Opportunity Costs when production is in quantity per/hr =
|
|
- Alexina Parks
- 5 years ago
- Views:
Transcription
1 CHAPTER 1 THE CENTRAL IDEA 1.1 Scarcity and Choice for Individuals SCARCITY PRINCIPLE Scarcity principle (no free lunch principle): Although we have boundless needs and wants, the resources available to us are limited. Consequently, having more of one good/thing usually means having less of another. People benefit from economic interactions trading goods and services with other people. Gains from trade occur because goods and services can be allocated in ways that are more satisfactory to people. OPPORTUNITY COST Opportunity cost: The value of the next best forgone alternative that was not chosen because something else was chosen. Example: The opportunity cost of going to a tutorial class is having lunch with friends. Personal, as everyone has different alternatives that they are giving up. SPECIALISATION Having people produce the good for which they have a comparative advantage. Enables the economy to achieve productive efficiency by producing at minimum cost. Therefore, maximising the level of output produced from its scarce resources. COMPARATIVE ADVANTAGE: THE BASIS FOR TRADE Absolute advantage: When one person is able to produce a good or service with less resources then another person (JUST BETTER). Comparative advantage: When one person s opportunity cost of producing a good or service is lower than another person s opportunity cost. Law of Comparative Advantage: The individual or country with the lowest opportunity cost of producing a particular good should specialise in producing that good. Opportunity Costs when production is in quantity per/hr = 1.2 Scarcity and Choice for the Economy as a Whole PRODUCTION POSSIBILITES CURVE Loss in Good B Gain in Good A A graph that describes the maximum amount of one good that can be produced for every possible level of production of another good. PPCs slope downward because the scarcity principle that states that the only way a person can produce more of one good is to produce less of another. An increasing opportunity cost is depicted by a PPC that is bowed away from the origin. 1
2 Different people in the group have different opportunity costs, hence there is diminishing marginal returns for people who do a particular thing which they are not suited to, decreasing efficiency. A straight line PPC depicts a constant opportunity cost of producing both goods. The PPC shifts out as resources increase. FACTORS THAT CAUSE THE PPC TO SHIFT OVER TIME Economic growth is represented by an outward shift of the PPC: Increases in the amount of productive resources available. Investment in new factories and equipment Increases productivity Improvements in knowledge or technology Existing resources more productive (labour, capital) Population growth CHAPTER 2 OBSERVING AND EXPLAINING THE ECONOMY 2.1 Variables, Correlation and Causation CORRELATION VS. CAUSATION Correlation: One event usually occurs with another Correlation does not imply causation. Example: High readings on a thermometer are correlated with hot weather. But the thermometer readings do not cause the hot weather. Economics is the study of the production, distribution and consumption of goods and services. It is the study of how people make choices under conditions of scarcity and of the results of those choices for society. Microeconomics: The study of individual choices and of group behaviour in individual markets. Macroeconomics: The study of the performance of national economies and of the policies that governments use to try to improve economic performance. THE CETERIS PARIBUS ASSUMPTION All other things being equal. Refers to holding all other variables constant or keeping all other things the same when on variable is changed. POSITIVE VS. NORMATIVE STATEMENTS Positive statements are what is factual statements. Normative statements are what should be statements that involve value judgements that cannot be tested. 2
3 CHAPTER 3 THE SUPPLY AND DEMAND MODEL 3.1 Demand DEMAND Demand describes consumers. DIAGRAM Law of demand: Price and quantity demanded are negatively related. Movements along demand curve occur: o When price rises and quantity demanded falls. o When price falls and quantity demanded rises. Shifts in demand are due to: o Preferences (changes in consumers tastes) o Number of consumers in market o Consumers information (about smoking, or faulty products, for example) o Consumers income (normal goods vs. inferior goods) o Expectations of future prices (consumers will buy more now if prices are expected to rise in the future) o Prices of related goods (both substitutes, like butter and margarine, and complements, like gasoline and SUVs) Complements: Two goods are complements in consumption if an increase (decrease) in the price of one causes a fall (rise) in demand for the other, as shown by a leftward (rightward) shift in the demand curve for the other. Example: Tennis court fees and tennis balls Substitutes: Two goods are substitutes in consumption if an increase (decrease) in the price of one causes a rise (fall) in demand for the other, as shown by a rightward (leftward) shift in the demand curve for the other. Example: Beef and chicken Normal good: A good for which demand increases when income rises and decreases when income falls. Examples: Shoes, clothing, jewellery 3
