentry to fix up eight houses per year. Each earns a wage of $80,000 per year. If George and Harriet work together and fix up eight old houses each year, their average cost is ______________(Round your response to the nearest dollar.) This problem tells us that one of the sources of economies of scale is ____________
40,000 (80,000/2) 20,000 (80,000x2 then /8) specialization
Suppose the market price of corn is $5.50 per bushel. Which of the following is not one of the three conditions that will need to be satisfied for the corn market to be in equilibrium at this price?
Both the buyers and sellers of corn could benefit by making small changes to their market behaviors.
Free riding occurs when people's private benefits are out of sync with the public interest. Which of the following is subject to the free-rider problem? -Which of the following is more susceptible to the free-rider problem: state parks or city−wide pest control?
DDDDDD-all of the above A neighborhood watch. B.National security. C.Public libraries. D.All of the above. -Use of city−wide pest control is more susceptible since even those who don't pay taxes still benefit, while state parks can charge for admission, so that everyone who goes pays their share.
If some sellers exit a competitive market, how will this affect its equilibrium? 1.) Using the 3-point drawing tool, show the impact if some sellers exit a competitive market. Label your new curve appropriately. 2.) Using the point drawing tool, show the new equilibrium price and quantity. Label this point 'A'. According to your graph, when some sellers exit a competitivemarket, the equilibrium price __________ and the equilibrium quantity ___________________
Increases decreases
What is the difference between marginal values and average values?
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.
Do all consumers in a competitive market enjoy the same amount of consumer surplus?
No, since considerable variation exists among consumers in terms of tastes and incomes.
The price elasticity of demand shows the sensitivity of consumers' purchases to _____________ change in the good's price. In the market for backpacks, suppose Green's price elasticity of demand is 0.5, Smith's price elasticity is 1.5, and the price elasticity of all the other consumers is greater than 0.5 but less than 1.5. Could the market price elasticity be less than 0.5 or greater than 1.5?
a percentage No, it must lie between 0.5 and 1.5.
Economists refer to the process of adding up the individual demand curves to find the market demand curve as ____________ Aggregation consists of fixing the ____________ and adding up the _________________ by each buyer. Al's Demand Schedule Joe's Demand Schedule Price Quantity Demanded Price Quantity Demanded $5. 150 $5 300 4 200 4. 400 3. 250 3. 500 2 300 2 600 The graph to the right illustrates Al's and Joe's demand curves for gasoline. 1.) Using the multipoint curve drawing tool, plot each point for the total demand curve and label the curve appropriately.
aggregation 1. price of the good 2. quantity demanded how to find quantity demanded: add each individuals up together (so the total would be 450, 600, 750, etc
Consider a market where there are many firms with different cost structures. When determining which firms enter the market first, we look at ____________. The last firm to enter earns ___________. If demand shifts to the left (decreases), the last firm that entered ____________.
average total cost. zero economic profits. earns negative economic profits and so exits the market.
Assume every semester after finals you fly back to your hometown using a $300 ticket you buy online. You have 40,000 frequent flier miles. You could exchange your miles for a round-trip ticket to Bermuda over spring break. If you choose to exchange your airline miles for a free trip to Bermuda over spring break, then your trip _________.
cost $300, since your next-best alternative for your miles was to use them to fly home at the end of the semester.
The graph on the right shows the long-run average total cost curve for a perfectly competitive firm. Refer to points A, B, and C on the graph and identify where the firm would experience economies of scale, constant returns to scale, and diseconomies of scale. At point A, the firm experiences _______________. At point B, the firm experiences ____________________ At point C, the firm experiences ______________________
experiences economies of scale. constant returns to sale diseconomies of scale.
During the process of optimization economists believe that people are considering _________. The goal of optimization for an individual is to maximize ______________________
the feasibility of a choice, given the information available at the time. -overall well-being
You have been invited to play a 4-hour round of golf that has a value to you of $90. The total price to play the round of golf is $35. The net benefit of the round of golf is _____. (Enter your response as an integer.) Now assume that you have a job that pays you $6 per hour. Would you be optimizing to accept the invitation to play golf? To optimize, you should _______ golf.
*55 (subtract 90-35) *play (since 55 is greater than 35)
Optimization is the process that describes __________. *Optimization in levels examines ___________, while optimization in differences analyzes ____________.
