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devry ECON-312 mid term project

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solution


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Question;(TCO 1) As a student of economics, when you speak of;scarcity, you are referring to the ability of society to;Student Answer: employ all of its;resources.;consume all that is produced.;satisfy economic wants given limited;resources.;continually make technological breakthroughs;and increase production.;Instructor Explanation: Chapter 1;Points Received: 3 of 3;Comments;Question 2. Question;(TCO 1) Henry wants to buy a book. The economic perspective suggests that Henry;will buy the book if;Student Answer: the book will;give him utility.;his income is high.;the marginal cost of the book is greater than;its marginal benefit.;the marginal benefit of the book is greater;than its marginal cost.;Instructor Explanation: Chapter 1;Points Received: 3 of 3;Comments;Question 3. Question;(TCO 1) A nation can increase its production possibilities;by;Student Answer: shifting;resources from investment good production to consumer good production.;shifting resources from private goods to;public goods.;improving labor productivity.;eliminating discrimination.;Instructor Explanation: Chapter 1;Points Received: 3 of 3;Comments;Question 4. Question;(TCO 1) Which expression is another way of saying;marginal benefit"?;Student Answer: Benefits given up;Unintended gain;Employment benefits;Extra benefit;Instructor Explanation: Chapter 1;Points Received: 3 of 3;Comments;Question 5. Question;(TCO 1) Which would not be considered as a capital resource;of a business by an economist?;Student Answer;A van used by a mother to transport the family around;An office computer used by an accountant;A crane used by a building contractor;A razor used by a barber;Instructor Explanation: Chapter 1;Points Received: 3 of 3;Comments;Question 6. Question;(TCO 1) Another term for capitalism is;Student Answer: the command;system.;the socialist economy.;the market system.;the system of inputs and outputs.;Instructor Explanation: Chapter 2;Points Received: 3 of 3;Comments;Question 7. Question;(TCO 1) Markets in which firms sell their output of goods;and services are called;Student Answer: resource markets.;product markets.;command markets.;mixed markets.;Instructor Explanation: Chapter 2;Points Received: 3 of 3;Comments;Question 8. Question;(TCO 1) By free enterprise, we mean that;Student Answer: products are;provided free to those who can't afford to buy them.;individuals may obtain resources, organize;production, and sell the resulting output in any legal way they choose.;individual producers are free to produce;whatever the government decides is needed by the society.;individuals are free to buy whatever products;will satisfy their needs the most.;Instructor Explanation: Chapter 2;Points Received: 3 of 3;Comments;Question 9. Question;(TCO 1) Consumer sovereignty and "dollar votes;guide the market system in dealing with which fundamental question?;Student Answer;What will be produced?;How is the output to be produced?;How can the system accommodate change?;Who is to receive the output?;Instructor Explanation: Chapter 2;Points Received: 3 of 3;Comments;Question 10. Question;(TCO 1) The major "success indicator" for business;managers in command economies like the Soviet Union and China in the past was;Student Answer;the quantity of output.;product quality.;the amount of profits.;worker morale.;Instructor Explanation: Chapter 2;Points Received: 3 of 3;Comments;Question 11. Question;(TCO 2) An increase in product price will cause;Student Answer;quantity demanded to decrease.;quantity supplied to decrease.;quantity demanded to increase.;the supply curve to shift to the left.;Instructor Explanation: Chapter 3.;Points Received: 3 of 3;Comments;Question 12. Question;(TCO2) If there is a shortage of product X;Student Answer: fewer resources;will be allocated to the production of this good.;the price of the product will rise.;the price of the product will decline.;the supply curve will shift to the left and;the demand curve to the right, eliminating the shortage.;Instructor Explanation: Chapter 3;Points Received: 3 of 3;Comments;Question 13. Question;(TCO 2) Which of the following is a consequence of rent;controls established to keep housing affordable for the poor?;Student Answer: Less rental;housing is available as prospective landlords find it unprofitable to rent at;restricted prices.;The quality of rental housing declines as;landlords lack the funds and incentive to maintain properties.;Apartment buildings are torn down in favor of;office buildings, shopping malls, and other buildings where rents are not;controlled.;All of the above are consequences of rent;controls.;Instructor Explanation: Chapter 3;Points Received: 3 of 3;Comments;Question 14. Question;(TCO 2) An increase in demand for oil along with a;simultaneous increase in supply of oil will;Student Answer: decrease price;and increase quantity.;increase