Williston State College

Adverse Selection (Ans – refers to the problem in which the buyers of insurance have more information about whether they are high-rick or low-risk than the insurance company does Moral Hazard (Ans – refers to the case when people engage in riskier behavior with insurance than they would if they did not have insurance Excludability (Ans – a person can be prevented from using resources Rivalry in consumption (Ans – one person's use diminishes other people's useCommon re...

When we say that U.S. GDP was roughly $19 trillion for 2017, what does that even mean? a) The U.S. created $18 trillion in new economic value for the year b) The U.S. produced and sold $18 trillion in new goods and services for the year c) The U.S. earned $18 trillion for the year d) All of the above e) None of the above (Ans- d) All of the above the stages of the business cycle in correct order (Ans- peak, contraction, trough, exp

Exports (Ans- Goods shipped out of country Imports (Ans- Goods shipped into country Absolute Advantage (AnsThe ability to produce a good using fewer inputs than someone else (when comparing, be able to identify country with absolute advantage) Comparative Advantage (AnsThe ability to produce a good at a lower opportunity coset than another producer. (When comparing, be able to identify country with comparative advantage) Reasons why a country may choose not to trade (Ans- -National ...

Which is NOT something companies try to achieve through price discrimination? -charge each customer the highest price they are willing to pay -create barriers to entry -sell to every customer whose marginal benefit exceeds the firm's marginal cost -increase profits (Ans- create barriers to entry what causes adverse selection? (Ans- -sellers having private information -buyers having private information -unobservable actions On a graph of a company's cost, revenue, and demand cu...

The civilian labor force includes: a. the sum of all employed and all unemployed people. b. all working people not in the military. c. the sum of all employed people. d. the sum of all people not in the military and all unemployed people. (Ans- a. the sum of all employed and all unemployed people. Structural Unemployment a. is unemployment that occurs as a result of a downturn in the economy. b. is short-term unemployment associated with individuals who are not working while seeking th...

Equilibrium (Ansa situation in which the market price has reached the level at which quantity supplied equals quantity demanded Surplus Shortage (Ans- :a situation in which quantity supplied is greater than quantity demanded : a situation in which quantity demanded is greater than quantity supplied Elasticity (Ans- a measure of the responsiveness of quantity demanded or quantity supplied to a change in one of its determination Price Elasticity of Demand (Ans- a measure of how much ...

Which of the following statements is false with regard to fixed interest rate loans? a. any of the other two could be correct b. debtors prefer inflation to be higher than expected during the life of a loan c. lenders prefer inflation to be higher than expected during the life of a loan (Ans- c. lenders prefer inflation to be higher than expected during the life of a loan Which of the following best describes a period of disinflation? a. price stability is occurring b. inflation is oc...

What is a price-taker? (Ans- when a firm or an individual takes the price of a good as determined by market supply and demand. When a firm is profitable, what does this mean? (Ans- Price > Average total costs When should a firm shut down? (Ans- When Price < Average total costs firms in perfectly competitive markets tend to earn how much in long run economic profits? (Ans- They typically earn zero profits in long run Definition of a monopoly (Ans- a market structure in which one ...

What is the Law of Increasing Opportunity Cost? (Ans- states that cost arises when producing more because resources are heterogenous and not equally useful in production of each product Demand (Ans- how much consumers willing and able to buy at each price, in given market and time period, considering all other factors are constant (ceteris paribus) Law of Demand (Ans- inverse relation between price and quantity demanded of good, ceteris paribus What is the "ceteris paribus" assum...

equilibrium (Ans- a situation in which the market price has reached the level at which quantity supplied equals quantity demanded equilibrium price (Ans- the price that balances quantity supplied and quantity demanded equilibrium quantity (Ans- the quantity supplied and the quantity demanded at the equilibrium price surplus (Ans- a situation in which quantity supplied is greater than quantity demanded Shortage (Ans- a situation in which quantity demanded is greater than quantity sup...