Public Goods
A tornado siren is what type of good?
A public good
Define Tax
A section of income taken by the government to pay for public goods
Define Marginal Cost
The cost of adding one more item to production
What is the difference between variable and fixed costs?
Variable costs change with the level of production while fixed costs stay the same
What grade are we gonna get on the test?
100!
Your laptop is what type of good?
Private good
What type of system is the United States Tax system
Define Average Variable Cost
The average cost of making one more item of a specific product
What happens in the long run to fixed costs
they turn into variable costs
Give an example of a perfectly competitive firm
Pretty much any farming good. Identical product, price takers, etc.
DOUBLE JEOPARDY REVIEW QUESTION:
What happens to the market for motorcycles if the price of wheels (input price) goes up
Decrease in supply
A tax is imposed where everyone in a given country must pay 100$. What type of tax system is that?
Regressive
What is the equation for ATC
ATC=AVC+AFC
What is the difference between explicit and implicit costs?
Explicit costs require direct spending by the firm while implicit costs do not
If your income is $50,000, your income tax liability is $10,000, and you paid $0.25 in taxes on the last dollar you earned. What is your average and total tax rate?
Average: 20%
Marginal: 25%
When goods do not have a price, which of the following primarily ensures that the good is produced?
The government
Jan makes 50,000. What is her marginal tax rate?
0-20,000 : 9%
20,000-60,000 : 14%
14%
Describe the following graph: (I'm gonna draw it on the board)
As the number of workers increases, what happens?
Marginal Product increases but at a decreasing rate
The marginal revenue for the 7th pair of shoes is 20 dollars. The marginal revenue for the 8th pair of shoes is 16 dollars. What would you advise the makers of the shoes do?
Make fewer shoes, do not make the 8th pair of shoes
If long-run average total cost decreases as the quantity of output increases, the firm is experiencing
economies of scale
The Mansfield Public Library has a large number of books that anyone with a library card may borrow. Anyone can obtain a card for free. Because the number of copies of each book is limited, not everyone can have the same book at the same time. What type of good is this?
Common Resource
An efficient tax system is one that imposes small
Deadweight losses and transfers of money
Board work: Draw a typical Marginal cost curve, AVC curve and ATC curve
Answer in PD
Some firms in a competitive industry are earning zero economic profits, while others are experiencing losses. In the long run, we would expect the number of firms in the industry to
Decrease
a firm can produce 165 units of output per day when 15 workers are hired. The firm can produce 181 units of output per day when 16 workers are hired. The marginal product of the 16th worker is_______
16 units