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1 During the winter break, Sam decides to go for a skiing vacation in
Aspen instead of taking piano lessons. The opportunity cost of the skiing
vacation is the: cost of accommodation and food in Aspen. value of
piano lessons. cost of buying a piano. amount paid to the skiing
instructor. 2 Which of the following is an example of a negative
externality? Smith reducing the consumption of imported wine
following an increase in the price of imported wine Phoebe refusing to
contribute to the building of a childrens park in her neighborhood
Christina accepting a payment in cash rather than in check for her
laundry services Tom playing music loudly in his room, disturbing his
roommate who has an exam the next day 3.A perfectly competitive firm
sells 10 units of Good X at a price of $2 per unit. It incurs a fixed cost of
$5 and a variable cost of $40 to produce the good. Which of the
following is true? The firm should operate in the short run but shut
down in the long run. The marginal cost of the good is $4. The average
revenue of the firm is $20. The firm should shut down. 4.Squeeze Inc.
sells orange juice in a market where there are a large number of
consumers and sellers. New firms can enter the market easily and also
exit whenever they want to. It sells 40 bottles in a month at a price of $4
per bottle and incurs a cost of $5 per bottle. The average revenue of the
firm: will be less than the marginal revenue. is $2, which is less than the
market price. will be greater than the marginal revenue. is $4, which is
equal to the marginal revenue. 5.Which of the following is a difference
between liberalism and libertarianism? Libertarians believe that
equality of opportunities is more important than the equality of
incomes, while liberals believe in policies that equalize the distribution
of income. Libertarians argue that the government should maximize
total utility, while liberals argue that the average utility of members of
society should be maximized. Libertarians believe that the
government should redistribute income from the rich to the poor, while
the liberals believe that the government should not redistribute income.
Libertarians emphasize the importance of the maximin criterion, while
liberals emphasize the importance of an egalitarian society. 6.Bryan is
trying to decide whether he should give up his job as a software
programmer and invest in a start-up. Bryan earns an annual salary of
$80,000 and has a saving of $50,000. The start-up would require an
initial investment of $600,000. Bryan plans to take a loan from Trust
Bank, a local commercial bank, which charges an interest rate of 5
percent on loans and provides an interest of 7 percent on savings
deposits. Which of the following is true in this case? The 7 percent
interest that Bryan could have earned on his savings will be included in
the calculation of his economic profit. Bryan should invest in the start-
up as he has to pay a lower interest rate on loans than he receives on
his savings deposits. Bryan should not invest in the start-up as his
economic profit is lower than his accounting profit. The interest rate
of 5 percent on loans is a part of the implicit cost of setting up the start-
up and will be included in the calculation of his accounting profit.
7.Color Mate Inc., a company that produces interior and wall paints,
dumps its chemical waste in a river. Which of the following is likely to be
true in this case? The social cost of the company is lower than the
private cost, and the equilibrium quantity of paints produced is less than
the social optimum. The social cost of the company is higher than the
private cost, and the equilibrium quantity of paints produced is larger
than the social optimum. The social cost of the company is higher than
the private cost, and the equilibrium quantity of paints produced is less
than the social optimum. The social cost of the company is lower than
the private cost, and the equilibrium quantity of paints produced is
larger than the social optimum. 8.Scarcity occurs because of: the
limited supply of resources. overutilization of labor. the excess of
quantity supplied over quantity demanded. limited human needs and
wants. 9.The exhibit given below shows the demand curve for Good X,
labeled D. At a price of $6 per unit, the quantity demanded of Good X is
5 units. A decrease in price to $4 per unit increases the quantity
demanded to 8 units. Assuming that a decrease in price leads to new
consumers buying the good, what is the consumer surplus received by
the new consumers in the market? $3 $10 $2 $13 10.Given an
increase in the market demand for its product, a firm decides to hire an
additional worker. The amount of output produced by 25 workers is 80
units. The marginal product of the 26th worker is 15 units. After the
26th worker is hired, the total output would increase to _____. 1,200
units 6 units 15 units 95 units 11.Suppose both Monica and Edith
grow roses and make guns. If Monica devotes 10 hours to growing
roses, she grows 16 roses, and if she devotes 10 hours to making guns,
she produces 4 guns. If Edith divides her 10 hours equally, she produces
12 roses and 6 guns. Identify the correct statement. Edith has an
absolute advantage in both growing roses and making guns. Monica
has an absolute advantage in growing roses, and Edith has an absolute
advantage in making guns. Monica has an absolute advantage in both
growing roses and making guns. Monica has an absolute advantage in
making guns, and Edith has an absolute advantage in growing roses.
