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Figure 13-9: Which of the curves is most likely to characterize the short-run average total cost curve of the smallest factory?
Sally's cat causes Mike to sneeze. Sally values her cat's companionship at $300 per year. The cost to mike of tissues and his allergy medication is $350 per year. Based on the Coase theorem,
Mike should pay Sally $325 to give away her cat.
The old lyric "the best things in life are free"
refers to goods provided by nature or the government
Over the past 100 years, as the U.S. economy's income has grown,
both tax rates and tax revenues have increased
An example of an oppurtunity cost that is also an implicit cost is
the value of the business owner's time
For a firm in a perfectly competitive market, the price of the good is always
equal to marginal revenue
A lighthouse is typically considered to be a public good because
all passing ships are able to enjoy the benefits of the lighthouse without paying.
The marginal product of an input in the production process is the increase in
quantity of output obtained from an additional unit of that input
Four roomates share an off-campu house and equally share the cost of rent. Everyone says that she values a clean house, yet the house is usually dirty. To an economist, a clean house in this case represents
a common resource problem
Figure 10-1: This graph represents the tobacco industry. the industry creates
If the government were to impose a fine of $1,000 for each unit of air-pollution released by a steel mill, the policy would be considered
a corrective tax
at a price of $20, which statement is not correct
equilibrium price is equal to equilibrium quantity
the combination of president Obama's strategies and the federal reserves reaction tot he deep economic downturn int he US in 2008 and 2009
intended to reduce unemployment and may lead to excessive inflation over time
which of the following is an important cause of inflation in an economy
growth in the quantity of money in the economy
what is the opportunity cost to Batterland of increasing the production of pancakes from 150 to 300
which arrow represents the flow of good and services?
the flow from markets of goods and services to households, arrow B
assume that the UK and the USA each has 80 labor hours available. If each country divides its time equally between the production of coolers and radios, then total production is
60 coolers and 18 radios
marquis and serena would like to wear sweaters and eat tasty food. The gains from trade between them are most obvious in which of the following cases?
marquis's skills are such that he can produce only sweaters, and serena's skills are such that she can produce only tasty food
assume Andia and Zardia each has 360 min available. If each person divides his time equally between the production of wheat and beef, then total production is
21 bushels of wheat and 33 lbs of beef
which of the following combinations of wheat and beef could andia produce in one 8 hour day
9 bushels of wheat and 25 pounds of beef
which of the following combinations of wheat and beef could zardia not produce in one 10 hour day
25 bushels of wheat and 25 lbs of beef
uppose him and tom can both produce two goods: baseball bats and hockey sticks. Which of the following is not possible?
jim has a comparative advantage in the production of baseball bats and in the production of hockey sticks
when each person specializes in producing the good in which he or she has a comparative advantage, total production in the economy
trade can make everybody better off because it
allows people to specialize according to comparative advantage
for an economist, the idea of making assumptions is regarded generally as a
good idea, since doing so helps to simplify the compile world and make it easier to understand
a model that shows how dollars flow through markets among households and firms is called the
circular flow diagram
making rational decisions at the margin means that people
compare the marginal costs and marginal benefits of each decision
people are willing to pay more for a diamond than for a bottle of water because
the marginal benefit of an extra diamond far exceeds the marginal benefit of an extra bottle of water
for a competitive market
if a seller charges more than the going price, buyers will go elsewhere to make their purchases
when drawing a demand curve
price is measured along the vertical axis, and quantity demanded is measured along the horizontal axis
Table 4-1 if the market consists of Michelle and Laura only and the price falls by $1, the quantity demanded in the market increase by
the short run tradeoff between inflation and unemployment implies that, in the short run,
a decrease in the growth rate of the quantity of money will be accompanied by an increase in the unemployment rate
a minimum wage that is set below a market's equilibrium wage will result in an excess
none of the above is correct
Fig 6-4 which of the following statements is not correct
when the price is $6, there is a surplus of 8 units
when a country allows trade and becomes an importer of a good
the gains of the winners exceed the losses of the losers
if a country allows trade and for a certain good the domestic price without trade is lower than the world price
the country will be an exporter of the good
at present, the maximum legal price for a human kidney is $0. The price of $0 maximizes
neither consumer nor producer surplus
Table 7-1 if the price of the product is $15, then who would be willing to purchase the product?
Lori, Audrey and Zach
necessities such as food and clothing tend to have
low price elasticities of demand and low income elasticities of demand
when a country allows trade and becomes an exporter of a good, which of the following is not a consequence
the losses of domestic consumers of the good exceed the gains of domestic producers of the good
the decrease in total surplus that results from a market distortion, such as a tax, is called a
the invisible hand refers to
the marketplace guiding the self interests of market participants into promoting general economic well being
assume, for the US, that the domestic price of wheat without international trade is higher tan the world price of wheat. This suggests that, in the production of wheat,
other countries have a comparative advantage over the US and the US will import wheat
when a tax is placed on the sellers of a product, buyers pay
more and sellers receive less than they did before the tax
when a tax is imposed on a good for which the supply is relatively elastic and the demand is relatively inelastic
buyers of the good will bear most of the burden of the tax
a decrease in supply will cause the largest increase in price when
both supply and demand are inelastic
when a nation first begins to trade with other countries and the nation becomes an exporter of soybeans,
all of the above
the study of how the allocation of resources affects economic well being is called
which of the following is not a commonly advanced argument for trade restrictions
the efficiency argument
cross price elasticity of demand measures how
the quantity demanded of one good changes in response to a change in the price of another good
suppose raymond and victoria attend a charity benefit and participate in a silent auction. Each has in mind a maximum amount that he or she will bid for an oil painting by a locally famous artist. This maximum is called
willingness to pay
table 5-6 using the midpoint method, the income elasticity of demand for good Y is
-2.33 and good Y is an inferior good
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