4 Inferior good: A good for which demand decreases when income rises and increases when income falls. 3.2 Supply SUPPLY Supply describes firms. DIAGRAM Law of supply: Price and quantity supplied are positively related. Movements along supply curve occur: o When price rises and quantity supplied rises. o When price falls and quantity supplied falls. Shifts in supply are due to: o Technology (new inventions) o Weather (especially for agricultural products) o Number of firms in market o Price of goods used in production (inputs such as fertiliser, labour) o Expectations of future prices (firms will sell less now if prices are expected to rise; for example, farmers may store goods to sell next year) o Government taxes, subsidies, regulations (commodity taxes, agricultural subsidies, safety regulations) 3.3 Market Equilibrium MARKET EQUILIBRIUM Where all buyers and sellers are satisfied with quantities at the market price. The situation in which the price is equal to the equilibrium price and the quantity traded equals the equilibrium quantity. EP = EQ Surplus (excess supply): The amount by which the quantity supplied exceeds quantity demanded. Caused by the price being higher than the EP as buyers will want to buy a lower quantity of the good than the sellers can sell at that price. 4
5 Shortage (excess demand): The amount by which quantity demanded exceeds quantity supplied. Caused by the price being lower than the EP as buyers demand more than the sellers can sell. CHAPTER 4 PRICE FLOORS, PRICE CELINGS AND ELASTICITY 4.1 Interference with Market Prices REGULATING MARKETS Price ceiling: A maximum allowable price specified by law. If a price ceiling is above equilibrium price then no effect. Price floor: A minimum allowable price specified by law. If a price floor is below equilibrium price then no effect. 4.2 Elasticity of Demand ELASTICITY OF DEMAND A measure of the sensitivity of the quantity demanded of a good to the price of the good. Price elasticity of demand = percentage change in quantity demanded e d = percentage change in price Q d Qd P P Midpoint formula change in quantity e d = average of old and new quantities change in price average of old and new prices Elastic demand: A demand for which the price is greater than one. Inelastic demand: A demand for which the price elasticity is less than one. Perfectly inelastic demand: The price elasticity is 0, indicating no response to a change in price and therefore a vertical demand curve. Example: People who need insulin will pay whatever they have for it as long as there are no substitutes. Perfectly elastic demand: The price elasticity is infinite, indicating an infinite response to a change in price and therefore a horizontal demand curve. Example: Goods that have a lot of competitive substitutes. Examples: Instant noodles, bus services PRICE ELASTICITY AT DIFFERENT POINTS ALONG A GIVEN STRAIGHT LINE DEMAND CURVE Price elasticity has a different value at every point along a straight line demand curve. The elasticity of demand declines steadily as we move downward along the curve. 5
This is what we call a demand schedule. It is a table that shows how much consumers are willing and able to purchase at various prices.
Demand Market: an institution or mechanism, which brings together buyers ("demanders") and sellers ("suppliers") of particular goods and services. The remainder of this unit assumes a perfectly competitive
More informationPRICING IN COMPETITIVE MARKETS
PRICING IN COMPETITIVE MARKETS Some markets, such as those for agricultural commodities and gasoline, seem to have just one price at any given time. All producers in the market charge the same or very
More informationDEMAND AND SUPPLY. Chapter 3. Principles of Macroeconomics by OpenStax College is licensed under a Creative Commons Attribution 3.
DEMAND AND SUPPLY Chapter 3 Principles of Macroeconomics by OpenStax College is licensed under a Creative Commons Attribution 3.0 Unported License Demand for Goods and Services Demand refers to the amount
More information23115 ECONOMICS FOR BUSINESS Lecture 1: Market forces of supply and demand
23115 ECONOMICS FOR BUSINESS Lecture 1: Market forces of supply and demand 1. INTRODUCTION THEORY OF SUPPLY AND DEMAND o Considers interactions between buyers and sellers in a competitive market. o In
More informationINTI COLLEGE MALAYSIA FOUNDATION IN BUSINESS INFORMATION TECHNOLOGY (CFP) ECO105: ECONOMICS 1 FINAL EXAMINATION: JANUARY 2006 SESSION
ECO105 (F) / Page 1 of 12 Section A INTI COLLEGE MALAYSIA FOUNDATION IN BUSINESS INFORMATION TECHNOLOGY (CFP) ECO105: ECONOMICS 1 FINAL EXAMINATION: JANUARY 2006 SESSION Instructions: This section consists
More informationMacro Unit 1b. This is what we call a demand schedule. It is a table that shows how much consumers are willing and able to purchase at various prices.
