Bec Ch 3 Econ

Question 1

What is micro economics

Answer 1

Focus on the behavior and purchasing decisions of individuals and firms

Question 2

What variables cause a demand curve shift?

Answer 2

Changes of prices of other goods and services, customer tastes, spendable income, wealth and size of market

Question 3

How is price elasticity of Demand calculated arc method?

Answer 3

Change in quantity demand/ average quantity divided by change in price / average price

Question 4

What non income factors affect consumption?

Answer 4

Expectations about future prices of goods
Quantity of consumer liquid assets
Amount of consumer debt
Stock of consumer durable goods
Attitudes about saving money
Interest rates

Question 5

What causes a supply curve to shift?

Answer 5

Number or size of producers
Changes in various production costs
Technological advances
Government actions

Question 6

What is a perfectly competitive market?

Answer 6

Large number of sellers each too small to affect the price ex soybeans no product differentiation must be a low cost producer

Question 7

Pure monopoly

Answer 7

Single seller no close substitutes entry barriers

Question 8

Monopolistic competition

Answer 8

Many firms selling differentiated products relatively easy barrier to entry typical grocery stores, detergent breakfast cereals

Question 9

Oligopoly

Answer 9

Significant Barriers to entry auto industry

Question 10

What is macro economics?

Answer 10

Focus on economy as a whole focuses on measure of output employment inflation and trade surplus or deficit

Question 11

Three segments of economy

Answer 11

Consumer business and government