rise due to excess demand D. choices must be made and tradeoffs will occur 3. The ’no-free-lunch’ principle is another name for the A. cost-benefit principle B. the scarcity principle C. the ceteris paribus principle D. the marginal (not average) principle 4. You currently go to the gym three times each week. Each visit costs you $15 and you get $90 worth of benefits from your current weekly gym routine. Given this information A. you should go to the gym a fourth time
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the diagrams in the book analyze decreases in price‚ so you might want to go over an example in which price increases. This will come in handy if you later go over the effects of a gasoline tax in Example 4.2. Once students understand the effect of price changes on consumer choice‚ they can grasp the derivation of the price-consumption path and the individual demand curve. Remind students that the price a consumer is willing to pay is a measure of the marginal benefit of consuming another unit
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2012 Alex Savitt Economics 256W 4/23/2012 2012 Alex Savitt Economics 256W 4/23/2012 Demand-Side vs. Supply-Side Economics Demand-Side vs. Supply-Side Economics Ever since the 1980s when President Ronald Reagan implemented a form of economic fiscal policy known as supply-side economics‚ there has been a continuing debate over whether a supply-side fiscal economic agenda or a more demand-side‚ Keynesian fiscal economic policy is more effective in promoting short and long-term real GDP
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CHAPTER 24-Monopoly TRUE/FALSE 1. Since a monopoly charges a price higher than marginal cost‚ it will produce an inefficient amount of output. ANS: T DIF: 1 2. If the interest rate is 10%‚ a monopolist will choose a markup of price over marginal cost of at least 10%. ANS: F DIF: 2 3. A natural monopoly occurs when a firm gains ownership of the entire stock of some natural resource and thus is able to exclude other producers. ANS: F DIF: 1 4. Since a monopoly makes excess profits beyond
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with little thought for the future‚ and so they may be unmoved by the threat of later punishment. Deterrence messages they receive‚ therefore‚ may fall on deaf ears. This article examines this issue by testing the relationship between criminal propensity‚ perceived risks and costs of punishment‚ and criminal behavior. The authors analyzed data from the Dunedin (New Zealand) Study‚ a longitudinal study of individuals from birth through age 26 (N = 1‚002). They found that in fact‚ deterrence perceptions
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the effect of a revenue-neutral tax reform has been an important issue in public finance and macroeconomics over the past three decades. When it comes down to reform the first is the ‘Revenue-neutral’ tax reform‚ which involves a switch from a decrease in the income tax rate to an increase in the consumption tax rate. This is to ensure a balanced budget and‚ hence‚ tax revenue neutrality. There have been models that have been extensively used to study the effects of tax reform on capital accumulation
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likely to increase the income of the consumer. Furthermore‚ education raises one’s productivity‚ which in turn benefits the society as a whole by increasing national income. Due to positive externalities‚ the social marginal benefit of merit goods is greater than its private marginal benefit. Consumers in a free market only consider private benefits when purchasing and will therefore underconsume merit goods. This scenario can be shown in the diagram 1 below. As shown in diagram 1‚ the socially
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the variable on the vertical axis divided by the variable on the horizontal axis. B) the variable on the horizontal axis divided by the variable on the vertical axis. C) the run over the rise. D) rise over the run. Answer: D 9) If a variable is 100 and then decreases to 60‚ then using the
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Economics 301 Intermediate Macroeconomics Exam #1 Fall‚ 2013 Prof. Twomey Please print your names on the back of the last sheet. Answer on these sheets‚ using the backs of the sheets if you need extra space. The weight of each question is indicated. Please ask for clarification if any question is unclear. Time: the entire class. 1) Identify the following with a sentence or at most two (20 points): a. Endogenous variable b. Classical dichotomy c. National income accounts identity
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3 3.1 Market equilibriuM and efficiency Equilibrium Learning outcomes • Explain‚ using diagrams‚ how demand and supply interact to produce market equilibrium. • Analyse‚ using diagrams and with reference to excess demand or excess supply‚ how changes in the determinants of demand and/or supply result in a new market equilibrium. Money is a medium of exchange – you can exchange it for something you want that somebody else has. Having examined demand and supply separately‚ we
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