Macro Unit 1b Demand Market: an institution or mechanism, which brings together buyers ("demanders") and sellers ("suppliers") of particular goods and services. Notice that the remainder of this unit assumes
More informationCHAPTER 2: DEMAND AND SUPPLY
CHAPTER 2: DEMAND AND SUPPLY CIA4U Ms. Schirk 2.3 THE MARKET A market can be: A physical place where goods are bought and sold A collective reference to all the buyers and sellers of a particular good
More informationCHAPTER 2: DEMAND AND SUPPLY
2.3 THE MARKET CHAPTER 2: DEMAND AND SUPPLY CIA4U Ms. Schirk A market can be: A physical place where goods are bought and sold A collective reference to all the buyers and sellers of a particular good
More informationWeek 1 (Part 1) Introduction Econ 101
Week 1 (art 1) Introduction Econ 101 reliminary Concepts (Chapter 2 g 38-41 & 47-50) Economics is the study of how individuals and societies choose to use scarce resources that nature and previous generations
More informationAP Microeconomics Chapter 3 Outline
I. Learning Objectives In this chapter students should learn: II. Markets III. Demand A. What demand is and how it can change. B. What supply is and how it can change. C. How supply and demand interact
More information1. Demand: willingness to buy a good or service and the ability to pay for it; how much of an item an individual is willing to purchase at each price
1. Demand: willingness to buy a good or service and the ability to pay for it; how much of an item an individual is willing to purchase at each price 2. The two things needed for demand to exist are: willingness
More informationECO401 Current Online 85 Quizzes Question Repeated ignore In Green color are doubted one
ECO401 Current Online 85 Quizzes Question Repeated ignore In Green color are doubted one Question # 1 of 15 ( Start time: 01:24:42 PM ) Total Marks: 1 A person with a diminishing marginal utility of income:
More informationSupply and demand is an economic model. Designed to explain how prices are determined in certain types of markets. What you will learn in this chapter
Supply and Demand Supply and demand is an economic model Designed to explain how prices are determined in certain types of markets What you will learn in this chapter How the model of supply and demand
More informationChapter 1- Introduction
Chapter 1- Introduction A SIMPLE ECONOMY Central PROBLEMS OF AN ECONOMY: scarcity of resources problem of choice Every society has to decide on how to use its scarce resources. Production, exchange and
More informationECON 120 SAMPLE QUESTIONS
ECON 120 SAMPLE QUESTIONS 1) The price of cotton clothing falls. As a result, 1) A) the demand for cotton clothing decreases. B) the quantity demanded of cotton clothing increases. C) the demand for cotton
More informationContents. Consumer Choice: Individual and Market Demand- Demand and Elasticity. I) Markets and Prices. II) Demand Side. III) The Supply Side
Consumer Choice: Individual and Market Demand- Demand and Elasticity Dr. Ashraf Samir Website: ashraffeps.yolasite.com Contents I) Markets and Prices II) Demand Side III) The Supply Side IV) Market Equilibrium
More informationA market is any arrangement that enables buyers and sellers to get information and do business with each other.
3 DEMAND AND SUPPLY A market is any arrangement that enables buyers and sellers to get information and do business with each other. A competitive market is a market that has many buyers and many sellers
More informationQuestion # 1 of 15 ( Start time: 01:24:42 PM ) Total Marks: 1 A person with a diminishing marginal utility of income: Will be risk averse. Will be risk neutral. Will be risk loving. Cannot decide without
More informationCh. 3 LECTURE NOTES Markets II. Demand
Ch. 3 LECTURE NOTES I. Markets A. A market, as introduced in Chapter 2, is an institution or mechanism that brings together buyers (demanders) and sellers (suppliers) of particular goods and services.
More informationBasic Economics Chapter 4
1 Basic Economics Chapter 4 The Market Forces of Supply and Markets and Competition Market = a group of buyers and sellers of a particular good or service Buyers = determine the demand for the product
More informationWEEK 4: Economics: Foundations and Models
WEEK 4: Economics: Foundations and Models Economics: study of the choices people and societies make to attain their unlimited wants, given their scarce resources Market: group of buyers and seels of good
More informationMICROECONOMICS DIAGRAMS
MICROECONOMICS DIAGRAMS 1. Abnormal Profit 5. Average Fixed Costs 2. ad valorem tax At Qpm, Ppm > Pcost All costs are covered and then some! 6. Average Product The red line diminishes, but never becomes
More informationOpportunity Cost The next best alternative foregone when making a decision. If X>Y, choose X, otherwise EcMan is being irrational.