*the choices that households make *total net benefits of alternatives; the change in net benefits.
Comparing a set of feasible alternatives and picking the best one is an optimization process called _________. When deciding whether to install visible countdown timers for pedestrians at crosswalks, which of the following would be considered in the cost-benefit analysis? (Check all that apply.)
cost-benefit analysis. CHOOSE ALLLL -A. The value of the pedestrians' lives saved by having the timers to assist in crossing the street. Your answer is correct. B. The higher maintenance bill associated with fixing these more complex signals when they break down. Your answer is correct. C. The value of the lives lost by drivers who watch the countdown timers and try to make it through a light. Your answer is correct. D. The cost in terms of dollars of installing these new timers all over the city.
Charley spends all of his income on soft drinks and pizza. Suppose he is currently buying these products in amounts such that his marginal benefit from an additional soft drink is $180 and his marginal benefit from an additional slice of pizza is $70. If the price of a soft drink is $3 and the price of a slice of pizza is $4, is Charley maximizing his total benefits?
No, he should shift consumption toward soft drinks and away from pizza to maximize total benefits.
Suppose your total benefit from eating slices of pizza (value in dollars) is 14x−x^2, where x is the number of slices of pizza. Pizza is sold by the slice and costs $2 per slice, and so the total cost of pizza is 2x. Using optimization in levels, what is the optimal amount of pizza for you to eat? Your net benefit is maximized at ________ slices of pizza. (Enter your response as an integer.)
6-plug in each formula, make a chart and then subtract (benefit-cost) (IT WILL BE LARGEST-SMALLEST)
Suppose that you allocate $20 each week for your entertainment budget. This money is spent on two items: either renting movies for $1 each at Redbox or downloading songs from iTunes at $1 each. Given this information, which of the following would represent your budget constraint for entertainment? -Your budget constraint for entertainment illustrates the concept of ______________ since as you increase your purchases of one item, you ________________________
Amount spent on iTunes + Amount spent at Redbox = $20. -trade offs, must decrease your purchases of the other item
Consider the following statement: Given that bacon and eggs are complementary goods, if the price of eggs decreases the demand for both goods will rise. Is this an accurate statement?
It is somewhat inaccurate. The decrease in the price of eggs will increase the quantity demanded (not the demand) for eggs.It will, however, as the statement claims, increase the demand for bacon
Which of the following is not a characteristic of a market?
Markets are physical locations where trading occur
Why does a demand curve with a constant slope not have a constant elasticity?
Slope is based on absolute change and elasticity is based on percentage change.
A consumer's satisfaction is maximized when the marginal benefit from the last dollar she spent on one good is equal to the marginal benefit from the last dollar she spent on another good because ___________.
the reality of diminishing marginal benefits assures that any shift in consumption toward either good must necessarily make her worse off.
The price elasticity of demand for a good is likely to be elastic __________.
DDDD ALL OF THE ABOVEEEE the the available time during which consumers can adjust. the the number of close substitutes for the good. the the budget share spent on the good. all of the above.
The price of rice in a small country is currently $6 per pound. In order to help low-income people afford an adequate diet, the government introduces a subsidy of $2 per pound of rice. Using the graph on the right, show the area representing the increase in consumer surplus as a result of the subsidy. Assume that the full amount of the subsidy is passed on to consumers. To do this you must create a single area by combining two shapes obtained as follows: 1.) Using the rectangle drawing tool, draw a portion of the desired area. 2.) Using the triangle drawing tool, draw the second portion of the desired area According to the graph, consumer surplus increases by _________ as a result of the subsidy. Now using the rectangle drawing tool, show the cost of the subsidy in the graph to the right. (Note: the "hatched" area measures the increase in consumer surplus derived above.) According to the graph, the cost of the subsidy is ________ From this analysis, the cost of the subsidy _____________ the increase in consumer surplus by ________
50: to solve-(20x2)+(1/2x10x2) find the base and hieght of the rectangle and triangle and add them together 60: just mutliply the area (30x2) *exceeds, $10 (60-50)
What is meant by holding all else equal and how is this concept used when discussing movements along the demand curve? 2.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 _____________________ .
