Bundle
Bundle of E201
10 Items
E201-Exam Questions and Answers 2023 (IU)
Market Demand the relationship between the price of a good and the quantity demanded by buyers Marginal Benefit the value of one more unit ... [Show More] Value what we get Price what we pay Maximum Price maximum amount of money a person is willing to pay Cost what the producer gives up Marginal Cost "minimum price" that a firm is willing to accept Overproduction is a social loss Underproduction a loss of surplus to society Deadweight Loss is a loss of economic efficiency that can occur when equilibrium for a good or service is not achieved or is not achievable Market Failure arises when a market delivers in inefficient outcome (overproduction, underproduction) The Invisible Hand term used by adam smith to describe the unintended social benefits of individual self-interested actions when the efficient quantity is produced... total surplus is maximized Consumer Surplus defined as the difference between the total amount that consumers are willing and able to pay for a good or service and the total amount that they actually do pay Individual Supply the relationship between the price of a good and the quantity supplied by all producers Market Supply the relationship between the price of a good and the quantity supplied by ALL producers Efficient Quantity unselfishness, minimizes waste and inefficiency (MARGINAL BENEFIT = MARGINAL COST) Producer Surplus economic measure of the difference between the amount a producer of a good receives and the minimum amount the producer is willing to accept for the good Utilitarianism "betterment of society" philosophy based on moral worth of an action upon the number of people it makes happy. Efficiency requires that resources are being used where they are most highly valued It's Not Fair If The Results Isn't Fair utilitarianism principal "the greatest happiness for the greatest number" It's Not Fair If The Rules Aren't Fair Symmetry Principle - state enforces laws that protect private property and right to sell it Common Resource a resource, such as water or pasture, that provides users with tangible benefits Free Rider Someone who consumes a resource without working or contributing to the resource's upkeep. Natural Monopoly Good a type of monopoly that exists as a result of the high fixed costs or startup costs of operating a business in a specific industry Non-rival does not decrease the quantity available for someone else Private Good is a product that must be purchased to be consumed (food, clothing, etc.) Rival decreases the quantity available for someone else Human Capital The productive knowledge and skills that workers acquire through education, training, and experience. rent ceiling when a price ceiling is applied to the housing market black market illegal market in which the equilibrium price exceeds the price ceiling. With tight rent ceilings, black market is equal to maximum price renter is willing to pay. With loose enforcement, black market is close to the regulated rent. Price Floor government regulation that makes it illegal to charge a price lower than a specified level is called a price floor. minimum wage when price floor is applied to the labor market Tax Incidence division of the burden of a tax between buyers and sellers. subsidy payment made by the government to a producer production quota upper limit to the quantity of a good that may be produced in a specified period. total utility total benefit that a person gets from the consumption of all the different goods and services utility benefit or satisfaction a person gets from the consumption of goods and services marginal utility change in total utility that results from a one-unit increase in the quantity of a good consumed Positive Marginal Utility all the things that people enjoy and want more of a have a positive marginal utility consumer equilibrium situation in which a consumer has allocated all of his or her available income in the way that maximizes his or her total utility [Show Less]
- Exam
- $15.45
- 0
- 557
E2.01 Questions And Answers 2022/2023
As a member of the budgeting committee, the nurse manager reviews the salaries for file clerks in the accounting department. These salaries should be inclu... [Show More] ded in which budget item? The indirect cost A nurse educator is asked by the chairperson of the department to submit a list of equipment that could be used to meet the departments goals. The list included projectors, computers, and computer-assisted programs. How would the educator categorize the materials? As part of the capital budget Which action by the nurse manager participating in the budget process demonstrated monitoring? Adjusting the staff assignment based on the client census. Which budget result could impact the nurse manager's performance evaluation? Overtime The nurse manager is reviewing the capital expenditures for the budget of an outpatient surgical center. Which item would the nurse manager include? Cardiac monitor The nurse manager is preparing a budget using the incremental method for an existing cardiac care unit. Which action should the nurse manager take? Determine the expected increase in salaries from the previous year. Which describes the time frame the nurse manager should being developing the budget for the next fiscal year? At least three months before the new fiscal year Which initial action will the action should the new nurse manager take when learning to develop a budget? Review the organizational budget guidelines The new nurse manager is reviewing the variable costs in a budget for a medical surgical unit. Which type of cost should the nurse manager expect in this category? Supplies An organization uses the top-down method for budget development. Which role should the nurse manager expect to take in the budgeting process? Implementation of the budget The nurse manager is discussing with a staff nurse a performance review. Which nonverbal behavior by the staff nurse reflects a silent message to the nurse manager? Select all that apply Arms folded across chest The nurse manager is preparing to discuss with a staff member who has repeatedly called in how their cations have affected the unit. Which statement by the nurse manager would be the best to make? I am challenged to maintain the quality of care when you call in for your shift The nurse manger is discussing a situation that has occurred between staff nurse and unlicensed assistive personnel. The staff nurse states, When I work with the UAP, they always ignore the client care tasks I have delegated. Which statement by the nurse manger is most appropriate? What I hear you saying is that your client are not getting the care you expected The nurse manager overhears a client scheduled for surgery state to the nurse, I am afraid that I will have too much pain when I wake up. Which response by the nurse would be most therapeutic? Can you tell me more about your fear of too much pain? A nurse manager has made a goal to be more available to staff. Which action by the nurse manager would send a confliction message to staff member? Keep the office door shut during open office hours The nurse manager is handling conflict between a female staff nurse and male unlicensed assistive personnel. The UAP was delegate hygiene care for a client and did not complete the task. Which statement by the UAP demonstrated a red herring logical fallacy? This is because you do not like male UAP The nurse manager observes a social media post by a staff nurse that discusses the care of a client. Which action should the nurse manager take? Request the post to be deleted The nurse manager is completing a char audit on the documentation completed by a new nurse. Which documented statement would require the nurse manager to intervene? The client had a unsteady gait when ambulating requiring a 1 person assist to avoid falling The nurse manager overhears a discussion between the charge nurse and staff nurse, discussing the delegation of responsibilities. Which response by the staff nurse demonstrated aggressive communication? Who gives you the authority to tell me what to do The nurse manager is reviewing the communication technique preference for different generation. Which strategy would be appropriate for staff who are considered baby boomer's? Formal meeting Which situation represents an obstacle to delegation? There is a budget shortfall for the current fiscal year What action is necessary by a delegate accepting delegation? A. Clarify the timeline and expectations The job description of the staff nurse states the nurse is responsible for attending hospital committee meetings as assigned. The nurse manager asking the staff remember to attend a risk management meeting is an example of which concept? Work assignment Which is the most important reason that practicing and mastering effective delegation skills is essential for nurses. Higher client satisfaction The nurse has attended a refresher course on successful delegation. Which statement indicated successful learning has taken place? I knew that effective delegation made my job easier, but I never thought about how it could benefit the hospital A nurse asks an unlicensed assistant to help with discharging clients since so many are going home at one time. The nurse asks, can you help get these clients ready to go home by helping them pack? Which option best describes the statement regarding effective delegation? Delegation would have been more effective had the nurse been more specific about which clients and when it should be completed Which statement represent a situation in which delegation in ineffective or inappropriate? The RN asks the LPN to assist with admissions by assessing the clients as they get to their rooms. For the nurse to effectively and legally delegate, which document must be consulted and followed to reduce the likelihood of liability? The regulations of the state nurse practice acts Which situation indicates the nurse needs additional training on effective delegation? The office nurse calls in orders for admission on a client following a surgical complication The nurse prepares the medication ordered for the client. The nurse asks the nurse assistant to give the medication when the client receives breakfast and to report on the task at its completion. The nurse assistant agrees. Which component of the steps of delegation was violated by this request? Deciding on the delegate A healthcare organization has provided intensive education to staff regarding benefits and correct methods of delegation. Which of the following would NOT be a reason for the organization to sponsor these sessions? Delegation is required by state boards of nursing A newly licensed nurse is concerned about the legal aspects of delegation. What is the most important question for the nurse to consider prior to delegation a task? Does this task involve nursing judgment? [Show Less]
- Exam
- $13.95
- 0
- 87
E201 Exam Questions and Answers {Micro Economics}