Econ 191 Part 1: Introduction to the Economic Approach Microeconomics how individual workers, consumers and firms act and interact in markets -an act is a choice (made under free will) -choice is subject
More informationAP Microeconomics: Test 2 Study Guide
AP Microeconomics: Test 2 Study Guide Mr. Warkentin nwarkentin@wyomingseminary.org 203 Sprague Hall 2017-2018 Academic Year Directions: The purpose of this sheet is to quickly capture the topics and skills
More informationThe Foundations of Microeconomics
The Foundations of Microeconomics D I A N N A D A S I L V A - G L A S G O W D E P A R T M E N T O F E C O N O M I C S U N I V E R S I T Y O F G U Y A N A S E P T E M B E R 1 4, 2 0 1 7 Lecture 3... INTRODUCTION
More information!"#$#%&"'()#*(+,'&$-''(.#/-'((
Lecture 1 Basic Concerns of Economics What is Economics! Economics is the study of how society manages its scarce resources. o Economic Problem: How a society can satisfy unlimited wants with limited resources
More informationLaw of Supply. General Economics
Law of Supply General Economics Supply Willing to Offer to the Market at Various Prices during Period of Time Able to Offer to the Market at Various Prices during Period of Time General Economics: Law
More information1. Demand: willingness to buy a good or service and the ability to pay for it; how much of an item an individual is willing to purchase at each price
1. Demand: willingness to buy a good or service and the ability to pay for it; how much of an item an individual is willing to purchase at each price 2. Quantity demanded vs demand: quantity demanded is
More informationAP Microeconomics Review With Answers
AP Microeconomics Review With Answers 1. Firm in Perfect Competition (Long-Run Equilibrium) 2. Monopoly Industry with comparison of price & output of a Perfectly Competitive Industry (which means show
More informationSHORT QUESTIONS AND ANSWERS FOR ECO402
SHORT QUESTIONS AND ANSWERS FOR ECO402 Question: How does opportunity cost relate to problem of scarcity? Answer: The problem of scarcity exists because of limited production. Thus, each society must make
More informationIntroductory Microeconomics. Dr. Lisa Mohanty TUI University
Introductory Microeconomics Dr. Lisa Mohanty TUI University Supply and Demand Forces that make market economies function Determines the quantity of each good produced Demand and Supply in a competitive
More informationMicroeconomics PART A. More Tutorial at
Microeconomics PART A 1. For Italy, the opportunity cost incurred when 6 cheeses are produced is 8 watches. For Switzerland, the opportunity cost incurred when 10 cheeses are produced is 50 watches. Which
More informationMidterm 2 Sample Questions. Use the demand curve diagram below to answer the following THREE questions.
! Midterm 2 Sample uestions Use the demand curve diagram below to answer the following THREE questions. 8 6 4 2 4 8 12 16 1. What is the own-price elasticity of demand as price decreases from 6 per unit
More informationLEARNING UNIT 4 LEARNING UNIT 4
DATE: March 2014 MODULE: PMIC6111 TEXTBOOK REFERENCE: CHAPTER 7 pgs 109-132 THEME: DEMAND, SUPPLY AND PRICES OBJECTIVES: BY END OF YOU SHOULD KNOW THE FOLLOWING: CONSTRUCT AND INTERPRET GRAPHS EXPLAIN
More informationMicroeconomics. Use the graph below to answer question number 3
More Tutorial at Microeconomics 1. Opportunity costs are the values of the: a. minimal budgets of families on welfare b. hidden charges passed on to consumers c. monetary costs of goods and services *
More informationMicroeconomics. Use the graph below to answer question number 3
More Tutorial at Microeconomics 1. Opportunity costs are the values of the: a. minimal budgets of families on welfare b. hidden charges passed on to consumers c. monetary costs of goods and services *
More informationLevel: 5 Learning Hours: 160 Learning Outcomes and Indicative Content:
Unit Title: Economic Principles and Their Unit Code: Econs Application to Business Level: 5 Learning Hours: 160 Learning Outcomes and Indicative Content: Candidates will be able to: 1. Explain the problem
More informationChapter 1: The Ten Lessons in Economics
Textbook Notes Page 1 Chapter 1: The Ten Lessons in Economics Saturday, 25 May 2013 1:09 PM Economics: The study of how society manages its scarce resources Individual Decision-Making Lesson 1: People
More informationChapter 4: The Market Forces of Supply and Demand
