Econ 302 - Study guides, Class notes & Summaries

Law of Demand - Answer There is an inverse relationship between price and quantity demanded When the price RISES , quantity demanded FALLS Choke Price - Answer The price at which quantity demanded is equal to zero. The intercept of the inverse demand curve Ceteris Paribus Conditions (in demand) - Answer Income • Prices of related goods • Everything else -Tastes/Quality -Expectations -Number of buyers Normal Good (definition and elasticity sign) - Answer When consu...

Under free trade: Domestic price=$8 per ton Under free trade: World price=$8 per ton Under free trade: QSd=6 tons Under free trade: QDd=24 tons With tariff: Domestic price=$10 per ton With tariff: World price=$8 per ton With tariff: QSd=12 tons With tariff: QDd=20 tons 1. What is the impact on domestic consumers of setting a $2 per ton tariff? - Answer -44 Under free trade: Domestic price=$8 per ton Under free trade: World price=$8 per ton Under free trade: QSd=6 tons Under free t...

INTERMEDIATE MACROECONOMICS (ECON 302) 1ST TRIMESTER 2012 Latest Verified Review 2023 Practice Questions and Answers for Exam Preparation, 100% Correct with Explanations, Highly Recommended, Download to Score A+ Question One • Assume two good economy which produces good A and B. 2006 2007 2008 P Q P Q P Q Good A 30 900 31 1000 36 1050 Good B 100 192 102 200 100 205 NB: Prices in US dollars. Required: • Compute nominal GDP in each year. ...

Substitutes.... When the price of Y increases then X goes higher.. - Answer Are they complements or subs? X = M+Py/2Px When Py gets bigger, than X gets higher so this means they are Only can add the exponents when they are being multiplied... if you are adding them then you must plug them in ... if they more than double after plugging in then it is increasing returns to scale. - Answer Other side The s-t run average cost curve reveals nothing regarding returns to scale. - Answer A firm...

We assume that the representative consumer's preferences exhibit the properties that - Answer consumption and leisure are both normal goods and that the consumer likes diversity in his or her consumption bundle. We assume leisure is a normal good. This implies that - Answer an increase in taxes decreases the demand for leisure. In the model presented in Chapter 4, the vertical intercept of the consumer's budget line is equal to - Answer wh + π -T At the optimal consumption bundle, th...

Economics - Answer The social science that studies production and trade. Positive Analysis - Answer Analysis that attempts to describe the way things are in reality Normative Analysis - Answer Analysis that attempts to describe the way things should be Theory - Answer A principle that explains some phenomenon. Model - Answer A simplified representation of a phenomenon How models work: - Answer Assumptions → Analysis → Implications The Four Starting Points of Economics - Ans...

What does the study of macroeconomics entail? - Answer The study of economy at the large scale level, examining total output, the price level, and other aggregate measures in the economy. (Think macro as the forest and micro as the trees) What is the capital? What are some examples of capital? - Answer 1 out of 4 resources. The tools, machinery, infrastructure, and knowledge used to produce goods and services. Resources are: A) Relatively plentiful in all countries. B) Relatively evenly di...

Consumer Theory Assumption: - Answer A consumer will choose the best bundle of goods and services that he or she can afford Rational Behavior - Answer People do not make decisions that intentionally make them worse off Budget Constraint Definition - Answer Shows the set of all bundles that a consumer can afford Budget Constraint Assumption - Answer There are two goods: Good X and Good Y Budget Constraint Formula - Answer Px(X) + Py(Y) = M Slope of Budget Constraint - Answer - Px /...

Price-Consumption Curve (PCC) - Answers Shows how the consumer's optimal bundle changes when the price of a good changes while holding the price of other goods and income constant Steps for PCC: U(X,Y) = X*Y - Answers 1) Use M/Px and M/Py to draw all budget constraints 2) X* = (α/(α+β)) * (M/Px) and Y* = (β/(α+β)) * (M/Px) and plot these points on the budget constraint [for each Px]; connect points to form the PCC 3) Make a table with Px, X, and Y 4) Plot Px on y-axis and X on x-ax...

The law of diminishing marginal returns assumes that A. Additional inputs are added in smaller and smaller increments B. there is at least one fixed input C. All inputs are changed by the same percentage D. All inputs are held constant - Answer B If indifference curves cross, then A. Consumers minimize their satisfaction B. The assumption of a demising marginal rate of substitution is violated C. The assumption of completeness is violated D. The assumption of transivity is violated E...