Constructing an Economic Model Essay

Constructing an Economic Model Essay

Instructions/Descriptions

Constructing an Economic Model Essay

[Order Now]

1. When constructing an economic model, economists (Points: 1) rely mostly on their own value judgments and ignore the far more complex world of facts always try to duplicate reality by including all available information use assumptions that are true for the individual but never true for the whole economy must rely on simplifying assumptions that abstract from the complexity of the real world
2. Which of the following is a positive statement? (Points: 1) An unemployment rate of 7 percent or higher is a national disgrace. Unemployment is a less important problem than inflation. When the national unemployment rate is 7 percent, the unemployment rate for inner-city youth is often close to 40 percent. Unemployment and inflation are equally important problems.
3. The difference between a positive economic statement and a normative statement is that (Points: 1) a positive statement must be true; a normative statement is often not true a normative statement must be true; a positive statement is often not true a positive statement can be verified; a normative statement cannot a normative statements can be verified; a positive statement cannot
4. One might commit the fallacy of composition by concluding that (Points: 1) statements that are true during prosperity are necessarily true during depression what is good for the individual is necessarily good for the group an event that precedes another is necessarily the cause of the latter intentions need not coincide with actions
5. Someone who commits the fallacy of composition is likely to assume that (Points: 1) the simplest model is the best predictor event B, which follows event A, was caused by event A event B, which follows event A, was not necessarily caused by event A what is true for the individual is also true for the group
6. The opportunity cost of an activity is (Points: 1) zero if you choose the activity voluntarily the amount of money spent on the activity the value of the best alternative not chosen the sum of benefits from all of the sacrificed alternatives the difference between the benefits and the costs of that activity
7. Any movement along the production possibilities frontier involves the production of (Points: 1) more of both goods more of one good and less of the other less of both goods more resources better technology
8. Which of the following would shift the production possibilities frontier outward? (Points: 1) a reduction in inefficiency a reduction in the size of the labor force an improvement in technology a change in the combination of goods produced increasing opportunity costs
9. Which economic question does the decision to give all of the butter the economy produces to the homeless answer? (Points: 1) What to produce? How to produce? For whom to produce? Who has a comparative advantage in butter production? Who has an absolute advantage in butter production?
10. The economic question of what will be produced is (Points: 1) primarily answered by the government in a system of pure capitalism primarily answered by markets in a command economy faced by all economies regardless of their wealth does not have to be answered by economies possessing great wealth cannot be illustrated by the economic concept of the production possibilities frontier
11. Owners of corporations are referred to most frequently as (Points: 1) entrepreneurs limited partners managers stockholders
12. In terms of total sales, the dominant form of business firm in the U.S. economy is the (Points: 1) corporation sole proprietorship partnership nonprofit organization
13. Which of the following is a defining characteristic of a public good? (Points: 1) It is produced and distributed by the government. The decision to produce it is made by the public through the voting process. It is produced and distributed by private firms according to government regulations. It is freely available to everyone once it is produced.
14. Gross Domestic Product is the value of all (Points: 1) goods and services produced during a particular year goods and services sold during a particular year final goods and services sold during a particular year final goods and services produced during a particular year[Order Now]
15. Which of the following taxes is most clearly based on the benefits-received principle of taxation? (Points: 1) corporate income tax gasoline tax personal income tax payroll tax
16. A decrease in demand for a good could mean that (Points: 1) consumers are willing to buy larger quantities of the good at each price the demand curve has shifted to the left consumers are willing to pay a higher price for each quantity of the good the demand curve has undergone a parallel shift to the right
17. Which of the following is true of an increase in quantity supplied of a given good? (Points: 1) It is represented by a rightward shift in the supply curve. It could result from a technological improvement. The price of a key resource used to produce the good may have decreased. It is caused by an increase in the price of the good.
18. A surplus occurs whenever (Points: 1) current price is greater than equilibrium price quantity supplied exceeds quantity demanded at the equilibrium price quantity demanded is greater than quantity supplied the problem of scarcity of a good is solved some buyers would be willing and able to pay even more for it than they have to at equilibrium
19. Economists emphasize the importance of equilibrium in markets because (Points: 1) trading in markets can only occur at the equilibrium price and quantity the behavior of buyers and sellers will automatically guide the market toward the equilibrium price and quantity all buyers and sellers are better off at the equilibrium point than any other price and quantity combination it represents a compromise between sellers hoping for low prices and buyers searching for high prices
20. The effect of an increase in consumer income on equilibrium price and quantity of Florida orange juice (a normal good) is (Points: 1) to increase equilibrium price and quantity to decrease equilibrium price and quantity to increase equilibrium price and decrease equilibrium quantity to increase equilibrium quantity and decrease equilibrium price
21. If demand increases and supply decreases, (Points: 1) equilibrium price will fall and equilibrium quantity will rise equilibrium price will rise; equilibrium quantity will either rise, fall, or remain unchanged equilibrium price and quantity will both rise equilibrium quantity will rise; equilibrium price will either rise or fall
22. Demand is elastic whenever (Points: 1) price elasticity has an absolute value of 1 price elasticity has an absolute value greater than 1 price elasticity has an absolute value less than 1 price elasticity is negative
23. The total revenue from selling trucks is equal to (Points: 1) the price of a truck times the quantity sold the change in quantity sold divided by the change in price average cost times quantity produced the price of a truck times the quantity produced