Formula for Price Elasticity of Demand (Price Elasticity of Demand) = (Percentage Change in Quantity Demanded / Percentage Change in Price) Def of ... [Show More] Perfectly Inelastic Demand If the quantity demanded remains constant when the price changes, then the price elasticity of demand is zero. Thus, the quantity demanded is constant regardless of the price; insulin and other necessities are good examples. Elasticity = 0 is graphed with a vertical line with undefined slope. Def of Unit Elastic Demand If the percentage in the quantity demanded equals the percentage change in the price. Def of Inelastic Demand When the percentage change in quantity demanded is less than the percentage change in price. Thus, the price elasticity of demand is between 0 and 1. Def of Perfectly Elastic Demand If the quantity demanded changes by an infinitely large percentage in response to a tiny price change. Imagine two soda machines, one with a higher price than the other; everyone is going to buy from the cheaper one. Def of Elastic Demand When the percentage change in the quantity demanded exceeds the percentage change in price; the price elasticity of demand is greater than 1; automobiles and furniture are good examples. Elasticity Along a Demand Curve The midpoint represents the unitary elasticity; points above the midpoint are elastic while points below are all inelastic. Def of Total Revenue The total revenue from the sale of a good equals the price of a good multiplied by the quantity sold. Total Revenue Test The test is a method of estimating the price elasticity of demand by observing the change in total revenue that results from a change in the price. When demand is elastic, a price cut increases total revenue; when demand is inelastic, a price cut decreases total revenue. Cross Elasticity of Demand Is the measure of the responsiveness of the demand for a good to a change in the price of a substitute or complement, other things remaining the same. The formula is: (Cross Elasticity of Demand) = (Percentage Change in Quantity Demanded / Percentage Change in Price of Substitute or Complement). Cross Elasticity of Demand with Substitutes and Complements If the CED is positive, then the two are substitutes; if it is negative, they are complements. Def of Income Elasticity of Demand A measure of the responsiveness of the demand for a good or service to a change in income, other things remaining the same. Formula: (Income Elasticity of Demand) = (Percentage Change in Quantity Demanded / Percentage Change in Income). Income Elasticity Categories If the IED is greater than 1, it is a NORMAL good and is income elastic. If IED is 0 < x < 1 then it is a normal good and income inelastic. If IED is negative, it is an inferior good. Def of Income Elastic Demand When the demand for a good is income elastic, the percentage of income spent on that good increases as income increases. Def of Income Inelastic Demand When the demand for a good is income inelastic, the percentage of income spent on that good decreases as income increases. Def of Elasticity of Supply Measures the responsiveness of the quantity supplied to a change in the price of a good when all other influences on selling plans remain the same. Formula: (Elasticity of Supply) = (Percentage Change in Quantity Supplied / Percentage Change in Price). Resource Allocation Methods Market price, command, majority rule, contest, first come first served, lottery, personal characteristics, and force. Def of Market Price as Allocation Method When a market price allocates a scarce resource, the people who are willing and able to pay the price get the resource. Does not work well for the poor who cannot afford school and doctor fees; these are usually allocated differently. Def of Command System as Allocation Method Allocation of resources by order of someone in authority, like the U.S. government. Works well in organizations where lines of authority are clear and easy to monitor; works badly when the range of activities monitored are large and when it is easy to fool those in authority. Def of Majority Rule as Allocation Method Allocation of resources in the way that the majority of voters choose. Works well when the decisions being made affect large numbers of people but self-interest must be suppressed to use resources most effectively. Def of Contest as Allocation Method Allocates resources to a winner; this is a good method when the efforts of the competitors are difficult to monitor but motivates people to work hard for the reward. Only a few people will win but more people will work hard in order to try and attain it. Def of First Come, First Served as Allocation Method Allocates resources to those first in line. Casual restaurants usually do this. Works best when a scarce resource can serve just one user at a time and badly when many try to access it simultaneously. Def of Lottery as Allocation Method Used to allocate landing spots in airports. Work best when there is no effective way to distinguish among potential users of a scarce resource. Def of Personal Characteristics as Allocation Method People with the "right" characteristics get the resources. Bad when used on basis of race and gender. Def of Force as Allocation Method Self-explanatory; war, theft are obviously bad. he state can use force to allocate resources in the form of taxes and other aspects of the law. A Demand Curve is... A demand curve is a marginal benefit curve since willingness to pay determines demand. Def of Market Demand Curve The market demand is the horizontal sum of the individual demand curves and is formed by adding the quantities demanded by all the individuals at each price. Def of Consumer Surplus Consumer surplus is the excess amount of the benefit received from a good over the amount paid for it. you calculate consumer surplus as the marginal benefit (value) of a good minus its price, summed over the quantity bought. This is graphically represented by the above shape (usually a triangle) resulting from the intersection of individual/market demand curve and demand curve. Def of Market Supply Curve The market supply curve is the horizontal sum of the individual supply curves and is formed by adding the quantities supplied by all the producers at each price. Def of Producer Surplus PS is the excess of the amount received from the sale of a good or service over the cost of producing it. It is calculated as the price received minus the marginal cost (or minimum supply-price), summed over the quantity supplied. Graphically represented as the area below the intersection of the market demand curve and the market supply curve. Def of Total Surplus The sum of consumer surplus and producer surplus. When the efficient quantity is produced, total surplus is maximized. Def of Market Failure A situation in which a market delivers an ineffective outcome: underproduction and overproduction. Def of Deadweight Loss The decrease in total surplus that results from an inefficient level of production. The Big Tradeoff is The big tradeoff is a tradeoff between efficiency and fairness. Results of a Price Ceiling/Price Cap A price ceiling set above the equilibrium price has no effect since it does not constrain the market forces. However, if it is set below the equilibrium price, it can have powerful effects; it can result in a housing shortage, increased search activity, and a black market. Def and Cause of Housing Shortage Rent set below the equilibrium rent, the quantity of houses demanded exceeds the quantity of houses supplied causing a shortage. This can itself create increased search activity. Def and Cause of Increased Search Activity Time spent looking for someone with whom to do business. The cost of increased search activity might end up making the full cost of housing higher than it would be without a rent ceiling. Def of Black Market A black market forms when a price ceiling is set below the equilibrium price; in a black market, the price can be higher. People can pay for useless things in order to make it technically legal. Why a Rent Ceiling is Inefficient It is inefficient because the marginal social benefit of housing exceeds its marginal social cost and a deadweight loss shrinks its producer surplus Why Minimum Wage Brings Unemployment A wage floor set above the equilibrium wage creates an excess in the quantity of labor demanded creating unemployment. Unemployment can be calculated for a specific supply and demand curve with the minimum wage intersecting each; the distance between the intersections of the supply and demand curves is the unemployment figure for that graph. Def of Tax Incidence Tax incidence is the division of the burden of a tax between buyers and sellers. Tax Incidence and Elasticity of Demand When the demand is perfectly inelastic, the buyers pay. While if the demand is perfectly elastic, sellers pay. Tax Incidence and Elasticity of Supply When supply is perfectly inelastic, sellers pay. When supply is perfectly elastic, buyers pay. Def of Production Quota A production quota is an upper limit to the quantity of a good that may be produced in a specified period. Nothing happens when the production quota is set above the equilibrium price but when it is lower it causes problems! Effects of a Quota Lower than Equilibrium Price A decrease in supply, a rise in price, a decrease in marginal cost, inefficient underproduction, an incentive to cheat and overproduce. Def and Effects of Subsidy A subsidy is a payment made by the government to a producer. Effects include: increase in supply, a fall in price and increase in quantity produced, increase in marginal cost, payments by governments to farmers, inefficient overproduction. Penalties on Sellers for Illegal Goods Bring a decrease in supply, a leftward shift in the supply curve. To determine the new supply curve, we add the cost of breaking the law to the minimum price that drug dealers are willing to accept. Penalties on Buyers for Illegal Goods Decreases demand, shifting the demand curve leftward. Penalties on Buyers and Sellers of Illegal Goods Both the demand and supply curves shift leftward creating a new equilibrium price. When penalties are heavier on sellers, the supply curve shifts farther than the demand curve and the market price rises above the previous equilibrium price. If penalties are heavier on buyers, the demand curve shifts farther than the supply curve and the market price falls. Def of Utility The enjoyment or satisfaction people receive from consuming goods and services. Def of Marginal Utility (MU) The change in total utility a person receives from consuming one additional unit of a good or service. The Law of Diminishing Marginal Utility The principle that consumers experience diminishing additional satisfaction as they consume more of a good or service during a given period of time. What is relationship between marginal benefit, value, and demand? The value of one more unit of good is its marginal benefit; measured by the max amount consumers are willing to pay for one more unit. Demand curve shows max consumers are walling to pay so the curve is the same as a marginal benefit curve. Two Main Approaches to Fairness It's not fair if the results aren't fair (utilitarianism), and It's not fair if the rules aren't fair (equality of opportunity). How does the elasticity of demand influence the incidence of a tax, the tax revenue, and the deadweight loss? The more elastic the demand for a given supply, the smaller the increase in the price paid by the buyers and the greater the decrease in the price received by the sellers, which means that the incidence on buyers is smaller. Additionally, the more elastic the demand, the smaller the quantity bought to the smaller the tax revenue and the larger the deadweight loss. How does elasticity of supply influence the incidence of a tax, the tax revenue, and the deadweight loss? The more elastic the supply for a given demand, the larger the increase in the price paid by the buyers and the smaller the decrease in the price received by the sellers which means that the incidence on buyers is larger. Additionally, the more elastic the supply, the smaller the quantity bought so the smaller the tax revenue and the larger the deadweight loss. Why is a tax inefficient? The imposition of a tax on a market causes a wedge to be driven between the price received by the seller and the price paid by the buyer. This causes the marginal social benefit from the last unit sold to be higher than its marginal social cost, and the market will under-produce the good or service being taxed. If more of the good or service were produced, the marginal social benefit gained would be greater than the marginal social cost incurred, and the net benefit to society would increase. When would a tax be efficient? A tax is efficient, that is, creates no deadweight loss, when demand is perfectly inelastic or supply is perfectly inelastic. In both cases a tax does not change the quantity produced and so creates no deadweight loss. Fairness Applied to the Tax System Two principles are the benefits principle and the ability-to-pay principle. Effects of Production Quota on Market Price and Quantity Produced A production quota set below the equilibrium quantity raises the price and decreases the quantity. whatever [Show Less]