Chapter 4: The Market Forces of Supply and Demand What factors affect buyers demand for goods? What factors affect sellers supply of goods? How do supply and demand determine the price of a good and the
More information+ What is Economics? societies use scarce resources to produce valuable commodities and distribute them among different people
ECONOMICS The word economy comes from a Greek word oikonomia for one who manages a household. is the study of how society manages its scarce resources. Traditionally land, labor, and capital resources
More informationECON (ENT) COURSE LESSON THREE. Supply and Demand. CHAPTER 7 Supply and Demand. Lesson Three Supply and Demand 93
ECON (ENT) COURSE LESSON THREE Supply and Demand CHAPTER 7 Supply and Demand Lesson Three Supply and Demand 93 EXERCISES Matching (28 points) From the list below, select the term that matches each of the
More informationPrinciples of Microeconomics Exam Notes
Principles of Microeconomics Exam Notes Week 1: Introduction to Microeconomics Learning objectives - Understand how to think like an economist - Understand the concepts of tradeoff, opportunity cost, and
More informationMarkets. Markets. The Market Forces of Supply and Demand. The Market Forces of Supply and Demand. Competition: Perfect and Otherwise
The Market Forces of and Demand Chapter 4 All rights reserved. Copyright 21 by Harcourt, Inc. Requests for permission to make copies of any part of the work should be mailed to: Permissions Department,
More informationIndividual & Market Demand and Supply
Mr Sydney Armstrong ECN 1100 Introduction to Microeconomic Lecture Note (3) Individual & Market Demand and Supply The tools of demand and supply can take us a far way in understanding both specific economic
More informationMaking choices in a world of scarcity means we must pass up some goods and services. Every decision we make is a trade-off:
Lecture Notes Chapter 1 - The Art and Science of Economic Analysis Introduction Economics is about choices. Definition: Scarcity: A resource is scarce when it is not freely available - when its price exceeds
More informationEconomics for Business. Lecture 1- The Market Forces of Supply and Demand
Economics for Business Lecture 1- The Market Forces of Supply and Demand The theory of supply and demand (S&D): Considers how buyers and sellers behave and interact with one another in competitive markets
More informationINTI COLLEGE MALAYSIA UNIVERSITY FOUNDATION PROGRAMME ECO 185 : BASIC ECONOMICS 1 RESIT EXAMINATION : APRIL 2003 SESSION
ECO 185 (R) / Page 1 of 10 INTI COLLEGE MALAYSIA UNIVERSITY FOUNDATION PROGRAMME ECO 185 : BASIC ECONOMICS 1 RESIT EXAMINATION : APRIL 2003 SESSION Answer ALL questions in SECTION A in the OMR sheet provided
More informationEco402 - Microeconomics Glossary By
Eco402 - Microeconomics Glossary By Break-even point : the point at which price equals the minimum of average total cost. Externalities : the spillover effects of production or consumption for which no
More informationCHAPTER THREE DEMAND AND SUPPLY
CHAPTER THREE DEMAND AND SUPPLY This chapter presents a brief review of demand and supply analysis. The materials covered in this chapter provide the essential background for most of the managerial economic
More informationAfter studying this chapter you will be able to
3 Demand and Supply After studying this chapter you will be able to Describe a competitive market and think about a price as an opportunity cost Explain the influences on demand Explain the influences
More informationCHAPTER 2 THEORY OF DEMAND AND SUPPLY. Unit 3. Supply. The Institute of Chartered Accountants of India
CHAPTER 2 THEORY OF DEMAND AND SUPPLY Unit 3 Supply Learning Objectives At the end of this unit you will be able to : understand the meaning of supply. understand what determines supply. get an insight
More informationEcon Microeconomics Notes
Econ 120 - Microeconomics Notes Daniel Bramucci December 1, 2016 1 Section 1 - Thinking like an economist 1.1 Definitions Cost-Benefit Principle An action should be taken only when its benefit exceeds
More information1.3. Levels and Rates of Change Levels: example, wages and income versus Rates: example, inflation and growth Example: Box 1.3
1 Chapter 1 1.1. Scarcity, Choice, Opportunity Cost Definition of Economics: Resources versus Wants Wants: more and better unlimited Versus Needs: essential limited Versus Demand: ability to pay + want
More information1. Supply and demand are the most important concepts in economics.