All variables that can affect the demand for the good are held constant. 2. only the price of the good
Which of the following would be considered a scarce resource for producers?
DDDDDDD. All of the above. A. Equipment and tools. B. Natural resources for production. C. Low−skill labor.
What is the difference between accounting profit and economic profit? Is it possible for accounting profit to be positive and economic profit to be negative? Under which of the following examples is it likely that the accounting profit is positive and the economic profit is negative?
Economic profit subtracts both explicit and implicit costs from total revenue, while accounting profit only subtracts explicit costs. Yes, this could occur if explicit costs were modest and implicit costs were high. if you use a diamond mine as a tourist attraction instead of using it for mining
There is a proverb "anything worth doing is worth doing well." Do you think an economist would agree with this proverb?
No, because the marginal cost of extra effort may be greater than the marginal benefit.
The definition of economics states that it is the study of how _________.
agents choose to allocate scarce resources and the impact of those choices on society.
To the right is the average total cost curve for a competitive firm. What is the relationship between the average total cost curve (ATC) and the marginal cost curve (MC)? 1.) Using the 3-point curve drawing tool, draw the marginal cost curve for this firm in a competitive market. Label your curve 'MC'. When the ATC curve is decreasing, we know that the MC curve is ________________ and when the ATC curve is increasing, we know that MC is __________________
below the atc curve above the atc curve
Economists mostly use optimization in differences, as opposed to optimization in levels, because ____________.
comparing different features of alternatives is simple.
The demand curve shows ___________. Everything else the same, as the price of the good increases, quantity demanded _____________
how the quantity demanded responds to changes in the price of the good -decreases
Which of the following equations measures price elasticity of supply? The more elastic a supply curve is the ____________responsive the quantity supplied is to changes in the price level. The more inelastic a supply curve is the __________ responsive the quantity supplied is to changes in the price level. 1.) Using the line drawing tool, show the supply curve when supply is unit−elastic. Label your curve 'S'. Carefully follow the instructions above and only draw the required object
percentage change in quantity supplied/percentage change in price more, less
Suppose Hershey's increases the price of its chocolate syrup by 18 percent. In response, the quantity demanded of Nesquik chocolate syrup rises by 13 percent and the quantity demanded of Breyer's vanilla ice cream falls by 4 percent. The cross-price elasticity of demand between Hershey's syrup and Nesquik's syrup is __________, implying these two goods are ____________. The cross-price elasticity of demand between Hershey's syrup and Breyer's vanilla ice cream is ________, implying these two goods are ______________. Suppose that incomes rise by 9 percent given the price change cited above. As a result, Hershey's experiences a 5 percent increase in sales volume. Given this information, Hershey's syrup is a normal good.
positive, substitutes negative,complements normal
Producer surplus is the difference between the _______________and the ______________ The graph on the right depicts the supply and demand curves for a market in competitive equilibrium. 1.) Using the triangle drawing tool, highlight the area on the graph that represents producer surplus. Label this area 'PS'. Using your graph, calculate the producer surplus in this market. Producer surplus is _______
price consumers pay, supply curve 8 (how to solve: 6-2,x4,x(1/2)
The amount of money the firm brings in from the sale of its outputs is called ______________, while the change in total revenue associated with producing one more unit of output is called marginal revenue. If the graph on the right represents the market supply and demand curves for pizza, what do we know about the demand curve for an individual pizza shop if the pizza market is in perfect competition?
revenue, marginal revenue The shop's demand curve is horizontal at exactly $8.
Scott loves to go to baseball games, especially home games of the Cincinnatti Reds. All else equal, he likes to sit close to the field. He also likes to get to the stadium early to watch batting practice. The closer he parks to the stadium the more batting practice he is able to watch (the garages all open simultaneously). Find Scott's optimal seat type and parking garage using the information that follows. Scott's optimal seat type is ____________ Scott's optimal parking is _________________
seat type: scout box parking: east river how to solve seating: subtract value of view minus price/125-77 how to solve parking: subtract benefit arrival of time-parking fee/50-23
The International Space Station (ISS) is a habitable satellite that was launched by NASA and space agencies of other countries. In 2009, NASA was considering shutting down the ISS within the next 5 to 6 years. Among those who were opposed to this idea of de-orbiting the ISS was Senator Bill Nelson, who was quoted as saying "If we've spent a hundred billion dollars, I don't think we want to shut it down in 2015." The "hundred billion dollars" that Senator Nelson is referring to is known as a _____________ Given this information, the senator's comment is ___________ since these types of costs ______________ affect current and future decisions. You are planning to build an apartment building. Your market research department estimates that your revenues will be $900,000. Your engineering department estimates the cost will be $600,000. You started construction and spent $100,000 to build the foundation when the recession begins. This causes the market research department to revise its revenue estimates downward to $499,950. Should you complete the apartment building?
