ECON 2D03 Lecture Notes - Lecture 1: Demand Curve, Capital Good

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limewolf4

27 Sep 2017

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Services: activities such as education, health care, and education are consumed by consumer. Consumer goods: goods that are consumed by consumers. Capital goods: goods such as machinery and factories that are used produce other goods. Private goods: goods produced or purchased by business firms and individuals. Public goods: goods produ(cid:272)ed or pur(cid:272)hased (cid:271)y gov"t. Important: choices distribution of goods and services, on what basis should distribution choices be made, market-based economy, choices of distribution and production, based primarily on prices, prices- determined by demand and supply.

Related Questions

Fill in the blanks.

a. ___________ is the study of choice under conditions of scarcity.

b. ____________exists if we desire more of something than we can have.

c. ___________when you give up one thing to get something else.

d. ___________the value of the next-best alternative given up when that choice is made.

e. ___________a system for coordinating the production and distribution of goods and services.

f. ___________physical items produced in an economy, such as jeans, tennis rackets, popcorn, cars, and homes.

g. ______________activities produced in an economy, such as education, entertainment, and health care.

h. _____________a collection of people who share a common bond, such as those living in a city, a country, or even the entire world.

i. ____________minimal requirements of things such as food, water, and shelter that are necessary for survival.

j. ___________things that are desired but are not essential to life.

k. ______________the time and effort people contribute to the production process.

l. _____________anything long lasting that is created by humans for use in production.

m. ___________ any long-lasting good that is used to make other goods or services.

n. ______________refers to the skills and knowledge of workers.

o. ___________are the basic elements from which all goods and services are produced.

harlequinsea-lion565

1. A consequence of the economic problem of scarcity is that:

a. Choices have to be made about how resources are used.

b. There is never too much of any good or service produced.

c. The production of goods and services must be controlled by the government.

d. The production-possibilities curve is bowed outward.

2. Microeconomics is concerned with issues such as:

a. The level of inflation in the economy

b. The demand for bottled water by individuals.

c. Maintaining a strong level of economic growth.

d. All of the choices.

3. In economics, scarcity means that:

a. A shortage of a particular good will cause the price to fall

b. A production possibilities curve cannot accurately represent the tradeoff between two goods.

c. Society's desires exceed the want-satisfying capability of the resources available to satisfy those desires.

d. The market mechanism has failed

4. A city's decision to limit smoking in public areas is an example of

a. The invisible hand at work.

b. The market mechanism at work.

c. Market failure.

d. Government intervention

brownsea-lion330

Q 1: Below is a production possibilities table for consumer goods and capital goods : Production Alternatives Capital Goods Consumer Goods A 0 70 B 3 65 C 6 55 D 9 40 E 12 20 F 15 0 a. Show these data graphically. Upon what speciﬁc assumptions is this production possibilities curve based? b. If the economy is at point C, what is the cost of one more unit of capital good? Of one more unit of consumer good? Explain how the production possibilities curve reﬂects the law of increasing opportunity costs. c. If the economy characterized by this production possibilities table and curve were producing 7 units of capital goods and 45 units of consumer goods, what could you conclude about its use of its available resources? d. What would production at a point outside the production possibilities curve indicate? What must occur before the economy can attain such a level of production? e. Assume consumer good are bread and cookies here. What happens to this frontier if disease kills half of the economy’s hens and cows? Q 2(a): How does self-interest help achieve society’s economic goals? Why is there such a wide variety of desired goods and services in a market system? In what way are entrepreneurs and businesses at the helm of the economy but commanded by consumers? b. Why is private property, and the protection of property rights, so critical to the success of the market system? c. How the market system decides what to produce, how to produce it, and who obtains it. Q 3: How will each of the following changes in demand and/or supply affect equilibrium price and equilibrium quantity in a competitive market; that is, do price and quantity rise, fall, or remain unchanged, or are the answers indeterminate because they depend on the magnitudes of the shifts? Use supply and demand diagrams to verify your answers. i. Supply decreases and demand is constant. ii. Demand increases and supply increases. iii. Supply increases and demand decreases. b. Explain why the price in competitive markets settles down at the equilibrium intersection of supply and demand. Explain what happens if the market price starts out too high or too low. c. Consider the following events: Scientists reveal that consumption of oranges decreases the risk of Corona Virus and, at the same time, farmers use a new fertilizer that makes orange trees more productive. Illustrate and explain what effect these changes have on the equilibrium price and quantity of oranges.

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ECON 2D03 Lecture Notes - Lecture 1: Demand Curve, Capital Good

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