Econ final

Refer to Figure 22.3 for a perfectly competitive firm. This firm should shut down at any price below?

$10

Walmart, the largest employer in the United States, employs less than what % of the workforce?

1 percent

Total current budget deficit? Is it sustainable?

1.1 trillion No

The current percentage of U.S. national debt to GDP is:

103%

Assume the marginal tax rate is 15 percent for the first $30,000 of income, 20 percent for income between $30,000 and $70,000, and 25 percent for any income over $70,000. If Emily has taxable income equal to $80,000 for the year, what is her tax bill?

12,000 in taxes

By 2015 in the United States there will be ____ workers for every retired person.

2.7

Accounting costs and economic costs differ because?

A monopoly occurs when Economic costs include the opportunity costs of all resources used, while accounting costs include actual dollar outlays.

Accounting costs and economic costs differ because

Accounting costs refer to the explicit dollar Economic costs, in contrast, refer to the value of all costs, both explicit and implicit.

Government intervention to alter market structure or prevent abuse of market power is the basic purpose of

Antitrust government

Provide an example of a private good?

Cars

What do we call it when the size of a factory (and all its associated inputs) doubles and, as a result, output more than doubles,

Economies of scale must exist

Firms in Colorado dump waste into the Colorado River and as a result, people in California and Mexico cannot use the water. What type of market failure is most likely involved?

Externalities

Provide an example of a public good?

Flood control

In the long run, what happens to fixed costs?

In the long run, all costs are variable.

Because a union is a form of monopoly, list 3 negative impacts of Unions

Less is produced at a higher cost, Increased job security decreases customer service, Individuals give up their personal negotiating rights

What is the second-largest federal income transfer program?

Medicare

The correct ranking of degree of market power (from highest to lowest) is?

Monopoly, oligopoly, monopolistic competition, perfect competition

According to the classical view, if consumer demand slowed down what would happen to prices and wages?

Prices would decrease and the economy would return to its long-term growth trend

A natural monopoly has an incentive to pad its cost of production under which type of regulation?

Profit regulation

Name 2 forms of government intervention designed to correct market failures? .

Public housing & Food stamps

What is the most common fixed cost?

Rent

The marginal physical product of labor in Figure 21.1 is negative for the

Sixth worker.

What is the largest federal income transfer program?

Social Security

Why do individuals own small businesses?

The basic incentive for producing goods and services is the expectation of profit.

What is likely to occur if a monopoly suddenly loses its ability to deny potential competitors entry into the market?

The market price of the product will fall

An industry's market structure refers to

The number and size of the firms in the industry.

At 4 units of output in Table 21.4, total fixed costs are

The total fixed cost is $16

Perfect competition is a situation in which

There are many firms and no buyer or seller has market power

A monopoly occurs when

There is only one producer of a good or service

If the demand for alarm clocks decreases, the effect on the alarm clock job market will be to

demand for the final product decreases, the demand for labor will decrease

In the short run, when a firm produces zero output, total cost equals

total costs are equal to fixed costs

A patent gives a firm the exclusive right to produce a product for limited or unlimited period?

20 years

Today the federal government collects how much in Taxes each year?

3 trillion

What % of public employees are in Unions?

36 percent

Price discrimination is best defined as

The selling of an identical good at different prices to different consumers by a single seller.

The term market mechanism refers to

The use of market prices and sales to signal desired output

The existence of income transfer programs tends to cause the labor supply to _________ and the economies production possibilities to _____________________.

Transfer payments may induce people to supply less labor at any market wage rate. If this happens, the supply of labor shifts to the left and the economy's production possibilities shrink

The use of government taxes and spending to alter economic outcomes is known as

fiscal policy

Typical goals of a labor union in the United States include

higher wages, better working conditions

Nearly half of the federal government's tax revenues come from

income taxes

Unlike the classical economists, Keynes asserted that the government should do what in a recession?

increase spending

Between 1950 and 2010, most of the growth in federal expenditures was a result of increases in

increased income transfers

The free-rider problem is

individual to reap direct benefits from someone else's purchase of a public good without paying for the good.