Page 1 1. Supply and demand are the most important concepts in economics. 2. Markets and Competition a. Def: Market is a group of buyers and sellers of a particular good or service. P. 66. b. Def: A competitive
More informationDEMAND. Economics Unit 2 Just the Facts Handout
DEMAND Economics Unit 2 Just the Facts Handout What is Demand? A market is a place where people buy and sell things. A market has two sides. There is a buying side and a selling side. The buying side of
More information1. Explain 2. Describe 3. Create 4. Interpret
Law of Demand Section:- B Objectives 1. Explain the law of demand. 2. Describe how the substitution effect and the income effect influence decisions. 3. Create a demand schedule for an individual and a
More informationA.P. Microeconomics. In Class Review #1 Economic Principles & Systems
A.P. Microeconomics In Class Review #1 Economic Principles & Systems Micro vs. Macro Economics: study decisions and use of resources Micro: study decisions of small units (households & firms) Macro: study
More informationGRAPHS WHAAAA???!!!???
Mumford and Sons Supply and Demand GRAPHS WHAAAA???!!!??? Demand Combination of desire, ability, and willingness to buy a product Question: Demand Schedule Price Quantity How many movie DVDs Demanded would
More information2000 AP Microeconomics Exam Answers
2000 AP Microeconomics Exam Answers 1. B Scarcity is the main economic problem!!! 2. D If the wages of farm workers and movie theater employee increase, the supply of popcorn and movies will decrease (shift
More informationECON 101 MIDTERM 1 REVIEW SESSION SOLUTIONS (WINTER 2015) BY BENJI HUANG
ECON 101 MIDTERM 1 REVIEW SESSION SOLUTIONS (WINTER 2015) BY BENJI HUANG TABLE OF CONTENT I. CHAPTER 1: WHAT IS ECONOMICS II. CHAPTER 2: THE ECONOMIC PROBLEM III. CHAPTER 3: DEMAND AND SUPPLY IV. CHAPTER
More informationINTRODUCTION... 3 SUPPLY AND DEMAND...
Table of Contents INTRODUCTION... 3 SUPPLY AND DEMAND... 4 DEMAND... 4 SUPPLY... 4 EQUILIBRIUM... 4 CHANGES IN THE DEMAND CURVE... 5 CHANGES IN THE SUPPLY CURVE... 6 PRICE CONTROLS... 7 CONSUMER SURPLUS,
More information1) Your answer to this question is what form of the exam you had. The answer is A if you have form A. The answer is B if you have form B etc.
This is the guide to Fall 2014, Midterm 1, Form A. If you have another form, the answers will be different, but the solution will be the same. Please consult your TA or instructor if you think there is
More information1. T F The resources that are available to meet society s needs are scarce.
1. T F The resources that are available to meet society s needs are scarce. 2. T F The marginal rate of substitution is the rate of exchange of pairs of consumption goods or services to increase utility
More informationMultiple Choice Part II, A Part II, B Part III Total
SIMON FRASER UNIVERSITY ECON 103 (2007-2) MIDTERM EXAM NAME Student # Tutorial # Multiple Choice Part II, A Part II, B Part III Total PART I. MULTIPLE CHOICE (56%, 1.75 points each). Answer on the bubble
More informationWHAT IS DEMAND? CHAPTER 4.1
Economics Unit 2 TEACHER WHAT IS DEMAND? CHAPTER 4.1 What is demand? THE DESIRE, ABILITY, AND WILLINGNESS TO BUY A PRODUCT. What is microeconomics? THE AREA OF ECONOMICS THAT DEALS WITH BEHAVIOR AND DECISION
More informationMicroeconomics. Use the Following Graph to Answer Question 3
More Tutorial at www.dumblittledoctor.com Microeconomics 1. To an economist, a good is scarce when: *a. the amount of the good available is less than the amount that people want when the good's price equals
More informationConcordia University Econ 201
Concordia University Econ 201 Department of Economics Shih-tse (Fred) Lo NOTE 3: MARKET DEMAND AND SUPPLY * Market An institution or mechanism that brings buyers (a.k.a. demanders, consumers), and sellers
