1. Circular Flow Model.
To explain the scientific aspects of
To explain the economic model of
circular flow ;
To illustrate the circular flow model
To explain economic concepts of
markets, flows and assumpt
The number of players would decrease. The marginal cost to hire another player would increase.
Subsequently, the wages would greatly increase. This increase in marginal cost contributes to an increase
in average cost. The MRP decreases as well
2.05 Shifts in Supply and Demand
1. Normally, whenever a new video game console comes out, there is a shortage all over the
United States. Graphically illustrate and fully explain where the shortage comes from, how the
various roles of prices can come tog
3.02 GRAPHING COST
Production is maximized when there are about 4 workers. This is the point of inflection between the marginal product
curve and the average product curve. After 4 workers, the marginal curve drops
4.02 Marginal Productivity
1. How many workers should the grove owner hire? Why?
To maximize profit, the grove owner should hire workers until the last worker hired
creates marginal cost input less than marginal revenue product. At workers, the marginal
1. Q: Two competing retail firms, Red Shop and Blue Mart, are studying potential locations for new
stores in the suburbs of a major city. Each firm must choose between a location north of the city
and a location south of the city. The payof
1.05 Economic Reasoning
1. Explain how marginal costs, direct costs and opportunity costs are different. Use an example
from your personal life to illustrate each concept.
A marginal cost is an extra cost. A direct cost is an obvious, out-of-pocket cost.
Microeconomics: 1.01 Graphing Basics
2. Is the relationship between the price of starfish and the quantity demanded inverse or direct?
The relationship between the price of starfish and quantity demanded is inverse
because as the quantity increase
1.06 Absolute/Comparative Advantages
1. Assume that at maximum production levels, Japan can produce either 100 CDs or 50 DVDs. The
U.S. can produce either 90 CDs or 30 DVDs.
a. Draw the PPF curves for each of these countries producing these two products.
3.10 Monopolistic Competition
Jack and Diane own Enviromax, a monopolistically competitive firm that recycles paper
products. Their demand, marginal revenue, and cost curves are shown in the diagram
1. If Enviromax wants to maximize profit, wha
REVIEW QUESTIONS FOR FINAL EXAM
1. In Keynesian theory, at the price-output combination that defines macro equilibrium:
A) The economy may or may not be at full employment.
B) The aggregate demand curve intersects the aggregate supply curve.
1. For each of the following, describe the opportunity cost when you decide to do each activity.
a. Go to the beach or study for an exam
If I choose to study for an exam, the opportunity cost is going to the beach and having
b. Get a job after high s
There is a growing need for businesses to go green in more comprehensive ways. Many
businesses have made changes like recycling paper and toner cartridges, cutting back on air
conditioning, heating, and lighting, and creating car and van pools for employe
HW#3 CH. 7-9
Questions #3 pg. 147 Problems #6 pg. 148 Questions #3 pg. 168 and Questions #3 pg. 188
3. Which of the following goods are usually intermediate goods and which are usually final
goods: running shoes, cotton fibers, wat
Chapters 4-6 Question: #6 pg. 90; Question #4 pg. 113; and Questions #3 & 5 pg. 127-128.
6. How would the following changes in price affect total revenue? That is, would total revenue
increase, decrease, or remain unchanged?
HW #1: Chapters 1-3: Questions: #3 pg. 44; Questions: #3 & #11 Pg. 66
Appendix Questions: #3 pg. 73
3. Because a market depends on people working for their own self-interest. If what you gain by