ECON 315

Hector would like to buy a new pair of soccer cleats. Hector prefers Adidas to Puma brand soccer cleats. But Hector chooses to buy the Puma brand cleats instead. Which of the following reasons for Hector's choice is consistent with rational consumer choice? - Answer The price of Puma brand soccer cleats was less than the price of Adidas brand soccer cleats Oscar makes purchases of an existing product (X) such that the marginal utility of the last unit he consumes is 10 utils and the pri...

How does the average American perceive inequality in the U.S.? - Answer A Harvard business professor and a behavioral economist recently asked more than 5,000 Americans how they thought wealth is distributed in the US. Most thought that it's more balanced than it actually is. Asked to choose their ideal distribution, 92% picked one that was more equitable. How is income dispersed? - Answer -Income can be dispersed in various methods, even with the same average. -The distribution of ...

Scenario 10.1: Barbara is a producer in a monopoly industry. Her demand curve, total revenue curve, marginal revenue curve and total cost curve are given as follows: Q = 160 - 4P TR = 40Q - 0.25Q2 MR = 40 - 0.5Q TC = 4Q MC = 4 Refer to Scenario 10.1. How much output will Barbara produce? - Answer 72 Scenario 10.3: The demand curve and marginal revenue curve for red herrings are given as follows: Q = 250 - 5P MR = 50 - 0.4Q Refer to Scenario 10.3. The marginal cost of red ...

1. present value calculation: key formula: - Answer PV = FV/(1+i)n 2. value of a perpetuity: key formula: - Answer PVperpetuity = CF/i 3. value of a firm (before and after dividend) - Answer Before: PVfirm = π0(1 + i)/(i - g) After: PVfirm = π0(1 + i)/(i - g) - π 4. (3) influences on present value - Answer 1. time (longer time = lower PV) 2. profit (higher profit = higher PV) 3. interest (higher interest = lower PV) 5. influences on demand - Answer 1. Change in...

Marginal Cost is defined as: a. Total cost divided by output b. The change in output due to a one unit change in an input c. Total product divided by the quantity of input d. The change in total cost due to a one unit change in output - Answer d. The change in total cost due to a one unit change in output An implicit cost is defined as: a. the opportunity cost of using a resource that is not explicitly paid out by the firm. b. the amount by which the money spent on an input to prod...

Spot Exchange - Answer an informal relationship between a buyer and seller in which neither party is obligated to adhere to specific terms for exchange contract - Answer a formal relationship between a buyer and seller that obligates the buyer and seller to exchange at terms specified in a legal document. Produce inputs internally(vertical integration) - Answer a situation where a firm produces the inputs required to make its final product. transaction costs - Answer costs a...

1. What term describes the situation when a firm earns a higher rate of economic profit than the average rate of economic profit of other firms competing within the same market? a) Industry effect b) Competitive advantage c) Business unit effect d) Competitive position e) Market profitability economics - Answer b) Competitive advantage 2. What is the perceived benefit of a product per unit consumed minus the product's monetary price? a) Value creation b) Competitive advantage c)...

Southwest Airlines begins a ''Bags Fly Free'' campaign, charging no fees for the first and second checked bags. This situation best represents - Answer producer-producer rivalry It is estimated that over 100,000 students will apply to the top 30 MBA programs in the United States this year. Using the concept of net present value and opportunity cost, when is it rational for an individual to pursue an MBA degree. multiple choice A:When the benefits of attending school are gre...

Charging higher prices for one category of patients in order to provide free or subsidized care to another group is called - Answer cost-shifting. Economists use the term "marginal" to describe costs and benefits - Answer that are incremental and thus relevant to decision making. Which is an example of the negative impact of the Law of Diminishing Marginal Returns? - Answer Drinking so many glasses of wine that the last glass you had made you very sick. Early in US histor...

If wages are above equilibrium... - Answer excess quantity supplied surplus of labor wages eventually decrease If wages are below equilibrium... - Answer excess quantity demanded shortage of labor wages eventually increase Determinant of supply - Answer Wages of other occupations nonwage income preference of work nonwage aspect of job number of qualified suppliers With perfect information and mobility, what happens? - Answer People leave market B (decrease in supply)...