12.Penelope has recently started a printing business in Duluth. She had
to pay a fee to obtain a trade license from the Minnesota government
and took a loan from the local bank to purchase inkjet printers, laser
printers, and screen printers. She employs 20 workers who are paid a
wage of $30 per hour. She is also a trained ballet dancer who used to
earn an average of $50,000 a year. Penelopes implicit cost of running
the business is: $72,000 per annum. the amount she used to earn as
a ballet dancer. the interest she has to pay on the loan. the fee paid
to the government. 13.A sudden increase in the demand for air
conditioners increased the earnings of the workers employed in air
conditioner-manufacturing firms and attracted workers from other
sectors. Which of the following will be true in the market for workers
employed in air conditioner-manufacturing firms? There will be a
leftward shift of the labor supply curve, leading to an increase in the
equilibrium wage and a decrease in employment. There will be a
rightward shift of the labor supply curve, leading to an increase in the
equilibrium wage and employment. There will be a rightward shift of
the labor supply curve, leading to a decrease in the equilibrium wage
and an increase in employment. There will be a leftward shift of the
labor supply curve, leading to a decrease in the equilibrium wage and
employment. 14.Moonlife LLC. observed that its total revenue is
proportional to the quantity of good sold. It is likely that Moonlife LLC. is
a: perfectly competitive firm. monopolistic competitor. monopoly.
monopsony. 15.The Rhodes and Samson families, with annual incomes
of $100,000 and $120,000, respectively, live in a society where the
primary objective of the government is to maximize the sum of the
utility attained by everyone in the society. Which of the following is
likely to be true in such a society? The government will redistribute
income between the two families in such a way that the welfare of the
Rhodes family improves. The government will redistribute income
between the two families in such a way that both the families will have
the same level of post-tax income. The government will tax the
Rhodes family and provide income transfers to the Samson family to
maximize total utility. The government will tax the Samson family and
provide income transfers to the Rhodes family, but there will exist an
inequality of income between the two families. 16.Which of the
following reflects the law of demand? Jonathan, a coffee drinker,
switching to green tea after a fall in the price of green tea John
purchasing a bigger apartment after an increase in his salary Jacques
purchasing 4 bottles of lemonade instead of 3 when its price decreased
from $12 to $10 per bottle Jimmys demand for donuts decreasing
from 4 per week to 2 per week after its price decreased from $1 to $0.5
per donut 17.Adrianne and Joanna love watching plays on Broadway.
Adrianne values a play at $85, and Joanna values it as $82. When the
price of tickets increased from $80 to $83 following the imposition of a
tax, Joanna stopped watching plays on Broadway, while Adrianne
continued to buy tickets. Identify the correct statement. The deadweight
loss is $3. The decrease in Adriannes consumer surplus is equal to the
deadweight loss. Total consumer surplus decreased by less than the tax
revenue. The decrease in Adriannes surplus is equal to the tax revenue.
