Econ 318 - Study guides, Class notes & Summaries

Econ 318 Practice Questions and Answers 2023 with complete solution

Define scarcity and explain why the concept is so central to neoclassical economics. correct answers - The concept of scarcity arise as individuals have unlimited wants but the available resources are limited. The concept of scarcity is so central to neoclassical economics, as scarcity directs individuals to make rational choices to survive in a world of scarcity. - Thus, under the condition of scarcity it is not possible to satisfy everyone's wants. Individuals should be able to make choic...

Externalities correct answers An externality occurs whenever actions taken by firms or consumers impose costs or confer benefits on others that are not involved in the transaction (third party effects) without any reimbursement for the cost or a charge for the benefit involved Examples of externalities correct answers Examples of Negative Externalities: a free market produces too much of a harmful good that is socially undesirable Automobile exhaust Cigarette smoking Barking dogs (lo...

Half of marriages end in divorce, why do people still marry? correct answers - comparative advantages have not disappeared but they have diminished since women are doing better in the labor market. Although, comparative advantage has not gone away completely. It is still true that women on average earn lower wages than men - women do the lions share of housework no matter if she works for wages or not. This gives men an incentive for marriage Other economic advantages: - Economies of ...

Who has a comparative advantage in home production? correct answers The spouse whose opportunity cost (forgone wages) of producing a given commodity (e.g., home cooked dinner) is lowest. Traditional specialization magnifies comparative advantages through correct answers "learning by doing" Still, most couples marry. Why? correct answers Comparative advantages have not disappeared Women earn lower wages than men Women do the lion's share of housework (irrespective of whether they w...

The RAND Health insurance Experiment correct answers Randomly assigned levels of health insurance coverage to people In the Rand Health Insurance Experiment, people randomized to "free" health care were substantially more likely to be prescribed antibiotics for viral conditions. This is evidence that: correct answers i) demand for health care is responsive to price ii) insurance can result in more inappropriate health care Which of the following is evidence in favour of the "thrift phe...

The organizational culture is also called corporate culture. correct answers True A system of shared beliefs and values that develops within an organizational and guides the behavior of its members is known as the corporate system. correct answers False Just as human beings have a personality, organizations also have a "personality" -the products they sell and the types of markets they participate in. correct answers False A clan culture is a type of dysfunctional organizations that h...

Data: Ramanathan 4-4, demand for bus travel. 1- Use method of OLS to estimate the parameters of the following model: BUSTRAVL = β0+ β1FARE+ β2GASPRICE+ β3INCOME+ β4POP+ β5DENSITY+ β6LANDAREA+u a. Do parameter estimates have the expected sign? Explain Model 1: OLS, using observations 1-40 Dependent variable: BUSTRAVL coefficient std. error t-ratio p-value ---------------------------------------------------------- const 2744.68 2641.67 1.039 0.3064 FARE −238.654 451.728 −0....