ECON 1200 Lecture Notes - Lecture 1: Marginal Revenue, Demand Curve, Economic Equilibrium

84 views53 pages

redhound536

5 Jan 2017

School

Department

Course

Professor

For unlimited access to Class Notes, a Class+ subscription is required.

Document Summary

Sellers have a cost and buyers have a value. If everyone trades at equilibrium price, everyone will get maximum surplus/maximum value. Predicts maximum surplus (value from trade) is extracted by markets. Predicts a price/quantity pair where supply and demand meet. Predicts that highest-value buyers trade with lowest-cost sellers. Managing resources is important bcos they are scarce. When wants are greater than the amount freely available from nature. Society has limited resources = cannot produce all goods and services. The study of how society manages its scarce resources (production, distribution/allocation, and consumption of goods and services) Methods: queuing, market (resource is allocated only when the willingness to pay of the buyer is greater than the price of the good/service, nepotism, lottery, force, hierarchy, voting. Resources are allocated by the combined choices of millions of households and firms. How people make decisions: people face trade-offs. There is no such thing as a free lunch . Use of scarce resources is costly trade-offs.

Related Questions

21. The English word that comes from the Greek word for "one who manages a household" is

A- market
B- consumer
C- producer
D- economy

Question 22. 22. For a college student who wishes to calculate the true costs of going to college, the costs of room and board

A- should be counted in full, regardless of the costs of eating and sleeping elsewhere.
B- should be counted only to the extent that they are more expensive at college than elsewhere.
C- usually exceed the opportunity cost of going to college.
D- plus the cost of tuition, equals the opportunity cost of going to college.

Question 23. 23. The phenomenon of scarcity stems from the fact that

A- most economies' production methods are not very good.
B- in most economies, wealthy people consume disproportionate quantities of goods and services.
C- governments restrict the production of too many goods and services.
D- resources are limited.

Question 24. 24. Central planning refers to

A- markets guiding economic activity. Today many countries that had this system have abandoned it.
B- markets guiding economic activity. Today many countries that did not have this system have implemented it.
C- government guiding economic activity. Today many countries that had this system have abandoned it.
D- government guiding economic activity. Today many countries that did not have this system have implemented it.

Question 25. 25. Senator Brown wants to increase taxes on people with high incomes and use the money to help the poor. Senator Johnson argues that such a tax will discourage successful people from working and will therefore make society worse off. An economist would say that

A- we should agree with Senator Brown.
B- we should agree with Senator Johnson.
C- a good decision requires that we recognize both viewpoints.
D- there are no tradeoffs between equity and efficiency.

Question 26. 26. Max and Maddy charge people to park on their lawn while attending a nearby craft fair. At the current price of $10, seven people park on their lawn. If they raise the price to $15, they know that only five people will want to park on their lawn. Whether they have seven or five cars parked on their lawn does not affect their costs. From this information, it follows that

A- they should leave the price at $10.
B- it does not matter if they charge $10 or $15.
C- they would do better charging $15 than $10.
D- they should raise the price even more.

Question 27. 27. A circular flow diagram is a model that

A- helps to explain how participants in the economy interact with one another.
B- helps to explain how the economy is organized.
C- incorporates all aspects of the real economy.
D- Both (a) and (b) are correct.

Question 28. 28. In the markets for goods and services in the circular-flow diagram,

A- households provide firms with savings for investment.
B- households provide firms with labor, land, and capital.
C- firms provide households with output.
D- firms provide households with profit.

Question 29. 29. Incomes of U.S. households in the 1970s and 1980s

A- grew rapidly, due to the widespread success of labor unions in pushing up wages during those decades.
B- grew rapidly, due to several increases in the minimum wage during those decades.
C- grew rapidly, due to government policies that discouraged the importation of foreign products during those decades.
D- grew slowly, due to the slow growth of the output of goods and services per hour of U.S. workers' time during those decades.

Question 30. 30. For economists, statements about the world are of two types:

A- assumptions and theories.
B- true statements and false statements.
C- specific statements and general statements.
D- positive statements and normative statements.

marooncat628

ECON 1200 Lecture Notes - Lecture 1: Marginal Revenue, Demand Curve, Economic Equilibrium

Document Summary

Get access

Related Documents

ECON 1200 Chapter Notes - Chapter 1: Longrun, Externality, Opportunity Cost

ECON 1200 Study Guide - Final Guide: Ceteris Paribus, Demand Curve, Marginal Utility

ECON 20A- Final Exam Guide - Comprehensive Notes for the exam ( 53 pages long!)

Related Questions