Econ- Exam 1- Homework Questions

  1. if the demand curve shifts to the right then
    demand has increased
  2. what variable will change market demand?
    • tastes
    • population, demographics
    • income
    • NOT the price of the product
  3. the income effect of a price change refers to the impact of a change in
    the price of a good on a consumers' purchasing power
  4. if the price of cars increased then
    the demand for gas would decrease
  5. one would speak of a change in the quantity of a good supplied rather than a change in supply if
    the price of the good changes
  6. equilibrium in a market is when the
    quantity demanded=quantity supplied
  7. the ideal market model is an example of
    coordination conflict situation
  8. consumer surplus
    the difference between the highest price a consumer is willing to pay and the price they actually paid
  9. producer surplus:
    the difference between the lowest price a firm would be willing to accept and the actual price
  10. marginal cost is the
    additional cost to a firm of producing one more unit of a G or S
  11. if equilibrium is achieved in a competitive market then
    there will be no deadweight loss
  12. government proposes a tax on an imported item, buyers will bear the entire burden of the tax if the
    demand curve for the imported item is vertical
  13. most economists who have studied the incidence of tax have concluded that
    the burden of tax falls almost entirely on workers
  14. if there is a positive externalitiy associated with consumption then we would say marginal social benefit is =
    marginal private benefit + marginal external benefite
  15. the US economy
    is one of many forms of semi-capitalist society
  16. scientific laws are best thought as
    tendencies that may be observed in the absence of other forces or influences
  17. economists reason that the optimal decision is to continue any activity up to the point where
  18. adam smith's invisible hand refers to
    the process by which individuals acting in their own self interest bring about a market outcome that benefits society as a whole
  19. the 'missing leg' of econ largely ignored by the text's definition of econ is
    the forms of interaction among individuals
  20. a successful market economy requires
    well defined property rights and an independent court system to adjudicate disputes based on the law
  21. when production reflects consumer preference ______ occurs
    allocative efficiency
  22. what is the result of a market economy
    voluntary exchange
  23. you have absolute advantage whenever you
    can produce more of something than others with the same resources
  24. an inward shift of a nations PPF can occur due to
    a natural disaster
  25. adam smith thought of society as
    a place where indifference to poverty and lack of compassion could undermine the ability of society to flourish
  26. the revenue received from the sale of __________ of a product is a MB to the firm
    an additional unit
  27. the law of instrument is said to make sense
    only when there is more than one way of a looking at a situation
  28. the PPF shows
    if all resources are fully and efficiently utilized more of one good can be produced only by producing less of another good
  29. markets promote
    competition and voluntary exchange
  30. according to the commentary
    one-dollar-one-vote need not be identical to one-person-one vote
Card Set
Econ- Exam 1- Homework Questions