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Econ 202 Final Exam John Church
Terms in this set (80)
1. A double coincidence of wants means...
Both parties desire the good that the other has, making exchanges possible
2. Given the current resources, one would need even more hours in each day in order to attain
D. points outside the PPF
3. An increase in the labor force would be reflected in society's PPF by...
Outward shift on PPF
4. If Lola can produce more output from a set amount of resources than Kevin, ___ has an ____ advantage
5. Imperfect markets...
A market where either the buyer or seller can influence market price
6. When the price for computers is expected to fall in the future what happens?
current demand will decrease
7. A subsidy...
Gov. payment to domestic producers helps the producers, compete against low-cost foreign imports, gain export markets
8. In the figure, consumer surplus...
B. upper part of supply demand triangle
9. In the figure, producer surplus...
C. lower part
10. The area under the demand graph/above market price
11. If a store sells a good at market price,even gov. Authorities set main price, the store is selling the good
A black market for a higher price market
12. A binding price ceiling will have which of the following consequences
Quantity demanded will always exceed quantity supplied
13. Setting a price ceiling below the equilibrium can result in
Price ceilings set below equilibrium price causes a shortage of goods
14. Price gouging laws will usually result in _____ the product in the distressed market
More demand than supply of
15. Apartment rent control in NYC is an example of
Binding price ceiling
16. An economic advisory committee is split on a decision on how to react to an export ban by Mexico of avocados. Isaac wants a price ceiling on avocados to ensure an adequate demand: Flora wants to put a price floor on avocados to ensure adequate supply: April claims on nothing is the best response. Who understands economics the best?
17. Who benefits from a price floor?
18. A positive externality exists whenever?
Production of a good creates external benefits
19. What does it mean for a good to be excludable?
Private good: it is possible to prevent consumers who have not paid for it from having access to it
20. A pizza can be divided between 2+ people. Why is it a rival good?
Any slice of pizza consumed by one person cannot be consumed by another
21. Which of the following is the best example of a common-resource good?
fish in the lake
22. Which of the following is true about explicit costs?
Explicit costs are tangible, out of pocket expenses
23. 3 primary inputs
Land, labor, capital
24. When profits are maximized, profits are equal to
25. As production increases, price consumers pay
26. Price discrimination exists when a firm is able to sell same good to:
27. What's the primary benefit of price discrimination?
Charging multiple prices generates more profit for firms/matches more buyers and sellers in the market place.
28. Common feature among perfect competition/price discrimination is the elimination of
29. From initial examination, price discrimination may not seem like a social good because _____ is transferred from consumers to producers, overall benefit for society____
30. If monopolistic competition firms are incurring losses existing firms would
See increase in demand in the long run, they're able to stay in the market
leave the industry until the remaining firms are earning a normal profit
31. Monopolistically competitive firms that are earning zero economic profits would
Leave the market. There will be barriers to entry for competition
32. Unique feature of monopolistic competition
Their products have no close substitutes/differentiated products
33. Economists measure oligopoly power present in an industry by using
34. In the US, ___ laws prohibit collusion between rivals
35. Equilibrium in a game in which players pursue their own self interest is called
Non cooperative equilibrium
38. When a price changes, there are two effects
real income and substitution
39. Diamond-water paradox
Unfair bc: the amount of marginal utility a person receives from a small quantity of something rare with the marginal utility received from consuming a small amount of additional water after already consuming a large amount
40. 2 Exceptions to convex indifference curves?
are perfect substitutes (linear indifference curves) and perfect complements (L-shaped indifference curves).
41. When comparing two goods for purchase, it is useful to acknowledge the marginal utility and the dollar price. The optimized choosing the good with
Highest marginal utility per dollar and lowest price
42. _____ exists when a consumer completely indifference between two goods
44. The argument that calls for the trade protection of only newly developing is known as
45. The presence of scarcity means that no choices come without
46. Mikhails opportunity cost of a sculpture
½ per painting
47. Leslie/Hussein _____ salad per ____steak
2.5 salads per one steak
48. When an economy shifts away from production of consumer goods and towards production of capital goods
NOT Higher standard of living
49. If the price of a good increases, holding all else constant
substitutes will increase
50. GRAPH Which of the following scenarios would explain the change in equilibrium shown in the accompanying figure?
a decrease in the number of buyers in a market
NOT increase in expected future price
51. Which would change in the coffee market would shift the supply curve to the right?
The wage for employees in the coffee business decreases.
52. Zumba classes sell 20 participant sports at the price of a $4.50 each. When the instructor raised the prices to $5.50, 10 people attended the class. From the midpoint method, the price elasticity of demand for Zumba is
53. In typical demand curve elastic = _____ inelastic = _______
54. Noelle received a promotion, her income rose by 50% income elasticity of demand, steak is a ____
55. A vertical supply curve can be described as
perfectly price inelastic
56. When a tax is imposed on a good, what tends to happen to consumer prices and producer prices
consumer prices increase and producer prices decrease
57.Victor is senator from Kansas who wants to help farmers. He has worked to encourage the passage of a law that would impose a binding price floor on wheat. What would he expect his critics to say?
Binding price floor will cause a surplus of wheat that farmers will be unable to sell
58. 535,000 - 165,000
60. A firm's short run cost curve shows us
lowest cost of output
61. Annabelle's ice shop and economies of scale
her long-run average cost of selling each Italian ice decreases
62. (Graph LRATC1) A firm expands its scale of production and finds that its long-run average total cost curve looks like LRATC1: It might look this way because the firm is :
Is able to negotiate lower prices with its suppliers
63. In its simplest form, long run market supply curve is a
Horizontal line at minimum average total cost (ATC)
64. "Where you live/who you are"
Loss of consumer surplus
65. When teams are able to change ticket price minute to minute based on demand
Transfer surplus from consumers to producers
66. Study of price discrimination is both interesting and complex
The power the firm and its rivals, single price can be set above the marginal cost in order to exploit the market
67. In the long run, monopolistic competition
the price will equal ATC
no economic profit or losses
68. In a monopolistically competitive industry, price is
above marginal cost since each firm is a price setter
each firm is making zero profit
NOT contingent and mutually independent
69. Entry by firms in the long run means...
Experienced in a market where there is many buyer/sellers and each having slight market power
is greater than ATC
70. 4 firm concentration ratio in this industry is...%?
71. The _____ act was the first antitrust bill in response to increase in concentration ratios
74. Jorge pay theory
efficiency wage utility
75. When given the marginal utility of the first five unity
Add marginal utility to total utility
NOT difference between 1st/fifth
77. Slope of indifferent for perfect substitutes
NOT C, either positive or 0
78. An economy that doesn't trade with the rest of the world
79. When price increases 30% and the quantity demanded drops by 30 percent, the price elasticity of demand
80. After 79 elastic
43. For country A, an export is a good produced in
country A and bought in country B
59. The production function of automobiles includes
a factory, an assembly line, workers, and robots
72. If the price increases from $10 to $20 per bag, what happens to the labor demand curve
37. higher prices-
something to do with buying less of it
73. kaitlin has recently beed trained as a highly specialized medical physician. there is only one hospital that needs her services. kaitlin can expect her wages to be ____ compared to what her wages would be in a situation pf perfect competition
no answer yet
76. which of the following statement is true?
no answer yet
36. Rachelle graduated from a university with a degree in chemical engineering. During her years of employment, she became proficient in a pa39. The diamond-water paradox unfairly compares particular type of process automation software. In addition, she spent countless hours outside of work amassing training certifications that augmented her work experience. Her collection of education, skills, and experience is defined as her
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