ECON 1014

Big Microeconomic Ideas - Answer Incentives matter, good institutions align self-interest with the social interest, Trade-offs are everywhere, Thinking on the margin, and The power of trade. Incentives Matter - Answer People respond to incentives in predictable ways. Self-interest does not - Answer equal greed Good institutions align self-interest with the social construct - Answer Invisible hand. Individuals working for their own self-interest, often produce out...

In a ___________________ economy the government does not tell consumers and producers directly what they need to buy or produce, but they impose some limitations to guide production and to protect consumers and workers from unfair treatment. - Answer Mixed In a ___________________economy the three economic questions are answered by "What has always been done." - Answer Traditional Which of these is a negative unintended consequence from your decision to go out for the eve...

inferior good - Answer a good that consumers demand less of when their incomes increase normal good - Answer a good that consumers demand more of when their incomes increase necessary good - Answer demand for a good goes up by a lesser proportion than income luxury good - Answer good for which demand increases faster than income when income rises Law of Supply - Answer the claim that, other things equal, the quantity supplied of a good rises when the pri...

New Beginnings Consignment Clothing is a clothing store located in downtown Columbia that charges 10% lower prices for faculty, students, and veterans. This is an example of what? - Answer Third degree price discrimination Suppose that you are a monopolist who faces two markets with different demand curves. Market 1's demand curve is elastic and Market 2's demand curve is inelastic. How do you maximize profit? - Answer Charge a high price in Market 2 and a low price in Marke...

International Trade a) Only benefits wealthy countries b) Is driven by the property of absolute advantage c) Decreases the amount of collective human knowledge d) makes the size of overall economic pie bigger - Answer D) makes the size of the overall economic pie bigger Which of the following will not lead to an increase in demand for hair transplant surgery? a) Jason Statham and bruce willis star in blockbuster films as leading men b) there is a general increase in income, and m...

A free rider is someone who: - Answer enjoys the benefits of a public good without paying a share of the costs Advertising allows producers to give goods like radio broadcasts away for free (which is the _____ solution) while still being profitable. - Answer efficient If a good is nonrival, then: - Answer people are not prevented from using it by another's use of the good The slaughter of the open-range buffalo during the nineteenth century is an example of: - Answe...

Number of Firms in Oligopoly? - Answer A Few Sellers How do Oligopolies pick best price-output combo? - Answer Game Theory Are Oligopolies Price takers or makers? - Answer Price Makers Profit Max of Oligopoly? - Answer MR=MC Do Oligopolies have no, small, or large barriers to entry? - Answer Large, so few firms 5 barriers to entry - Answer Scale Economies, Switching Costs, Product Differentiation, Absolute Cost Advantage, Government Regulations ...

Incentives - Answer Are rewards and penalties that motivate behavior Opportunity Cost - Answer A choice is the value of the opportunities lost Inflation - Answer An increase in the general level of prices Absolute Advantage - Answer The ability to produce the same good using fewer inputs than another producer Comparative Advantage - Answer The ability to produce a good or service at a lower opportunity cost than another producer Demand Curve - Answer ...

Price Discrimination - Answer charging more than one price for the same product. (increase surplus as compared to simple monopoly) Is there Arbitrage? - Answer No. What is Elasticity equal to? - Answer Escape What happens when price discrimination increases output? - Answer The total surplus will increase. Tying - Answer Consumption of one good requires the consumption of a second good produced by same firm. (allows firms to price discriminate). Objec...

How is the burden of taxation and the benefit of subsidies divided between producers and consumers?a.Th - Answer the burden of taxation and the benefit of subsidies is determined by the relative elasticities of supply and demand. Which (if any) of the following statements are TRUE for both taxes and subsidies? I. Both create deadweight losses II. Both increase the welfare of consumers and producers. III. Both create a difference between the consumer's price paid and the producer...