Unit 1 Basics Economics
The study that focuses on firms, households, and individuals is known as
What is microeconomics?
A change in which of the following will cause a change in the supply of personal computers (PC’s) in the short run?
A- Technology
B- Demand for PC’s
C- Price of disks, which are a complement to PC’s
D- Price of PC’s
A- Technology
market in which buyers and sellers are numerous and well informed that all elements of monopoly are absent.
What is perfect competition?
A player's best strategy in game theory is known as?
Dominant strategy
A decrease (leftward shift) in the supply for a good will tend to cause
A. an increase in the equilibrium price and quantity.
B. a decrease in the equilibrium price and an increase in the equilibrium quantity.
C. an increase in the equilibrium price and a decrease in the equilibrium quantity.
C. an increase in the equilibrium price and a decrease in the equilibrium quantity.
Cindy and Martin both sew t-shirts in a small factory. Using the same resources, Martin can sew twelve t-shirts and Cindy can sew nine t-shirts in one day. Which of the following can be concluded from the given information?
A- Martin has a higher opportunity cost of sewing t-shirts than Cindy does.
B- Cindy has a comparative advantage in sewing t-shirts.
C- Martin has a comparative advantage in sewing t-shirts.
D- Martin has an absolute advantage in sewing t-shirts.
D- Martin has an absolute advantage in sewing t-shirts.
The point where the demand and supply curve intersect
Market Equilibrium
What is another term for long run equilibrium?
Breaking even or normal profit
Define Nash Equilibrium
stable state in game theory where each player chooses the best strategy for themselves, assuming all other players' strategies remain fixed, meaning no single player can improve their outcome by changing their move alone
The lowest wage permitted by law
what is minimum wage
An economic system where the government has total control
What is Command Economy?
The relationship between Price and Qty on the Demand Curve
What is inverse
If P = MC above the ATC, the is...
A. breaking even
B. making a profit
C. incurring losses but stay open
D. incurring losses and should shut down
making a profit
When a firm expands its size and results in a decrease in Average Total Cost, it is known as ...
economies of scale
Public goods are typically provided by the government, because private markets tend to
A- produce them at higher cost
B- produce less than the socially optimum quantity
C- produce more than the socially optimum quantity
D- charge a monopoly price that is greater than the marginal social cost
B- produce less than the socially optimum quantity
Land, Labor, Capital, and entrepreneurship is also known as the...
What is the four factors of production
If a normal good is produced in a competitive market, which of the following combination of events could cause the price of the good to increase and the quantity to decrease?
A- An increase in the average income of consumers and an increase in the number of producing firms
B- An increase in the average income of consumers and an increase in the price of a variable input
C- An increase in the price of a substitute good an an increase in the number of producing firms
D- A decrease in the number of consumers and a decrease in the price of a variable input
B- An increase in the average income of consumers and an increase in the price of a variable input
In the short run, a firm should always shut down when what is true?
P<AVC
ABC Limited, Inc., sells its product in a perfectly competitive market for a price of $15 per unit and hires workers at a daily wage of $75. Labor is the only factor cost, and the firm is currently earning profits. If ABC hires one more worker and output increases by 5 units per day, the firm's profits will
A- remain unchanged
B- decrease by $75
C- increase by $75
D- increase by $15
remain unchanged
The surgeon general has determined that smoking causes cancer and heart disease for both smokers and passive smokers, nonsmokers who breathe smoke-filled air. If cigarette prices are determined in a free market, which of the following will be true?
A- The price of cigarettes will be too low and the quantity sold will be too high.
B- The price of cigarettes will be efficient but the quantity sold will be too high.
C- The market will be efficient because markets always equate marginal benefits and marginal costs.
D- The price of cigarettes will reflect the marginal social benefit received by nonsmokers.
A- The price of cigarettes will be too low and the quantity sold will be too high.
Dr. Art and Dr. Zed jointly own an outpatient surgery practice. Dr. Art takes 2 hours to perform knee surgery and 1 hour to perform elbow surgery. Dr. Zed takes 4 hours to perform knee surgery and 1 hour to perform elbow surgery. Which of the following conclusions is supported by the information provided?
A- Dr. Art has a comparative advantage in elbow surgery.
B- Dr. Zed has a comparative advantage in elbow surgery.
C- Dr. Zed does not have a comparative advantage in performing either procedure.
D- Dr. Art does not have a comparative advantage in performing either procedure.
B- Dr. Zed has a comparative advantage in elbow surgery.
BRAIN TEASER!
1, 1, 2, 3, 5, 8, 13, ___, 34
21
Define and/or give an example of diminishing marginal returns.
When the next worker hired does not contribute as much as the previous worker hired. Too many cooks in the kitche.
BRAIN TEASER!
84% of people reading this will not find the the mistake in this. A,B,C,D,E,F,G,H,I,J,K,L,M,N,O,P,Q,R,S,T,U,V,W,X,Y,Z
the the
When marginal costs are below average total costs,
A. average fixed costs are rising.
B. average total costs are rising.
C. average total costs are falling.
D. average total costs are minimized.
C. average total costs are falling