which of the following "things" are scarce
a. black footed ferrets
b. paper clips
c. chili dogs
d. economists
e. all of the above
e
the nominal rate is 7% per year. if, at the same time, the inflation rate is 3% per year than the real rate of interest is....
4% per year
the amount of a given input purchased by a firm depends of the...
a. price of the finished good
b. prices of all other related inputs
c. price of the input
d. state of technology
e. all of the above
e
the legislative act that established the Land Grant University system was...
the morrill act
superstorm sandy" disrupted transportation networks, interrupted utility service, and caused major damage to housing and business on the Atlantic cost this call. in economic terms, this storm represents a ____________
supply shock
the supply elasticity for agricultural products has been estimated at +0.1. this indicates that:
a. a 1% rise in prices of agricultural goods will lead to a 10% decrease in quantity supplied
b. a 1% rise in prices of agricultural goods will lead to a 10%
c
in benefit-cost analysis or net present value analysis, a lower interest or discount rate will....
a. result in future costs and benefits playing a smaller role in projected decisions
b. result in future costs and benefits playing a larger role in project
b
which of the following is an example of an externality
a. acidic smoke which produces acid rain
b. heat from a factory that makes the neighboring tomato patches more productive
c. carbon dioxide emissions from energy generation that adds to the worldwide
d
the condition for a profit maximizing for firms in ALL types of industry is __________
MR = MC
i pay an annual membership fee to National Public Radio. my neighbor, who does not contribute, is a devout listener who enjoys shows like prairie home companion and all things considered. in economic terms he is a ______________
free rider
the best 'bundle' of goods combinations for an economy to produce on its production possibilities curve is...
a. the bundle on the vertical axis
b. the bundle on the horizontal axis
c. the bundle in the middle of the production possibilities curve
d. some
d
a firm's profit equals ______
TR-TC
if the optimal size of efficient production for a firm is large relative to the total demand in an industry, we would expect to see an _______________
oligopoly or monopoly
ms. smith's cousin, Rambo Smith, is coming to visit. he could take the bus for a seven hour ride, which would cost him $50, or he could book a flight with an airline for $300, which would take a total of two hours of his time. he should fly (opposed to ta
a
what are the 3 major components which make up the interest rate
#NAME?
___________________ is the study of how societies use scare resources to produce valuable commodities and distribute them among different people
economics
if the nominal rate o interest is 5% and the inflation rate is 5%, what is the real rate of interest
0
the practice of cutting prices in order to drive competitors from an industry is called _________________
predatory pricing
the current worth of future income after it is discounted back to the present is the ____________________ of that income
present value
a sustained rate of increase in the general price level is defined as ________________
inflation
when the buyer of a good or service wants the service not for itself, but because it will create something which can be sold, the demand for this good or service is called a _________________ demand
derived
the two distinguishing characteristics of a public good are that it is _________________ and _________________
nonexclusive and nonrival
the law of diminishing marginal utility says that eventually marginal utility ______________ as more of a good is consumed
decreases
name one major piece of antitrust legislation
sherman anti-trust act
the "price" of (borrowing) money is also known as
interest
the value of the "next best" alternative sacrificed in order to consume something is its ________________________
opportunity cost
the study of the individual units--firms, individuals, ect-- that comprise the economy is called _________________________
microeconomics
if a firm triples all of its inputs and output more than triples, the firm is said to be experiencing ______________________
economies of scale
if you had to use one word to describe the fundamental problem which economics addresses, what would it be?
scarcity
________________ statements are based on people's value judgements and cannot be proven true or false
normative
what are the three basic questions that any economic system must ask?
what is being made
how is it being made
for whom is it being made
name 2 factors which could shift a country's production possibilities frontier in or out
available resources and technology
what are 2 conditions necessary for a market to exist?
gains to be made and property rights
an economy in which both public and private sectors play important roles is generally known as a ______________ economy
mixed
if a nation can produce manufactured goods and agricultural products more efficiently than another nation, and produces agricultural products more efficiently than manufactured goods, then that country is said to have a _______________________ in the prod
comparative advantage
one reason quantity demanded of a good tends to rise as its price falls is that:
a. the decrease in price shifts the supply curve downward
b. people feel a bit richer and increase their use of a good
c. demand has to rise to restore equilibrium after a pr
b
the income elasticity of demand for salami in Bulgaria is +0.545. this indicates that salami is a ________________ good (in Bulgaria)
normal or necessity
a good is a necessity if
its income elasticity is between 0 and 1
if the quantity purchased of a good decreases as the result of a price increase of another good, we say that these two goods are ____________________
compliments
the physical transformation process which describes the input-output relationship between resources (inputs) and their final product is called the ____________________
production function
the law of _________________________ says that an increase in the amount of any one input, holding the amounts of all other inputs constant, ultimately leads to lower marginal returns to the expanding input
diminishing marginal return
oligopoly means
a. one seller
b. two sellers
c. a few sellers
d. a regulated utility
c
monopolistic competition is characterized by...
a. many buyers and sellers
b. easy entry and exit
c. long term economic profit equal to zero
d. all of the above
d
in an oligopoly
a. price decreases by one firm tend to be matched by other firms
b. price decreases by one firm are usually not followed by other firms
c. price increases by one firm are likely to be matched by other firms
d. the pricing behavior of one f
a
a firm in an industry which is NOT perfectly competitive faces a demand curve which is ___________
sloping down
obstacles that limit the freedom of potential rivals to enter and industry are called _________________
barriers to entry
a firm will ALWAYS maximize profits at the level of output where _____________________
MR=MC
in a monopolistically competitive market at long run equilibrium, marginal revenue = _______________ and price= _____________
marginal cost and ATC
the short run is
a. less than one year
b. when a firm is unable to change some of its inputs
c. when a firm is unable to change output
d. when a firm is unable to change its price
b
the largest possible loss a profit maximizing firm in a purely competitive market experiences in the long run is
a. 0
b. equal to the firm's fixed cost
c. equal to the firm's variable cost
d. cannot be determined without knowing the price at which the pro
a
if MR=MC=$25 (and the firm does not shut down), the price a monopoly charges is...
a. less than $25
b. is $25
c. more than $25
d. cannot be determined with the available information
c
the zero economic profit point for a perfectly competitive firm occurs where the price equals the minimum point of the...
a. AVC curve
b. ATC curve
c. MC curve
d. AFC curv
b
if MPP is above APP then
a. APP is increasing
b. APP is decreasing
c. the producer must be in stage II of production
d. costs have been minimized
a
if a firm's demand curve is horizontal, then the firm's marginal revenue is...
a. less than the price of the product
b. equal to the price of the product
c. greater than the price of the product
d. greater than, equal to, or less than the price of the pro
b
which of the following is true at the quantity of output where average total cost per unit has reached its minimum level?
a. AVC=FC
b. MC = AVC
c. MC = AC
d. AC=AFC
e. E=MC2
C
the cost which the firm would incur even if its output were zero is its __________________
fixed cost
what are the 3 basic Marshall time periods discussed in class and how are they characterized by input characteristics
1. momentary - no flexibility/all fixed
2. short run - some flexibility/ some fixed and some variable
3. long run - all variable
the point where a firm's AVC = MC is called the ______________
shut down point
the marginal cost curve intersects both the average variable cost and average total cost curves at their ______________
lowest point
when a firm's variable costs are more than its total revenue, a firm should ____________
shut down
list one supply curve shifter
technology
name one famous economist
Adam Smith
what are the major factors which determine whether demand for a good is elastic or inelastic (3)
-presence (or absence) of a good substitute
-% of money spent on it
-time