- Exam
- $14.45
- 0
- 92
E2-01 Questions and Answers 2022/2023
What does the CCMD J-2 Assist the Commander and Staff in? Developing strategy; planning major operations and campaigns' coordinating the intel structure a... [Show More] nd architecture' recommending appropriate command relationships for ISR, and production and dissemination. Who should exercise staff supervision over the JIOC? CCMJ-2 CCJIOC? Combatant Command Joint Intelligence Operations Center. The CCMD JIOC Supports? Joint operations planning and conducts intelligence operations in support of the commander and staff, subordinate component commands and JTFs. What does the CCMD JIOC maintain? Maintains visibility on all intelligence collection resources available to the command, aids the CCDR and staff in determining intel gaps and shortfalls in intel collection capability, and recommends solutions to mitigate them. A JIOC is organized in accordance with (IAW)? The CCDRs prerogatives as specified in the command's intel TTP or standard operating procedures. How do JIOCs respond to crisis'? By shifting its focus and assets rather than by altering its organizational structure. What is the standard JIOC org structure? There is no "standard". List one key principle and function a JIOC is organized around? Integrate intel with traditional ops and plans capabilities. List one key principle and function a JIOC is organized around? Institutionalize and strengthen IP. List one key principle and function a JIOC is organized around? Improve Reserve Component Integration. List one key principle and function a JIOC is organized around? More closely align partner nations. List one key principle and function a JIOC is organized around? Improve intel mission/ collection mgt. List one key principle and function a JIOC is organized around? Expand red teaming/ alternative analysis capabilities. List one key principle and function a JIOC is organized around? Improve all-source analysis and multidiscipline intelligence. List one key principle and function a JIOC is organized around? Establish a horizontal integration/collaborative IT enterprise in a net-centric environment. List one key principle and function a JIOC is organized around? Improve training, education, and readiness. List one key principle and function a JIOC is organized around? Integrate national intelligence and combat support agency (CSA) capabilities. CCMD JIOCs Concept of Operations? Use a task oriented approach similar to joint interagency task forces, utilizing personnel assigned to the command military and civilian personnel detailed to the command. Who is in general support and is expected to respond to JIOC requirements consistent with national priorities? The Defense Attache' office and service CI elements. JIOCs conduct intel mission operations function to plan intel ops. To fill gaps in info and produce all source intel. What do JIOCs plan for? Transition from peacetime to wartime. Who work in tandem within the JIOC? Analysts and collection managers work in tandem to design collection plans to fill known information gaps. Who executes collection management authority on behalf of the J-2? The JIOC collection management authority. What is the primary responsibility of the JIOC? To integrate all DOD intel functions and disciplines, and facilitate access to all source intel in prescribed timeline and appropriate format to positively affect CCMD missions and ops. What other responsibilities does the JIOC have? Coordinating with the joint staff J-2 and DOD IC agencies to address PIRs. What other responsibilities does the JIOC have? Determine gaps in intel, info, and capabilities. What other responsibilities does the JIOC have? develop and maintain integrated intel architecture that supports planning, ops, and targeting. What other responsibilities does the JIOC have? maintain and coordinate the CCMD intel collection plan in coordination with components of other IC assets. What other responsibilities does the JIOC have? conduct IP in support of the CCMD plans. What other responsibilities does the JIOC have? Ensure target intel and battle damage assessments. What other responsibilities does the JIOC have? Provide continuous indications and warning (I&W) intel assessments, and maintain awareness. What other responsibilities does the JIOC have? direct joint intel preparation of the op environment (JIPOE) effort. What other responsibilities does the JIOC have? Provide intel support to and augment intel infrastructure of subordinate forces. The size and org structure of subordinate joint force intel element is determined by? The JFC based on the situation, mission, and available intel resources. JFC roles and functions? Are varied based upon the cope of JFCs mission and required support relationships. Who plans and directs the overall intel effort on behalf of the JFC? The J-2 develops and recommends PIRs based on the JFCs guidance, identifies shortfalls in the intel capabilities and submits requests for additional augmentation. Conduct liaison and provide intelligence products and support to the following JTF entities as applicable? Joint targeting coordination board. Joint Collection MGT Board. IO Cell. Joint Personal Recovery Team. Civil military ops cell. Joint planning group. Geospational intel cell. Red Team. JIPOE Cell. Who establishes a J-2X? JFC normally establishes the J-2X. What concept is this designed to integrate? HUMINT and CI by combining the human intel opts cell (HOC), Task Force CI Authority (TIFCICA), a HUMINT analysis cell, and CI analysis cell. What else should a J-2X include? Operational support element to provide services of common concern to the HOC and TFCICA. What is the J-2X responsible for? The management, coordination, and deconfliction of HUMINT and CI collection within the AO. What does the J-2X actively do? Monitors and supports activities of the joint document exploitation centers, maintains the command source registry, deconflict's source matters and performs liaison functions with external org. Where should the J-2X be located? In a SCIF. What is imperative to the J-2X to function properly? A secure communications/ systems architecture be established. IC is defined in the National Security Act of? 1947. What is the IC guided by? EO 12333 as updated in 2008. how man member organizations are part of the IC? 17. IC Governance? The IRTPA established the office of Director of National Intelligence with authority over IC budgeting, appointment of IC agency heads, IC personnel policies, tasking, liaison, and protection of sources and methods. What do national level intel organizations conduct? Extensive collection, processing, analysis, and dissemination activities. Is the focus of NIO split evenly among intel customers. No, the focus of National organizations is not evenly split among intel customers and varies according to the situations and competing requirements. [Show Less]
- Exam
- $14.45
- 0
- 155
E201 Questions and Answers 100% correctly
What percentage of your final grade for this course will be determined by your grade in the final exam; and why is it called a "common final"? 10%; multip... [Show More] le sections of E201 taught by different professors will all have the same exam questions. Your final grade for this course will be comprised of your grades on which of the following: Quizzes, exercises, tests, a final exam, & class participation If I have to miss a test, then in order to be allowed to do the test at another date/time: I must provide documentary evidence (eg, doctor's note) that I had a valid reason for missing the originally scheduled test/assignment The first author of the required textbook is ________ Krugman Clean air is considered scarce good because: Not enough of it is available for all needs If the state government allocates additional spending on education, the opportunity cost is: Measured in terms of the best alternative uses for that money Marginal analysis: Refers to decisions about whether to do a bit more or a bit less of an activity, helps when making a choice about "how much," and involves trade-offs Which of the following is NOT true? a)People typically make choices that will make themselves better off b)The real cost of a choice is what you must give up to get that choice c)Resources are scarce when they can satisfy everyone's wants d)Rational people use marginal analysis when making decisions about "how much" to buy or produce C) Specialization and trade should lead to all of the following EXCEPT: a)The exchange of goods and services in markets b)A decrease in total economic output c)Higher living standards d)Individuals learning specific skills and earning a salary B The opportunity cost of attending university is, The sum of the cost of tuition, textbooks, and the income given up from not working when going to university Scarcity -Limited quantities of resources to meet unlimited wants - All economic problems arise b/c of scarcity - We choose the thing we prefer - Scarcity -> Choice opportunity cost the next best alternative use of those resources - result of choice Production Possibility frontier (ppf) curve illustrating the different possible amounts that two separate goods may be produced when there is a fixed availability of a certain resource that both items require for their manufacture Trade-off an alternative that we sacrifice when we make a decision Efficiency The percentage of the input work that is converted to output work comparative advantage the ability to produce a good at a lower opportunity cost than another producer absolute advantage the ability to produce a good using fewer inputs than another producer normative economics makes prescriptions about the way the economy should work positive economics the analysis of facts or data to establish scientific generalizations about economic behavior supply and demand an economic concept that states that the price of a good rises and falls depending on how many people want it (demand) and depending on how much of the good is available (supply) the market forces of supply and demand Determine what is produced at what price and in what quantity: free market Equilibrium A state of balance Demand Shift Factors 1. Society's income 2. The prices of other goods 3. Tastes 4. Expectations 5. Taxes and subsidies Supply Shift Factors 1. Price of inputs 2. Technology 3. Expectations 4. Taxes and subsidies Supply shifts to the right If nominal wages fall, then short-run aggregate demand shifts right price rises, quantity rises Demand shifts to the left Price falls, quantity falls Choice -every choice involves a loss - You lose the opportunity to use the resource ($, time, etc) in another way - Choice -> Opportunity Cost The importance of an economic model is that it allows us to: focus on the effects of only one change at a time If an economy is producing