1. One advantage market economies have over other types of economies is that market economies
a. provide an equal distribution of goods and services to consumers.
b. establish government economic control.
Practice Test 13
Identify the letter of the choice that best completes the statement or answers the question.
1. According to the law of supply,
a. firms' production levels are not correlated with the price of a good.
The Costs of Production
ACCOUNTING PROFIT VS. ECONOMIC PROFIT
Total RevenueTotal Costs
Monetary costs a firm pays out and the revenue a firm receives
Total RevenueOpportunity Costs ( Implicit + Explicit)
The World Price and Comparative Advantage
o The world price of a good that prevails in world markets
o Domestic price without trade
If PD < PW
o Country has a comparative advantage in the good
o Under free trade,
Elasticity and Its Application
Measures the responsiveness of quantity demanded or quantity supplied to one of its
PRICE ELASTICITY OF DEMAND
Percentage Changes Formula
End ValueStart Value
ASSIGNMENT # 3
Microeconomics-ECON 1000.0LH Fall 2016
The Business School- Humber ITAL
Due Date: Nov. 23, 2016
Work is due in hard copy by November 23, 2016. You must complete this assignment in groups
Supply: Peak Oil, Natural Gas and Coal?
-With the oil price shocks of 1973- 1974, market observers began to warn about
the decrease in oil resources.
-President Jimmy Carter warned World consumption of oil is going up. If it were
possible to keep it risin
What are marketable permits? Suppose there are two firms in an area, each emitting tons of
sulfur. The government decides on a target level of 200 tons of sulfur, and gives each firm a
permit to emit 100 tons of sulfur. Suppose Firm A is very e
Controls on Prices
Price controls are governmental restrictions on the prices that can be charged for goods and
services in a market. The intent behind implementing such controls can stem from the desire to
maintain affordability of goods, to
By: Brooke Heitshu,
Julia Farrero &
Question: Write a paragraph that evaluates the accuracy of the statement:
Profits serve no useful purpose and cont
Microeconomics 1000; Fall 2015, Humber College
Professor: Adela Nistor
Test 1 (30%)
All questions are 1 point unless otherwise stated.
Answer all the questions for a total of 50 Points.
Bonus question: 1
Multiple choice 35 questions
The Market Forces of Supply and Demand
MARKETS AND COMPETITION
- Is a group of buyers and sellers of a particular product
- Is one with many buyers and sellers, each has a negligible effect on price.
Supply, Demand, and Government Policies
GOVERNMENT POLICIES THAT ALTER PRIVATE MARKET OUTCOMES
- Price ceiling A legal maximum on the price of a good or service (rent control)
- Price floor A legal minimum on the price of a good or
Practice Test 1
1.Tammie makes $150 a day as a bank clerk. She takes off two days of work without pay to fly to
another city to attend the concert of her favourite music group. The cost of transportation for
the trip is $250. The cost of the concert
INTERDEPENDENCE AND THE
GAINS FROM TRADE
1. Trade makes everyone better off because it allows people to specialize in those activities in which
they have a comparative advantage.
2. The principle of comparative advantage applies to countries as well as
ELASTICITY AND ITS
The Elasticity of Demand
Definition of elasticity: a measure of the responsiveness of quantity demanded
or quantity supplied to one of its determinants.
The Price Elasticity of Demand and Its Determinants
The Determinants of Trade
Example used throughout the chapter: the market for steel in a country called Isoland.
The Equilibrium Without Trade
If there is no trade, the domestic price in the textile market wi
THE COSTS OF PRODUCTION
1. The goal of firms is to maximize profit, which equals total revenue minus total cost.
2. When analyzing a firms behavior, it is important to include all the opportunity costs of production.
Some of the opportunity costs, such
FIRMS IN COMPETITIVE
What Is a Competitive Market?
The Meaning of Competition
Definition of competitive market: a market with many buyers and sellers
trading identical products so that each buyer and seller is a price taker.
A competitive firm is a price taker; a monopoly firm is a price maker.
Why Monopolies Arise
Definition of monopoly: a firm that is the sole seller of a product without close
The fundamental cause of monopoly is barr
Ch. 4 & 7
16 March, 2016
*Show calculation steps clearly. Round the values to 2 decimal places only*
Q1 Assume that you are a Canadian business owner. You may face any of the following business
Interdependence and Gains from Trade
- The ability of an individual to be more efficient than another individual or group.
- The ability of an individual to carry out an activity more efficiently than ano
Consumers, Producers, and the Efficiency of markets.
WILLINGNESS TO PAY
A buyers willingness to pay for a good is the maximum amount that buyer will pay for
- Is the amount a buyer is willing to pay minus the amount