1. Problems with team production
Suppose you hired Kevin, a real-estate agent, to help sell your house at the best possible price. As compensation, Kevin will receive 3% of the selling
price. Suppose Kevin can sell the house in a few days by putting it on
1. Calmlat'l rig the price elasticityI of supplyI
Shen is a retired teacher who lives in Philadelphia and teachm tennis Iasons for extra cmh. At a wage of$40 per hourII he is willing to teach 2 hours
per week. At $512) per hourI he is willing to teach 5 h
6. Using the income elasticity of demand to characterize goods
Data collected from the economy of Pokerville reveals that a 19% increase in income leads to the following changes:
I A 12% decrease in the quantity of clubs demanded
- A 15% increase in the
5. Various measures of cost
Douglas Fur is a small manufacturer of fake-fur boots in Denver. The following table shows the company's total cost of production at various
ll in Hie remaining cells of Hie table,
Quantity Total Cost Mar
1. Characteristics of pricetaker markets
Firms in the market will be price-takers when the following conditions are met:
1. All firms in the market produce an identical product.
2. A large number of firms (buyers and sellers) exist in the market, so that
pricetang rms must accept the given market price.)
PRICE [Dalars per large bout]
0 1 2 3 4 5 6 ? 3
QUANTITY [Thousands of large boxes
Open Explanatiun V
In I'J'Te fella wing tab
3. Individual and market demand
Suppose that Lorenzo and Neha are the only consumers of pina slices in a particular market. The following table shows their annual demand
Price Lorenzo's Quantity Demanded Neha's Quantity Demanded
3. Definition of economic costs
Sam lives in San Diego and runs a business that sells boats. In an average year, he receives $93,000 from selling boats. Of this sales revenue, he
must pay the manufacturer a wholesale cost of $430,000; he also pays wages a
5. Elasticity and total revenue
The following graph shows the demand curve for trekking poles. Points L, M, N, and 0 mark price ranges over which you will be asked to calculate
the price elasticity of demand for this good.
Use the purpie rectangie iabel'e
6. Costcurve shifters
The following graph shows the average total cost (PIC) curve, average variable cost (AVE) curve. and average xed cost (AFC) curve for Kvokn's
Fina Parlor when Kyoko pavs her workers a wage of $15 per hour.
II. The relationship between marginal and average costs
Consider the following scenario to understand the relationship between marginal and average values. Suppose Clancy is a professional basketball
player, and his game log for free throws can be summari
2. rm structure
which type of business aooounts for Hie majority of sal. revenue in Hie United States?
J . Corpolation
Busins structur. where the ownership and management are separateI as with oorporationsI are likeiy subj
4. Profit maximization in the costcurve diagram
Suppose that the market for polo shirts is a competitive market. The following graph shows the daily cost curves of a firm operating in this market.
Hint: After placing the rectangle on the graph, you can cl
5. Short-run and long-run effects of a shift in demand
Suppose that the chicken industry is in long-run equilibrium at a price of $5 per pound of chicken and a quantity of 150 million pounds per year.
Suppose the Surgeon General issues a report saying tha
4. Calculating the price elasticity of demand: Astep-bv-step guide
Suppose that during the past year, the price of a laptop computer rose from $2,100 to $2,550. During the same time period, consumer sales
decreased from 4?0,000 to 353,000 laptops.
3". Sunk costs and decision making
Clancy has plans to go to a play and already has a $50 nonrefundable, nonemchangeable, and nontransferable ticket. Now Eileen, whom Clancy has
wanted to date for a long time, asks him to a concert. Clancy would prefer to
3. Profit maximization using total cost and total revenue curves
Suppose Rajiv runs a small business that manufactures frying pans. Assume that the market for frying pans is a price-taker market, and the market
price is $10 per frying pan.
The following g
1. Fundamentals of consumer choice
Kyoko spends a significant amount of time researching resorts for a long overdue vacation, paying
special attention to resorts' chefs and food options. Which of the following best explains Kyoko's
behavior from an econom
Accounting Profits vs.
The key to calculating "Economic Profit" is getting to a total cost number
that includes both explicit and implicit costs. Like we discussed in the last
"Course Document", explicit costs can more easily be audited b
Fixed Costs vs. Variable
Costs (in the Short Run)
As you read Chapter 21 and these "Course Documents" about it, I'm hoping
that you're beginning to realize that categorizing costs is not necessarily a
simple task for business managers. In the long run all
Explicit (Monetary) vs.
Implicit (Opportunity) Costs
This course document again emphasizes the difference between studying
economics and studying accounting. In accounting classes emphasis is
typically on the tracking of costs that are explicit, meaning t
Name: ID: A
Econ 202: Quiz 1
Identify the choice that best completes the statement or answers the question.
1. When economists say a good is scarce, they mean
a. there are only a limited number of consumers who would be interested in purch
A decline is a fall or descent and, in the product life cycle, the decline
stage represents similar behavior for products. The decline stage in the
product life cycle is when a product dissolves as a result of decreased or