at a point on its production possibilities frontier, it is efficient in production but not necessarily in allocation Suppose Indiana produces only steel and corn, with fixed amounts of land, labor, and capital resources. Which scenario BEST sets the stage for economic growth The percentage of Indiana residents with a college degree rises from 25% to 30% When a nation's economy grows its production possibility frontier shifts outward to achieve gains from trade, each nation should specialize in the production of a good or service if the country can make that good or service while forgoing the production of fewer alt products than any other country FALSE money flows from household to firms as households offer factors of production for sale Law of Demand Consumers buy more personal computer because prices have fallen A negative relationship between quantity demanded and price is demand A decrease in the price of eggs will result in an increase in quantity of eggs demanded Raclette is a popular wintertime dis in Switerland. It is essentially with cheese and potatoe. If price of cheese decreased, we would expect an increase in demand for new potatoes When the economy suffers a downturn and the incomes of many people decrease, vactioners are more likely to take car trips than fly. One explanation is Air travel is a normal good and travel by car is an inferior good If goods A and Z are complements an increase in price of good Z will decrease the demand for good A If goods A and B are substitutes, a decrease in the price of good B will decrease the demand for good A An announcement that smoking will harm your ability to think clearly will MOST likely result a decrease in the demand for cigarettes Which factor is likely to cause a rightward shift in the demand for hime-delivered pizza? a larger population If the price of eggs decrease, it would probably result in ____ in the demand of bacon an increase Suppose that people expect the price of Bluetooth speakers to rise next year. As a result... observe higher prices for Bluetooth speakers this year Consider two competing motorcycle manufactures, HD and H. If HD raises the price, expect a shift to the right in the demand for Hondas and higher prices for Hondas If economy booms and people's incomes rise, then the demand curve for a normal good like new house will _____ and the rquilibrium quantity of new houses produced will _____ shift to the right: increase [Show Less]
- Exam
- $14.45
- 0
- 167
E201 EXAM Questions and Answers 2023
What is a firm's fundamental goal and what happens if the firm doesn't pursue this goal? A firm's fundamental goal is to maximize its profit. If the firm ... [Show More] fails to maximize profit it is either eliminated or bought out by other firms maximizing profit. Why do accountants and economists calculate a firm's cost and profit in different ways? Accountants and economists have different reasons for computing a firm's costs. An accountant calculates a firm's cost and profit to ensure that the firm pays the correct amount of income tax and to show its investors how their funds are being used. An economist calculates a firm's cost and profit in a way that enables him or her to predict the firm's decisions. What are the items that make opportunity cost differ from the accountant's measure of cost? A firm's opportunity cost includes the cost of using resources bought in the market, owned by the firm and supplied by the firm's owner. Economists and accountants both include the price of resources bought in the market as costs. But accountants omit costs included by economists. For instance, use of a building the owner has already purchased has an opportunity cost that accountants do not include. Additionally the normal profit, interest foregone, and economic depreciation are other opportunity costs not recorded by an accountant. Why is normal profit an opportunity cost? Normal profit is the return to a firm's owner for the owner's supply of entrepreneurial ability and labor to the firm's production process. Using the owner's ability to run the business implies that the owner could have received a return for using it in another capacity, such as running another firm. This cost is an opportunity cost for the firm because it is the cost of a forgone alternative, which is running another firm, and must be included in calculating the firm's opportunity cost of production What are the constraints that a firm faces? How does each constraint limit the firm's profit? The three types of constraints a firm faces are technology constraints, information constraints, and market constraints. Technology is any specific method of producing a good or service and it advances over time. Using the available technology, the firm can produce more only if it hires more resources, which will increase its costs and limit the profit of additional output. Information is never complete, for the future or the present. A firm is constrained by limited information about the quality and effort of its work force, current and future buying plans of its customers, and the plans of its competitors. The cost of coping with limited information itself limits profit. Market constraints mean that what each firm can sell and the price it can obtain are constrained by its customers' willingness to pay and by the prices and marketing efforts of other firms. The resources that a firm can buy and the prices it must pay for them are limited by the willingness of people to work for and invest in the firm. The expenditures a firm incurs to overcome these market constraints will limit the profit the firm can make. Is a firm technologically efficient if it uses the latest technology? Why or why not? Technological efficiency occurs when a firm produces a given level of output using the least amount of inputs. Adopting the latest available technology does not necessarily imply that a firm's production process is technologically efficient. As long as the firm is getting the maximum possible output for a given combination of inputs, it is technologically efficient. Is a firm economically inefficient if it can cut its costs by producing less? Why or why not? Economic efficiency occurs when the firm produces a given level of output at the least cost. If a firm can decrease production costs by decreasing output, it is not necessarily economically inefficient. If it is producing the new level of output at the least possible cost, it is achieving economic efficiency Explain the key distinction between technological efficiency and economic efficiency. The difference between technological and economic efficiency is that technological efficiency concerns the quantity of inputs used in production for a given level of output, whereas economic efficiency concerns the value of the inputs used. Economic efficiency requires technological efficiency, but technological efficiency does not require economic efficiency. Why do some firms use large amounts of capital and small amounts of labor while others use small amounts of capital and large amounts of labor? The mix of resources used, such as large amounts of capital versus small amounts of capital, depends on economic efficiency. Economic efficiency is based on minimizing the value of the resources used, not the quantity. A firm will use the mix that produces output at the lowest possible cost, without regard to specific physical quantities or ratios of inputs. As the cost of capital decreases relative to the cost of other resources, capital-intensive production methods will become economically efficient and firms will avoid labor-intensive methods Explain the distinction between a command system and an incentive system A command system uses a managerial hierarchy, where commands pass downward through the hierarchy and information (feedback) passes upward. These systems are relatively rigid and can have many layers of specialized management. Incentive systems use market-like mechanisms to induce workers to perform in ways that maximize the firm's profit. What is the principal-agent problem? What are three ways in which firms try to cope with it? The principal-agent problem is the problem of devising compensation rules that induce an agent to act in the best interests of a principal. There are three ways of coping with this problem: Ownership, often offered to managers, gives the agents an incentive to maximize the firm's profits, which is the goal of the owners, the principals; incentive pay links managers' or workers' pay to the firm's performance and helps align the managers' and workers' interests with those of the owners, the principal; long-term contracts tie managers' or workers' long-term rewards to the long-term performance of the firm, encouraging the agents to work in the best long-term interests of the firm owners, the principals What are the three types of firms? Explain the major advantages and disadvantages of each. The three main ways of organizing a firm have both advantages and disadvantages: 1. Proprietorship. ADVANTAGES—easy to set up; managerial decision-making is simple and rapid; and profits are taxed only once. DISADVANTAGES—bad decisions on the part of the owner are not subject to review; the owner's entire wealth is at stake because of unlimited liability; the firm dies with the owner; and acquiring capital and labor is expensive. 2. Partnership. ADVANTAGES—easy to set up; has diversified decision-making so that more than one person's expertise can be utilized; can survive the death or withdrawal of a partner; and profits are taxed only once. DISADVANTAGES—all the owners' wealth is at risk because of unlimited liability; if there are many partners, gaining a consensus about managerial decisions may be difficult; the withdrawal of partner may create capital shortage; labor costs are high compared to corporations; and capital costs can be high. 3. Corporation. ADVANTAGES—perpetual life; limited liability for its owners; readily available, largescale, and low-cost capital; can rely on professional managers rather than the talents of the owners; and reduced costs from long-term labor contracts. DISADVANTAGES—potentially complex management structure may lead to slow and expensive decision-making; and profits are taxed twice, once as corporate profit and once as income to the stockholders. What are the four market types? Explain the distinguishing characteristics of each 1. Perfect competition is a market with many firms, each selling an identical product. There are many buyers and no restrictions on entry of new firms. Firms and buyers are all well informed of prices and products of all firms in the industry. 2. Monopolistic competition is a market with many firms that produce similar but slightly different goods. 3. Oligopoly is a market in which a small number of firms compete and each firm may produce almost identical or differentiated goods. 4. Monopoly is a market in which only one firm produces the entire output of the industry. There are no close substitutes for the monopolist's p Is the U.S. economy competitive? Is it becoming more competitive or less competitive? The U.S. economy would be considered competitive since three-quarters of the value of goods and services bought are in markets characterized as perfect competition or monopolistic competition. The U.S. economy has become increasingly competitive over the decades. What are the two ways in which economic activity can be coordinated? Firms and markets both coordinate resources. What determines whether a firm or markets coordinate production? Firms coordinate resources when they can do so at lower cost than can a market. 1. Firms may reduce transactions costs, which are the costs arising from finding someone with whom to do business, reaching agreement on the price and other aspects of the exchange, and ensuring that the terms of the agreement are fulfilled. 2. Firms can capture economies of scale, which occurs when the cost of producing a unit falls as its output rate increases. 3. Firms can capture economies of scope, where one firm can use specialized inputs to produce a range of different goods at a lower cost than otherwise. 4. Firms can engage in team production, in which the individuals specialize in mutually supportive tasks. Firms coordinate economic activity when they can perform a task more efficiently than markets can. In such a situation, it is profitable to set up a firm. If markets can perform a task more efficiently than a firm can, firms will use markets, and any attempt to set up a firm to replace such market coordination will be doomed to failure What are the main reasons why firms can often coordinate production at a lower cost than markets can? Firms can often coordinate production at a lower cost than can markets because firms lower transactions costs and achieve economies of scale, scope, and team production. These opportunities are not present when markets coordinate production. Distinguish between the short run and the long run. The short run is a period of time during which the quantity of at least one factor of production is fixed and cannot be changed. The long run is a period of time long enough so that the quantities of all factors of production can be varied. [Show Less]