24. A good that takes up a very large percentage of the consumer’s budget will tend to have (Points: 1) an elastic demand a perfectly elastic demand an inelastic demand an upward-sloping demand curve
25. If supply is perfectly elastic, the supply curve is (Points: 1) vertical horizontal any straight-line supply curve any supply curve intersecting a perfectly elastic demand curve
26. The most important determinant of price elasticity of supply is (Points: 1) price elasticity of demand technological conditions such as how rapidly costs increase when a firm increases its output whether the production process relies heavily on capital or on labor the number and closeness of available substitutes
27. If the cross-price elasticity of demand between two goods is 0, (Points: 1) a price change for one good will be exactly offset by a price change for the other neither demand curve would shift following a change in the price of one of the goods there is no income effect between the two goods the demand for each good is price inelastic
28. Which of the following is not an explicit cost? (Points: 1) sales taxes the value of a firm owner’s time insurance premiums the cost of utilities, such as gas and electricity
29. Economic profit is defined as (Points: 1) wages plus interest minus rent total revenue minus implicit costs total revenue minus implicit and explicit costs total revenue plus implicit costs
30. The law of diminishing marginal returns states that (Points: 1) long-run average cost declines as output increases if the marginal product is above the average product, the average will rise as units of a variable input are added to a given amount of fixed inputs, the marginal product of the variable input eventually diminishes as a person consumes more of a good, the marginal satisfaction from that good eventually diminishes
31. Which of the following is true of the MC curve? (Points: 1) It intersects the ATC curve at its minimum, but it does not intersect the AVC curve at its minimum. It intersects the AVC curve at its minimum, but it does not intersect the ATC curve at its minimum. It intersects both the ATC and the AVC curves at their minimums. It intersects both the ATC and the AFC curves at their minimums.
32. Economies of scale can be caused by (Points: 1) all of the following short-run increases in marginal productivity the use of larger, more specialized machines higher information costs as a firm expands
33. For a perfectly competitive firm operating at the profit-maximizing output level in the short run, (Points: 1) MR = TR MC = price MC = ATC MC = AVC
34. If price is less than its minimum average variable cost, a perfectly competitive firm that continues to produce in the short run (Points: 1) cannot cover any of its variable cost incurs a loss greater than its fixed cost can cover all of its fixed cost and some of its variable cost can cover all of its variable cost and some of its fixed cost
35. A perfectly competitive firm in the short run determines its quantity supplied at various prices by using (Points: 1) the portion of its marginal cost curve rising above its average total cost curve the portion of its marginal cost curve rising above its average variable cost its average variable cost curve its average total cost curve
36. Firms achieve productive efficiency in the long run by (Points: 1) striving to minimize fixed cost striving to maximize revenue producing at their minimum long-run average cost producing at their minimum long-run marginal cost
37. To achieve allocative efficiency, firms (Points: 1) strive to minimize fixed costs strive to maximize profits produce at their minimum long-run average cost produce the output consumers want most
38. The term allocative efficiency refers to (Points: 1) the level of output where MC = AVC the equality between MR and MC the production of those goods and services most valued by consumers the point where marginal revenue equals average total cost
39. [Order Now]Which of the following does a monopoly control, that a perfectly competitive firm does not control? (Points: 1) how much to produce technology what price to charge what inputs to use
40. A monopolist (Points: 1) can charge whatever price it wants charges more than almost any consumer is willing to pay is constrained by marginal cost in setting price is constrained by demand in setting price
41. If a nondiscriminating monopolist is operating at an output level where price equals average total cost, we can conclude that (Points: 1) economic profit is $0 the firm is not maximizing profit the firm should go out of business in the long run the firm is not earning its normal profit
42. Barriers to entry (Points: 1) prevent monopolies from earning profit in the long run prevent monopolies from earning profit in the short run may allow monopolies to earn profit in the long run prevent government from regulating a monopoly
43. Unlike firms in a perfectly competitive industry, monopolists have control over (Points: 1) the price they charge for the product the quantity of output they produce the prices they pay for resources the quantities of various resources which are used improvements in technology
44. Price discrimination occurs when a monopolist charges (Points: 1) both c and d different prices to different buyers for different products different prices to different groups of buyers, based on differences in the cost of providing the commodity to the buyer different prices to different groups of buyers for reasons unrelated to the cost of providing the commodity to the buyer
45. In the short run, a monopolistically competitive firm is (Points: 1) guaranteed to earn zero economic profit guaranteed to earn an economic loss not guaranteed any level of economic profit guaranteed to earn economic profit
46. Which of the following is unique to oligopoly among all the market structures? (Points: 1) product differentiation profit maximization mutual interdependence advertising
47. A brand name may contribute to oligopolists’ economic profit by (Points: 1) shifting the demand curve leftward shifting the supply curve leftward overcoming economies of scale acting as a barrier to entry
48. Collusion occurs when (Points: 1) a firm chooses a level of output to maximize its own profit firms get together to maximize joint profits firms refuse to follow their price leaders firms petition their U.S. senators for favors
49. Game theory is most useful in understanding the decision-making behavior of firms in which type of industry? (Points: 1) perfect competition monopoly natural monopoly oligopoly
50. The term strategy in terms of game theory refers to (Points: 1) the relationship between price and marginal cost the relationship between individual firm demand curves and the market demand curve each firm’s game plan in making decisions the interrelationship between price and marginal revenue
    

    Constructing an Economic Model Essay

    

PLACE THE ORDER WITH US TODAY AND GET A PERFECT SCORE!!!