price and decrease quantity.;increase quantity, but whether it increases;price depends on how much each curve shifts.;increase price, but whether it increases;quantity depends on how much each curve shifts.;Instructor Explanation: Chapter 3;Points Received: 3 of 3;Comments;Question 15. Question;(TCO 2) For most products, purchases tend to fall with;decreases in buyers' incomes. Such;products are known as;Student Answer: inferior goods.;direct goods.;average goods.;normal goods.;Instructor Explanation: Chapter 3;Points Received: 3 of 3;Comments;Question 16. Question;(TCO 2) When the price of a product is increased 10 percent;the quantity demanded decreases 15 percent.;In this range of prices, demand for this product is;Student Answer;elastic.;inelastic.;cross-elastic.;unitary elastic.;Instructor Explanation: Chapter 4;Points Received: 3 of 3;Comments;Question 17. Question;(TCO 2) Total revenue falls as the price of a good is;raised, if the demand for the good is;Student Answer;elastic.;inelastic.;unitary elastic.;perfectly elastic.;Instructor Explanation: Chapter 4;Points Received: 3 of 3;Comments;Question 18. Question;(TCO 2) The price elasticity of demand increases with the;length of the period considered because;Student Answer: consumers;incomes will increase over time.;the demand curve will shift outward as time;passes.;all prices will increase over time.;consumers will be better able to find;substitutes.;Instructor Explanation: Chapter 4;Points Received: 3 of 3;Comments;Question 19. Question;(TCO 2) To economists the main differences between "the;short run" and "the long run" are that;Student Answer: the law of;diminishing returns applies in the long run, but not in the short run.;in the short run all resources are fixed;while in the long run all resources are variable.;fixed inputs are more important to decision;making in the long run than they are in the short run.;in the long run all resources are variable;while in the short run at least one resource is fixed.;Instructor Explanation: Chapter 4;Points Received: 3 of 3;Comments;Question 20. Question;(TCO 2) When universities announce a large tuition increase;and follow it with an announcement that more financial aid will be available;they are assuming that students who pay full tuition;Student Answer: have elastic;demand and students who use financial aid have inelastic demand.;have inelastic demand and students who use;financial aid have elastic demand.;view a college education as an inferior good;and students who use financial aid view it as a normal good.;view a college education as a normal good and;students who use financial aid view it as an inferior good.;Instructor Explanation: Chapter 4;Points Received: 3 of 3;Comments;Question 21. Question;(TCO 3) Which would be an implicit cost for a firm? The cost;Student Answer: of worker wages;and salaries for the firm.;paid for leasing a building for the firm.;paid for production supplies for the firm.;of wages foregone by the owner of the firm.;Instructor Explanation: Chapter 7;Points Received: 3 of 3;Comments;Question 22. Question;(TCO 3) If a firm's revenues just cover all its opportunity;costs, then;Student Answer: normal profit is;zero.;economic profit is zero.;total revenues equal its explicit costs.;total revenues equal its implicit costs.;Instructor Explanation: Chapter 7;Points Received: 3 of 3;Comments;Question 23. Question;(TCO 3) The long run is a period of time, or a time frame;in which;Student Answer: IN;all resources are fixed.;the level of output is fixed.;the amount of all resources can be varied.;the capacity of the production plant is fixed.;Instructor Explanation: Chapter 7;Points Received: 0 of 3;Comments;Question 24. Question;(TCO 3) Fixed costs are those costs which are;Student Answer: IN;zero if the firm produces no output in the short run.;unchanging through time.;independent of the rate of output.;implicit to a competitive firm.;Instructor Explanation: Chapter 7;Points Received: 0 of 3;Comments;Question 25. Question;(TCO 3) Marginal cost can be defined as the;Student Answer: IN;change in total fixed cost resulting from one more unit of production.;change in total variable cost resulting from;one more unit of production.;change in average total cost resulting from;one more unit of production.;change in average variable cost resulting from;one more unit of production.;Instructor Explanation: Chapter 7;Points Received: 0 of 3;Comments;Question 26. Question;(TCO 3) If the price of a fixed factor of production;increases by 50 percent, what effect would this have on the marginal-cost;schedule facing a firm?;Student Answer;None, because fixed costs do not affect marginal cost.;Marginal cost would increase by 50 percent.;Marginal cost would increase by less than 50;percent.;Marginal cost would increase by more than 50;percent.;Instructor Explanation: Chapter 7;Points Received: 3 of 3;Comments;Page: 1 2;* Times are displayed;in (GMT-07:00) Mountain Time (US & Canada)(TCO 3) In which market model would there be a unique;product for