🏷️ LIMITED TIME OFFER: GET 20% OFF GRADE+ YEARLY SUBSCRIPTION →
Log in
HomeClass Notes1,200,000CA670,000

EC120 Lecture Notes - Lecture 1: Eurocopter Ec120 Colibri, Market Power, Externality

69 views4 pages
plumherring413
16 Oct 2015
School
WLU
Department
Economics
Course
EC120
Professor
Jason Dean

For unlimited access to Class Notes, a Class+ subscription is required.

carminegrasshopper545 and 38337 others unlocked
EC120 Full Course Notes
30
EC120 Full Course Notes
Verified Note
30 documents

Document Summary

The study of how society allocates its limited resources. Limited time, you make a choice between which is the best fit right now to you: cost of something is what you give up to get it. You may buy equipment to build something, but ur time devoted to building it is also measured: rational people think at the margin. People respond to incentives: trade can make everyone better off, markets are usually a good way to organize economic activity. Who wants something, if you want to sell, if you want to buy: governments can sometimes improve market outcomes, a country"s standard of living depends on its ability to produce goods and services. Price rises when government prints too much money. Society faces a short run tradeoff between inflation and unemployment. How economists approach a problem: use a model to think about how limited resources are allocated, make assumptions to simplify a complex problem, use equations, diagrams, etc.

Get access

Grade+20% off
$8 USD/m$10 USD/m
Billed $96 USD annually
Grade+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
40 Verified Answers
Class+
$8 USD/m
Billed $96 USD annually
Class+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
30 Verified Answers

Related Documents

EC120
Final Exam
Study Guide
EC120 Study Guide - Quiz Guide: Pigovian Tax, System On A Chip, Demand Curve
scarletsardine719
EC120
Final Exam
Study Guide
EC120 Study Guide - Final Guide: Profit Motive, Demand Curve, Human Capital
ceruleanferret113
EC120
Final Exam
Study Guide
EC120 Study Guide - Final Guide: Deadweight Loss, Nash Equilibrium, Economic Surplus
azureprairie-dog701

Related Questions


Economics is the study of

A. production methods.

B. how society manages its scarce resources.

C. how households decide who performs which tasks.

D. the interaction of business and government.

Point Value: 1

2
When computing the opportunity cost of attending a concert you should include

A. the price you pay for the ticket and the value of your time.

B. the price you pay for the ticket, but not the value of your time.

C. the value of your time, but not the price you pay for the ticket.

D. neither the price of the ticket nor the value of your time.

Point Value: 1


You are considering staying in college another semester so that you can complete a major in economics.? In deciding whether or not to stay you should

A. compare the total cost of your education to the total benefits of your education.

B. compare the total cost of your education to the benefits of staying one more semester.

C. compare the cost of staying one more semester to the benefits of staying one more semester.

D. compare the total benefits of your education to the cost of staying one more semester.

Point Value: 1


Trade between countries tends to

A. reduce both competition and specialization.

B. reduce competition and increase specialization.

C. increase competition and reduce specialization.

D. increase both competition and specialization.

Point Value: 1


5- The "invisible hand" directs economic activity through

A. advertising.

B. prices.

C. central planning.

D. government regulations.

Point Value: 1


6- One reason we need government, even in a market economy, is that

A. there is insufficient market power in the absence of government.

B. property rights are too strong in the absence of government.

C. the invisible hand is not perfect.

D. Both a and b are correct.

Point Value: 1

7.This question has not been answered completely
The government enforces property rights by

A. requiring property owners to pay property taxes.

B. providing police and courts.

C. forcing people to own property.

D. providing public parks and recreation facilities.

Point Value: 1

8.This question has not been answered completely
Causes of market failure include

A. externalities and market power.

B. market power and incorrect forecasts of consumer demand.

C. externalities and foreign competition.

D. incorrect forecasts of consumer demand and foreign competition.

Point Value: 1

9.This question has not been answered completely
Market power refers to the

A. power of a single person or small group to influence market prices.

B. ability of a person or small group to successfully market new products.

C. power of the government to regulate a market.

D. importance of a certain market in relation to the overall economy.

Point Value: 1

10.This question has not been answered completely
Large or persistent inflation is almost always caused by

A. excessive government spending.

B. excessive growth in the quantity of money.

C. foreign competition.

D. higher-than-normal levels of productivity.

Question 1

The amount of profit that can be achieved using uniform pricing is __________ the profit that can be achieved from price discrimination because of _______.

Select one:

a. greater than; the cost of trying to determine every single consumer's individual demand (willingness to pay) is prohibitively expensive.

b. less than; uniform pricing is more costly so the ATC and AVC curves are higher than they are under price discrimination.

c. equal to; the TR and TC curves are equivalent under either pricing scheme, so there is no profit advantage to either scheme.

d. less than; total demand includes people who would be willing to pay more than, as well as less than, the uniform market price.

Question 2

A firm selling in two markets is practicing price discrimination:

Select one:

a. when it refuses to sell the good to some group of consumers.

b. anytime it charges different consumers different prices.

c. when it charges the same price to different consumers as long as they differ in their demand for the good.

d. when it is charging different consumers, different prices, and the price difference is not based upon cost differences.

Question 3

To successfully practice price discrimination:

Select one:

a. consumers in two separate markets must have identical demand.

b. the firm must possess market power.

c. it must be easy for consumers in one market to sell to consumers in the other market.

d. the firm must be a pure monopoly.

Question 4

If it could practice first-degree price discrimination, a firm with market power could earn:

Select one:

a. its typical monopoly profit as well as the area which, under uniform pricing, would represent the deadweight loss associated with market power.

b. an area half the size of its monopoly power under uniform pricing.

c. its typical monopoly profit as well as the area which, under uniform pricing, would represent consumer surplus.

d. its typical monopoly profit as well as the area which, under uniform pricing, would represent consumer surplus and the deadweight loss associated with market power.

1.
The demand curve for a good is very unlikely to be perfectly vertical because
A) scarcity and limited income restrict the ability of consumers to afford goods as they become very expensive.
B) as the price of a good rises to high enough levels, the incentive for other suppliers to invent new substitutes for the good increases.
C) consumers generally do not care about the price of the goods they consume.
D) both a and b are true.
2.
As the period for firms to expand output is lengthened, the elasticity of the market supply curve will
A) approach zero.
B) increase.
C) decrease.
D) remain the same since time does not affect the elasticity of market supply.
3.
The price elasticity of demand for automobiles measures the responsiveness of
A) consumer purchases to a change in the price of automobiles.
B) consumer purchases to a change in the quality of automobiles.
C) supplier production levels to a change in the price of automobiles.
D) consumer purchases of automobiles to a change in their income.
4.
Which of the following is true regarding the price elasticity of demand?
A) Demand is generally more elastic in the long run than in the short run.
B) Along a single demand curve, demand elasticity decreases as you move down the curve (to lower prices).
C) a flatter demand curve (has a less steep slope) is relatively more elastic than a demand curve that has a steeper slope.
D) All of the above are true.
5. (Answer ONE of the Following Question)
  • Economists maintain that the price of a product does not affect demand. How can this be true?
  • National defence is considered a public good because there appear to be no limits to the nonrivalry-in-consumption characteristic, and exclusion of nonpayers is impossible. Are there any other goods that so perfectly meet both public goods criteria?
  • Congressman Local stuff always votes for a balanced budget amendment to the U.S. Constitution. He also always votes for spending bills supported by the leadership of his political party. Is this rational?