Social Security redistributes payroll taxes from today's workers to today's retirees—in essence, an _________________________ transfer.

inter generational transfer

____________ is the price paid for the use of money.

interest

Uncontrollable government spending includes

interest on debt

What are the 4 factors of production?

land, labor, capital, and entrepreneurship

The opportunity cost of working is giving up what?

leisure time

When management shuts down a plant and does not allow workers to perform their jobs, there is a?

lockout

Currency held by the public plus balances in transactions accounts is called?

m1

The study of aggregate economic activity for the economy as a whole is?

macro economics

Provide an example of In-Kind Benefits provided by the Federal Government.

medicare

The use of money and credit controls to change the macroeconomy is

monetary policy

Means-tested income transfer programs are referred to as

must fall below a certain established guideline for poverty in order to qualify

Which market structure is characterized by a few interdependent firms?

oligopoly

The most desired goods and services that are given up in order to get more of another good are the

opportunity cost

Total Federal Debt is ______________________________

over 16 trillion

Examples of barriers to entry include (name 2)

patents/ government regulation.

If the percentage of income paid in taxes increases as income rises, then the tax system is

progressive income tax

Cities and other local governments receive most of their tax revenues from

property/sales taxes

Output regulation is likely to result in?

quality deterioration

An In the News article titled "Perpetuating Poverty: Lotteries Prey on the Poor" reports that poor people spend a larger percentage of their income on government-promoted gambling than do rich people. On the basis of this information, we can conclude that lotteries function as

regressive tax

The period in which at least one input is fixed in quantity is the

short run

Based on the classical view what should the government do in a recession, spend more or Less?

spend less

The refusal to work by unionized labor is an example of a?

strike

In general, lower marginal tax rates provide incentives to

stronger incentive to produce

The principal mechanism for redistributing incomes is

tax-and-transfer system

A major drawback of providing subsidies to private companies that are natural monopolies is that?

taxpayers often complain about the cost

The term market power refers to

the ability to alter the market price of a good or service

Profit is

the difference between total revenue and total cost

In Figure 30.2, a minimum wage of $20 will result in unemployment of how many workers?

unemployment equal to 32 workers (192 - 160)

According to classical theory wages and prices will adjust to result in what level of Unemployment?

zero unemployment

Greater labor productivity means

each worker can add more to the total output than before

If wages and prices are flexible, then a recession is best eliminated when prices

fall

Which of the following is true about the equilibrium market wage?

At equilibrium, quantity supplied and quantity demanded are equal; therefore there is no surplus of labor and no unemployment.

A barrier to entry is

Barriers to entry are obstacles, such as patents, that make it difficult or impossible for would-be producers to enter a particular market20 years

Name a characteristic of a perfectly competitive market?

Zero economic profit in the long run

A monopoly occurs when

a firm that produces the entire market supply of a particular good or service

What is a merit good?

a good or service that society deems everyone is entitled to some minimal quantity of, such as food.

As an individual earns additional income, the marginal utility of income tends to

diminish

According to Keynes, the level of economic activity is predominantly determined by the level of

aggregate demand

Dynamic pricing allows a seller to

allows the firm to increase the price when demand is rising and lower the price when demand is falling

How high was unemployment during the Great Depression?

around 24%

Alternating periods of economic growth and contraction in real GDP define?

business cycle

Marginal cost

change in total cost from producing one additional unit of output.

Externalities

costs or benefits of a market activity borne by a third party

A decrease in private sector borrowing and spending caused by increased government borrowing is

crowding out

Students who major in computer science are paid a lot more when they graduate than those who major in philosophy because?

demand for labor

Workers who demand a wage that is higher than the equilibrium wage

difficulty finding a job