More information1 of 14 5/1/2014 4:56 PM
1 of 14 5/1/2014 4:56 PM Any point on the budget constraint Gives the consumer the highest level of utility. Represent a combination of two goods that are affordable. Represents combinations of two goods
More informationREVIEW FOR TEST I (Chapters 1-4 of Case, Fair, Oster text) HCCS Spring Branch Campus Instructor: J.H. Ewing. What Economics is About
REVIEW FOR TEST I (Chapters 1-4 of Case, Fair, Oster text) HCCS Spring Branch Campus Instructor: J.H. Ewing What Economics is About Economics deals with the human condition that arises when Wants > Limited
More informationEXAM 2: Professor Walker - S201 - Fall 2008
EXAM 2: Professor Walker - S201 - Fall 2008 I. (3 Points Each) Multiple Choice 1. Leisure Hours Grades 10 80 15 40 20 20 The tradeoff shown in the PPF table above depicts A. decreasing per unit O.C. of
More informationChapter 3 Elasticity.notebook. February 03, Chapter 3: Competitive Dynamics and Government (Elasticity and Related Concepts)
Chapter 3: Competitive Dynamics and Government (Elasticity and Related Concepts) price elasticity of demand the responsiveness of a product's quantity demanded to a change in its price. Degree of Elasticity
More informationMULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. FIGURE 1-2
Questions of this SAMPLE exam were randomly chosen and may NOT be representative of the difficulty or focus of the actual examination. The professor did NOT review these questions. MULTIPLE CHOICE. Choose
More informationSupply and Demand Study Guide
Supply and Demand Study Guide Fill in the blank Demand 1. If price increases, quantity demanded. 2. If the number of buyers decreases, demand. 3. Increasing demand causes the demand curve to shift to the.
More informationChapter 1: What is Economics? Definition of Economics All economic questions arise because we want more than we can get Our inability to satisfy all
Chapter 1: What is Economics? Definition of Economics All economic questions arise because we want more than we can get Our inability to satisfy all our wants is called scarcity Because we face scarcity,
More informationSupply and Demand: CHAPTER Theory
3 Supply and Demand: CHAPTER Theory Markets and Prices A market is any arrangement that enables buyers and sellers to get information and do business with each other. A competitive market is a market that
More informationChapter 2: The Basic Theory Using Demand and Supply. Multiple Choice Questions
Chapter 2: The Basic Theory Using Demand and Supply Multiple Choice Questions 1. If an individual consumes more of good X when his/her income doubles, we can infer that a. the individual is highly sensitive
More informationElasticity and Its Applications
Elasticity and Its Applications 1. In general, elasticity is a. a measure of the competitive nature of a market. b. the friction that develops between buyer and seller in a market. c. a measure of how
More informationTest 2. MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
Name R# ECO 2301.007 - Roach Test 2 MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Air pollution generated by a steel mill is an example of 1)
More informationWeek One What is economics? Chapter 1
Week One What is economics? Chapter 1 Economics: is the social science that studies the choices that individuals, businesses, governments, and entire societies make as they cope with scarcity and the incentives
More informationMarket Forces. Sherif Khalifa. Sherif Khalifa () Market Forces 1 / 62
Sherif Khalifa Sherif Khalifa () Market Forces 1 / 62 Sherif Khalifa () Market Forces 2 / 62 Sherif Khalifa () Market Forces 3 / 62 Sherif Khalifa () Market Forces 4 / 62 Sherif Khalifa () Market Forces
More informationExercise questions. ECON 102. Answer all questions. Multiple Choice Questions. Choose the best answer.
