EC120 Study Guide - Midterm Guide: Average Variable Cost, Allocative Efficiency, Externality

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EC120 Full Course Notes

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Budget constraints: given an amount of money, what are the consumer"s options. Indifference curves: how do consumers compare their options. Represents opinion seen as equally good by consumer. A consumer sees hamburgers and hotdogs are perfect substitutes. For a normal good, a reduction in the price of the good results in . For a normal good, a reduction in the price of other good results in . All of the above (marginal rate of substitution will equal the relative price, the indifference curve it tangent to the budget constraint and the slope of the indifference curve equals the slope of the budget constraint) The price of coke and coffee (both normal goods) each fall by 10 percent. Budget constraints identify feasible options for consumers. Spend all your money on one good, or the other good, or a mix. Slope: price of good x/ price of good y. Points on the budget constraint you will spend all your money, ideal.

Related Questions

For several years, a professor at Johns Hopkins University had been using the following grading scheme for his final exam: He would give an A to the student with the highest score. The grades of the remaining students were then based on what percentage their scores were of the top student's score.

In the fall of 2012, the students in the class came up with the idea of boycotting the final exam. They stood in the hallway outside the classroom but, did not enter the room to take the exam. After waiting for a time, the professor canceled the exam and, applying his grading scale, gave everyone in the class an A on the exam. An article in the New York Times about this incident observes: "This is an amazing game theory outcome and not one that economists would likely predict."

Game theory indicates the students' strategy was unlikely to work because
a. game theory predicts that there must be winners and losers.
b. it is difficult to get a group of people to agree and not defect.
c. it is a violation of university policy to refuse to take an exam.
d. game theory is predicated on Nash equilibriums.

graydog441

The factors that are likely to affect individualâs decisions about the type of transport they use daily and how they respond to changes in the market. (Any type of factor can be given especially related to microeconomics)

1. Compare the trends in transport use in Perth and another city in Australia (with evidence).

2. The factors affecting individualsâ decisions about the type of transport (e.g., private cars, public transport, cycling, car-pooling, taxi, etc.).

3. Demonstrate how individual respond to changes (e.g., income, prices of vehicles, petrol prices, parking fees, etc.) in the market.

4. Government/University policies that intend to change your transport choices and its effectiveness.

21. [Price Theory] At UTM the market for plastic bottles of water can be described by de- mand and supply: D = 1000 - 200P and S = 2002 - 200. a) The University decides to introduce a Per-Unit Tax of $2 per bottle. Provide a la- belled diagram and supporting calculations to assess how the introduction of this tax will affect Consumer Surplus, Producer Surplus and Government Surplus. b) Environmental groups and economists might both support a tax on water that is sold in plastic bottles. What rationale would economists provide? EX Change CS

EC120 Study Guide - Midterm Guide: Average Variable Cost, Allocative Efficiency, Externality

EC120 Full Course Notes

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