- Exam
- $15.45
- 0
- 109
E201 Exams Questions and Answers 2023
What is a firm's fundamental goal and what happens if the firm doesn't pursue this goal? A firm's fundamental goal is to maximize its profit. If the firm ... [Show More] fails to maximize profit it is either eliminated or bought out by other firms maximizing profit. Why do accountants and economists calculate a firm's cost and profit in different ways? Accountants and economists have different reasons for computing a firm's costs. An accountant calculates a firm's cost and profit to ensure that the firm pays the correct amount of income tax and to show its investors how their funds are being used. An economist calculates a firm's cost and profit in a way that enables him or her to predict the firm's decisions. What are the items that make opportunity cost differ from the accountant's measure of cost? A firm's opportunity cost includes the cost of using resources bought in the market, owned by the firm and supplied by the firm's owner. Economists and accountants both include the price of resources bought in the market as costs. But accountants omit costs included by economists. For instance, use of a building the owner has already purchased has an opportunity cost that accountants do not include. Additionally the normal profit, interest foregone, and economic depreciation are other opportunity costs not recorded by an accountant. Why is normal profit an opportunity cost? Normal profit is the return to a firm's owner for the owner's supply of entrepreneurial ability and labor to the firm's production process. Using the owner's ability to run the business implies that the owner could have received a return for using it in another capacity, such as running another firm. This cost is an opportunity cost for the firm because it is the cost of a forgone alternative, which is running another firm, and must be included in calculating the firm's opportunity cost of production What are the constraints that a firm faces? How does each constraint limit the firm's profit? The three types of constraints a firm faces are technology constraints, information constraints, and market constraints. Technology is any specific method of producing a good or service and it advances over time. Using the available technology, the firm can produce more only if it hires more resources, which will increase its costs and limit the profit of additional output. Information is never complete, for the future or the present. A firm is constrained by limited information about the quality and effort of its work force, current and future buying plans of its customers, and the plans of its competitors. The cost of coping with limited information itself limits profit. Market constraints mean that what each firm can sell and the price it can obtain are constrained by its customers' willingness to pay and by the prices and marketing efforts of other firms. The resources that a firm can buy and the prices it must pay for them are limited by the willingness of people to work for and invest in the firm. The expenditures a firm incurs to overcome these market constraints will limit the profit the firm can make. Is a firm technologically efficient if it uses the latest technology? Why or why not? Technological efficiency occurs when a firm produces a given level of output using the least amount of inputs. Adopting the latest available technology does not necessarily imply that a firm's production process is technologically efficient. As long as the firm is getting the maximum possible output for a given combination of inputs, it is technologically efficient. Is a firm economically inefficient if it can cut its costs by producing less? Why or why not? Economic efficiency occurs when the firm produces a given level of output at the least cost. If a firm can decrease production costs by decreasing output, it is not necessarily economically inefficient. If it is producing the new level of output at the least possible cost, it is achieving economic efficiency Explain the key distinction between technological efficiency and economic efficiency. The difference between technological and economic efficiency is that technological efficiency concerns the quantity of inputs used in production for a given level of output, whereas economic efficiency concerns the value of the inputs used. Economic efficiency requires technological efficiency, but technological efficiency does not require economic efficiency. Why do some firms use large amounts of capital and small amounts of labor while others use small amounts of capital and large amounts of labor? The mix of resources used, such as large amounts of capital versus small amounts of capital, depends on economic efficiency. Economic efficiency is based on minimizing the value of the resources used, not the quantity. A firm will use the mix that produces output at the lowest possible cost, without regard to specific physical quantities or ratios of inputs. As the cost of capital decreases relative to the cost of other resources, capital-intensive production methods will become economically efficient and firms will avoid labor-intensive methods Explain the distinction between a command system and an incentive system A command system uses a managerial hierarchy, where commands pass downward through the hierarchy and information (feedback) passes upward. These systems are relatively rigid and can have many layers of specialized management. Incentive systems use market-like mechanisms to induce workers to perform in ways that maximize the firm's profit. What is the principal-agent problem? What are three ways in which firms try to cope with it? The principal-agent problem is the problem of devising compensation rules that induce an agent to act in the best interests of a principal. There are three ways of coping with this problem: Ownership, often offered to managers, gives the agents an incentive to maximize the firm's profits, which is the goal of the owners, the principals; incentive pay links managers' or workers' pay to the firm's performance and helps align the managers' and workers' interests with those of the owners, the principal; long-term contracts tie managers' or workers' long-term rewards to the long-term performance of the firm, encouraging the agents to work in the best long-term interests of the firm owners, the principals What are the three types of firms? Explain the major advantages and disadvantages of each. The three main ways of organizing a firm have both advantages and disadvantages: 1. Proprietorship. ADVANTAGES—easy to set up; managerial decision-making is simple and rapid; and profits are taxed only once. DISADVANTAGES—bad decisions on the part of the owner are not subject to review; the owner's entire wealth is at stake because of unlimited liability; the firm dies with the owner; and acquiring capital and labor is expensive. 2. Partnership. ADVANTAGES—easy to set up; has diversified decision-making so that more than one person's expertise can be utilized; can survive the death or withdrawal of a partner; and profits are taxed only once. DISADVANTAGES—all the owners' wealth is at risk because of unlimited liability; if there are many partners, gaining a consensus about managerial decisions may be difficult; the withdrawal of partner may create capital shortage; labor costs are high compared to corporations; and capital costs can be high. 3. Corporation. ADVANTAGES—perpetual life; limited liability for its owners; readily available, largescale, and low-cost capital; can rely on professional managers rather than the talents of the owners; and reduced costs from long-term labor contracts. DISADVANTAGES—potentially complex management structure may lead to slow and expensive decision-making; and profits are taxed twice, once as corporate profit and once as income to the stockholders. What are the four market types? Explain the distinguishing characteristics of each 1. Perfect competition is a market with many firms, each selling an identical product. There are many buyers and no restrictions on entry of new firms. Firms and buyers are all well informed of prices and products of all firms in the industry. 2. Monopolistic competition is a market with many firms that produce similar but slightly different goods. 3. Oligopoly is a market in which a small number of firms compete and each firm may produce almost identical or differentiated goods. 4. Monopoly is a market in which only one firm produces the entire output of the industry. There are no close substitutes for the monopolist's p Is the U.S. economy competitive? Is it becoming more competitive or less competitive? The U.S. economy would be considered competitive since three-quarters of the value of goods and services bought are in markets characterized as perfect competition or monopolistic competition. The U.S. economy has become increasingly competitive over the decades. What are the two ways in which economic activity can be coordinated? Firms and markets both coordinate resources. What determines whether a firm or markets coordinate production? Firms coordinate resources when they can do so at lower cost than can a market. 1. Firms may reduce transactions costs, which are the costs arising from finding someone with whom to do business, reaching agreement on the price and other aspects of the exchange, and ensuring that the terms of the agreement are fulfilled. 2. Firms can capture economies of scale, which occurs when the cost of producing a unit falls as its output rate increases. 3. Firms can capture economies of scope, where one firm can use specialized inputs to produce a range of different goods at a lower cost than otherwise. 