Final Econ

Refer to table 13-4: What is the marginal product of the third worker:

15 students

For which of the following individuals would the opportunity cost of going to college be highest:

A famous, highly-paid actor who wants to take time away from show business to finish college and earn a degree.

An increase in the price of blueberries would lead to a(n):

A movement up and to the right along the supple curve for blueberries.

Caroline sharpens knives in her spare time for extra income. Buyers of her service are willing to pay $2.95 per knife for as many knives as Caroline is willing to sharpen. On a particular day, she is willing to sharpen the first knife for $2.00, the second knife for $2.25, the third knife for $2.75, and the fourth knife for $3.50. Assume Caroline is rational in deciding how many knives to sharpen. Her producer surplus is:

$1.85

Refer to Fig 7-19 At the equilibrium price, consumer surplus is:

$100

Refer to Fig 7-19 At the equilibrium price, producer surplus is:

$150

Refer to Fig. 1-1 Of price is $25, then quantity demanded and quantity supplied, respectively, are:

$500 units and 800 units.

Refer to Fig 1-1 At a price of $15,:

All of the above are correct. -quantity demanded exceeds quantity supplied. -there is a shortage. -the market is not in equilibrium.

A student might describe information about the costs of production as:

All of the above be correct Dry and technical boring crucial to understanding firms and market structures.

Inflation is defined as:

An increase in the overall level of prices in the economy.

If mayonnaise and Miracle Whip are substitutes, then which of the following would increase the demand for Miracle Whip:

An increase in the price of mayonnaise

Suppose a tax is imposed on the sellers of fast-food French Fries. The burden of the tax will:

Be shared by the buyers and sellers of fast-food French Fries but not necessarily equally.

The unique point at which the supply and demand curves intersect is called:

Equilibrium

Refer to Fig. 1-1 At a price of $20, which of the following statements is not correct:

Equilibrium price is equal to equilibrium quantity.

The law of demand states that other things equal, when the price of a good:

Falls, the quantity demanded of the good rises.

Refer to Figure 13-7: Which of these figures represents the marginal cost curve for a typical firm? "NIKE"

Figure 1

Refer to Figure 13-7: Which of the figures represents the production function for a typical firm: "OVER S"

Figure 4

Bubba is a shrimp fisherman who could earn $5,000 as a fishing tour guide. Instead, he is a full-time shrimp fisherman. In calculating the economic profit of his shrimp business, the $5,000 that Bubba gave up is counted as part of the shrimp business's:

Implicit Costs

If the demand for a good falls when income falls, then the good is called a(n):

Inferior Good

When the government imposes taxes on buyers or sellers of a good, society:

Loses some of the benefits of market efficiency.

Refer to Fig 1-2 Which of the four panels represents the market for pizza delivery in a college town as we go from summer to the beginning of the fall semester?

Panel A

A supply curve can be used to measure producer surplus because it reflects:

Seller's costs.

Katie is planning to sell her house, and she is considering making two upgrades to the house before listing it for sale. Replacing the carpeting will cost her $2,500 and replacing the roof will cost her $9,000. Katie expects the new carpeting to increase the value of her house by $3,000 and the roof to increase the value of her house:

She should replace the carpeting but nor replace the roof.

Ashley bakes bread that she sells at the local farmer's market. If she purchases a new convection oven that reduces the costs of baking bread, the:

Supply curve for Ashley's bread will increase.

the benefit that government receives from a tax is measured by:

Tax Revenue.

Consumer surplus is:

The amount a buyer is willing to pay for a good minus the amount the buyer actually pays for it.

Producer surplus is:

The amount a seller is paid minus the cost of production goods that go unsold.

Deadweight loss is the:

Decline in total surplus that results from a tax.

An increase in the price of a good will:

Decrease quantity demanded

Diseconomies of scale occur when:

long-run average total costs rise as output increases.

