Statistics for Business Whitten Spring 2008 Exam 1 Thursday, Feb. 28 100 points EXAM INSTRUCTIONS 1. Bubble Sheet: (a) Write and bubble your Name (last name, first name) (b) Write and bubble your 8-digit Student ID Number (Begin in the leftmost box.)
Ten Things to Know from Chapter 15:
1. What is an externality? Why does the presence of externalities cause marginal private cost
and marginal social cost to differ?
a. Externality: a cost of benefit resulting from some activity
Ten Things to Know from Chapter 14:
1. What are the main characteristics of a monopolistically competitive industry?
a. A large number of firms
b. No barriers to entry
c. Product differentiation
d. Easy entry and exit
2. What is
Nine Things to Know from Chapter 8:
1. What are fixed costs? What is average fixed cost? How do they
vary in response to changes in the level of output? Understand Figure
a. Fixed Cost: any cost that does not depend on the fi
Ten Things to Know From Chapter 13:
1. What is meant by market power? What does the elasticity of demand for a good have to do with
the potential for a firm to exercise market power over its sales?
a. Market Power: an imperfectly
Ten Things to Know from Chapter 6:
1. What are the main characteristics of a perfectly competitive industry?
a. An industry structure in which there are many firms, each small relative to the
industry and producing virtually ident
Nine Things to Know from Chapter 7:
1. When a firm sells its output in a perfectly competitive market, what
does the demand curve for its output look like? Why does it look like
this? Understand Figure 7.2
a. It is horizontal perfe
Ten Things to Know from Chapter 1:
1. What is economics?
a. The study of how individuals and societies choose to use the scarce resources
that nature and previous generations have provided. The key word in this
definition is choos
Chapter 3 B
Ten More Things to Know from Chapter 3:
1. What is a supply schedule? What is a supply curve? How do Table 3.3 and
Figure 3.6 work?
a. Supply schedule: a table showing how much of a product firms will sell
at different prices
Ten Things to Know from Chapter 5:
1. What is an elasticity? How does it measure the responsiveness of one
variable to another?
a. Elasticity: a general concept used to quantify the response in
one variable when another variable c
Eight Things to Know from Chapter 4:
1. What two roles does the market system play in dealing with the
problems of scarcity? How do these roles differ?
a. Price Rationing and Allocation of Resources
i. Price rationing determines a
Ten Things to Know from Chapter 2:
1. What is scarcity? Why is economics important in a world of scarcity?
a. Scarcity: limited resources
i. Human wants are unlimited, but resources are not
b. Scarcity forces individuals to choose
Nine Things to Know from Chapter 3:
1. What role do firms and households play in the economy? In what markets do they
interact? What do households provide to firms? What do firms provide to
a. Firms: the primary produc