REM 100 Final Exam 2024/2025 with 100% correct answers
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Course
REM 100 Fi
Institution
REM 100 Fi
Explain the difference between weather & climate correct answersWeather is the current state of the atmosphere, whereas climate is the statistical description of the weather at a location over a longer period of time
Describe the greenhouse effect correct answersThe warming of the atmosphere tha...
Explain the difference between weather & climate correct answersWeather is the current state of the
atmosphere, whereas climate is the statistical description of the weather at a location over a longer
period of time
Describe the greenhouse effect correct answersThe warming of the atmosphere that results due to
greenhouse gases found in the atmosphere
Define the concept of excludability correct answersGoods and services for which one can, at a low cost,
prevent those who have not paid for it to consume it
Define the concept of depletability correct answersWhen the consumption by one agent means another
cannot use it
What is the supply curve? correct answersThe relationship between product price and the quantity of
product that a seller is willing and able to supply
What is the demand curve? correct answersThe relationship between product price and the amount that
consumers are willing and able to purchase at a given price
What is the equilibrium price? correct answersThe price at which suppliers are producing exactly as
much as is demanded by buyers, therefore both the supplier and the buyer is happy
What happens when the initial price is greater than the equilibrium price? correct answersA surplus
What happens when the initial price is less than the equilibrium price? correct answersA shortage
What is a free market? correct answersWhen transactions between buyers and sellers are driven by the
relationship between supply and demand
, What are the requirements for a free market? correct answers- large number of sellers and buyers
- perfect information about current and future prices
- all economic agents behave rationally
- market prices reflect full costs of production & consumption
- inputs & goods are individually owned and divisible
What is a regulated market? correct answersAn idealized system where the government controls the
forces of supply and demand, such as who is allowed to enter the market and the prices that are charged
What is the invisible hand? correct answersWhen all economic agents behave rationally/self-motivated
What is a market failure? correct answersDescribes the situation when the market does not allocate
scarce resources to generate the greatest social welfare
When does a market failure occur? correct answersWhen the conditions for the free market are not
fulfilled
Name the two types of market failures correct answersOpen access & free rider
Define an open access market failure correct answersGlobal commons has an open access problem,
because people take advantage of the open access in order to benefit their own situation
Define the free rider market failure correct answersLittle incentive for an individual to supply or protect a
public good
What is an externality? correct answersThe cost of benefit of the production or consumption of a good
or service that is experienced by people other than the producer or consumer
What is a negative externality? correct answersIt relates to the negative impacts of production or
consumption. There is no compensation paid to the third party who endure the negative impacts
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