ECON 1 Lecture Notes - Lecture 18: Marginal Product, Production Function, Marginal Utility
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Question 26 pts
Which of the following is not a reason why specialization and trade are beneficial to society?
Specialization fosters learning by doing, thus lowering the unit-costs of products | |
Firms and workers become less dependent on others for producing goods and services |
The total output of economic goods may be increased even without any increase in resources | |
Scarce resources are utilized more efficiently by exploiting differences among them |
Question 27 pts
Laissez-faire capitalism limits the government's economic functions to the following, except:
Protecting private property rights | |
Establishing a legal environment to enforce contracts among individuals |
Setting prices of individual goods and services | |
Preventing individuals and firms from coercing others |
Question 28 pts
A production system where various workers concentrate on different specialized tasks to contribute towards a whole product is referred to as:
Roundabout production | |
A coincidence of wants |
Freedom of enterprise | |
Division of labor |
Question 29 pts
The market system is said to be characterized by "consumer sovereignty." This is because:
A sovereign government determines which consumer goods will be produced | |
Firms must match their production decisions to the consumers' choices |
The prices of consumer goods are regulated by a sovereign government | |
Consumer goods are considered to be more important than capital goods |
Question 30 pts
Consumers express self-interest when they:
Seek the lowest price for a product | |
Reduce business losses |
Exclude others in their thinking | |
Collect economic profits |
Question 311 pts
Refer to the above graph with three demand curves. An "increase in quantity demanded" would be illustrated by a change from:
Point 5 to point 1 | |
Point 4 to point 1 |
Point 2 to point 5 | |
Point 4 to point 6 |
Question 32 pts
The table below shows the weekly demand for hamburger in a market where there are just three buyers.
Refer to the above table. At a price of $6, the weekly market quantity demanded for hamburger is:
17 | |
23 |
24 | |
18 |
Question 33pts
If farmers withhold some of their current corn harvest from the market because they anticipate a higher price of corn in the near future, then this would cause a(n):
Movement up along the current supply curve of corn | |
Movement down along the current supply curve of corn |
Leftward shift in the current supply of corn | |
Rightward shift in the current supply of corn |
Question 34 pts
Which of the following will not cause the supply curve to shift?
A technological change in the production of the good | |
A change in the prices of other goods that producers could be producing |
A change in the costs of resources needed to produce the good | |
A change in the price of the good |
Question 35 pts
All of the following would affect the position of the supply curve for cranberries, except the:
Price of agricultural land for cranberries | |
Cost of fertilizers for cranberry production |
Popularity of cranberry drinks | |
Development of a new pest control for cranberries |
Question 36 pts
When high-school and college graduates apply for jobs in the labor markets,
Job applicants and employers are both "buyers". | |
Job applicants are the "sellers" while employers are the "buyers". |
Job applicants and employers are both "sellers". | |
Job applicants are the "buyers" while employers are the "sellers". |
Question 37 pts
Refer to the figure above, which shows three supply curves for corn. Which of the following would cause the supply of corn to shift from S1 to S2?
A decrease in consumer incomes, assuming corn is a normal good | |
The development of a more effective insecticide against corn rootworm |
An increase in the price of fertilizer | |
A change in consumer tastes away from cornbread |
Question 38 pts
Which is of the following statements is correct?
If demand increases, then price will decrease | |
If demand decreases, then price will decrease |
If price decreases, then demand will decrease | |
If price increases, then demand will decrease |
Question 39 pts
Which would be a likely cause of an increase in the demand for pizza?
A decrease in the price of hamburger sandwiches | |
A health report showing eating pizza reduces stress |
A reduced desire for take-out and fast-food dining | |
A decrease in the prices of cheese, pepperoni, and mushrooms |
Question 40 pts
A market for a product reaches equilibrium when:
Price falls further after there is a shortage | |
The price rises further after there is a surplus |
Buyers intend to buy a quantity equal to the quantity that sellers intend to sell | |
The actual quantity bought by buyers equals actual quantity sold by sellers |
Question 41 pts
A higher price reduces the quantity demanded for a product because:
Individuals can afford less of the product and will switch to substitutes | |
The financial assets of individuals increase |
Individuals will buy more of the product and less of its substitutes | |
The purchasing power of individuals increases |
Question 42 pts
The idea of the Law of Demand, as applied to electric cars, assumes which of the following to be constant?
Price of electric cars | |
How much sellers are charging customers for electric cars |
Price of gasoline cars | |
Quantity of electric cars demanded by buyers |
Question 43 pts
Use the following graph of the demand for coffee:
Refer to the above diagram of three demand curves for coffee. An increase in the price of coffee, other factors constant, would cause a:
Movement from point a to point b | |
Movement from point b to point a |
Shift from D1 to D2 | |
Shift from D1 to D3 |
Question 44 pts
Which of the following factors will decrease the current demand for a product?