The terms equality and efficiency are similar in that they both refer to benefits to society. However they are different in that:

equality refers to uniform distribution of those benefits and efficiency refers to maximizing benefits from scarce resources.

In the long run,:

inputs that were fixed in the short run become variables.

The length of the short run:

is different for different types of firm.

The Get-There-Safe Bus company incurs an average cost of $45 for each passenger it carries on its trip from Atlanta to Chattanooga. In advance of a particular trip, four sear remain unsold. The bus company could increase its profit only if it:

charged any ticket price above $0 for the four remaining seats.

When a tax is levied on a good, the buyers and sellers of the good share the burden:

regardless of how the tax is levied.

The Phenomenon of scarcity stems from the fact that:

resources are limited

The cost of producing an additional unit of output is the firm's:

Marginal cost.

A group of buyers and sellers of a particular good or service is called a(n):

Market

The term used to describe a situation i which markets do not allocate resources efficiently is a economic meltdown:

Market Failure

Suppose Jan started up a small lemonade stand business last month. Variable costs for Jan's lemonade stand now include the cost of:

lemons and sugar.

Goods with many close substitutes tend to have:

More elastic goods.

When a tax is placed on the sellers of a product, buyers pay:

More, and sellers receive more than they did before the tax.

Assume the demand for cigarettes is relatively inelastic, and the supply of cigarettes is relatively elastic. When cigarettes are taxed, we would expect:

Most of the burden of the tax to fall on buyers of cigarettes, are required to pay the tax to the government.

Jamar used to work as an office manager, earning 40,000 per year. He gave up that job to start a life-coaching business. In calculating the economic profit of his life-coaching business, the $40,000 income that he gave up s counted as part of the life-coaching business's:

Opportunity Cost

Refer to table 13-4 Charles's math tutoring company experiences diminishing marginal productivity with the addition of the:

Third Worker

If the supply of a product increases, then we would expect equilibrium price:

To decrease and equilibrium quantity to increase.

In the former Soviet Union, produces were paid for meeting output targets, not for selling products. Under those circumstances, what were the economic incentives for producers:

To produce enough to meet the output target, without regard for quality or cost.

Which of the following is likely to have the most price elastic demand:

Tommy Hilfiger jeans.

Efficiency is attained when:

Total surplus is maximized.

Which is the most accurate statement about trade:

Trade can make every nation better off.

If the demand for a product increases, then we would expect equilibrium price:

and equilibrium quantity both to increase.

The fundamental reason that marginal cost eventually rises as output increases is because of:

diminishing marginal product.

The phrase "no such thing as a free lunch" means:

people must face tradeoffs

Refer to Fig 7-19 At the equilibrium price, total surplus is:

$250

Scenerio 13-6: Ziva is an organic lettuce farmer, but she also spends part of her day as professional organizing consultant. As a consultant, Ziva helps people organize their houses. Due to the popularity of her home-organization services, Farmer Ziva has more clients requesting her services than she has time ti help if she maintains her farming business. Farmer Ziva charges $25 an hour for her home-organization services. One spring day, Ziva spends 10 hours in her fields planting $130 worth of seeds on her farm. He expects that she seeds she planted will yield #$300 worth of lettuce:

$380

Table 13-4 Charle's Math Tutoring Number of Workers: Output-Students Tutored 0 0 1 20 2 45 3 60 4 70

25 Students

Suppose that a firm has only one variable input, labor, and firm output is zero when labor is zero. When the firm hires 6 workers it produces 90 units of output. Fixed cost of production are $6 and the variable cost per unit of labor is $10. The marginal product of the seventh unit of labor is 4. Given this information, what is the total cost of production when the firm hires 7 workers:

76 workers

Average total cost (ATC) is calculated as follows:

ATC=(total cost)/(quantity of output)

Refer to Fig 6-16 In this market, a minimum wage of $7.725 is:

Binding and creates unemployment.