18 The exhibit given below shows the market for wheat in Zenetia. At a
price of p, the profit-18.maximizing quantity for a wheat producer is
_____. Q between Q and Q Q Q1 19.The exhibit given below shows
Melanies budget constraint for two goods, wine and cheese. The slope
of the budget constraint equals: 2 3/2 2/3 3 20.Liz starts driving
rashly after buying insurance. This is an example of a(n): negative
externality. free-rider problem. common-resource problem. moral-
hazard problem. 21.The exhibit given below shows the demand curve
for and the supply curve of laptops, D and S1. The government decides
to impose a price ceiling on the price of laptops. At the same time, the
price of inverter boards that provide power to backlight lamps inside
laptop screens increases. Identify the correct statement. A price of P2
will be binding in this market. At a price ceiling of P1, the quantity
demand and supplied in the market will be Q2. The government
should set the price ceiling at P1 to eliminate shortage. A price ceiling
above P3 will eliminate shortage in the market. 22.The state
government of Dalmatia noticed that whenever its baseball team
played a match in any of the local stadiums, the prices of tickets
became too high. It decided to impose a price ceiling on the ticket
prices. The exhibit given below shows the demand curve for and the
supply curve of baseball game tickets in Dalmatia. If the government
were to impose a binding price ceiling, it should set the price at: $120
per ticket, which would give rise to a shortage of 10,000 tickets. $120
per ticket, which would give rise to a surplus of 20,000 tickets. $80 per
ticket, which would give rise to a shortage of 16,000 tickets. $80 per
ticket, which would give rise to a surplus of 8,000 tickets. 23.Which of
the following is an example of adverse selection? Patrick uses the
service of a mechanic to inspect the condition of a second-hand Dodge
he is interested in buying. Harry refuses to buy health insurance at
high premiums because he feels that he is in good health. Thomas
refuses to pay for the construction of a swimming pool in his
neighborhood that will be open to the public free of cost. When the
National Museum increased its entry fee, there wa 24.Mike sells navel
oranges in a market where there are a lot of other sellers and faces a
perfectly elastic demand curve for oranges. He hires 10 workers in a
perfectly competitive market to help him with picking oranges. Given
this information, it can be said that: the demand for workers is a
positive function of the prevailing market wage rate. the demand
curve for orange pickers is vertical. Mike can employ only 10 workers
as the supply of workers is fixed in a perfectly competitive labor market.
Mike cannot bargain with the workers over their wage rates
25.Suppose Timothy consumes two goods, soda and chips. The slope of
his indifference curve for these two goods reflects: the relative price of
soda. the total utility he gets from the consumption of the two goods.
the relative price of chips. the rate at which he is willing to substitute
one good for the other. 26.The exhibit given below shows the supply
curve of printing machines. At a price of $400 per machine, the
producer surplus is: 27.Recent political unrest has caused many citizens
of Serria to flee the country. This is likely to: shift the labor demand
curve in Serria to the left. increase labor employment in Serria. shift the
labor supply curve in Serria to the right. increase the equilibrium wage
rate in the labor market in Serria. 28.Suppose both Ross and Vivian
produce butter and cheese. When Ross works for 10 hours a day, he
produces 6 pounds of butter and 24 pounds of cheese. When Vivian
works for the same hours, she produces 20 pounds of cheese and 40
pounds of butter. Rosss opportunity cost of producing a pound of butter
is: 5 pounds of cheese. 1/4 pounds of cheese. 18 pounds of cheese. 4
pounds of cheese. 29. Paula wants to buy 3 packs of frozen yoghurt
when it is priced at $2 per pack. When the price increases to $3.50 per
pack, she wants to buy 2 packs. This reflects the: maximization of
marginal utility by Paula. law of diminishing marginal utility. law of
demand. maximization of total utility by Paula. 30. The table given
below shows three buyers willingness to pay for an antique necklace. At
a market price of $25,000, the total consumer surplus in the market is
_____. $30,000 $6,000 $26,000 $7,000
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Identify at least one shift of the supply curve and one shift of the
demand curve in the simulation. What causes the shifts?
For each shift, analyze how it would affect the equilibrium price,
quantity, and decision making.
How may you apply what you learned about supply and demand
from the simulation to your workplace or your understanding of a
real-world product with which you are familiar?
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ECO 365 Week 2 Learning Team Reflection Production and Cost
Analysis
FOR MORE CLASSES VISIT
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Discuss this weeks objectives with your team. Include the topics you
feel comfortable with, any topics you struggled with, and how the topics
relate to your field.
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the organization competes. You will assess how the market structure po
sitively and negatively affects the firm and evaluate the efficacy of the s
tructure's competitive strategies.
Evaluate the efficacy of these strategies in the market structure you ide
ntified.
Paper
PowerPoint Presentation:
Create a 12-
15 slide Microsoft PowerPoint presentation including detailed speake
r notes.
Video
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