ECON 2101 Chapter 1 & 2
Homework (82 questions and
answers)
Market - answer A group of buyers and sellers of a good or service and the
institution or arrangement by which they come together to trade.
Here are the three important ideas about markets that we'll return to
frequently - answer People are rational.
People respond to economic incentives.
Optimal decisions are made at the margin.
Economists generally assume that people are ___ - answer rational
Economists generally assume that people respond to ___ - answer economic
incentives
optimal decisions are made ___ - answer at the margin
Economists assume that people are rational in the sense that ___ - answer
they use all available information as they take actions intended to achieve
their goals.
Economists reason that the optimal decision is to continue any activity up to
___ - answer the point where the marginal benefit equals the marginal cost—
that is, to the point where MB = MC
, Marginal analysis - answer Analysis that involves comparing marginal
benefits and marginal costs.
Which of the following best describes scarcity? - answer Unlimited wants
exceed the limited resources available.
Scarcity is central to the study of economics because it implies that - answer
every choice involves an opportunity cost.
Consider the following statement: "The problem with economics is that it
assumes that consumers and firms always make the correct decisions. But
we know that everyone makes mistakes."
What is the most correct response to this statement? - answer Economics
assumes that consumers and firms are rational, not that they always make
the right decisions.
If you were a manager at McDonald's, how would you go about analyzing
whether to switch to fresh, never-frozen beef patties? In your answer,
consider whether your decision would have to be all or nothing long dash —
all fresh, never-frozen beef patties in all McDonald's hamburgers, and
whether you would have to switch in all McDonald's locations around the
world (they are in 119 countries), or just in certain countries. - answer You
would want to compare the marginal benefits and marginal costs of serving
hamburgers made with fresh beef.
Late in the semester, a friend tells you,
"I was going to drop my psychology course so I could concentrate on my
other courses, but I had already put so much time into the course I decided
not to drop it."
Is your friend's reasoning correct or incorrect? - answer Your friend's
reasoning is incorrect.
Homework (82 questions and
answers)
Market - answer A group of buyers and sellers of a good or service and the
institution or arrangement by which they come together to trade.
Here are the three important ideas about markets that we'll return to
frequently - answer People are rational.
People respond to economic incentives.
Optimal decisions are made at the margin.
Economists generally assume that people are ___ - answer rational
Economists generally assume that people respond to ___ - answer economic
incentives
optimal decisions are made ___ - answer at the margin
Economists assume that people are rational in the sense that ___ - answer
they use all available information as they take actions intended to achieve
their goals.
Economists reason that the optimal decision is to continue any activity up to
___ - answer the point where the marginal benefit equals the marginal cost—
that is, to the point where MB = MC
, Marginal analysis - answer Analysis that involves comparing marginal
benefits and marginal costs.
Which of the following best describes scarcity? - answer Unlimited wants
exceed the limited resources available.
Scarcity is central to the study of economics because it implies that - answer
every choice involves an opportunity cost.
Consider the following statement: "The problem with economics is that it
assumes that consumers and firms always make the correct decisions. But
we know that everyone makes mistakes."
What is the most correct response to this statement? - answer Economics
assumes that consumers and firms are rational, not that they always make
the right decisions.
If you were a manager at McDonald's, how would you go about analyzing
whether to switch to fresh, never-frozen beef patties? In your answer,
consider whether your decision would have to be all or nothing long dash —
all fresh, never-frozen beef patties in all McDonald's hamburgers, and
whether you would have to switch in all McDonald's locations around the
world (they are in 119 countries), or just in certain countries. - answer You
would want to compare the marginal benefits and marginal costs of serving
hamburgers made with fresh beef.
Late in the semester, a friend tells you,
"I was going to drop my psychology course so I could concentrate on my
other courses, but I had already put so much time into the course I decided
not to drop it."
Is your friend's reasoning correct or incorrect? - answer Your friend's
reasoning is incorrect.
