Inelastic demand is when a demand for a product doesn’t increase or decrease with a fall or rise in its price; an increase in price would increase the revenue regardless of a fall in the quantity demanded. Inelastic examples would be groceries‚ gasoline‚ etc. things that are necessities. The percentage change in quantity demanded is less than the percentage change in price. It is also unresponsive to changes like demand‚ when it falls to increase in proportion to a decrease in price. (Tocker‚ R
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As the world’s natural resources become scarce or too expensive‚ the world has begun to use substitute resources. One resource that is being used in place of gasoline is biodiesel. A renewable fuel‚ produced from agricultural resources such as vegetable oils‚ biodiesel has more than one good thing going for it. It reduces the emission of gases responsible for global warming‚ promotes rural development‚ contributes toward the goal of energy security‚ is renewable‚ and reduces pollution. Biodiesel
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Microeconomics‚ 8e (Pindyck/Rubinfeld) Chapter 1 Preliminaries 1.1 The Themes of Microeconomics 1) Microeconomics is the branch of economics that deals with which of the following topics? A) The behavior of individual consumers B) Unemployment and interest rates C) The behavior of individual firms and investors D) B and C E) A and C Answer: E Diff: 1 Section: 1.1 2) A Rolling Stones song goes: "You can’t always get what you want." This echoes an important theme from
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Chapter 1 What Is Economics? 1) All economic questions are about A) how to make money. B) what to produce. C) how to cope with scarcity. D) how to satisfy all our wants. 2) An incentive A) could be a reward but could not be a penalty. B) could be a penalty but could not be a reward. C) could be either a reward or a penalty. D) is the opposite of a tradeoff. 3) An inducement to take a particular action is called A) the marginal benefit. B) the marginal cost. C) opportunity cost
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You must include a brief explanation of approximately 50 words for each answer to receive full credit: i. There is an increase in the amount of subsidies given to soybean producers. Increase in Supply of Soybeans: Subsidies are supply-side microeconomic policies. Suppliers are paid to encourage supply as the cost to supply is less. ii. There is a decrease in the price of fertilizer‚ an input needed to produce soybeans. iii. There is an increase in the price of corn‚ an alternative good that
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Q1. What is an opportunity cost? How does the idea relate to the definition of economics? Which of the following decisions would entail the greater opportunity cost: Allocating a square block in the heart of New York City for a surface parking lot or allocating a square block at the edge of a typical suburb for such a lot? Explain. LO1 A1. Opportunity cost is the value of the next best thing forgone‚ this is always present whenever a choice is made. Economics is the social science that examines
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bailout plan. As the new administration began Obama passed a 825 billion dollar bailout plan. 3. Compare and contrast microeconomics and macroeconomics. How do the two approaches interrelate? Use a specific example to explain. Macroeconomics is the study of a country’s overall economic issues such as performance‚ structure‚ behavior‚ decision making‚ and study rates. Microeconomics focuses on smaller economic units such as individual consumers‚ families and businesses. They can affect how much and
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Consumer Choice Exercise 1. Function U allows us to know how that agent orders different combinations of goods x e y according to his preferences. For each of the following representations what is the shape of the indifference curves and what is the marginal rate of substitution (MRS)? What does that tell you about the agent’s preferences? a. U x 2 y x y b. U min ‚ 3 4 c. U xy d. U x 2 y Exercise 2. Consider the following utility functions: a. U ( x‚ y) ( x
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want and desires through production‚ distribution‚ and consumption of goods and services (Colander‚ 2010). To understand economics‚ one has to understand the basic fundamentals of economics. Economics is based on two groups’ macroeconomics and microeconomics. So what is macroeconomics? Macroeconomics is the decision-making of an economy as entire picture. In this paper I will cover the fundamentals of macroeconomics‚ so there is a better understanding of how economics evolves in our everyday lives
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the following are microeconomic or macroeconomic policy issues: a. Should U.S. interest rate be lowered to decrease the amount of unemployment? macroeconomics b. Will the fact that more and more doctors are selling their practices to managed care networks increase the efficiency of medical providers? Macroeconomics c. Should the current federal income tax be lowered to reduce unemployment? macroeconomics d. Should the federal minimum wage be raised? Microeconomics e. Should Sprint
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