Which of the following would not result from a price ceiling (below equilibrium price)?
Correct an increase in supply
At a price of $6 the quantity demanded of good X is 150 units and the quantity supplied of good X is
350 units. The equilibri
Refer to Exhibit 9-10. At the profit maximizing quantity, how much does this firm earn in profits.
Refer to Exhibit 9-7. The perfectly competitive, profit-maximizing firm will produce _ units of
output and charge a price of _.
Refer to Exhibit 8-12 above. The numbers that go in spaces A-D, respectively, are
Correct 12, 13, 14 and 12.
Refer to Exhibit 8-5. Constant returns to scale are present between
Correct points B and C.
Marginal cost is the change in
Correct a and
Chapter 6 &7
If the price of good X falls and the demand for good X is elastic, then it follows that the percentage
change in quantity demanded is _ the percentage change in price, and total revenue
Correct greater than; rises
When its price is $5.25,
It seems quite possible that cigarette companies concealed information about the effect of smoking
on health, causing cigarette prices to be _ and cigarette sales to be _ than would
have been the case under symmetric information.
The lower the elasticity of demand for a product,
Correct the lower the elasticity of demand for the labor that produces the product.
Refer to Exhibit 12-1. What goes in blank D?
Refer to Exhibit 13-10. If the firm in the exhibit
A means for deciding who gets what of available resources and goods
First come first serve
Government is the decider
Prices as a Rationing Device
A means for deciding who gets what of ava
The science of how individuals and societies deal with the fact that wants are greater than the
limited resources available to satisfy those wants.
1. The Need to Make Choices
2. The Need for a Rationing Device
Economists build theories to answer questions that do not have obvious answers.
Theory is an abstract representation of the real world designed with the intent to better understand
Cause -> Effect
Any place people come togethe
n Possibilities Frontier
Represents the possible combination of two goods that can be produced in a certain period of time
under the conditions of a given state of technology and fully employed resources.
Law of Increasing Opportunity Costs
As more of a
[Exhibit 1: Computing the Consumer Price Index]
CPI = (total dollar expenditure on market basket in current year/total dollar expenditure on market base in
base year) x 100
High inflation rate
High unemployment rate
High interest ra
Total Cost = Fixed Cost + Variable Cost
Average Total Cost = Average Fixed Cost + Average Variable Cost
Average Total Cost = Total Cost/Quantity or ATC = AFC + AVC
Average Fixed Cost = Fixed Cost/Quantity or AFC =
Chapter 3 Supply and Demand Theory Questions
1. The statement Demand refers to the willingness of buyers to purchase different
quantities of a good at different prices during a specific time period is wrong. What is
wrong with this statement is that Deman
1 out of 1 points
Which of the following statements is false?
To an economist, the resource capital consists of unproduced
goods that can be turned into produced goods.
To an economist, the resource land includes natur
Francisco Javier Vargas
Chapter 1 Questions
Economics 101 T,TH 9:30-10:45
January 27, 2015
1. Scarcity is the condition in which our wants are greater than the limited
resources available to satisfy those wants. Even though the United St
Law of Demand = P Qd ; P Qd
Quantity Demanded = the number of units of a good that individuals are willing and able to buy at a
Change in Quantity Demanded = movement from one point to another on the same demand curve caused
Demand & Supply Quiz
"As the price of apples goes up, the demand for apples goes down."
The author of this statement
implies that price and demand are unrelated.
uses the word "demand" when he should use the word
uses the word "dem
Final Take Home
51. When a perfectly competitive firm incurs losses, it follows that price is
a. necessarily below average total cost.
b. necessarily below average variable cost.
c. below marginal cost.
d. below marginal revenue.
52. Equilibrium price is
1. Which of the following might shift a nation's production possibilities curve inward?
A) improved technology.
B) devastation by war.
C) improved health care.
D) a business downturn in which unemployment temporarily rises.
2. Which of the followin
Professor P. Crane
September 2, 2015
Economists say that they "make decisions at the margin but what exacly
does this mean? Well basically making decisions at the margin are decisions in terms
of two other concepts, Mar