Econ 111 - Refresher

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Microeconomics and macroeconomics are two branches of economics that study different aspects of the economy. Microeconomics focuses on individual economic agents such as households, firms, and markets, analyzing their behavior and decision-making processes. On the other hand, macroeconomics examines the overall behavior and performance of the economy as a whole, including factors like inflation, unemployment, and economic growth. Therefore, the correct answer is macroeconomics, as it completes the statement by identifying the other scope of economics alongside microeconomics.

Economics is the study of the allocation of SCARCE goods.

The statement is true because demand and supply curves are typically represented graphically, showing the relationship between price and quantity demanded or supplied. On the other hand, demand and supply schedules are presented in tabular form, listing the various quantities demanded or supplied at different price levels. Graphical illustrations provide a visual representation of the relationship, while tabular illustrations present the same information in a more organized and structured format.

Opportunity cost refers to the value of the next best alternative that is foregone when making a decision. In other words, it is the cost of choosing one option over another. This concept recognizes that resources are limited and that choosing to allocate them towards one option means sacrificing the benefits that could have been gained from the alternative option. Therefore, the answer "Opportunity Cost" accurately describes the cost of giving up something in order to obtain something else.

When the price of a product increases, it becomes more expensive for consumers to purchase. As a result, the demand for the product decreases because fewer people are willing or able to afford it. This is a basic principle of economics known as the law of demand, which states that as the price of a product rises, the quantity demanded decreases. Therefore, the correct answer is that the demand decreases when the price of a product increases.

The Production Possibilities Frontier (PPF) is a graphical representation of the maximum output combinations that an economy can produce given its resources and technology. It shows the different trade-offs between producing two goods. By analyzing the PPF, we can identify points that are considered efficient, where resources are allocated optimally, and points that are inefficient, where resources are not fully utilized. Therefore, the PPF is indeed used to detect trades that are better off (efficient) and inefficiencies, making the statement "True."

A price ceiling is a maximum limit set by the government on the price of a particular good or service. It is the opposite of a price floor, which sets a minimum limit. In this scenario, the question is asking for the term that refers to the maximum amount to which an above transaction is not allowed. This aligns with the concept of a price ceiling, as it restricts prices from going above a certain level. Therefore, the correct answer is price ceiling.

It is because when the maximum amount of selling price is lower than normal the producers will cease to create more products.

When the price of a product increases, it incentivizes producers to supply more of that product in order to maximize their profits. This is because higher prices mean higher revenues for producers, which can offset any additional costs associated with increasing production. As a result, the quantity of the product supplied in the market increases. Therefore, the answer is that the supply increases when the price of the product increases.

If the cost of production decreases, it becomes more affordable for producers to produce goods. This leads to an increase in the supply of goods in the market. As the cost of production decreases, producers are able to offer their products at lower prices, attracting more buyers and increasing the quantity of goods supplied. Therefore, a decrease in the cost of production results in an increase in the supply of goods.

In a Circular Flow Diagram, the firm is the entity that provides resources to the output market. This is because the firm is responsible for producing goods and services, which are then sold in the output market. The firm hires labor and purchases other inputs from the input market, and uses these resources to produce output. Therefore, the firm plays a crucial role in supplying resources to the output market.

When a person's income increases, their purchasing power also increases. As a result, they are more likely to switch from purchasing inferior products to higher quality alternatives. This is because inferior products are generally considered to be of lower quality and less desirable. Therefore, the demand for inferior products decreases when income increases.

Because if the minimum amount of the product is increased the producers are willing to produce more of the product.

Supply refers to the quantity of goods or services that producers are willing and able to offer for sale at various prices in a given market. It represents the producers' willingness to produce and sell their products. The higher the price, the more willing producers are to supply a larger quantity of goods or services. Conversely, if the price decreases, producers may be less willing to supply as much. Therefore, the correct answer is "Supply."

It is binding because it will force the equilibrium point to move down.

When the price of a substitute product increases, it becomes more expensive for consumers to purchase the substitute. As a result, consumers are more likely to choose the original product instead, leading to an increase in demand for the product. This is because the substitute has become less attractive in comparison, making the original product a more desirable option. Therefore, when the price of the substitute increases, the demand for the product increases as well.

The word "economics" is derived from the Greek word "oikonomia" which means "household management". This etymology suggests that economics originally referred to the management of a household's resources and finances. Over time, the field of economics has expanded to encompass the study of broader economic systems and the allocation of resources on a larger scale. Therefore, the statement that the etymology of the word economics means "household management" is true.

Demand refers to the quantity of a product or service that consumers are willing and able to purchase at a given price and time. It is influenced by various factors such as consumers' preferences, income levels, and affordability. The statement "Is the number of consumers' want that they can afford" aligns with the concept of demand, as it implies that demand is determined by the desires of consumers that they can actually afford to fulfill.

In a Circular Flow Diagram, the household is the entity that provides resources to the input market. This includes factors of production such as labor, land, and capital. The household supplies these resources to the input market, which in turn distributes them to firms for production purposes. Therefore, the household is responsible for supplying the necessary resources for the production process to take place.

