ECON 2306 EXAM 3 WEHR MACROECONOMICS TEST #1
QUESTIONS AND CORRECT DETAILED ANSWERS
(VERIFIED ANSWERS) ALREADY GRADED A+
Absolute Advantage Ans✓✓✓who can produce most
-Adam Smith
Allocative Efficiency Ans✓✓✓producing what people want (right mix
of goods)
Arrow's Impossibility Theorem Ans✓✓✓it is impossible to devise a
voting scheme which satisfies all elements of a set of criteria including:
1. transitivity
2. free of irrelevant outcomes
3. no dictator.
The basis for trade is _____ advantage Ans✓✓✓comparative
Bilateral Monopoly Ans✓✓✓a case in which there is both a labor
union(monopoly) and a monopsony
Carrot & Stick Regulation Ans✓✓✓carrot represents the reward and the
stick represents the penalty.
-example: clean air act of 1990. Only one group benefited which was the
landlords. Lead to a market of pollution units. If a company goes over
the limit, they will be taxed or shut down.
, Condorcet's Paradox Ans✓✓✓issue of intransitivity
Cross-Subsidization Ans✓✓✓one activity helps pay for another activity
Differentiated Product Ans✓✓✓a product that is made different from
others through advertising or quality variation....?
basis for trade Ans✓✓✓why nations export and import certain
products....?
Economic Profit Ans✓✓✓total revenue minus total cost,
-including both explicit and implicit costs
Elasticity of Land Ans✓✓✓?
Exclusive Union Ans✓✓✓driving up wages by EXCLUDING certain
workers
Externalities Ans✓✓✓the cost or benefit that affects a party who did not
choose to incur that cost or benefit.
QUESTIONS AND CORRECT DETAILED ANSWERS
(VERIFIED ANSWERS) ALREADY GRADED A+
Absolute Advantage Ans✓✓✓who can produce most
-Adam Smith
Allocative Efficiency Ans✓✓✓producing what people want (right mix
of goods)
Arrow's Impossibility Theorem Ans✓✓✓it is impossible to devise a
voting scheme which satisfies all elements of a set of criteria including:
1. transitivity
2. free of irrelevant outcomes
3. no dictator.
The basis for trade is _____ advantage Ans✓✓✓comparative
Bilateral Monopoly Ans✓✓✓a case in which there is both a labor
union(monopoly) and a monopsony
Carrot & Stick Regulation Ans✓✓✓carrot represents the reward and the
stick represents the penalty.
-example: clean air act of 1990. Only one group benefited which was the
landlords. Lead to a market of pollution units. If a company goes over
the limit, they will be taxed or shut down.
, Condorcet's Paradox Ans✓✓✓issue of intransitivity
Cross-Subsidization Ans✓✓✓one activity helps pay for another activity
Differentiated Product Ans✓✓✓a product that is made different from
others through advertising or quality variation....?
basis for trade Ans✓✓✓why nations export and import certain
products....?
Economic Profit Ans✓✓✓total revenue minus total cost,
-including both explicit and implicit costs
Elasticity of Land Ans✓✓✓?
Exclusive Union Ans✓✓✓driving up wages by EXCLUDING certain
workers
Externalities Ans✓✓✓the cost or benefit that affects a party who did not
choose to incur that cost or benefit.