A decrease in the current price of a complementary product | |
A decrease in the current price of a substitute product |
An increase in the current price of a substitute product | |
An expected increase in the future price of the product |
Question 45pts
In competitive markets, a surplus or shortage will:
Cause shifts in the demand and supply curves that tend to eliminate the surplus or shortage | |
Cause changes in the quantities demanded and supplied that tend to intensify the surplus or shortage |
Cause changes in the quantities demanded and supplied that tend to eliminate the surplus or shortage | |
Never exist because the markets are always at equilibrium |
Question 46 pts
Which of the following would cause a leftward shift in the supply curve for car washes?
A decrease in taxes on car washes | |
An increase in the price of car washing equipment |
A decrease in the price of water | |
An increase in the number of cars in the city |
Question 47pts
The market system automatically corrects a surplus condition in a competitive market by:
Raising the price of the commodity in question while decreasing the quantity demanded | |
Raising the price of the commodity in question while increasing the quantity demanded |
Reducing the price of the commodity in question while increasing the quantity demanded | |
Reducing the price of the commodity in question while decreasing the quantity demanded |
Question 48 pts
A leftward shift of the supply curve for oil in the United States is most likely to result from:
A decrease in the world price of oil | |
An increase in the costs of exploration and drilling for oil |
An increase in the subsidy for oil exploration and drilling | |
A decrease in the fees that oil companies must pay for drilling licenses |
Question 49 pts
A fall in the price of milk, used in the production of ice cream, will:
Decrease the supply of ice cream | |
Have no effect on the supply of ice cream |
Increase the supply of ice cream | |
Cause a movement along the supply curve of ice cream |
Question 50 pts
Refer to the above graph, which shows the market for beef where demand shifted from D1 and D2. The change in equilibrium from E1 to E2 is most likely to result from:
An increase in the cost of cattle feed | |
A decrease in consumer incomes |
A decrease in the tax on beef products | |
An increase in the price of pork |
Read the articles and consider two people, Mon and Shaman, that can produce 2 goods, shrimp and mobile apps.
If Mon and Shaman devoted themselves to shrimp and mobile app production, the chart below shows how much each person can produce per hour.
Complete the first table by showing how many shrimp and mobile apps each person would produce if they did not specialize.
Hours worked per year | Total amount produced if each person devotes all their working hours per year to each good. | ||||
Shrimp per hour | Mobile Apps per hour | Total Shrimp | Total Mobile Apps | ||
Mon | 3500 | 50 | 1 | ||
Shaman | 2000 | 10 | 5 |
In a world hungry for cheap shrimp, migrants labor overtime in Thai sheds
By Jason Motlagh, Published: September 19, 2012
Jason Motlagh/For The Washington Post - Burmese migrant workers peel shrimp at a processing factory in Samut Sakhon province in Thailand. High standards allow the factory to export its seafood to the United States.
MAHACHAI, Thailand â At an age when she should have been in a classroom, Thazin Mon discovered her knack for peeling shrimp. To help support her Burmese migrant family, the 14-year-old pulled 16-hour shifts, seven days a week, for less than $3 a day. âI am uneducated, so I work. I have to work bravely,â she says.
Although she was the best peeler in the factory, speed was never enough. Mon was beaten if she slowed down, she said, and when she asked for a day off to rest hands swollen with infection, her boss kicked her and threatened rape.
Thanks to a bottomless appetite for cheap shrimp in the West, Burmese migrants such as Mon are the backbone of a Thai shrimp industry that is the worldâs third largest. The United States is Thailandâs top customer, accounting for a third of the countryâs annual shrimp exports.
Rights groups say that overseas demand for shrimp products in greater volume has fueled a culture of exploitation in the Thai industry. They insist that the failure of foreign companies to sufficiently verify the origin of the shrimp they import allows abuses to persist.
âIf you look at the cost of shrimp overseas, itâs very, very cheap, and that comes from the exploitation inherent in the shrimp industry,â says Andy Hall, an expert on migration at Mahidol University who tracks Burmese labor in the Thai seafood industry.
Brisk business with major U.S. retailers such as Wal-Mart, Costco, Samâs Club and Red Lobster pumps more than $1 billion in revenue each year into the Thai economy, the second largest in Southeast Asia. As Thai living standards have risen, a shortage of unskilled labor has attracted tens of thousands of Burmese migrants looking to escape the poverty and job scarcity that has gripped their homeland for decades.
Most head to Samut Sakhon province, the heart of the processing industry just south of the capital, Bangkok, where modern facilities line the highway alongside fast-food chains and car dealerships. The more prominent factories are the size of football fields, with neon signage and billboards that feature smiling children. But thereâs a darker side behind the scenes, activists say.