which there are no close substitutes? Student Answer: Monopolistic;competition Pure competition Pure monopoly Oligopoly Instructor Explanation: Chapter 8 Points Received: 3 of 3 Comments: Question 2. Question;(TCO 3) Local electric or gas utility companies mostly;operate in which market model? Student Answer: Monopolistic;competition Pure competition Pure monopoly Oligopoly Instructor Explanation: Chapter 8 Points Received: 3 of 3 Comments: Question 3. Question;(TCO 3) The production of agricultural products such as;wheat or corn would best be described by which market model? Student Answer: Monopolistic competition Pure competition Pure monopoly Oligopoly Instructor Explanation: Chapter 8 Points Received: 3 of 3 Comments: Question 4. Question;(TCO 3) In pure competition, the demand for the product of a;single firm is perfectly Student Answer: elastic because;the firm produces a unique product. inelastic because the firm produces a unique;product. elastic because many other firms produce the;same product. inelastic because many other firms produce the;same product. Instructor Explanation: Chapter 8 Points Received: 3 of 3 Comments: Question 5. Question;(TCO 3) Let us suppose Harry's, a local supplier of chili;and pizza, has the following revenue-and-cost structure: Total Revenue $3,000 Per Week Total Variable Cost $2,000 Per Week Total Fixed Costs $2,000 Per Week Student Answer: Harry's should;stay open in the long run. Harry's should shut down in the short run. Harry's should stay open in the short run. Harry's should shut down in the short run but;reopen in the long run. Instructor Explanation: Chapter 8 Points Received: 3 of 3 Comments: Question 6. Question;(TCO 3) If a purely competitive firm is producing at an;output where marginal revenue exceeds marginal cost, the firm will increase its;profit by Student Answer: reducing;production to the point where variable costs are minimized. reducing production to the point where unit;costs are minimized. reducing its output and simultaneously;increasing its price. increasing its output. Instructor Explanation: Chapter 8 Points Received: 3 of 3 Comments: Question 7. Question;(TCO 3) In pure competition, each extra unit of output that;a firm sells will yield a marginal revenue that is Student Answer;equal to the price. less than the price. greater than the price. equal to the average cost. Instructor Explanation: Chapter 8 Points Received: 3 of 3 Comments: Question 8. Question;(TCO 3) One feature of pure monopoly is that the monopolist;is Student Answer: a producer of;products with close substitutes. one of several producers of a product. a price taker. a price maker. Instructor Explanation: Chapter 10 Points Received: 3 of 3 Comments: Question 9. Question;(TCO 3) Which of the following is a barrier to entry? Student Answer;Patents Revenue maximization Profit maximization Elastic product demand Instructor Explanation: Chapter 10 Points Received: 3 of 3 Comments: Question 10. Question;(TCO 3) The nondiscriminating pure monopolist must decrease;price on all units of a product sold in order to sell more units. This explains why Student Answer: there are;barriers to entry in pure monopoly. a monopoly has a perfectly elastic demand;curve. marginal revenue is less than average revenue. total revenues are greater than total costs at;the profit-maximizing level of output. Instructor Explanation: Chapter 10 Points Received: 3 of 3 Comments: Question 11. Question;(TCO 3) Which case below best represents a case of price;discrimination? Student Answer: An insurance;company offers discounts to safe drivers. A major airline sells tickets to senior;citizens at lower prices than to other passengers. A professional baseball team pays two players;with identical batting averages different salaries. A utility company charges less for electricity;used during "off-peak" hours, when it does not have to operate its;less-efficient generating plants. Instructor Explanation: Chapter 10 Points Received: 3 of 3 Comments: Question 12. Question;(TCO 3) Monopolistic competition is characterized by firms Student Answer;producing differentiated products. making economic profits in the long run. producing at optimal productive efficiency. producing where price equals marginal cost. Instructor Explanation: Chapter 11 Points Received: 0 of 3 Comments: Question 13. Question;(TCO 3) Assume that in a monopolistically competitive;industry, firms are earning economic profit.;This situation will Student Answer: reduce the excess;capacity in the industry as firms expand production. attract other firms to enter the industry;causing the firm's profits to shrink. cause firms to standardize their product to;limit the degree of competition. make the industry allocatively efficient as;each firm seeks to maintain its profits. Instructor Explanation: Chapter 11 Points Received: 3 of 3 Comments: Question 14. Question;(TCO 3) In an oligopolistic market there are Student Answer: many buyers. few buyers. few sellers. many sellers. Instructor Explanation: Chapter 11 Points