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Microeconomics
Which one of the following statements about the consumption function is incorrect?
a) Consumption spending consists of autonomous consumption and induced consumption.
b) Autonomous consumption consists largely of spending on durable consumer goods.
c) Autonomous consumption is independent of the level of income.
d) As income increases, the level of induced consumption increases.
a) Consumption spending consists of autonomous consumption and induced consumption.
b) Autonomous consumption consists largely of spending on durable consumer goods.
c) Autonomous consumption is independent of the level of income.
d) As income increases, the level of induced consumption increases.
Microeconomics
If two countries have differing opportunity costs of production for two goods, then:
a) Each country should specialise in the good for which it has a higher opportunity cost of production.
b) Only the country with an absolute advantage in the production of both goods stands to gain from trade.
c) Each country should purchase inputs from the other country in order to gain an absolute advantage.
d) Each country should specialise in the production of the good for which it has a relative advantage.
a) Each country should specialise in the good for which it has a higher opportunity cost of production.
b) Only the country with an absolute advantage in the production of both goods stands to gain from trade.
c) Each country should purchase inputs from the other country in order to gain an absolute advantage.
d) Each country should specialise in the production of the good for which it has a relative advantage.
Microeconomics
The basic economic problems faced by a socialist economy are:
a) Different from those faced by a mixed economy.
b) Different from those faced by a market economy, but the same as those faced by a mixed economy.
c) Similar to those faced by both a market and a mixed economy.
d) Different from those faced by a market economy.
a) Different from those faced by a mixed economy.
b) Different from those faced by a market economy, but the same as those faced by a mixed economy.
c) Similar to those faced by both a market and a mixed economy.
d) Different from those faced by a market economy.
Microeconomics
1) What are the Fixed and Variable Costs for a car wash business?
2) Is it likely to experience economies of scale? Answer both questions.
2) Is it likely to experience economies of scale? Answer both questions.
Microeconomics
You are a writer and suppose you decided to take your $100,000 to sell your books over the internet.
1) What will be your fixed and variable costs?
2) Show how your business can take advantage of economies of scale. Answer both questions.
1) What will be your fixed and variable costs?
2) Show how your business can take advantage of economies of scale. Answer both questions.
Microeconomics
1) How can your time be incorporated into the theory of consumer behavior? Explain the following comment: “Want to make millions of dollars? Devise a product that saves Americans lots of time.”
2) Explain the water-diamond paradox. Why is water, which is essential to life, so cheap, while diamonds, which are not at all essential, are so expensive?
2) Explain the water-diamond paradox. Why is water, which is essential to life, so cheap, while diamonds, which are not at all essential, are so expensive?
Microeconomics
1) What effect would a rule stating that university students must live in university dormitories have on the price elasticity of demand for dormitory space?
2) What impact might this in turn have on room rates?
3) When would you want to own a business that sells products that face elastic demand? Explain.
2) What impact might this in turn have on room rates?
3) When would you want to own a business that sells products that face elastic demand? Explain.
Microeconomics
What effect would a rule stating that university students must live in university dormitories have on the price elasticity of demand for dormitory space?
Microeconomics
3 Explain SEVEN (7) conditions necessary for a perfectly competitive market to exist.
Microeconomics
Consider a market with a price ceiling that is binding. With the aid of a diagram, if the price ceiling is lowered, what will happen to consumer surplus, produce surplus and deadweight loss?