4. Firms can engage in team production, in which the individuals specialize in mutually supportive tasks. Firms coordinate economic activity when they can perform a task more efficiently than markets can. In such a situation, it is profitable to set up a firm. If markets can perform a task more efficiently than a firm can, firms will use markets, and any attempt to set up a firm to replace such market coordination will be doomed to failure What are the main reasons why firms can often coordinate production at a lower cost than markets can? Firms can often coordinate production at a lower cost than can markets because firms lower transactions costs and achieve economies of scale, scope, and team production. These opportunities are not present when markets coordinate production. Distinguish between the short run and the long run. The short run is a period of time during which the quantity of at least one factor of production is fixed and cannot be changed. The long run is a period of time long enough so that the quantities of all factors of production can be varied. Why is a sunk cost irrelevant to a firm's current decisions? Sunk cost is irrelevant because it cannot be changed by any decision. It is already incurred and so must be paid. The only costs that concern the firm are costs that the firm can change with its current decisions Explain how the marginal product and average product of labor change as the labor employed increases (a) initially and (b) eventually. Initially, as the quantity of labor is increases, the firm experiences increasing marginal returns, which means that the marginal product increases as more labor is employed. Increasing marginal returns occur because hiring additional workers allows the workers to specialize and become more productive. Eventually, the firm will experience diminishing marginal returns which means that the marginal product decreases as more labor is employed. Decreasing marginal returns occur because eventually the gains from specialization diminish and because more and more workers are working with the same fixed amount of capital. The average product of labor follows the marginal product of labor. Initially, when the marginal product of labor is increasing, the average product also increases. As long as the marginal product of labor exceeds the average product of labor, the average product continues to increase. Eventually when the marginal product is falling it falls enough so that it is less than the average product, at which point the average product of labor decreases. What is the law of diminishing returns? Why does marginal product eventually diminish? The law of diminishing returns states that as a firm uses more of a variable factor of production with a given quantity of fixed factors of production, the marginal product of the variable factor eventually diminishes. Diminishing marginal returns arises from the fact that ever more workers are using the same capital and working in the same space. Explain the relationship between marginal product and average product As the quantity of labor initially increases the firm experiences increasing marginal returns and the marginal product of labor increases. The marginal product of labor is greater than the average product over this range of labor, so the average product of labor increases when the quantity of labor increases. Eventually, diminishing marginal returns causes the marginal product of labor to fall. When the marginal product of labor falls below the average product, the average product decreases as the quantity of labor increases Which of the following news items involves a short-run decision and which involves a long-run decision? Explain. 1. January 31, 2008: Starbucks will open 75 more stores abroad than originally predicted, for a total of 975. This decision is a long-run decision. It increases the quantity of all of Starbucks' factors of production, labor and the size of Starbucks' plant. 2. February 25, 2008: For three hours on Tuesday, Starbucks will shut down every single one of its 7,100 stores so that baristas can receive a refresher course. This decision is a short-run decision. It involves increasing the quality of Starbucks' labor and so only one factor of production—labor—changes and all the other factors remain fixed. 3. June 2, 2008: Starbucks replaces baristas with vending machines. This decision is a short-run decision. It involves changing two of Starbucks' factors of production, labor and one type of capital. But other factors of production, such as Starbucks' land and other capital inputs such as the store itself, remain fixed. 4. July 18, 2008: Starbucks is closing 616 stores by the end of March. This decision is a long-run decision. It decreases the quantity of all of Starbucks' factors of production, labor and the size of Starbucks' plant What relationships do a firm's short-run cost curves show? The marginal cost (MC), average total cost (ATC) and average variable cost (AVC) curves are all related in the short run: When the MC curve lies above (lies below) the AVC curve, the AVC curve rises (falls) with output. This implies that as output increases, the MC curve cuts through the AVC curve at its lowest point. When the MC curve lies above (lies below) the ATC curve, the ATC curve rises (falls) with output. This implies that as output increases, the MC curve cuts through the ATC curve at its lowest point. As output increases, the ATC curve becomes vertically closer to the AVC curve. How does marginal cost change as output increases (a) initially and (b) eventually? At small outputs, marginal cost decreases as output increases because of greater specialization and the division of labor, but as output increases further, marginal cost eventually increases because of the law of diminishing returns. What does the law of diminishing returns imply for the shape of the marginal cost curve? The law of diminishing returns states: As a firm uses more of a variable factor of production, with a given quantity of the fixed factor of production, the marginal product of the variable factor eventually diminishes. The law of diminishing returns means that each additional worker produces a successively smaller addition to output. So to get an additional unit of output, ever more workers are required. The cost of an additional unit of output—marginal cost—is increasing, so the marginal cost curve eventually slopes upward What is the shape of the AFC curve and why does it have this shape? Average fixed cost (AFC) equals total fixed cost divided by total product. As the quantity produced increases, the fixed costs are spread over a larger and larger quantity of output so average fixed cost decreases. So the AFC curve slopes downward as the quantity produced increases. What are the shapes of the AVC curve and the ATC curve and why do they have these shapes? The average variable cost (AVC), and average total cost (ATC) curves are both U-shaped. The marginal cost (MC) curve shows how total cost changes when output increases by one unit. If the MC curve lies below the AVC curve, AVC is falling. Diminishing marginal returns means that eventually the MC curve slopes upward. At some point the MC curve lies above the AVC curve, and the AVC curve is upward sloping. ATC is the sum of average fixed cost (AFC) and AVC. Initially the ATC curve falls as the quantity produced increases because the AFC is initially quite large, but drops rapidly as total fixed costs are spread over greater levels of output. However, eventually diminishing returns cause marginal product to fall below average product, and average product decreases. As a result AVC increases as the quantity produced increases. If AVC rises more quickly than AFC falls, then the ATC curve is upward sloping. What does a firm's production function show and how is it related to a total product curve? A firm's production function is the relationship between the maximum output attainable and the quantities of both capital and labor. The total product curve shows the maximum output that a given quantity of labor can produce for a given quantity of capital. Does the law of diminishing returns apply to capital as well as labor? Explain why or why not. oes the law of diminishing returns apply to capital as well as labor? Explain why or why not. The law of diminishing returns applies to capital as well as labor. The marginal product of capital is the change in the total product resulting from a one-unit increase in capital, holding the quantity of labor constant. As the quantity of capital increases for a given level of labor, the first units of capital will increase output substantially. But as capital continues to increase, eventually the increase in production starts to get smaller and diminishing returns to capital are occurring. What does a firm's LRAC curve show? How is it related to the firm's short-run ATC curves? The long-run average cost curve (LRAC) shows the relationship between the lowest attainable ATC and output when both plant size and labor are varied. The LRAC curve reflects the minimum possible ATC the firm can attain for any given level of output. For any level of output the firm might choose to produce, the LRAC reflects the lowest possible ATC taken from an ATC curve that corresponds to a particular plant size. Once the firm has chosen that plant size, it will incur costs corresponding to the ATC curve associated with that plant size What are economies of scale and diseconomies of scale? How do they arise? What do they imply for the shape of the LRAC curve? Economies of scale are features of a firm's technology that lead to falling long-run average cost (LRAC) as output increases. As plant size increases, the minimum attainable average total cost (ATC) for each plant size falls with output. Diseconomies of scale are features of a firm's technology that lead to rising LRAC as output increases. As plant size increases, the minimum attainable ATC for each plant size rises with output. A firm initially experiences economies of scale up to some output level and over this range of output the LRAC curve is downward sloping as output increases. Beyond that output level, it may move toward diseconomies of scale. When there are diseconomies of scale, the LRAC slopes upward as output increases, resulting in a U-shaped LRAC curve. What is a firm's minimum efficient scale? Minimum efficient scale is the smallest quantity of output at which long-run average cost reaches its lowest level. If the long-run average cost curve has the typical U shape, the minimum point of the LRAC identifies the level of output that represents the firm's minimum efficient scale. How do we derive the short-run market supply curve in perfect competition? The short-run market supply curve is the horizontal sum of each individual firm's supply curve. That is, the amount supplied by the total market equals the sum of what each firm in the industry supplies at a given price. In perfect competition, when market demand increases, explain how the price of the good and the output and profit of each firm changes in the short run. When market demand increases, the market price of the good rises, and the market quantity increases. Because price equals marginal revenue, the rise in the price means marginal revenue rises. As a result, each firm moves up its marginal cost curve and increases the quantity it produces. The firm's economic profit rises (or its economic loss decreases). If the firm had been making a normal profit before the increase in demand, after the increase the firm makes an economic profit. In perfect competition, when market demand decreases, explain how the price of the good and the output and profit of each firm changes in the short run. When market demand decreases, the market price of the good falls and the market quantity decreases. Because the price equals marginal revenue, the fall in the price means marginal revenue falls. As a result, each firm moves down its marginal cost curve so each firm decreases the quantity it produces. The firm's economic profit falls (or its economic loss increases). If the firm had been making a normal profit before the decrease in demand, after the decrease the firm incurs an economic loss [Show Less]
