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Question;CON2-1;Explain shortcoming of markets. What are market failures? What;are major arguments between market enthusiasts and government interventionists?;Market failure is when a market doesn?t generate an efficient;outcome.;CON2-2;1.How about changes in demand;when there are changes in income for normal goods and inferior goods? How about;changes in demand when there are changes in the price of a related good for;subsitute goods and complementary goods?;2. Explain price controls. Compare price floors and price;ceilings. What are major problems of price floors and price ceilings. Please;explain price ceilings and price floors using market equilibrium price. Please;show practical examples of the price floors and price ceilings;ASN2-1;1.(1 point)Suppose that in;the British compound of a POW camp, the price of cheese is 6 cigarettes per;cheese ration and price of coffee beans is 3 cigarettes per coffee ration. In;the French compound, the price of coffee beans is 24 cigarettes per ration.;1)Is there an opportunity for;beneficial exchange?;2)A British prisoner could;exchange his cheese ration for;cigarettes, then exchange the extra cigarettes for;coffee rations in the British compound.;3)If he travels to the French;compound, he could exchange the extra coffee for ();cigarettes.;4)When he returns to the;British compound, he can exchange the extra cigarettes for;cheese rations. In other words, his net gain from trade;is () cheese rations.;2. (1 point) Assume that;demand for a commodity is represented by the equation P=10-0.2Qd, and supply by;the equation P=2+0.2Qs where Qd and Qs are quantity demanded and quantity;supplied, respectively, and P=price. Using the equilibrium condition Qd=Qs;solve the equations to determine equilibrium price. Now determine equilibrium;quantity(Dr.Shin);Multiple Choice Questions;Ch3 Quiz;Macroeconomics;Prin., Apps, & Tools, 8e(O'Sullivan) TB2;Chapter 3;Exchange and Markets;1) The ability of one person;or nation to produce a good at a lower opportunity cost than another is called;a(n);A) market advantage.;B) comparative advantage.;C) absolute advantage.;D) specialization advantage.;2) Suppose that in the time;it takes for him to bake a cake, Bob can sew 5 pairs of jeans. In the time it;takes for Joe to bake a cake, he can sew 8 pairs of jeans day. In this example;who has the comparative advantage in baking a cake?;A) Joe;B) both Bob and Joe;C) Bob;D) neither Bob nor Joe;3);An individual or country that has a comparative advantage in the production of;one good;A) must have an absolute;advantage in the good's production.;B) must not have an absolute;advantage in the good's production.;C) may or may not have an;absolute advantage in the good's production.;D) must not have an absolute;advantage in the production of the other good.;4) A product produced in the;home country and sold in another country is;A) an export.;B) an import.;C) savings.;D) investment.;5) The more times a worker performs;a particular task, the more proficient the worker becomes at that task. This is;called;A) continuity.;B) innovation.;C) specialization.;D) repetition.;6) In modern economies;individuals in markets make most of the decisions about;A) what to produce.;B) how to produce.;C) for whom to produce.;D) all of the above.;7) The decrease in the;scarcity of a product usually results in;A) an increased number of;sizes.;B) more colors being;available.;C) lower prices.;D) more stores selling the;product.;8) In a market system;prices;A) signal the relative;scarcity of a product.;B) are unfair.;C) are too high.;D) all of the above.;9) Suppose a product suddenly;loses popularity and the firms producing the product begin to realize large;losses. In response, entrepreneurs would;A) enter the market and;increase production.;B) enter the market and;decrease production.;C) exit the market and;decrease production.;D) exit the market and;increase production.;10) A market failure could be;caused by;A) competition.;B) imperfect information.;C) profit.;D) capitalism.;11) A market failure;could be caused by;A) imperfect production.;B) many firms competing;against each other for customers.;C) profit.;D) imperfect competition.;12) Which of the following;best defines a public good?;A) A public good is available;for anyone to utilize, regardless on who pays and who doesn't.;B) A public good is a good;that uses public funds to finance its production.;C) A public good is a good;that is sold to other people in the market.;D) A public good is a good;that requires government approval before it can be produced.;13) Which of the following is;not a public good?;A) national defense;B) space exploration;C) a hamburger;D) levees;14) The main reason why the;government enforces contracts and maintains a legal system that punishes those;who