Of an estimated 400,000 migrants at work in the province, only about 70,000 are legally registered. The rest are employed illegally in anonymous peeling sheds that supply the larger companies that must fill massive orders from abroad. At this lower end of the supply chain, according to migrant activists, crooked brokers and employers trap scores of Burmese in abusive conditions tantamount to slavery, particularly in the shrimp industry.
âThe small factory owners know that most of their workers are undocumented, so they can control the workforce however they want â such as locking workers in until they finish their work,â says Sompong Sakaew, a labor activist based in Mahachai, the provincial capital. âThere are also teenagers between 12 and 17 years old in the workforce.â
Sold into waking nightmare
Problems for Burmese migrants typically start as soon as they link up with brokers who promise steady work and a decent salary, only to sell them into a nearly inescapable cycle of debt bondage.
Min Oo, 28, a Burmese farmer who lost his home in a flood, said he paid a broker the equivalent of $500 to smuggle him across the border to Samut Sakhon, with the guarantee of a minimum-wage (about $10 a day) factory job. Instead, he said, the broker sold him into a waking nightmare, with 18-hour workdays in a shrimp-processing factory and net earnings of no more than $20 a week, leaving almost nothing to send home.
In some cases, migrant workers and rights groups allege, police officials or their relatives hold an ownership stake in unregistered peeling sheds. More commonly, the critics say, the authorities or those they protect shake down undocumented workers for bribes to supplement their incomes, knowing that the migrants would rather pay up on the spot than be deported to Burma.
Despite occasional police action and robust anti-trafficking laws, Sakaew, the labor activist, estimates that fully a quarter of the 1,200 to 1,300 factories in Samut Sakhon province are unregistered and, therefore, ripe for abuse. With so much profit-induced apathy on the Thai side, activists say reform pressure must come from Western companies whose trade partnerships drive the shrimp industry.
Codes of conduct
It is difficult to establish precise links between the larger Thai companies that process shrimp of dubious origin and the Western companies whose consumers increasingly demand ethical sourcing.
To do business overseas, Thai companies must qualify for membership in the Thai Frozen Foods Association, which adheres to globally recognized codes of conduct and carries out unscheduled inspections. Spokesman Arthon Piboonthanapatana asserts that anyone found guilty of labor -abuses would be expelled. In more than three years of inspections, he said, this has never happened.
âIf the shrimp is from TFFA members, I can 100 percent guaranteeâ that it is produced without labor exploitation, he said.
But critics say that until the Thai shrimp industry requires larger factories to provide records of lower-level suppliers and follows through with random inspections, the shrimp it exports will remain tainted by human trafficking and labor abuses.
For the past three years, the State Department has given Thailand a poor grade on human trafficking, citing it among countries that do not fully comply with the minimum standards for efforts to combat the problem.
After the release of the departmentâs report in 2012, Thai Foreign Minister Surapong Tovichakchaikul said his country would improve its performance by strengthening cooperation among agencies tasked with fighting human trafficking.
Motlagh reported with a grant from the Pulitzer Center on Crisis Reporting.
More world news coverage: - Turmoil in Egypt stalls talks on U.S. aid - Suicide blast kills 12 near Afghan capitalâs international airport - U.S. troops to cut missions with Afghan forces - Read more headlines from around the world.
Google reportedly acquiring Waze app for $1.3 billion
News ends months of rumors on deals with Apple, Facebook, or Google, according to Globes; Waze source refuses to comment
By David Shamah June 9, 2013, 7:20 pm
Waze co-founder Uri Levine at a Jerusalem conference in May (photo credit: Flash90)
After dating at least three of the biggest tech companies in the world, it appeared Sunday night that Waze was finally getting the ring â one worth $1.3 billion, according to a report in the Israeli business newspaper Globes.
Thatâs the sum Google has reportedly agreed to pay for Waze, the Raâanana-based crowdsourced driving and navigation app with 50 million users around the world. The figure is $300 million higher than Facebook reportedly offered to pay for the firm earlier this year.
A company source contacted by The Times of Israel had no comment on whether talks with Google (or any other party) were on or off. âWe donât comment on rumors and speculation in general,â the source said.
The purchase, reported by Globes citing an anonymous source, would be the biggest buyout yet for an Israeli consumer firm, far outstripping Face.comâs $60-million sale to Facebook last year. Indeed, it is believed that it would be the biggest sum paid for any app, ever.
In May, it was rumored that Facebook had offered nearly $1 billion for Waze, but negotiations broke down several weeks later, apparently over Facebookâs insistence that Waze move its R&D from Israel to one of Facebookâs existing facilities, in the US or Britain. Several weeks later, it was reported that Google was interested in Waze, and that the search giant had offered as much as $1 billion for the company as well.