- Exam
- $15.95
- 0
- 102
Econ E201 Questions with correct Answers 2023
Which of the following is NOT a factor of production? A) The effort of farmers raising cattle. B) The wages paid to workers. C) Cattle D) The managemen... [Show More] t skill of a small business owner. E) The water used to cool a nuclear power plant. B) The wages paid to workers. The ultimate cost of any choice is A) the dollars expended on the good. B) what someone else would be willing to pay. C) the value of the good assessed by an independent auditor. D) the highest-valued alternative forgone. E) the after-tax cost to the individual. D) the highest-valued alternative forgone. Your friend Jane makes the statement, "The cost of books has increased 100 percent over the past year," she is A) testing an economic model. B) making a positive statement. C) facing a tradeoff of book cost last year and this year. D) making a normative statement. E) making a post hoc fallacy. B) making a positive statement. When the production possibilities frontier is bowed outwards, the opportunity cost of producing more of one good A) cannot be determined. B) increases in terms of the amount foregone of the other good. C) produces a convex shaped curve. D) remains constant. E) decreases in terms of the amount foregone of the other good. B) increases in terms of the amount foregone of the other good. The opportunity cost of economic growth is A) present consumption that a nation gives up to accumulate capital B) investment that a nation gives up to increase its economic growth. C) future consumption that a nation gets if it gives up some present consumption. D) future consumption that a nation gives up to consume more today A) present consumption that a nation gives up to accumulate capital In an eight-hour day, Andy can produce either 24 loaves of bread or 8 pounds of butter. In an eight-hour day, Adam can produce either 8 loaves of bread or 8 pounds of butter. We know that Andy has a comparative advantage in the production of A) bread, while Adam has a comparative advantage in the production of butter. B) butter, while Adam has a comparative advantage in the production of bread. C) both bread and butter. D) bread and neither has a comparative advantage in the production of butter A) bread, while Adam has a comparative advantage in the production of butter. Homer and Teddy are stranded on a desert island. To feed themselves each day they can either catch fish or pick fruit. In a day, Teddy could pick 60 pieces of fruit or catch 20 fish. Homer could pick 100 pieces of fruit or catch 150 fish. Which of the following is correct? A) Only Homer would be better off if Homer specialized in picking fruit and Teddy specialized in catching fish. B) Both Homer and Teddy would be better off if Homer specialized in catching fish and Teddy specialized in picking fruit. C) Both Homer and Teddy would be better off if Homer specialized in picking fruit and Teddy specialized in catching fish. D) Only Homer would be better off if Homer specialized in catching fish and Teddy specialized in picking fruit. B) Both Homer and Teddy would be better off if Homer specialized in catching fish and Teddy specialized in picking fruit. Considering only candy bars and fast food meals, if the price of a candy bar is $1 and the price of a fast food meal is $5, we can say that ___________________________________________ A) the relative price of a candy bar is 5 fast food meals. B) the money price of a candy bar is 1/5 of a fast food meal. C) the money price of a fast food meal is 1/5 of a candy bar. D) the relative price of a fast food meal is 5 candy bars D) the relative price of a fast food meal is 5 candy bars Consumers come to expect that the price of a gallon of gasoline will decrease next week. As a result, you would expect A) next week's supply of gasoline decreases. B) today's supply of gasoline increases. C) today's demand for gasoline increases. D) today's demand for gasoline decreases. E) the price of a gallon of gasoline increase today D) today's demand for gasoline decreases. DVDs and CDs are substitutes in production and not related in consumption. If there is an increase in the demand for DVDs that increases the market price of a DVDs, we would expect to see ________________________ A) a decrease in the supply of CDs. B) a decrease in the quantity supplied of CDs but not in the supply. C) an increase in the supply of CDs. D) an increase in the quantity supplied of CDs but not in the supply. D) an increase in the quantity supplied of CDs but not in the supply. Beef and leather belts are complements in production. If people's concern about health shifts the demand curve for beef leftward, you would predict that in the market for leather belts there will be _____________________________________ A) a lower equilibrium price for a leather belt that results from an increase in the supply of leather belts. B) no change in the equilibrium price. C) a higher equilibrium price for a leather belt that results from an increase in the supply of leather belts. D) a lower equilibrium price for a leather belt that results from a decrease in the supply of leather belts. E) a higher equilibrium price for a leather belt that results from a decrease in the supply of leather belts. E) a higher equilibrium price for a leather belt that results from a decrease in the supply of leather belts. Suppose that you observe the price of tomatoes decreases after the supply for tomatoes increased. You then observe that people buy more lettuce at any price. These observations suggest that lettuce and tomatoes are ________. A) normal goods B) complements consumption C) complements in production D) substitutes in consumption E) inferior goods B) complements consumption After you graduate, you have decided to accept a position working at the Bureau of Labor Statistics for $45,000.00 a year. The two other offers you received were working for Wal-Mart for $38,000 and working for Ernst and Young consulting for $42,000. Of these two offers, you would have preferred the job at Ernst and Young. What is the opportunity cost of accepting the position at the Bureau of Labor Statistics? A) the $45,000 you are paid for working at the Bureau of Labor Statistics B) the $42,000 you would have been paid working for Ernst and Young C) the $42,000 you would have been paid working for Ernst and Young and the $38,000 you would have been paid working for Wal-Mart D) the $38,000 you would have been paid working for Wal-Mart E) None of the above are correct. B) the $42,000 you would have been paid working for Ernst and Young Suppose that the government of New York state promises to decrease taxes to a firm if it decides to stay in New York instead of moving to another state. This policy on the part of the state constitutes ________, to make the ________ of the firm remaining in New York. A) a command; marginal benefit exceed the marginal cost B) an incentive; marginal benefit exceed the marginal cost C) a command; marginal cost exceed the marginal benefit D) an incentive; marginal cost exceed the marginal benefit B) an incentive; marginal benefit exceed the marginal cost Jed had an exam score of 50 percentage points. There is an extra credit assignment that Jed can complete that will raise his exam score by 20 percentage points. Jed has determined that the extra credit assignment will take 10 hours of his time. Jed will complete the assignment he values the A) additional 20 percentage points more than the first 50 percentage points. B) wants a higher score. C) 20 percentage points more than the 10 hours of his time. D) 10 hours of his time more than the 20 percentage points. E) 70 percentage points more than the 10 hours of his time. C) 20 percentage points more than the 10 hours of his time. [Show Less]
- Exam
- $15.45
- 0
- 98
IPFW E201 Questions and Answers 2023
1. Which of the following is not an assumption of the theory of perfect competition? a. There are many sellers and many buyers, none of which is large in ... [Show More] relation to total sales or purchases. b. Each firm produces and sells a differentiated product. c. Buyers and sellers have all relevant information with respect to prices, product quality, and sources of supply. d. There is easy entry and exit. b 2. Examples of perfect competition include a. some agricultural markets. b. the soft drink market. c. the stock market. d. a and c e. a, b, and c d 3. The theory of perfect competition generally assumes that a. sellers act independently of other sellers, but buyers do not act independently of other buyers. b. buyers act independently of other buyers, but sellers do not act independently of other sellers. c. buyers and sellers act independently of other buyers and sellers. d. neither buyers nor sellers act independently of other buyers and sellers. c 4. In the theory of perfect competition, a. sellers of the product are not influenced by other sellers and therefore have virtually complete control over the production and pricing of their product. b. buyers of the product may have a preference as to whom they purchase from based on brand loyalty. c. buyers and sellers of the product know everything that there is to know about the product. d. it can be quite expensive for a firm to enter this type of market, but once the firm is established, it will be a profitable venture. c 5. Does a real-world market have to meet all the assumptions of the theory of perfect competition before it is considered a perfectly competitive market? a. No, probably no real-world market meets all the assumptions of the theory of perfect competition. All that is necessary is that a real-world market behave as if it satisfies all the assumptions. b. Yes, if a real-world market does not meet the assumptions, then it cannot be considered a perfectly competitive market. c. Yes, unless it is a new market such as the computer market. New markets are not held to the same assumptions as old, more established markets. d. No, but it does have to meet the assumption of producing and selling a homogeneous product. It does not have to fully meet the other assumptions. a 6. Perfectly competitive industries are a. difficult to enter because there are already so many producers in the industry. b. not particularly appealing or attractive to enter because there tend to be so many buyers that it is difficult to deal with them. c. relatively easy to enter but not so easy to exit from. d. a and b e. none of the above e 7. A "price taker" is a firm that a. does not have the ability to control the price of the product it sells. b. does have the ability, although limited, to control the price of the product it sells. c. can raise the price of the product it sells and still sell some units of its product. d. sells a differentiated product. e. none of the above a 8. Perfectly competitive firms are price takers for all of the following reasons except that a. each firm is quite small relative to the total market supply. b. buyers and sellers have all the necessary information about prices, etc. c. the product is homogeneous. d. barriers to exit force firms to sell at the market price. d 9. Which of the following is probably the worst example of a perfectly competitive market? a. the market for corn b. the market for automobiles c. the stock market d. the market for wheat b 10. The demand curve for a perfectly competitive firm a. is downward sloping. b. is upward sloping. c. is perfectly horizontal. d. is perfectly vertical. e. may be downward or upward sloping, depending upon the type of product offered for sale. c 11. The market demand curve in a perfectly competitive market is a. downward sloping. b. upward sloping. c. perfectly horizontal. d. perfectly