Received: 3 of 3 Comments: Question 15. Question;(TCO 3) You are told that the four-firm concentration ratio;in an industry is 20. Based on this;information you can conclude that Student Answer: each of the top;four firms has 20 percent of industry sales. the four largest firms account for a combined;80 percent of the industry sales. the four largest firms account for 20 percent;of industry sales. each of the four largest firms accounts for;five percent of industry sales. Instructor Explanation: Chapter 11 Points Received: 3 of 3 Comments: Question 16. Question;(TCO 3) In which set of market models are there the most;significant barriers to entry? Student Answer: Monopolistic;competition and pure competition IN Monopolistic competition and pure;monopoly Oligopoly and monopolistic competition Oligopoly and pure monopoly Instructor Explanation: Chapter 11 Points Received: 0 of 3 Comments: Question 17. Question;(TCO 1) Which of the following is a land resource? Student Answer: A farmer An oil-drilling rig A machine for detecting earthquakes Natural gas Instructor Explanation: Chapter 1 Points Received: 3 of 3 Comments: Question 18. Question;(TCO 1) Refer to the diagram which is based on the Circular;Flow Model in Chapter 2. Arrows (3) and;(4) represent diagram1 Graph Description Student Answer: goods and services;respectively. incomes and consumer expenditures;respectively. IN resources and goods, respectively. consumer expenditures and income;respectively. Instructor Explanation: Chapter 2 Points Received: 0 of 3 Comments: Question 19. Question;(TCO 2) Refer to the diagram. A decrease in demand is depicted by adiagram2Graph Description Student Answer: move from Point x;to Point y. shift from D1 to D2. shift from D2 to D1. move from Point y to Point x. Instructor Explanation: Chapter 3 Points Received: 3 of 3 Comments: Question 20. Question;(TCO 2) Refer to the information and assume the stadium;capacity is 5,000. The supply of seats;for the gamePrice per Ticket Quantity Demanded $13 1,000 11 2,000 9 3,000 7 4,000 5 5,000 3 6,000 Student Answer: varies inversely;with ticket prices. varies directly with ticket prices. is perfectly inelastic. is perfectly elastic. Instructor Explanation: Chapter 4 Points Received: 3 of 3 Comments: Question 21. Question;(TCO 2) Which of the following goods (with their respective;income-elasticity coefficients in parentheses) will most likely suffer a;decline in demand during a recession? Student Answer: Dinner at a nice;restaurant (+1.8) Chicken purchased at the grocery store for;preparation at home (+0.25) Facial tissue (+0.6) Plasma-screen and LCD TVs (+4.2) Instructor Explanation: Chapter 4 Points Received: 3 of 3 Comments: Question 22. Question;(TCO 3) In the figure, Curves 1, 2, 3, and 4 represent thecurves figure 1Graph Description Student Answer: ATC, MC, AFC, and;AVC curves, respectively. MC, AFC, AVC, and ATC curves, respectively. MC, ATC, AVC, and AFC curves, respectively. ATC, AVC, AFC, and MC curves, respectively. Instructor Explanation: Chapter 7 Points Received: 3 of 3 Comments: Question 23. Question;(TCO 1) Refer to the diagram. If society is producing nine units of;bicycles and four units of computers and it now decides to increase computer;output to six, the costpoints diagram1Graph Description Student Answer;will be four units of bicycles. will be two units of bicycles. will be zero because unemployed resources are;available. IN of doing so cannot be determined;from the information given. Instructor Explanation: Chapter 1 Points Received: 0 of 3 Comments: Question 24. Question;(TCO 3) What type of barrier to entry was used by De Beers;throughout much of its history to maintain its monopoly position? Student Answer: Patent protection Government regulation Economies of scale Ownership of an essential resource Instructor Explanation: Chapter 10 Points Received: 3 of 3 Comments: Question 25. Question;(TCO 3) a.) A pure monopolist determines that at the current;level of output the marginal cost of production is $2, average variable costs;are $2.75, and average total costs are $2.95.;The marginal revenue is $2.75.;What would you recommend that the monopolist do to maximize profits? b.) Why might a business owner keep their;business open but let it deteriorate, rather than shut it down? Will this profitability last? Comments: Question 26. Question;(TCO 2) Evaluate how the following situations will affect;the demand curve for iPods.(a) Income statistics show that income of 18?25-year-olds;have increased by 10 percent over the last year.(b) Efforts of music artists wanting greater protection of;their music result in more stringent enforcement of copyrights and the shutdown;of numerous illegal downloading sites.(c) Believing that it has significant control of the market;for portable digital music players, Apple decides to raise the price of iPods;with the goal of increasing profits.(d) The price of milk decreases.="msonormal">

 

Paper#57923 | Written in 18-Jul-2015

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