Are 201 Nc State

Front 1

According to the example in the text, when a monetary fine was imposed for picking up a child late at a daycare center, the number of late pickups actually rose. Which of the following correctly explains this?

Back 1

The monetary fine was less than the moral cost the tardy parent incurred when there was no fine.

Front 2

A centrally planned economy has a planning authority that decides:

Back 2

What products to produce.
Who receives the products.
How the products are produced.

Front 3

Economics is the study of...

Back 3

Choices made by people faced with scarcity

Front 4

Considering how a change in one variable affects the value of another is called:

Back 4

the marginal principle

Front 5

Normative Economics

Back 5

"What ought to be"

Front 6

Diminishing returns occurs because

Back 6

one of the inputs of production is fixed

Front 7

When people act in their own self interest, it is described as the:

Back 7

principle of voluntary exchange

Front 8

To make things simpler and focus attention on what really matters economists use

Back 8

assumptions

Front 9

A rich nation will trade with a poor nation because

Back 9

The poor nation has the comparative advantage in a product

Front 10

To explore the rationale for specialization, economists use:

Back 10

Principle of oppurtunity cost

Front 11

One common source of market failure is:

Back 11

pollution

Front 12

According to the principle of diminishing returns, if all factors of production are held constant and if that one factor is doubled then eventually output will most likelt:

Back 12

less than double

Front 13

Economic models are used to

Back 13

explore decision making by individuals, firms and other organizations

Front 14

Under which condition might diseconomies of a scale result

Back 14

Hampered coordination brought about by bureaucracy and increasing cost of inputs

Front 15

A perfectly competitive firm's marginal cost curve above the minimum of the average variable cost curve is its

Back 15

short run supply curve

Front 16

if a firm in a perfectly competitive market is currently producing output where price=marginal cost>avg total cost the firm is earning a positive or negative profit?

Back 16

earning a positive profit

Front 17

For a normal good if there is an increase in income there will be a ________ in the number of units purchased

Back 17

increase

Front 18

When average variable cost is less than average fixed costs the firm is

Back 18

suffering an economic loss

Hint 18

when AVC < AFC

Front 19

When price is less than average variable costs, When marginal revenue=marginal costs

Back 19

shut down

Front 20

Diminishing marginal returns implies that firms

Back 20

require more and more workers to produce each additional unit of output

Front 21

A firms Marginal Cost curve is above the minimum of the Avg Variable cost curve is its

Back 21

short-run supply curve

Front 22

when price=marginal cost>average total cost the firm is?

Back 22

earning a positive profit

Hint 22

When MC>AVG Total Cost

Front 23

A profit maximizing firm in a perfectly competitive market is currently producing the output where (price-average variable cost)<average fixed cost, the firm is:

Back 23

suffering n economic loss

Front 24

In a perfectly competitive market a firm can maximize its profit by producing the output where:

Back 24

Price is equal to its marginal cost

Front 25

Average total costs are minimized when

Back 25

Marginal cost=Average total cost

Front 26

Average variable costs are minimized when

Back 26

Marginal Costs = Average Variable costs

Front 27

Profit is equal to

Back 27

(Marginal Cost - Average Total cost)*Quantity

Front 28

Explain why diseconomies of scales exist:

Back 28

Diseconomies of scale exist when average costs increase with firm size.
its possible that input prices are increasing.
the average amount spent on inputs increases as
the scale of production increases.
coordination problems associated with an increasing number
of layers of bureaucracy

Front 29

A ban on imported goods would result in:

Back 29

Equilibrium quantity increase
Equilibrium prices increases

Front 30

A price-taking firm should produce the quantity of output at which

Back 30

marginal Revenue= marginal cost

Front 31

An unprofitable firm should continue to operate if

Back 31

its total revenue>total variable cost

Front 32

The long-run supply curve is flatter than the short run supply curve because

Back 32

there are diminishing returns in the short run but not in the long run