MGEA02H3 Chapter : Week 1 study guide

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lavenderdonkey6

1 Dec 2010

School

UTSC

Department

Economics for Management Studies

Course

MGEA02H3

Professor

Gordon Cleveland

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MGEA02H3 Full Course Notes

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Document Summary

N market prices and quantities prices and quantities are determined in free markets in which would-be sellers compete to sell. N a production possibilities boundary illustrates three concepts: scarcity, choice, and opportunity cost. N microeconomics study of causes and consequences of allocation of resources as it is affected by workings of price system. N questions relating to the idleness of resources and the growth of productive capacity fall within the realm of macroeconomics. N macroeconomics study of determination of economic aggregates such as total output, price level, employment, and growth. N major cause of globalization is rapid reduction in transportation costs and revolution in it that has occurred in past 50 years. N mixed economy an economy in which some economic decisions are made by firms and households and some by government. The government creates laws of ownership and contract and then provides the institutions to enforce these laws.

Related Questions

Discuss the role of expected profit in a capitalist economy. Is the allocation of scarce resources determined by expected profit? Do companies have an incentive to produce as efficiently as possible?

Discuss the Adam Smith proposition that consumers and businesses operating in their own self interest results in the best interest of society.

Part 1.Choose the correct answer of the following:

1.In a market economy, economic activity is guided by

a.Self-interest and prices

b.The government.

c.Corporations.

d. Central planners.

2. Which of the following decisions must be made by all economies?

a.How much to produce? When to produce? How much does it cost?

b.What to produce? How to produce? For whom to produce?

c.What is the price? Who will produce it? Who will consume it?

d. None of the above