sunk cost, should not No, the remaining cost to build is $500,000 and you only expect to earn $499,950; you will ignore the $100,000 spent since it is a sunk cost.
Utility measures __________
the happiness or satisfaction that comes from consuming a good.
Which of the following are necessary ingredients to the buyer's problem?
Consumer's tastes and preferences. Prices of goods and services. Amount of money the consumer has to spend.
Percent Change in Price Percent Change in Quantity Sofas 20 −15 Floor lamps 9 −9 Oriental rugs −20 28 For sofas, the price elasticity of demand is negative _________ Demand for sofas is _________ For lamps, the price elasticity of demand is negative_________ Demand for lamps is ___________ For rugs, the price elasticity of demand is negative ______ Demand for rugs is _________- Of these three price changes, which would, through its impact on sales, generate a revenue increase for the store?
-.75, inelastic (15/20) -1, unit elastic -1.4, elastic Sofas and rugs.
Which of the following is true regarding the concept of causation? Which of the following is not an example of causation?
-It describes how one event can bring about change in another. -driving without car insurance will lead to getting into a car accident
1. Which of the following is not one of the five major factors that shifts the demand curve when it changes? 2. When one of the five major factors changes, causing an increase in demand, the demand curve shifts ______________ 3. The graph to the right illustrates the demand for smartphones in a country. If the price of a complementary good increases, how would the demand for a normal good be impacted? 1.) Using the line drawing tool, depict how this increase will impact the demand for smartphones. Label the new curve 'D2'. Carefully follow the instructions above and only draw the required object.
1. the price of the good itself 2. rightward 3.
Your total benefits from spending time with your spouse are shown in the following table. Hours per Day Total Benefit 0 0 1 16 2 30 3 42 4 52 5 60 6 66 7 70 Alternatively, you have the option of working as many hours as you want, earning $11 per hour. Assume this is the next best use of your time. Use the marginal principle to find your optimal number of hours to spend with your spouse per day. The optimal amount of time for you to spend with your spouse is _________ hours per day. (Enter your response as an integer.)
3 hours: how to solve- find money value for jobs, by multiplyiing 11x1 hour, 2 hour.... then subtract total benefit-how much you would get paid for that hour (16-11), the biggest number will be your answer
You are given the following information about the ABC Widget Company's short-run costs. Using what you have learned, fill in the missing values in the table. Given the table above, the average total cost of producing the fourth unit is ____. The marginal cost of producing the sixth unit is _____ The marginal cost of producing the third unit is _______________the average total cost of the third unit. This means that producing the third unit causes the average total cost to decrease.
ATC of fourth: 5 MC of sixth: 6 less than, decrease
Suppose your New Year resolution is to get back in shape. You are considering various ways of doing this: you can sign up for a gym membership, walk to work, take the stairs instead of the elevator, or watch your diet. -How would you evaluate these options and choose an optimal one? -When making your decision about which activity to choose, you should consider the monetary cost ____________ the opportunity cost of the activities. The goal is to choose the option that offers the greatest __________ benefit.
Do a cost-benefit analysis to compare the alternatives. -as well as, net
Harley has $240 to spend on movies and concerts. Suppose the price of a movie ticket is $12 and the price of a concert ticket is $60. 1.) Using the line drawing tool, show the budget line for Harley on the top graph to the right. Label your line 'BL'. Suppose the price of concert tickets drops to $40. 1.) Using the line drawing tool, show the change in the budget line that would occur on the bottom graph to the right. Label your line 'BL2'. Now suppose Harley has $480 to spend rather than $240. How will this change affect Harley's budget line? Given the information about Harley's income and the prices for concerts and movies, we are unable to determine where on the budget line Harley would choose to consume because __________.IMG_8010.HEIC
It shifts outward in a parallel fashion. -Harley's tastes regarding movies and concerts are unknown to us
Economics, anthropology, psychology, sociology, and political science all study human behavior. Economics differs from these other social sciences because it also addresses these three key concepts: _________.
