ECON 221 Final Exam Actual Questions and Answers 100% Correct;(Everything you
need is here)View ahead exam
which of the following is NOT a supply curve shifter?
a. demographics
b. expectations
c. input prices
d. innovation Ans- a. demographics
which of the following would shift the demand curve for footballs?
a. a change in income
b. a change in the price of tennis rackets
c. a change in the price in the footballs
d. all of the above
e. Both A and B Ans- e. Both A and B
the amount of time during which at least one of a firm's resources is fixed is..
a. the short run
b. the long run
c. a fiscal year
d. a calendar year Ans- a. the short run
in the formula for marginal cost, 🔺TC /🔺Q, what is Q? Ans- the quantity of the final product
in the formula for marginal product, 🔺TP/🔺Q, what is Q? Ans- the quantity of variable resource used
which chain is correct? Ans- Productivity->Cost-> Profit
which of these items has the most elastic demand? Ans- Apple iPhone XR
suppose that 4% rise in the price of sofas reduces quantity demanded by 8%. Calculate the elasticity of demand for sofas. Ans- -2.0
suppose the demand for sofas is elastic, and furniture store experiments with higher prices. what will happen to its total revenue? Ans- total revenue will fall
the elasticity of demand for chicken is around -0.37. What would happen to the quantity of chicken demanded if price rises by 10%? Ans- quantity demanded would fall by 3.7%
so= -3.7%
economists assume that the goal of a firm is to maximize what? Ans- profit
if a firm shuts down, ______ costs go to $0 and _____ costs linger. Ans- variable; fixed supposed a local barber shop earns revenue of $11,000 per month. It has a fixed cost of $2,500 and a variable cost of $10,000. What is its profit? Ans- -$1,500
brand management is the actions taken by a firm to maintain _____ of its product over time. Ans- differentiation
in which type of market(s) do firms NOT use brand management? Ans- perfect competition
True or False: long-run economic profit is $0 in markets that entrepreneurs may easily enter Ans- true
barriers to entry include all of the following EXCEPT..
a. ownership of a key input
b. economic of scale c. negative externalities
d. patents Ans- c. negative externalities
which statement best explains why the law of one price may be violated? Ans- shipping costs
may vary by location
which condition must hold for a company to practice price discrimination? Ans- arbitrage and resale are blocked
Mr. glass man of CrossFit earns revenue from all of the following EXCEPT..
a. winnings from lawsuits
b. corporate apparel sponsorships
c. annual fees from box owners
d. monthly fees from gym members Ans- d. monthly fees from gym members
which of these factors would make the demand for an item more inelastic?
a. the item is viewed as a necessity
b. the item is a large portion of the family budget
c. the item has many substitutes
d. all of the above Ans- a. the item is viewed as a necessity
At Bob's Burgers, the sandwiches have a price elasticity of demand of -3.0. If Bob's raises menu prices by 12%, what will happen to total revenue? Ans- revenue will decrease
what is an example of a fixed cost? Ans- Rent, car payment, utilities, loans, manager's salary
what is an example of a variable cost? Ans- raw materials, labor
what's the difference between a fixed cost from a variable cost? Ans- a fixed cost remains the same unlike variable costs, which vary.
What is an opportunity cost? Ans- something you give up due to limited resources
ex: staying in on a Sat. night to study for a test
what are the 3 key principles of economics? Ans- 1. People are rational
2. People respond to incentives
3. Optimal decision are made at the margin what does making optimal decisions made on the margin mean? Ans- Economists reason that the optimal decision is to continue any activity up to the point where the marginal benefit equals the marginal cost
ex: when you ask yourself if you should drink a second cup of coffee
at its core, economics is the study of what? Ans- the choices people make to attain their goals, given limited resources
the basic economic problem of _____ has always existed and will continue to exist. Ans- scarcity
consider British colonization in the 1700s. what was the biggest obstacle to British prisoners arriving safely in Australia? Ans- the captain's pay structure
which economist wrote The Wealth of Nations? Ans- Adan smith
what is the key idea of The Wealth of Nations? Ans- prices do a better job of coordinating the
activities of buyers and sellers than government could
who decides what goods and services will be produced in a centrally planned economy? Ans- the government
what are the 4 parts of the Economic Circular Flow? Ans- - Households (top)
- product market
- firms (bottom)
- factor markets
what are the 3 types of economies? Ans- 1. centrally planned
2. market 3. mixed
if the demand for rice falls when income rises, then rice is an ____ good. Ans- inferior
the law of demand states that, other factors constant, the higher the price of a product the_____ the quantity demanded Ans- lower
An economy in which the decisions of households and firms allocate economic resources is known as a _____? Ans- Market economy
What is macroeconomics? Ans- The study of the economy as a whole
what is a market economy? Ans- A system where decisions are made by interactions between buyers and sellers. (is used by most countries today)
What is a mixed economy? Ans- some regulations, some buyers and sellers
What is the substitution effect? Ans- the change in quantity demanded because of the change in the relative price of the product
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller Wiseman. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $14.99. You're not tied to anything after your purchase.
