Additional Questions

Question 1

What is microeconomics?

Answer 1

the fair and equitable distribution of resources among consumers

Question 2

National market

Answer 2

the domestic marketplace for goods and services operating within the borders of and governed by the regulations of a particular country

Question 3

Single market

Answer 3

a group of countries that have an agreement which allows goods to be moved, bought, or sold between them very easily

Question 4

What is not a an example of a perfectly competitive market?

Answer 4

diamond market.

-because each individual producers can influence the price

Question 5

When supply increases, the supply curve

Answer 5

shifts to the right

Question 6

What causes the demand curve to shift?

Answer 6

• Decrease in price of a substitute.
• Decrease in income if good is normal.
• Increase in price of a complement.
• Increase in income if good is inferior good.

Question 7

Difference between shift in the supply curve vs a movement along the supply curve

Answer 7

shift- changes in supply determining variables such as production costs
Movement along- price changes

Question 8

Why is the long-run price elasticity of supply is larger than the short run elasticity

Answer 8

in the short run, some firms may be constrained by their productive capacity

Question 9

why do long run elasticities of demand differ from short run

Answer 9

• it takes time for people to change their consumption habits
• durable goods last a long time

Question 10

Cyclical industries

Answer 10

manufactures products who demand fluctuate sharply in response to short run changes in income

Question 11

most industries, supply is ____ in the short run than the long run

Answer 11

less elastic

Question 12

excess demand implied by the shortages will depend on

Answer 12

the elasticities of supply and demand, where the shortages will be larger if both supply and demand are more elastic

Question 13

demand for labour
product demand schedule, tech, labour supply remained constant but the supply of capital changed and fell by 50%, what would happen to demand of labour?

Answer 13

impossible to determine without knowing more info about the scale and substitution effect

(impossible for supply as well)

Question 14

critical assumption economists make about the relationship between the quantity of labour hired and the marginal product of labour is

Answer 14

MPL diminishes as additional units of labour are added to the production process

Question 15

monopsony

Answer 15

one buyer

Question 16

Monopsonistic labour market

Answer 16

marginal expense of labour curve lies above the labour supply curve

Question 17

Monopsonist pays a wage

Answer 17

lower than the wage determined in a competitive labour market

Question 18

Internal labour market

Answer 18

workers are hired into relatively low level jobs and higher level jobs are filled only from within the firm.
constraints the employment relationship

Question 19

officially unemployed

Answer 19

-15 or older and seeking employment

Question 20

Greatest percentage reduction in employment since 1900

Answer 20

agriculture

Question 21

Not an example of payment of in-kind to an employee?

Answer 21

Christmas bonus of 100 cash.

because it’s cash

Question 22

represents the supply side of the labour market

Answer 22

workers and potential workers

Question 23

equilibrium pice fell but equilibrium quantity increased, what might have caused this?

Answer 23

• supply and demand both shifted right, the magnitude of the supply shift was greater

Question 24

price ceiling can result in a net loss in consumer surplus when _ and the curve is _. Also must recall than effective price ceiling causes a loss of _

Answer 24

1) demand
2) very inelastic
3) producer surplus for sure and possibly consumer surplus as well