Optimization, equilibrium, and empiricism.
For this exercise, assume there are only two goods. The substitution effect of an increase in the price of one good always _____________ the amount of that good in the individual's new consumption choice (bundle) and _________ the amount of the other good. The associated income effect of an increase in the price of one good ________________ the quantity of that good and ___________________ the quantity of the other good, but the quantities of the two goods in the new consumption choice cannot simultaneously _________ as a result of the income effect.
decreases, increases may increase or decrease, may increase or decrease, increase
Read the story to the right, and then answer the following questions: Based on what happened at the Richmond event, it is apparent that at a price of $50, the quantity _________ of laptops exceeded the quantity _________. This resulted in an excess _________ for laptops. 2. Which of the following ways of distributing the laptops would be more efficient? (Check all that apply.)
demanded; supplied; demand 2. B. Auctioning off the laptops to the highest bidders. Your answer is correct. C. Using a random lottery to decide who gets the laptops. Your answer is correct. D. Using flexible prices, so those who value the laptop more would pay more for it.
Suppose you need to buy shoes for your upcoming vacation. The table below summarizes your quantity demanded of shoes at various prices. Using this information, graph your demand curve for shoes.Price Quantity Demanded $25. 4 pairs of shoes 50. 3 pairs of shoes 75. 2 pairs of shoes 100. 1 pair of shoes 1.) Using the point drawing tool, plot each price/quantity combination for shoes. 2.) Using the line drawing tool, draw your demand curve for shoes. Label your curve appropriately. Based on your graph, the demand curve is ____________ because as price decreases, quantity demanded _____________
downward sloping increases
You and your friend, Jim, have just moved out of your dorm and into a new apartment. Both of you decide that you need to get a couch. Jim thinks you should get a new one from a furniture store nearby. You feel that, given your budget, it is best to buy a used one. Your other options are to buy one online or get a couch custom-made at the same furniture store. How would you arrive at an optimal solution here? Assume that your opportunity cost of time is $5 per hour. You and Jim would need to consider ___________. Now suppose that you have a summer job that pays you $15 per hour. How would your analysis change? With a $15-per-hour summer job, _______________ would increase.
the direct costs and the indirect opportunity cost of your time required to shop. *the opportunity cost of your time
A perfectly competitive firm will choose to shut down when the price (marginal revenue) intersects the marginal cost curve below the average variable cost curve. Therefore, the short-run supply curve for a perfectly competitive firm is represented by __________. -In the long run, the supply curve for a perfectly competitive firm is represented by __________.
the portion of the marginal cost curve above average variable cost. -the portion of the marginal cost curve above average total cost.
Consumer surplus is __________. For an individual, consumer surplus is calculated as the difference between the _____________ to pay and the price actually paid for a good.
the value or total benefits one receives from a good in excess of the price paid for it willingness
Suppose the following table shows the supply schedule and demand schedule for windshield wiper fluid in Country 1. Fill in the blank at the top of each column, indicating whether it represents the supply or demand for windshield wiper fluid. Price QD QS 2 70. 30 4 65 35 6 60 40 8 55 45 10 50 50 12 45 55 14 40 60 -fill in the chart to find total demand and total supply -When graphing the new total market supply and demand curves, these curves will be _________ the individual countries' demand curves, since these curves are derived by _________.
to the right of; summing quantities at a given price. to find total market demand and total market supply: add each up together (they are seperated by eachother so in the graph it goes s d s d s dIMG_4792.HEIC
A company mines 390,000 tons of coal per year in a rural county. The coal is worth $73 per ton. The average price for a 2,000-square-foot house with three bedrooms more than 20 km away from the mining site in this county is $210,000. The average price for a similar, 2,000-square-foot house with three bedrooms within 4 km of the mine is 6 percent lower. Using comparative statics, what is the effect of mining on home prices in this county? Mining changes the price of a 2,000-square-foot home (with three bedrooms) by __________________. (Round your response to two decimal places and use a negative sign if necessary.)
