Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

ECON200 > Final Exam > Flashcards

Final Exam Flashcards

1
Q

The extra benefit associated with producing or consuming the next unit is called the

A

Marginal Benefit

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

When a producer had a comparative advantage at producing a good, it means the producer

A

has the ability to produce a good or service at a lower opportunity cost than others

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

The concepts of comparative advantage, specialization, and trade form a compelling argument in favor of:

A

Free trade

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

The law of demand can be stated as:

A

all else equal, quantity demanded rises as price falls

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Some non-price determinants of demand are:

A

consumer preferences, expectations of future prices, and the number of buyers in the market.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

reaching a Nash equilibrium means that

A

the players have reached a stable outcome where neither true would wish to change your strategy once your find out what the other play is doing.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

The tendency for people to behave in a risker way to renege on contracts when they do not face the full consequences of their actions is called:

A

Moral Hazard

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Screening is when someone takes action to:

A

reveal private information about someone else

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Returns that occur in the long run when average total cost does not depend on the quantity of output are

A

constant returns to scale

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

In the long run, firms in a perfectly competitive market:

A

1) Produce a quantity that maximizes profit
2) earns zero economic profit
3) choose the level of output the that minimizes their total costs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

In reality the long-run supply curve for a perfectly competitive market is upward sloping because:

A

1) Of changing costs of production that firms may face
2) Not all from have identical cost structures
3) experienced firms will have different information and costs than new firms

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

The monopolistic outcome happens at:

A

A higher price than perfectly completive one.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Oligoply describes a market with:

A

only a few sellers

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Whether a cross-price elasticity of demand is positiver or negative:

A

tells us whether the goods are substitutes or complements

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

A determinant of the price elasticity of supply is also a determinant of the price elasticity of demand is:

A

adjustment time

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

An effective price floor

A

must be set above the equilibrium price and will likely cause a surplus

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Tax incidence:

A

Depends on the relative elasticity of the supply and demand curves in the market

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Utility measures are:

A

a relative ranking of the values a person places on alternative combination of things

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

In general, general substation effect of an increase in the price of a normal good:

A

will cause the individual to buy less of that good and more of others because it is relatively more expensive

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

In an effort to lose weight, Sam posts flyers all over town that offer a reward of $50 to anyone who catches him eating unhealthy food. Sam’s flyers are an example of

A

a commitment device

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Game Theory

A

the study of how people behave strategically under different circumstances

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

In the short run, monopolistically competitive firms behave like ________, but in the long run, the outcome is similar to that of the_______

A

Monopolies; perfectly competitive firms

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

The demand curve facing the monopolistically competitive firm is:

A

flatter the that of a monopolist

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

If a monopolistically competitive firm’s demand curve shifts left, it will stop shifting

A

when the price is equal to the average total cost

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

In the long run, a profit-maximizing monopolistically competitive firm sells at a price that is:

A

equal to average total cost, but higher than marginal cost

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

Collusion is:

A

the act of firms working together to make decision about price and quantity.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

In the graph of supply and demand in the market for labor

A

firms provide the demand

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

The competitive firm’s profit-maximizing quantity of labor is the quantity where

A

the value of the marginal product of labor is equal to the market wage

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

The labor-supply curve would be downward slopping if:

A

the income effect outweighs the price effect.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

In a competitive labor market, if the demand for labor decreases, labor demand will shift

A

to the left and wages will decrease

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
31
Q

The quantity of labor supplied is determined by the

A

opportunity cost of providing the labor

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
32
Q

Human capital is defined as

A

the set of skills, knowledge, experience, and talent that determine the productivity of workers

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
33
Q

In the market for labor, the monopolist:

A

is the sole buyer and can push wages down, below the competitive wage

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
34
Q

A country that would be a net-importer of wine if it moved from autarky to free trade would cause what reaction

A

Domestic wine producers would be opposed

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
35
Q

Laws limiting trade are often referred to as

A

Trade protection

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
36
Q

A benefit that accrues without compensation to someone other than than the person who caused it is called:

A

an external benefit

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
37
Q

When a negative externalities are present, it means that:

A

1) Individuals don’t take into account all the costs associated with their market choice
2) Society bears part of the cost borne of private transactions
3) Production and consumption is above the social optimal level

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
38
Q

Knowing that the presence of externalities reduce surplus, it implies that

A

there are mutually beneficial trades waiting to be exploited so private parties have any incentive to solve the externality problem themselves

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
39
Q

When a good ends up undersupplied, we can assume it is

A

a public good

40
Q

Excludability matters because it

A

allows owners to set an enforceable price on a good

41
Q

A common resource is

A

rival In consumption, but to excludable

42
Q

Free rider enjoy:

A

positive externalities from others’ choices to pay for a good

43
Q

In market where the tragedy of the commons arises, the equilibrium quantity Is both individually ______ and collectively ________

A

rational ; inefficient

44
Q

Bans are applied to

A

1) Common-resource problems
2) reduce the inefficiency created by overuse
3) situation where the optimal quantity of consumption is zero

45
Q

One of the primary aims of taxation is:

A

1) to increase government taxation
2 to reduce the equilibrium quantity
3) to alter the incentives of market participants

46
Q

How much deadweight loss a tax causes depends on:

A

How responsive buyers and sellers are to a price change

47
Q

The logistical costs associated with implementing a tax are called the:

A

Administrative burden

48
Q

A public expenditure that has to be approved each year is called

A

discretionary spending

49
Q

An example of entitlement spending is:

A

Social Security

50
Q

When a market consists of a few large firms, it:

A

is likely an oligopoly

51
Q

Monopolistic competition describes a market with:

A

Many forms that sell good and services that are similar, but slightly different

52
Q

Long-run economic profits are possible in:

A

Oligopoly

53
Q

The demand curve facing the monopolistically competitive firm is:

A

Flatter than that of a monopolist

54
Q

Discretionary spending involved public expenditures that

A

have to be approved each year

55
Q

The Laffer curve demonstrates that:

A

raising tax rates increase ten decrease tax revenues

56
Q

A $0.50 tax on lemons currently generates $200 in revenues per day. If the tax were increased to $2, the revenues generated would drop to $70. This tells you that in this range of tax rates:

A

The quantity effect outweighs the price effect

57
Q

When a tax is imposed, the surplus that is lost to buyers and sellers but converted into tax revenue is:

A

transferred to others through public programs

58
Q

The total amount of surplus for customer and producers lost due to taxation is:

A

greater than the amount of revenue generated

59
Q

The depletion of a common resource due to individually rational but collectively inefficient overconsumption is called:

A

the tragedy of the commons

60
Q

One way to solve the free-rider problem is

A

make the good or service more excludable

61
Q

A public good is:

A

not rival in consumption and not excludable

62
Q

An example of a good that is not excludable:

A

fish in the ocean

63
Q

Goods that are rival in consumption, but not excludable are

A

a common resource

64
Q

When a good is rival in consumption:

A

one person’s consumption prevents or decease others ability to consume it.

65
Q

If Pigovian tax is not large enough, the resulting:

A

1) outcome will not maximize surplus
2) Quantity will be too high
3) Outcome will be inefficient

66
Q

The Coast theorem is the idea that:

A

individuals can reach an effect equilibrium through private trades, even in the presence of an externality

67
Q

One way to make consumers take a positive externality into account in their demand is to

A

subsidize the purchase of the item

68
Q

When positive externalities are present in a market, it means that

A

private benefits are less than social benefits

69
Q

As a general rule, free trade

A

increases the demand for factors of production that are domestically abundant

70
Q

An import quota is

A

a limit on the amount of a particular good that can be imported

71
Q

Who is likely to be in favor of free trade in a country that would be a net-exporter if it moved from autarky to free trade?

A

Domestic producers

72
Q

The in crease in welfare in both countries that results from specialization and trade is called:

A

gains form trade

73
Q

the facts of production called “capital” refers to:

A

manufactures good that are used to procure new goods

74
Q

The values of the marginal product is:

A

the marginal product generated by an additional unit of input ties the price of output

75
Q

Human capital is defined as:

A

the set of skills, knowledge, experience and talent that determine the productivity of workers

76
Q

In the case of borrowing in capital markets, the rental price of capital is:

A

the interest paid on loans

77
Q

a monopsony is an example of:

A

buyers holding market power

78
Q

a government-owned monopoly is more likely to:

A

1) Provide a great quantity of output than a private one
2) provide output at a lower price than a private one
3) sever public interest than maximize profit

79
Q

For a monopolist, at the profit-maximizing competitive market is:

A

goods are standardized

80
Q

Holds ture at the chosen level of output in the long runoff the firms in a perfectly competitive markey?

A

P=MC
P= minimum ATC
MR = MC

81
Q

The increase in output that is generated by an additional unit input is called the

A

marginal product

82
Q

When a firm can achieve economies of scale by expanding, it’s long ru ATC curve:

A

Slopes down

83
Q

The marginal utility Gaines from the consumption of successive units of a normal good

A

tends to decrease

84
Q

In general, the income effect of an increase in the price of a normal good

A

will cause the individual to buy less of the good because they have relatively less income

85
Q

If the demand curve is less elastic than the supply curve, then:

A

the buyers will bear a greater tax incidence

86
Q

An interested consequence of price ceiling is:

A

non-price rationing must occur, and can lead to bribes

87
Q

If Bill’s reservation price on a snowboard is $250, how many snowboards world he buy if the market price of snowboards is $500?

A

0

88
Q

Assume a market that has an equilibrium price of $7. If the price Is set at $3. what is true?

A

Some surplus is transferred from producers to consumers. but total surplus falls

89
Q

Income elasticity will be positive for:

A

all normal goods

90
Q

If the cross-price elasticity of two goods is 0.25, then we know that:

A

those goos are substitutes because their elasticity is greater than zero

91
Q

John just won Megamillion Jackpot. We can assume that

A

His demand for all normal goods will increase

92
Q

The law of supply can be states as:

A

All else equal, quantity supplied rises as prices rises

93
Q

If society were to experience an increase in its available resource

A

its production possibilities frontier would shift out

94
Q

When a producers has the ability to produce a good or service at a lower opportunity cost than others, economists say the producer:

A

Has a competitive advantage of producing that good

95
Q

The assumption of rational behavior:

A

Helps economists explain a lot about the real world by assuming that people behave in the way that will best achieve their goals

96
Q

What is an example of a positive incentive:

A

Discover credit cards after 0 percent balance transfer rates for someone to open an accountant.

ECON200 (1 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions