MICROECON HW 1/3 WITH COMPLETE SOLUTIONS 100% VERIFIED
Fundamentally, economics deals with - ANSWER scarcity
The adage, "There ain't no such thing as a free lunch," means - ANSWER people face
tradeoffs.
Efficiency means that - ANSWER society is getting the most it can from its scarce
resources
Which of the following is true?. - ANSWER Efficiency refers to the size of the economic
pie; equality refers to how the pie is divided.
Senator Fujita argues that replacing the federal income tax with a national sales tax
would increase the level of output. Senator Watson objects that this policy would benefit
the rich at the expense of the poor. - ANSWER Senator Fujita's argument is primarily
about efficiency, while Senator Watson's argument is primarily about equality.
A rational decisionmaker - ANSWER takes an action only if the marginal benefit of that
action exceeds the marginal cost of that action
A hair stylist currently cuts and colors hair for 50 clients per week and earns a profit. He
is considering expanding his operation in order to serve more clients. Should he
expand? - ANSWER It depends on the marginal cost of serving more clients and the
marginal revenue he will earn from serving more clients.
After much consideration, you have chosen Ireland over Spain for your Study Abroad
program next year. However, the deadline for your final decision is still months away
and you may reverse this decision. Which of the following events could prompt you to
reverse this decision? - ANSWER The marginal benefit of going to Spain increases.
, Savion is restoring a car and has already spent $4,000 on the restoration. He expects to
be able to sell the car for $5800. Savion discovers that he needs to do an additional
$2,400 of work to make the car worth $5,800 to potential buyers. He could also sell the
car now, without completing the additional work, for $3,800. What should he do? -
ANSWER He should sell the car now for $3,800.
Aiden and Zaria charge people to park on their lawn while attending a nearby craft fair.
At the current price of $10, six people park on their lawn. If they raise the price to $15,
they know that only five people will want to park on their lawn. Whether they have six or
five cars parked on their lawn does not affect their costs. From this information it follows
that - ANSWER they would do better charging $15 than $10.
Suppose your finance professor has been offered a corporate job with a 25 percent pay
increase. He has decided to take the job. For him, the marginal - ANSWER benefit of
leaving was greater than the marginal cost.
Dee is an accomplished actress and a homeowner who pays a landscaper to maintain
her lawn rather than do it herself. Dee has determined that she can earn more in the
hour it would take her to work on her lawn than she must pay her landscaper. This
scenario is an example of which principle of economics? - ANSWER Trade can make
everyone better off.
Central planning refers to - ANSWER government guiding economic activity. Today
many countries that had this system have abandoned it.
The "invisible hand" refers to - ANSWER how the decisions of households and firms
lead to desirable market outcomes.
The term market failure refers to - ANSWER a situation in which the market on its own
fails to allocate resources efficiently
Market power refers to the - ANSWER power of a single person or small group to
influence market prices
Fundamentally, economics deals with - ANSWER scarcity
The adage, "There ain't no such thing as a free lunch," means - ANSWER people face
tradeoffs.
Efficiency means that - ANSWER society is getting the most it can from its scarce
resources
Which of the following is true?. - ANSWER Efficiency refers to the size of the economic
pie; equality refers to how the pie is divided.
Senator Fujita argues that replacing the federal income tax with a national sales tax
would increase the level of output. Senator Watson objects that this policy would benefit
the rich at the expense of the poor. - ANSWER Senator Fujita's argument is primarily
about efficiency, while Senator Watson's argument is primarily about equality.
A rational decisionmaker - ANSWER takes an action only if the marginal benefit of that
action exceeds the marginal cost of that action
A hair stylist currently cuts and colors hair for 50 clients per week and earns a profit. He
is considering expanding his operation in order to serve more clients. Should he
expand? - ANSWER It depends on the marginal cost of serving more clients and the
marginal revenue he will earn from serving more clients.
After much consideration, you have chosen Ireland over Spain for your Study Abroad
program next year. However, the deadline for your final decision is still months away
and you may reverse this decision. Which of the following events could prompt you to
reverse this decision? - ANSWER The marginal benefit of going to Spain increases.
, Savion is restoring a car and has already spent $4,000 on the restoration. He expects to
be able to sell the car for $5800. Savion discovers that he needs to do an additional
$2,400 of work to make the car worth $5,800 to potential buyers. He could also sell the
car now, without completing the additional work, for $3,800. What should he do? -
ANSWER He should sell the car now for $3,800.
Aiden and Zaria charge people to park on their lawn while attending a nearby craft fair.
At the current price of $10, six people park on their lawn. If they raise the price to $15,
they know that only five people will want to park on their lawn. Whether they have six or
five cars parked on their lawn does not affect their costs. From this information it follows
that - ANSWER they would do better charging $15 than $10.
Suppose your finance professor has been offered a corporate job with a 25 percent pay
increase. He has decided to take the job. For him, the marginal - ANSWER benefit of
leaving was greater than the marginal cost.
Dee is an accomplished actress and a homeowner who pays a landscaper to maintain
her lawn rather than do it herself. Dee has determined that she can earn more in the
hour it would take her to work on her lawn than she must pay her landscaper. This
scenario is an example of which principle of economics? - ANSWER Trade can make
everyone better off.
Central planning refers to - ANSWER government guiding economic activity. Today
many countries that had this system have abandoned it.
The "invisible hand" refers to - ANSWER how the decisions of households and firms
lead to desirable market outcomes.
The term market failure refers to - ANSWER a situation in which the market on its own
fails to allocate resources efficiently
Market power refers to the - ANSWER power of a single person or small group to
influence market prices