-12600 *JUST MULTIPLY original house price of first option by the percentage given (6) so 210,000 x .06= 12600 and since it is DECREASING in price, add THE NEGATIVE SIGN!!!!
Since the inputs used to produce goods are scarce, the total amount produced of most goods is ____________ the amount that consumers would like to buy. To allocate the goods produced to the people who value them the most, we use ______________
-below -the price mechanism
Which of the following is not one of the four major factors that shifts the supply curve when it changes? 2. When one of the four major factors changes, causing an increase in supply, the supply curve shifts _____________ 3.he graph to the right illustrates the supply of smartphones in a country. If the number of sellers increases, how would the supply of smartphones be impacted? 1.) Using the line drawing tool, depict how this increase will impact the supply of smartphones. Label the new curve 'S2'.
1. the income of consumers 2. rightward
Would a profit-maximizing firm continue to operate if the price in the market fell below its average cost of production in the short run? -The graph on the right shows the average total cost (ATC), average variable cost (AVC), marginal cost (MC), and marginal revenue (MR) for a firm. If the firm produces where marginal revenue equals marginal cost, what would be the fixed costs the firm would still have to pay if it shut down? 1.) Using the rectangle drawing tool, highlight the area on the graph that represents the fixed costs the firm must pay even if it shuts down.
Yes, but only if price stayed above average variable cost -
Andy consumes two goods, books and video games. His income is $40, the price of a video game is $8, and the price of a book is $4.Suppose Andy's parents give him $24 for his birthday. 1.) Using the triangle drawing tool, show Andy's budget set on the top graph to the right. Label your triangle 'BS1'. Now suppose Andy's parents had given him three video games for his birthday instead of giving him $24. Andy is a very polite young man and would never return a gift that his parents had given him for cash or to him parents. 1.) Using the multipoint curve drawing tool, show the budget constraint that Andy now faces on the graph to the right. Label your curve 'BS2'. (Hint: The budget constraint is simply a subset of the budget set; graphically, it is the outer edge of the budget set that separates affordable bundles from unaffordable bundles.) Based on your preceding answers, which of the following is possible? (Check all that apply.)
could be indifferent between a gift of $24 and a gift of three video games. Andy could prefer a gift of $24 to a gift of three video game
identify the cause and effect in the following examples: Lower infant mortality is _____________ and an improvement in nutrition is _____________ A surge in cocoa prices is ___________ and a pest attack on the cocoa crop is _____________
-an effect/the cause -an effect/the cause
The Law of Supply states that as the price of a good increases, ceteris paribus, the __________ of that good increases. This can be shown graphically with an ___________________ supply curve or numerically in a table using a _______________. The relationship that exists between these two variables can be described as _______________. Price($/barrel) QuantitySupplied (billions of barrels) $10 0.0 50. 1.1 100. 1.5 150 1.7 1.Using the point drawing tool, plot each of the points in the supply schedule above on the graph to the right. 2.Using the 4-point curve drawing tool, draw and properly label ExxonMobil's supply curve.
1. quantity supplied 2. an upward sloping 3. supply schedule
There are four consumers willing to pay the following amounts for an electric car: Consumer 1: Consumer 2: Consumer 3: Consumer 4: $60,000. $50,000 $70,000 $30,000 There are four firms that can produce electric cars. Each can produce one car at the following costs: Firm A: Firm B: Firm C: Firm D: $80,000 $20,000. $30,000. $50,000 Each firm can produce at most one car. Suppose the market for electric cars is competitive. Why is the equilibrium price in this market $50,000? Which firms will produce an electric car if the price is $50,000? Complete the following table by calculating consumer surplus, producer surplus, and social surplus when the market price is $50,000. (Enter your responses to the nearest dollar.) Consumer Surplus: Producer Surplus: Social Surplus:
DDDDD ALL OF THE ABOVE A. At this price, three consumers are willing to buy an electric car and three firms are willing to sell an electric car. B. At this price, the quantity demanded (three cars) equals the quantity supplied (three cars). C. At $50,000, three consumers have reservation values equal to or above $50,000 and three firms have reservation values equal to or below $50,000. D.All of the above. 1, 3, and 2. consumer: 30,000 producer: 50,000 social: 80,000
