Graphs
Math/Formulas
Find the mistake
Know the difference
Problems
100
A graph that measures the amount of good made relative to another good, can represent the capability of that economic entity (specific to the image +100 pts)
What is a PPC curve (decreasing opportunity cost)?
100
The general formula:
What is the elasticity formula
100
The cost incurred from an additional unit of output is not the same as the the mean cost of items (total cost/quantity)
What is common misconception between marginal cost and average cost?
100
Tastes and preferences, Income, Market size, Expectations of consumers, Related goods vs. Regulations (taxes), Input (material), productivity, expected prices, number of producers
What is difference between determinants of supply and demand?
100
Answer the fundamental concept behind economics
What is scarcity?
200
The below graph:
What is a Natural Monopoly graph?
200
compare rates of opportunity cost over units gained (determines if they should specialize in that good)
What is the comparative advantage formula?
200
They do not mean what you think they mean. One goes above the equilibrium price to create surplus and the other goes below equilibrium price to create shortage
What is common misconception between price floor and price ceiling?
200
They are all taxes, but one is equal rate/percentage (neutral), another increases rate/percentage (helps the poor), and the last one decreases in rate/percentage (hurts the poor, think sales tax)
What is difference between proportional, progressive, and regressive tax?
200
David has it for cakes and William has it for pies
What is comparative advantage?
300
A graph that varies in appearance based on the type of good, has to do with the equation (change in quantity over change in price), "measured" based on if it is less than, equal to, or greater than a certain constant
What is an elasticity of demand or supply graph?
300
(Marginal product/Price) are equal and (Marginal resource product/marginal resource cost) are equal (think of what happens when MR = MC)
What is resource market formula rules? (least-cost minimizing and profit-maximizing rule)
300
It's not the slope!!, associated with the extend to which quantity demanded or supplied changes due to a price change
What is common mistake with elasticity coefficient?
300
One states that as greater quantity is produced, decreasing cost (it applies to AFC), the other states that as greater quantity is produced, increasing cost (it applies to AVC). They work in tandem
What is difference between spreading effect and law of diminishing marginal return?
300
This individual should purchase this combination to maximize utility
What is 3 bowling excursions and 1 movie?
400
Graphs that determine the collective benefit/cost rather than just the individual, if it's excess benefit, the triangular area points to the right; if it's excess cost, the area points to the left, often associated with taxes or subsidies
What are the positive & negative externality graphs?
400
A/(A+B) where A is the area between the curve and the income equality line and B is the area under the curve
What is Gini coefficient formula?
400
Firms will not decide based on who will make the most profit or how they can prevent opponents from making profit, rather: deciding what action will bring more profit regardless of what opposing firm does
What is the mistake with game theory?
400
the three different market models, one treats firms as price-takers, another as price-makers, and the final one explains firm decisions with game theory
What is difference between perfectly competitive, monopoly, and oligopoly?
400
solution to (c) and (d)
What is four advertisements?
500
Two graphs for a perfectly competitive market (one for industry and another for the firm) and only one graph for a monopoly (because monopoly is the market), determines the price, demand, and available supply of one of the FOPs
What is the resource market for labor graph?
500
point where TC/Q = VC/Q + FC/Q = D = MR
point where AVC > MR
Name both.
What is normal profit formula and shut-down price?
500
Mike assumes that his costs will decrease in the long-run because as he produces more good, he gets more value out of his rental equipment and property. Mike is wrong in his assumption because of this mistake.
What is the mistake with long-run ATC?
500
One has decreasing long-run ATC, another has constant ATC, and the other is increasing ATC (sections on the LRATC curve)
What is the difference between economies of scale, constant, and diseconomies of scale?
500
The answers to (c)
What is Q3 because profit maximization for supply (private cost) and demand, should tax to correct overproduction, $5 from Q3 to Q2?