vertical. e. downward or upward sloping depending upon the type of product offered for sale. a 12. In the theory of perfect competition, a. the market demand curve is horizontal. b. the single firm's demand curve is horizontal. c. the single firm's demand curve is downward sloping. d. a and b e. a and c b 13. Which of the following statements is false? a. The perfectly competitive firm's demand curve is horizontal at the market price. b. The theory of perfect competition is completely and accurately descriptive of most realworld firms. c. If Firm X does not strictly meet all the assumptions of the theory of perfect competition, but behaves as if it does, then the theory of perfect competition is relevant to it. d. In perfect competition, the market price is established at the intersection of the market demand and market supply curves. b 14. The price at which a perfectly competitive firm sells its product is determined by a. the individual seller based on his costs of production and his profit margin. b. all sellers and buyers of the product, collectively. c. the buyers of the product, because there are so many sellers that they cannot agree on a price. d. the government, because there are so many buyers and sellers of the product that together they cannot agree on the price. b 15. The perfectly competitive firm will seek to produce the output level for which a. average variable cost is at a minimum. b. average total cost is at a minimum. c. average fixed cost is at a minimum. d. marginal cost equals marginal revenue. d 16. Marginal revenue is a. total revenue divided by the quantity of output. b. total profit minus total costs. c. the change in total output brought about by using an additional unit of a variable input. d. the change in total revenue brought about by selling an additional unit of the good. e. the change in total revenue minus the change in total costs. d 17. For a perfectly competitive firm, a. the marginal revenue curve and the demand curve are the same. b. the marginal revenue curve and the marginal cost curve are the same. c. the supply curve and the marginal revenue curve are the same. d. the demand curve and the marginal cost curve are the same. e. none of the above a 18. Refer to Exhibit 9-1. The dollar amounts that go in blanks A and B are, respectively, a. $1 and $12. b. $12 and $12. c. $12 and $10. d. $12 and $11. b 19. Refer to Exhibit 9-1. The data are relevant to a perfectly competitive firm because a. its total revenue is different at different levels of quantities sold. b. its total revenue is the same at all levels of quantities sold. c. it doesn't have to lower price to sell additional units of the product. d. marginal revenue is greater than price. c 20. Refer to Exhibit 9-1. The data are relevant to a perfectly competitive firm because a. its total revenue is different at different levels of quantities sold. b. its marginal revenue is the same at all quantities sold. c. it must lower price to sell additional units of its product. d. marginal revenue is greater than price. b 21. A perfectly competitive firm will increase its production as long as a. total revenue is less than total cost. b. the total revenue curve is rising. c. marginal revenue is greater than marginal cost. d. the marginal revenue curve is rising. c 22. For a perfectly competitive firm, profit maximization or loss minimization occurs at the output at which a. MR = MC. b. MR = AVC. c. P = ATC. d. MR = ATC. a 23. If MR > MC, then a. profits will be at their maximum. b. the firm is producing too much of the good to be maximizing profits. c. the firm can increase its profits or minimize its losses by increasing output. d. the firm is necessarily incurring losses. c 24. If, for the last unit of a good produced by a perfectly competitive firm, MR > MC, then in producing that unit the firm a. added more to total costs than it added to total revenue. b. added more to total revenue than it added to total costs. c. added an equal amount to both total revenue and total costs. d. maximized profits or minimized losses. b 25. Refer to Exhibit 9-2. What quantity does the profit-maximizing or loss-minimizing firm produce? a. Q1, where "what is coming in" on the last unit is greater than "what is going out." b. Q2, where the difference between "what is coming in" on the last unit and "what is going out" is zero. c. Q3, where marginal cost is greater than marginal revenue. d. Q4, which maximizes the excess of marginal cost over marginal revenue. b 26. Refer to Exhibit 9-2. If the firm produces the quantity of output at which marginal revenue (MR) equals marginal cost (MC), is it guaranteed maximum profit or minimized loss? a. Yes, when MR = MC, it follows that MR - MC = 0, and thus the firm maximizes profit and minimizes losses. b. No, at the quantity of output at which MR = MC, it could be the case that average variable cost is greater than price and the firm would do better to shut down. c. Yes, when the firm produces the quantity at which MR = MC, it has maximized both revenue and profit. d. Yes, because if the MC curve is rising, the average total cost curve always lies below it and thus profit is earned. b 27. Refer to Exhibit 9-2. For the firm that faces the demand curve in the exhibit, a. marginal revenue is constant. b. price equals marginal revenue. c. if the firm maximizes profits, it produces the quantity of output at which price equals marginal cost. d. a and c e. a, b, and c e 28. Refer to Exhibit 9-3. What quantity of output would the profit-maximizing firm produce? a. 41 units b. 42 units c. 43 units d. 45 units e. none of the above d 29. Refer to Exhibit 9-3. What is the gain in profit from producing 45 units of the product rather than producing 42 units? a. $40 b. $30 c. $10 d. $20 e. $0 c 30. Refer to Exhibit 9-3. What is the maximum profit? a. $50 b. $40 c. $20 d. $378 a 31. Refer to Exhibit 9-3. Is it possible for the firm to produce "too much"? a. Any quantity above 42 units is too much. b. Any quantity above 44 units is too much. c. Any quantity above 45 units is too much. d. It is not possible in the range of 40-47 units shown. c 32. Consider the following data: equilibrium price = $9, quantity of output produced = 100 units, average total cost = $8, and average variable cost $6. Given this, total revenue is __________, total cost is __________, and fixed cost is __________. a. $600; $800; $100 b. $900; $700; $800 c. $900; $800; $200 d. $900; $800; $600 e. none of the above c 33. In the short-run, if P < ATC, a perfectly competitive firm should a. increase production to the output level at which P = ATC. b. continue producing at a loss. c. shut down. d. continue producing at a profit. e. There is not enough information to answer the question. e 34. Consider the following data: equilibrium price = $10, quantity of output produced = 100 units, average total cost = $8, and average variable cost = $7. What will the firm do and why? a. Shut down in the short run, because it is taking a loss of $200. b. Continue to produce in the short run, because price is greater than average variable cost. c. Shut down in the short run, because average variable cost is less than average total cost. d. Continue to produce in the short run, because firms are always stuck with having to produce in the short run. b 35. The perfectly competitive firm will produce in the a. short run if price is below average variable cost. b. long run if price is below average variable cost. c. short run if price is below average total cost but above average variable cost. d. long run if price is below average total cost but above average variable cost. c 36. Consider the following data: equilibrium price = $7.50, quantity of output produced = 100 units, average total cost = $9, and average variable cost = $8. What will the firm do and why? a. Shut down in the short run, because price is below average variable cost. b. Shut down in the short run, because it will be taking a loss of $50. c. Continue to produce in the short run, because price is greater than average variable cost. d. Continue to produce in the short run, because firms are always stuck with having to produce in the short run. e. none of the above a 37. In order for a firm to continue producing, price must exceed __________ and total revenue must exceed __________. a. marginal cost, total cost b. ATC; total cost c. AFC; total fixed cost d. AVC; total variable costs e. price; total cost d [Show Less]
- Exam
- $16.95
- 0
- 131
ATP E2-01 Exam Questions with correct Answers
Commander's Critical Information Requirements (CCIR) information requirement identified by the commander as being critical to facilitating timely decision... [Show More] making. The two CCIR categories are friendly force information requirements and PIRs Priority Intelligence Requirements (PIR) Category of CCIR; designated by the commander to focus information collection on the enemy or adversary and the OE to provide information required for decision making. Identify information about enemy, terrain, weather, and civil considerations that the commander considers most important assessing collection involves two concurrent tasks of assessing the information collection plan and assessing tactical task execution evaluation of collection assets via Availability Capability Sustainability Vulnerability availability staff members must known the collectors and PED (processing, exploitation, dissemination) enablers available to their echelon, echelons above and below, and how to request and manage these assets capability staff must know and consider practical capabilities and limitations of all unit organic assets sustainability staff must consider the collection asset's sustainability for long-duration operations vulnerability staff must evaluate the collector's vulnerability to threat forces, not only in target area but also along the route of travel cueing using one or more information collection asset to provide data that directs collection by other assets redundancy involves using same capability assets to cover the same target mix planning for complementary coverage by a combination of assets from multiple intelligence disciplines information collection plan support tools information collection matrix information collection synchronization matrix information collection overlay information collection matrix (ICM) links PIRs with indicators, SIRs, NAIs, and TAIs (target areas of interest) information collection synchronization matrix (ICSM) synchronizes information collection tasks with the current threat assessment and friendly concept of operations information collection overlay (ICO) depicts the information collection plan in graphic form as an appendix to annex L (information collection) to the operation order planning requirements briefing tool graphic version of the planning requirements function that combines the ICSM, ICO, and PIRs into one product immediate retasking effecting changes or making additions to information collection tasks assigned to an asset after planning but before it being executing the mission dynamic retasking effecting changes in the mission of a collection asset while it is executing its mission commander's require intelligence operations to__________ provide information that is timely, accurate, relevant, and in sufficient detail to enable situational understanding and effective decision making [Show Less]
- Exam
- $15.45
- 0
- 102
Purchase the bundle to get the full access instantly
- 3 Million+ Study Documents
- 100% Money Back Guarantee
- Immediate Download Access
Add To Cart
Reviews 0
Bundle Details
$34.95
- Trusted by 800,000+ Students
- 24/7 Money Back Guarantee
- Download is directly available
89
0
Seller Details