It is not binding for it will not force the equilibrium point to change.

Inflation is the increase of the AGGREGATE levels of prices.

When the price of a Veblen good increases, the demand for it also increases. This is because Veblen goods are luxury items that are associated with status and prestige. As the price rises, the perceived value of the good also increases, making it more desirable for individuals who wish to display their wealth and social standing. Therefore, the higher price leads to an increase in demand as consumers are willing to pay more to obtain the Veblen good and signal their high social status.

Total Surplus refers to the overall economic welfare gained from a transaction or market. It is calculated by adding the consumer surplus, which represents the difference between what consumers are willing to pay and what they actually pay, and the producer surplus, which represents the difference between the price producers receive and the minimum price they are willing to accept. By considering both the benefits to consumers and producers, the total surplus provides a measure of the overall efficiency and welfare generated in a market.

Equity in the definition of economics refers to the allocation of resources based on the need. This means that resources are distributed in a way that takes into account the varying needs of individuals or groups. It ensures that those who require more resources due to their circumstances or disadvantages are given priority in resource allocation. This approach aims to achieve fairness and reduce inequality by addressing the specific needs of different individuals or groups in society.

The answer is that when the price of a giffen good decreases, the demand for it also decreases. This is because giffen goods are rare exceptions to the law of demand, where the quantity demanded of a good decreases as its price increases. Giffen goods are inferior goods that have no close substitutes and are considered necessities. When their price decreases, consumers have more purchasing power and can afford to buy more of other goods, leading to a decrease in demand for the giffen good.

When the price of a complement decreases, it means that the complementary product has become more affordable. This leads to an increase in the demand for the complementary product, which in turn decreases the demand for the original product. This is because consumers are more likely to purchase the complementary product when it is cheaper, reducing their need for the original product. Therefore, the demand for the product decreases when the price of the complement decreases.

In this situation, the government of Soseqsui controls all the resources and has the power to manipulate and allocate them as they see fit. This indicates a command economy, where the government has centralized control over the allocation and distribution of resources. Additionally, the government's ability to determine what is considered just aligns with the principles of socialism, which aims to achieve economic equality and social justice through government intervention and control.

The given situation describes a capitalist economic system, specifically a market economy. In this system, individuals like Vyanaira, Marcus, and Eyricka are free to own and operate their businesses without any external force or coercion. They have the autonomy to make their own decisions and compete in the market to meet the demands of consumers. This system emphasizes private ownership, profit motive, and free market competition.

Producer Surplus - PS

At 10-9 the PS is 5 x 1 = 5
At 8-9 the PS is 4 x 1 = 4
At 7-8 the PS is 3 x 1 = 3
At 6-7 the PS is 2 x 1 = 2
At 5-6 the PS is 1 x 1 = 1

total PS of 15

at 7 the PS excluded above the graph is 12
so the PS at 7 is 3

15-12 = 3

The situation described indicates that the government of Natpretti is allowing the people of Fhackhers to have their own area of land and the liberty to do what they want with it. This suggests that there is a combination of government intervention and individual freedom in the economic system. Therefore, the correct answer is a mixed economy, where there is a mix of private and public ownership and control of resources.

Marginal cost is the additional cost at the expense of normal expenditures or budgets.

The given observation states that the economic status of Crimea is at critical levels because it lost connection to Kiev, which was its lifeline to the Ukraine economy. Positive analysis involves the objective examination of facts and data without any personal bias or value judgments. In this case, the observation is presenting a factual statement about the current economic situation in Crimea without expressing any subjective opinions or evaluations. Therefore, the analysis used in this observation is positive analysis.

Adam Smith's Absolute Advantage looks at a producer's ability to produce the same good with fewer resources.

David Ricardo's Comparative Advantage looks at the producer's ability to produce at a lower opportunity cost.

The given answer is correct because market demand refers to the total quantity of a product or service that all consumers in a particular market are willing and able to purchase at a given price. It is calculated by summing up the individual demands of all consumers in the market. By considering the demands of all consumers, market demand provides a comprehensive view of the overall demand for a product or service in the market.

The given observation states that the Crimean people chose to side with Russia because they are attracted to the promises made by the Russian government. This statement is an example of normative analysis. Normative analysis involves making judgments and evaluations based on opinions, values, and subjective criteria. In this case, the observation is presenting a subjective opinion about why the Crimean people made their choice, rather than providing objective facts or evidence.

Veblen goods are a type of luxury goods that are considered status symbols. They have an upward-sloping demand curve, meaning that as the price of the goods increases, the demand for them also increases. This is because consumers perceive these goods as being more desirable and exclusive when they are more expensive. In contrast, inferior goods are those for which demand decreases as consumer income increases. Giffen goods are a specific type of inferior goods for which demand increases as the price increases, but they are not the same as Veblen goods.

The consumer surplus is the difference between the maximum price a consumer is willing to pay for a product and the actual price they pay. In this case, Tydings Company is willing to spend up to 700 diamond stones to purchase IGACOS, but the current market price is only 200 diamond stones. Therefore, the consumer surplus would be the difference between these two values, which is 500 diamond stones.