ECON 1116 Chapter Notes - Chapter 4: Shortage, Economic Equilibrium, Ramen

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ochredeer739

24 Aug 2016

School

Northeastern University

Department

Economics

Course

ECON 1116

Professor

Niam Nehan

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Document Summary

Perfect market lots of buyers and lots of sellers c. ii. Buyers have perfect information about the products c. iii. Sellers are not trying to manipulate the market c. iii. 1. If one of the sellers manipulate, customers will know and will switch to another seller c. iv. Assuming let the market forces do the job, no manipulation c. v. government intervenes not a free market because its not part of the demand or supply side: competitive market d. i. A market in which there are so many buyers and sellers that there is limited impact on the market price d. ii. Each seller cannot control their price as there are other sellers providing similar products d. ii. 1. d. ii. 2. If the seller chargers more buyers will go to other sellers. And sellers don"t have reason to sell less: perfectly competitive e. i. So many buyers and sellers that no single seller/buyer has an influence on the market price e. iii.

Related Questions

2. If the government decides to levy a small excise tax on the buyers in a perfectly competitive market in which the elasticity of demand is greater than the elasticity of supply, then we can conclude that: (A) The buyers will bear all of the tax (B) The sellers will bear all of the tax (C) The buyers will bear more of the tax than sellers ((D) The sellers will bear more of the tax than buyers YE) The government will bear most of the tax (F) It is not possible to tell who will bear most of the tax without additional information (G) The tax will be shared equally between the buyers and the sellers (H) There will be a smaller amount of excess burden than there would have been if the elasticity of supply is greater than the elasticity of demand (I) all of the above (J) none of the above

13. One of the limitations of Five Forces is that:

a. These tools reduce producer surplus

b. For one firm to increase profit, it takes it from other participants in the industry

c. Does not provide a firm with sustainable competitve advantage

d. both b & c.

15. All these are characterisctics of a monopoly except,

a. There is one seller of the product

b. Has few substitutes

c. Controls a large share of the market

d. Controls a small share of the market

22. Industries with high barriers to entry

a. Pushes profits to normal returns

b. increases the likelihood of firms entering the industry

c. help firms sustain profits

d. increases the number of competitors

14. How does Ebay differ from an economist's view of a perfect competitve market?

a. Ebay has few buyers whereas perfect competitve industry assumes many buyers

b. Ebay has few sellers whereas perfect competitve industry assumes many sellers

c. There is limited information in ebay whereas perfect competitive industry assumes full information for both buyers and sellers

d. There is no difference between these two markets

26. Low cost strategies are usually found in industries where

a. Products are not particularly differentiated

b. Price competion tends to be fierce

c. Both a and b

d. None of the above

Cigarettes - Price Elasticity of demand = - 0.67

A. Cigarettes

B. Alcohol

C. Sodas

D. None of the above

2. The demand for insulin will be ______________ than the demand for a Caribbean cruise in general

a. More elastic

b. More inelastic

c. Less elastic

d. Less inelastic

1. From an economist's perspective, an important consideration for policies to address global warming is:

The market for recyclable inputs

The supply and demand for recycled products

The marginal cost and marginal benefit of the policies

A lawsuit that can arise from the enactment of the policies

2. When a producer cannot get all consumers of their product to pay for enjoying it, such as in the case of a fireworks display, then we'd have a demand-side market failure.

True

False

3. In a well-functioning cap-and-trade system for pollution rights, the right to pollute will go to those who can acquire the largest net benefit from using the scarce resource "clean air".

True

False

4. Which of the following does not illustrate the asymmetric information problem:

Ordinary financial investors do not know the motivations of financial advisers

Ordinary customers do not know how sanitarily the food is prepared in a restaurant

Ordinary stock-buyers do not know what will happen to the stock's price next week

Ordinary car buyers do not know the actual quality of the various cars in the dealer's lot

5. Better Business Bureaus in various cities exist partly to try to deal with inadequate buyer information about sellers.

True

False

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ECON 1116 Chapter Notes - Chapter 4: Shortage, Economic Equilibrium, Ramen

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