Previous rumors â earlier this year â had Apple as a prospective Waze buyer, with an offer of $400 million for the Israeli company.
A Google-Waze deal would likely not get snagged over location; Google already has several large R&D facilities in Israel, and employs hundreds of engineers here. Integrating the already existing Waze group into the Google infrastructure would be much simpler than getting Waze integrated with Facebook, local social media expert Yotam Tavor told The Times of Israel.
However, it appears that location wasnât the only issue. As recently as several weeks ago â amid the rumors that Google was poised to make an offer for Waze â company insiders were quoted in news reports as saying that members of the Waze board of directors believed that they would be selling themselves short if they âsettledâ for $1 billion â and that they could raise much more with an IPO. How much Waze would fetch in an IPO isnât clear, but if the latest report is true, Google apparently agrees with the Waze officials opposed to a sale.
Google already has its own mapping and driving app, and competes with Waze, but the latter dominates in most of the markets where Googleâs Navigator app is used. As such, Google and Waze are competing in the same space, but most users agree that the Waze app is much more elegant and user-friendly than the Google one.
In addition, Waze has built an active and loyal social network, which is highly engaged with the app, as well as a built-in mobile ad platform. In its latest version, it supplies Google Maps-like recommendations â making it a perfect match for Google, Tavor said.
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The Outcome Without Trade | The Outcome With Trade | The Gains From Trade | ||||||
What they Produce and Consume if they do not specialize according to comparative advantage. | What They Produce if they fully specialize in one good. | What They Trade | What They Consume | The Increase in Consumption | ||||
Mon | 1.) | Point A | 5.) | 9.) 10.) | 13.) | Point A* | 17.) | A to A* |
2.) | 6.) | 14.) | 18.) | |||||
Shaman | 3.) | Point B | 7.) | 11.) 12.) | 15.) | Point B* | 19.) | B to B* |
4.) | 8.) | 16.) | 20.) |
Suppose Mon and Shaman do not specialize according to comparative advantage and exchange but instead choose to be self-sufficient.
Further, they devote half of their hours in each year to each good and they consume everything they produce domestically.
After specialization according to comparative advantage, they exchange 5,000 apps for 75,000 shrimp.
Compute values for the numbered cells.
Question 29
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What is the opportunity cost of producing shrimp for Mon?
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Question 30
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What is the opportunity cost of producing shrimp for Shaman?
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Question 31
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What is the opportunity cost of producing Mobile Apps for Mon?
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Question 32
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What is the opportunity cost of producing Mobile Apps for Shaman?
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Question 33
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1.) Before specialization, how much shrimp will Mon produce?
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Question 34
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2.) Before specialization, how many mobile apps will Mon produce?
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Question 35
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3.) Before specialization, how much shrimp will Shaman produce?
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Question 36
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4.) Before specialization, how many mobile apps will Shaman produce?
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Question 37
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5.) If they specialize according to comparative advantage, how much shrimp will Mon produce?
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Question 38
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6.) If they specialize according to comparative advantage, how many mobile apps will Mon produce?
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Question 39
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7.) If they specialize according to comparative advantage, how much shrimp will Shaman produce?
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Question 40
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8.) If they specialize according to comparative advantage, how many mobile apps will Shaman produce?
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Question 41
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9.) After specialization according to comparative advantage, they exchange 5,000 apps for 75,000 shrimp, i.e. each country sells some of the good in which they have a comparative advantage for the good in which they have a comparative disadvantage.
How much shrimp will Mon trade?
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10.) How many mobile apps will Mon trade?
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Question 43
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11.) How much shrimp will Shaman trade?
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Question 44
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12.) How many mobile apps will Shaman trade?
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Question 45
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13.) After trade, how much shrimp will Mon consume?
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Question 46
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14.) After trade, how many mobile apps will Mon consume?
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15.) After trade, how much shrimp will Shaman consume?
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Question 48
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16.) After trade, how many mobile apps will Shaman consume?
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Question 49
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17.) After trade, Monâs shrimp consumption increased by how much?
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Question 50
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18.) After trade, Monâs mobile app consumption increased by how much?
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Question 51
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19.) After trade, Shamanâs shrimp consumption increased by how much?
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Question 52
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20.) After trade, Shamanâs mobile consumption increased by how much?
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Question 53
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What is the total amount of shrimp produced if Mon fully specializes in shrimp production?
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Question 54
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What is the total amount of shrimp produced if Shaman fully specializes in shrimp production?
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Question 55
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How many mobile apps will Mon produce if she fully specializes in producing mobile apps?
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Question 56
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How many mobile apps will Shaman produce if he fully specializes in producing mobile apps?
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