WEEK THREE QUESTIONS: 38) What is Utility? "The utility of a consumer is a measure of the satisfaction the consumer derives from consumption of goods and services" (p. 270) 39) What is the Law of Diminishing Marginal Utility? "According to the principle of diminishing marginal utility‚ each successive unit of a good or service consumed adds less to total utility than the previous unit." (p.272) In other words the more one consumes the more they will be satisfied until they reach a
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CHAPTER 6| Elasticity: The Responsiveness of Demand and Supply SOLUTIONS TO END-OF-CHAPTER EXERCISES Answers to Thinking Critically Questions 1. Even if the overall demand for gasoline is inelastic‚ a revenue increase for Joe’s Gas-and-Go will occur only if the percentage increase in price is greater than the percentage decrease in quantity demanded. If Joe’s price increase is too large and Joe has other competitors who do not raise their prices‚ then it is possible that the percentage
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Microeconomics Week 4 Homework Chapter 6: #4 An explicit cost is the monetary payment a firm must make to an outsider to obtain a resource. An implicit cost is the monetary income a firm sacrifices when it uses a resource it owns rather than supplying the resource in the market. Say you owned a deli shop. Examples of explicit costs would be the salaries of your employees‚ the cost of the building (electricity‚ plumbing‚ etc.) and all the different ingredients and foodstuffs you need to
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fixed costs and variable costs would create a loss for some farmers. Despite having higher than normal variable costs‚ the farmers cannot raise their prices to cover their total costs because in perfect competition the seller’s price is set by the market equilibrium price‚ giving consumers the ultimate purchasing power. If one farmer did not do well in covering their total costs because of variable costs‚ they cannot recover their costs by increasing price and therefore are price takers. Farmers
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1 Total unity is best defined by which of the following The total satisfaction received from consuming a particular amount of a product 2 Which best express the law of diminishing marginal unity? The less of a product is consumed‚ the greater is the marginal utility of the product 3 Refer to the above table. What is the marginal utility of the fourth unit? 80 4 If the total utility is increasing‚ then marginal utility: May either be increasing or decreasing‚ but it must be greater than zero
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Supply and Demand Simulation MACRO AND MICROECONOMICS Two principles of macroeconomics are local income and housing market growth in the town of Atlantis. I chose these because if the people of Atlantis’ have low income‚ they will not be able to pay for apartments in the area that have high rent. This would hinder the housing and apartment complex growth in the area because there would be no economic support. Two principles of microeconomics are the choice to rent an apartment or buy a
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individuals‚ businesses‚ governments‚ and entire societies make as they cope with scarcity and the incentives that influence and reconcile those choices. Economics divides into Microeconomics and Macroeconomics. Microeconomics is the study of the choices that individuals and businesses make‚ the way these choices interact in markets‚ and the influence of governments. Macroeconomics is the study of the performance of the national economy and the global economy. Two Big Economic Questions • •
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PEPERIKSAAN AKHIR SEMESTER I SESI 2011/2012 (PRINCIPLES OF MICROECONOMICS) 1. Which of the following is the best example of a variable cost? A. Monthly payments for hired labour. B. Property tax payments. C. Monthly rent payments for a warehouse. D. Pension payments to retired workers. 2. Malik wants to start his own business. The business he wants to start will require that he purchase a factory that costs $400
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Returns to Scale‚ Isoquants‚ production function and Managerial decisions‚ Returns to scale. Cost Concepts – Fixed‚ Variable‚ Average‚ Marginal Costs‚ Short Run and Long Run Cost output relationship. Module: 4 (12 Hours) Introduction to Market Structures - Perfect Competition‚ Monopoly‚ Monopolistic Competition‚ Oligopoly. Pricing - Pricing policies in practice and pricing methods - Skimming and Penetration Price‚ Cost plus Pricing‚ Transfer Pricing‚ Target Rate of Return Pricing. Price Leadership
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Chapter 4 2. Why do economists use percentages rather than absolute amounts in measuring the responsiveness of consumers to changes in price? Why do economists use percentages rather than absolute amounts in measuring the responsiveness of consumers to changes in price? Economists use percentages rather than absolute amounts for two different reasons. The first reason for using percentages rather than absolute amounts has to do with the affect a particular amount can have on demand.
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