Exercise questions. ECON 102 Answer all questions. Multiple Choice Questions. Choose the best answer. 1.On Saturday morning, you rank your choices for activities in the following order: go to the library,
More informationOCR Economics A-level
OCR Economics A-level Microeconomics Topic 2: How Competitive Markets Work 2.3 Supply and demand, and the interaction of markets Notes A market is created when buyers and sellers interact. A sub-market
More informationMultiple Choice Part II, Q1 Part II, Q2 Part III Total
SIMON FRASER UNIVERSITY ECON 103 (2008-2) MIDTERM EXAM NAME Student # Tutorial # Multiple Choice Part II, Q1 Part II, Q2 Part III Total PART I. MULTIPLE CHOICE (56%, 1.5 points each). Answer on the bubble
More informationThe law of supply states that higher prices raise the quantity supplied. The price elasticity of supply measures how much the quantity supplied
In a competitive market, the demand and supply curve represent the behaviour of buyers and sellers. The demand curve shows how buyers respond to price changes whereas the supply curve shows how sellers
More informationEconomics for Managers, 3e (Farnham) Chapter 2 Demand, Supply, and Equilibrium Prices
Economics for Managers, 3e (Farnham) Chapter 2 Demand, Supply, and Equilibrium Prices 1) According to the case for analysis (Demand and Supply in the Copper Industry) in the text, all of the following
More informationBUSINESS ECONOMICS (PAPER IV-PART I)
BUSINESS ECONOMICS (PAPER IV-PART I) (60 MARKS) Q1: Macroeconomics is also called economics (a) applied (b) aggregate (c) experimental (d) none Q2: A Study of how increase in the corporate income tax rate
More informationEcon103_Midterm (Fall 2016)
Econ103_Midterm (Fall 2016) Total 50 Points. Multiple Choice Identify the choice that best completes the statement or answers the question. 1 point for each question. Total 15 pts. c 1. Which of the following
More informationChapter 5. Market Equilibrium 5.1 EQUILIBRIUM, EXCESS DEMAND, EXCESS SUPPLY
Chapter 5 Price SS p f This chapter will be built on the foundation laid down in Chapters 2 and 4 where we studied the consumer and firm behaviour when they are price takers. In Chapter 2, we have seen
More information2.1 Markets Definition of markets with relevant local, national and international examples
2.1 Markets of markets with relevant local, national and international examples M&B 41 Market: Institution or mechanism that brings together the buyers ( demanders ) and sellers ( suppliers ) of particular
More informationChapter 2: The Basic Theory Using Demand and Supply. Multiple Choice Questions
Chapter 2: The Basic Theory Using Demand and Supply Multiple Choice Questions 1. If an individual consumes more of good X when his/her income doubles, we can infer that a. the individual is highly sensitive
More information2010 Pearson Education Canada
What Is Perfect Competition? Perfect competition is an industry in which Many firms sell identical products to many buyers. There are no restrictions to entry into the industry. Established firms have
More informationDemand/Supply Unit Essential Questions
Demand/Supply Unit Essential Questions -What is the role of demand in free market capitalism? -How do changes in price influence quantity demanded? -What factors affect changes in demand that influence
More informationEastern Mediterranean University Faculty of Business and Economics Department of Economics Fall Semester
Eastern Mediterranean University Faculty of Business and Economics Department of Economics 2015 16 Fall Semester ECON101 Introduction to Economics I Midterm Exam Duration: 90 minutes Type A Answer Key
More informationSupply and Demand. ECO 120: Global Macroeconomics
Supply and Demand ECO 120: Global Macroeconomics 1 1.1 Goals of today s class Goals Specific Goals Learn what demand is and what influences demand. Learn what supply is and what influences supply. Learn
More informationGACE Economics Assessment Test I (038) Curriculum Crosswalk
Subarea I. Fundamental Economic Concepts (20%) Objective 1: Demonstrates an understanding of the fundamental concepts of economics A. Understands the concepts of scarcity, choice, and opportunity cost
More informationMicro Semester Review Name:
Micro Semester Review Name: The following review is set up to emphasize certain concepts, graphs and terms. It is the responsibility of the individual teachers to emphasize and review the analysis aspects
More informationChapter 3 Where Prices Come From: The Interaction of Demand and Supply
Economics 6 th edition 1 Chapter 3 Where Prices Come From: The Interaction of Demand and Supply Modified by Yulin Hou For Principles of Microeconomics Florida International University Fall 2017 What determines
More informationMechanism through which buyers (demanders) and sellers (suppliers) communicate to trade goods and services.
By the end of this learning plan, you will be able to: Use marginal (Cost-Benefit) analysis in decision-making Apply supply and demand analysis to price determination Assess the role price plays in a market
More informationMicroeconomics Exam Notes
Microeconomics Exam Notes Opportunity Cost What you give up to get it Production Possibility Frontier Maximum attainable combination of two products (Concept of Opportunity Cost). Main Decision Makers:
More informationInstructions: DUE: day of your unit exam Block Period 1/31 st or 2/1 st
----------------- AP MICROECONOMICS-2018 MICRO Unit #1 Study Guide Name: Instructions: UE: day of your unit exam Block Period 1/31 st or 2/1 st Section 1: SUPPLY & EMAN (review Section from Semester 1)
More information