violate contracts is;A) to facilitate exchange.;B) to decrease imperfect;competition.;C) to decrease imperfect;information.;D) to increase uncertainty.;15) Why does the government's;role of enforcing contracts facilitate exchange?;A) Enforcing contracts allows;people to trade with confidence that the contracts they enter will be met.;B) Enforcing contracts;guarantees consumers that the government will bail them out in case the seller;does not fulfill his end of the contract.;C) Enforcing contracts;guarantees sellers that the government will bail them out in case the buyer;does not fulfill his end of the contract.;D) Enforcing the contract;effectively makes the government the seller's partner in the business.;Ch4 Quiz;Macroeconomics;Prin., Apps, & Tools, 8e(O'Sullivan) TB2;Chapter 4 Demand;Supply, and Market Equilibrium;1) A perfectly competitive;market is a market that has;A) many buyers.;B) many sellers.;C) no single buyer or seller;who can affect the price.;D) All of the above are;correct.;2) A change in the quantity;demanded of a product is the result of a change in;A) the price of the product.;B) the price of related;goods.;C) consumer income.;D) the cost of producing the;product.;3) The law of demand states;that the quantity demanded of a product increases as;A) consumer income rises.;B) the prices of other;products fall.;C) the price of the product;rises.;D) the price of the product;falls.;4) The market demand curve;A) shows the relationship;between the price of a good and the quantity that all consumers together are;willing to buy.;B) is drawn assuming that;variables such as income and tastes are fixed.;C) is drawn assuming that the;number of consumers is fixed.;D) all of the above.;5) A supply curve is defined;as the relationship between;A) the price of a good and;the quantity that consumers are willing to buy.;B) the price of a good and;the quantity that producers are willing to sell.;C) the income of consumers;and the quantity of a product that consumers are willing to buy.;D) the income of consumers;and the quantity of a product that producers are willing to sell.;6) When a supply curve is;drawn, which of the following is not held constant?;A) taxes and subsidies;B) the state of production;technology;C) prices of inputs;D) the price of the good;7) If at a price of $1000, 8;different laptop manufacturers are willing to sell 20 laptops each. If the 8;manufacturers are the only sellers of laptops in the market, then at a price of;$1000, there are ________ laptops supplied in the market.;A) 160;B) 8;C) 20;D) 820;8) Why is the market supply;curve positively sloped?;A) At a higher price, more;firms enter the market willing to sell the product or service.;B) At a higher price, fewer;firms enter the market willing to sell the product or service.;C) At a higher price, the;firms already in the market and are willing to sell a larger quantity of the;product or service.;D) Both A and C are correct.;9) Suppose that the current;price in a market for Pizza is $9. At that price, the quantity demanded is 519;and the quantity supplied is 400. At the current price, the market is;experiencing;A) an excess demand of 119;pizzas.;B) an equilibrium.;C) an excess supply of $119.;D) an excess demand of 500;pizzas.;10) Suppose that a market for;a product is in equilibrium at a price of $5 per unit. At any price below $5;per unit;A) there will be an excess;demand for the product.;B) there will be an excess;supply of the product.;C) the quantity supplied of;the product will be greater than the quantity demanded of that product.;D) both B and C.;11) A government sometimes;creates an excess supply of a product by setting a minimum price at which the;product may be sold to consumers. This is sometimes called a;A) price ceiling.;B) price floor.;C) tax.;D) none of the above;12) If the government imposes;a price floor that is below the equilibrium price, then the market will;experience;A) an equilibrium.;B) a shortage.;C) an excess supply.;D) no scarcity.;13) Minimum wage laws are;examples of;A) price ceilings.;B) equilibrium prices.;C) price floors.;D) minimum supply prices.;14) When Mary's income;increases, she purchases fewer hamburgers. We can conclude that for Mary;hamburger is a(n) ________ good.;A) normal;B) inferior;C) substitute;D) complementary;15) A normal good is defined;as a good for which demand decreases when;A) the price increases.;B) income increases.;C) the price decreases.;D) income decreases.;16) If incomes increase and;Honda Civics are considered normal goods, then;A) the demand for Honda;Civics will increase.;B) the quantity demanded for;Honda Civics will increase.;C) the demand for Honda;Civics will decrease.;D) the quantity demanded for;Honda Civics will decrease.;17) If incomes increase and;Honda Civics are considered inferior goods, then;A) the demand