The price elasticity of demand measures:

Buyers' responsiveness to a change in the price of a good.

Demand is elastic if the absolute value of the price elasticity of demand is

Greater than 1.

In general, elasticity is a measure of:

How much buyers and sellers respond to changes in market conditions.

Welfare economics is the study of:

How the allocation of resources affects economic well-being.

Refer to Fig 6-16 In this Market, a minimum wage of $2.75 is:

Non bidding and creates neither a labor shortage nor unemployment.

Variable cost divided by quantity produced is:

None of the above is correct Average total cost marginal cost profit

The law of supply states that, other things equal, an increase in:

Price causes quantity supplied to increase.

What is the most important factor that explains differences in living standards across countries:

Productivity

For a firm, the production function represents the relationship between:

Quantity of inputs and quantity of outputs.

A tax on a good:

Raises the price that buyers effectively pay and lowers the price that sellers effectively receive.

Table 13-7: The Flying Elvis Copter Rides Q: TC: FC: VC: MC: AFC: AVC: ATC: 0 $50 $50 $0 -- -- -- -- 1 $150 A B C D E F 2 G H I $120 J K L 3 M N O P Q $120 R

Refer to table 13-7: What is the value of A? What is the value of C? What is the value of G? What is the value of J? What is the value of Q? What is the value of R?

Explicit Costs:

Require an outlay of money by the firm.

For a good that is a luxury, demand

Tends to be elastic.

Harry's Hotdogs is a small street vendor business owned by Harry Huggins. Harry is trying to get a better understanding of his costs by categorizing them as fixed or variable. Which of the following costs are most likely to be considered fixed costs:

The cost of bookkeeping services.

Which of the following would shift the supply of Green Bay Packers football jerseys to the left:

The cost of the fabric used to make the jerseys increases.

A shortage exists in a market if:

The current price is below its equilibrium price.

A very hot summer in Atlanta will cause:

The demand for jackets to decrease

The term tax incidence refers to:

The distribution of the tax burden between buyers and sellers.

Which of these assumptions is often realistic for a firm in the short run:

The firm can vary the number of workers it employs but not the size of its factory.

Demand is said to be inelastic if:

The quantity demanded changes only slightly when the price of the good changes.

since the 1980's. Wal-Mart stores have appeared in almost every community in America. Wal-Mart buys its goods in large quantities and, therefore, at cheaper prices. Wal-Mart also locates its stores where land prices are low, usually outside of the community business district. Many customers shop at Wal-Mart because of low prices. Local retailers, like the neighborhood drug store, often go out of business because they lose customers. This story demonstrates that:

There are economies pf scale on retail sales.

Consider the market for oranges: 1.) Draw an initial supply and demand model 2.) Determine how the event effects the model and clearly show the effect on your graph. *An early freeze destroys much of the orange crop. b.) Researchrs discover and publish results that find that drinking a glass of orange juice everyday reduces your risk of heart disease by 60%. c.) There is a new technology that improves the speed at which oranges can be harvest, and the price of apple (a substitute) increase:

When the early freeze destroys the orange crop the supply curve moves to the left because there will be a decrease. When researchers find that drinking orange juice reduces the risk of heart disease the demand will go up causing the demand curve to move to the right. With the new technology that improves the rate at which oranges can be harvested the supply will move to the right because its an increase. As apples increase in price the demand for oranges will increase so the demand curve will shift to the right. (have 3 different graphs)

Suppose Larry, Moe, and Curly are bidding in an auction for a mint-condition video of Charlie Chaplin's first movie. Each has in mind a maximum amount that he will bid. This maximization is called:

Willingness to pay.

Marginal Cost is equal to average total cost when:

average total cost is at its minimum.

A leftward shift of a supply curve is called a(n):

decrease in supply.

Fixed costs can be defined as costs that:

do not change as production increases.

Refer to figure 13-7: Which of these figures represents the total cost curve for a typical firm: "S"

figure 2