for Honda;Civics will increase.;B) the quantity demanded for;Honda Civics will increase.;C) the demand for Honda;Civics will decrease.;D) the quantity demanded for;Honda Civics will decrease.;18) When the price of peanuts;falls;A) the demand for peanuts;decreases.;B) the demand for peanuts;increases.;C) the quantity demanded of;peanuts decreases.;D) the quantity demanded of;peanuts increases.;19) Suppose you have 2 goods;X and Y. If the price of X increases and you buy more Y, then X and Y are;A) substitutes.;B) normal goods.;C) complements.;D) inferior goods.;20) Assume that tortilla;chips and salsa are complements. When the price of tortilla chips decreases;A) the demand for salsa;increases.;B) the demand for salsa;decreases.;C) the supply of salsa;decreases.;D) the demand for tortilla;chips decreases.;21) If the U.S. population;increases, then;A) the demand for electricity;increases.;B) the demand for electricity;decreases.;C) the quantity demanded for;electricity decreases.;D) the quantity demanded for;electricity increases.;22)If the price of hotdogs;are expected to decrease in the future, then;A) the current demand for;hotdogs will increase.;B) the current demand for;hotdogs will decrease.;C) the current quantity;demanded for hotdogs will decrease.;D) the current quantity;demanded for hotdogs will increase.;23) A decrease in demand for;coffee can be caused by;A) an increase in demand for;substitute products by younger populations.;B) a decrease in demand due;to changing preferences for healthier products.;C) an increase in income and;coffee is an inferior good.;D) all of the above.;24) Hops are used to produce;beer. If the price of hops decreases;A) the demand for beer;increases.;B) the demand for beer;decreases.;C) the supply of beer;increases.;D) the supply of beer decreases.;25) Flour is used to produce;bread. If the price of flour increases;A) the demand for bread;increases.;B) the demand for bread;decreases.;C) the supply of bread;increases.;D) the supply of bread;decreases.;26) A decrease in the tuition;(i.e., price) that a public university charges would result in;A) an upward movement along;the supply curve for college classes.;B) an downward movement along;the supply curve for college classes.;C) a shift in the supply of;college classes to the left.;D) a shift in the supply of;college classes to the right.;27) An increase in supply of;a product results when;A) more companies produce the;product.;B) the companies that produce;the product have reduced input costs.;C) technological innovations;are introduced in the manufacturing.;D) all of the above.;28) If sellers have an;expectation of lower future prices;A) the current supply of that;good will decrease.;B) the current demand for;that good will increase.;C) the current supply of that;good will increase.;D) the current demand for;that good will decrease.;29) Suppose that a new;advertising campaign extolling the virtues of apple juice is successful and a;major freeze destroys half of the country's apple crop. What happens to the;price and quantity of apple juice?;A) The equilibrium price of;apple juice might rise or fall and the equilibrium quantity of apple juice;falls.;B) The equilibrium price of;apple juice might rise or fall and the equilibrium quantity of apple juice;rises.;C) The equilibrium price of apple;juice rises and the equilibrium quantity of apple juice might rise or fall.;D) The equilibrium price of;apple juice falls and the equilibrium quantity of apple juice might rise or;fall.;30) Using supply and demand;analysis, the increase in the price of ice cream can be illustrated as;A) a leftward shift in the;supply curve for ice cream caused by more expensive ingredients.;B) a rightward shift in the;supply curve for ice cream caused by more expensive ingredients.;C) a leftward shift in the;demand curve for ice cream caused by more expensive ingredients.;D) a rightward shift in the;demand curve for ice cream caused by more expensive ingredients.;31) Bananas and apples are;substitutes. When the price of bananas rises, the equilibrium quantity of;apples will ________ and the equilibrium price of apples will ________.;A) increase, increase;B) increase, decrease;C) decrease, increase;D) decrease, decrease;32) Suppose that steak is a;normal good. When income increases, the equilibrium quantity of steak will;and the equilibrium price of steak will ________.;A) rise, rise;B) rise, fall;C) fall, rise;D) fall, fall;33) Lettuce and spinach are;substitute goods. All else equal, if a spinach beetle destroys half of the;nation's spinach crop, we predict that the equilibrium price of lettuce will;and the equilibrium price of spinach will ________.;A) rise, rise;B) rise, fall;C) fall, rise;D) fall, fall

 

Paper#56512 | Written in 18-Jul-2015

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