Final Exam Guide
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This 6 page Study Guide was uploaded by Taryn manciu on Friday December 4, 2015. The Study Guide belongs to Econ201 at University of Oregon taught by Keaton Miller in Fall 2015. Since its upload, it has received 278 views.
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Date Created: 12/04/15
Final Exam Review uestions Although the final is accumulative I ve chosen only to include material information from after the first midterm My previous study guide will have some information from before the midterm 10 Due to new regulations grocery stores that would like to pay better wages in order to hire more workers and are prohibited from doing so is an example of what kind of price control and is it binding or not The government has instituted a legal minimum price of 325 per gallon for gasoline is an example of what kind of price control and is it binding or not The government prohibits gas stations from selling gasoline for more than 325 per gallon is an example of what kind of price control and is it binding or not When does an externality occur If an impact of an externality on a third party is beneficial it is called a positive ne gative externality An oncology lab has published its breakthrough in cancer researchquot is an example of what kind of externality The town where you lived has turned the publicity owned land next to your house into a park causing trash dropped by park visitors to pile up in your backyardquot is an example of what kind of externality lake has planted several trees in his backyard that increase the beauty of the neighborhood especially during the fall foliage seasonquot is an example of what kind of externality Your roommate Latoya has bought a bird that keeps you up in to the late hours of the night with all it s chirpingquot is an example of what kind of externality The government limits total carbondioxide emission by all factories to 120000 tons per decade Each individual factory is given the right to emit 100 tons of carbondioxide and factories may buy and sell these rights in a market placequot is an example of which of the following policies Command andcontrol Tradable Permit System Corrective Subsidy Corrective Tax 11 The government orders every factory to adopt a new tech which reduces carbondioxide emissions into the atmospherequot is an example of which of the following policies Commandandcontrol Tradable Permit System Corrective Subsidy Corrective Tax 12 The government agrees to reimburse all factories that purchase new emissionreducing tech in order to provide cleaner airquot is an example of which of the following policies Commandandcontrol Tradable Permit System Corrective Subsidy Corrective Tax 13 The government charges factories 250 for every ton of carbon dioxide they emitquot is an example of which of the following policies Commandand control Tradable Permit System Corrective Subsidy Corrective Tax 14 A new SUV that you use to drive all your friends around is an example of what kind of good 15 A large playground in a park is an example of what kind of good 16 A basketball in a gym that is open to the public is an example of what kind of good 17 Olivia enjoys eating hot Cheetos and drinking milk She is particular about her proportions though for every serving of hot Cheetos she eats she must drink exactly one glass of milk or vice versa In this scenario hot Cheetos and glasses of milk are examples of what 18 The following is an example of what kind of cost wholesale cost for hover boards that Charles pays the manufacturerquot Implicitexplicit 19 The following is an example of what kind of cost wages and bills that Charles paysquot implicitexplicit 20 The following is an example of what kind of cost rental income Charles could receive if he chose to rent out a showroomquot implicitexplicit 21 The following is an example of what kind of cost salary Charles could ear if he worked as a economistquot implicitexplicit 22 Does the following constitute for a competitive market or monopolistically competitive market Price equal to marginal cost price equals average total cost in long run identical products 23 Does the following constitute for a competitive market or monopolistically competitive market Product differentiation price equals average total cost in the long run many sellers free entry 24 Based on the graph below what can you infer They will make profittake a loss choose to continue to operate shut down and in the long run stay in business exit the market FARE Cents per mile Figure A Discrlmlnatory Firm AVC MC 0 2 4 6 8 10 12 14 16 18 20 DISTANCE Hundreds of miles 25 Based on the graph below what can you infer They will make profittake a loss choose to continue to operate shut down and in the long run stay in business exit the market FARE Cents per mile 50 45 40 35 30 25 20 15 10 Figure B Nondiscriminatory Firm AVC Answers 1 Price ceiling that is binding 2 Price oor that is binding 3 Price ceiling that is nonbinding 4 When a firm or person engages in an activity that affects the well being of a third party yet neither pays nor receives any compensation for that effect 5 Positive 6 Positive 7 Negative 8 Positive 9 Negative 10 Tradable permit system 11 Commandandcontrol Policy 12 Corrective Subsidy 13 Corrective Tax 14 Private good 15 Public good 16 Common source 17 Perfect Complements 18 Explicit 19 Explicit 20 Implicit 21 Implicit 22 Competitive Market 23 Monopolistically competitive market 24 Loss continue to operate exit the market 25 Positive profit continue to operate stay in business Terms to be familiar with Binding price ceiling price ceiling that is set below the equilibrium price Binding price oor a price oor that is set above the equilibrium price Price ceiling legal maximum on the price at which a good can be sold Price oor legal minimum on the price at which a good can be sold Negative externality a cost that a third party incurs from someone else s economic activity Positive externality a benefit that a third party receives from someone else s economic activity Commandandcontrol policy remedy an externality by legally limiting a specific behavior by a specific entity Tradable Permit System remedies an externality by regulating general behavior Corrective Subsidy encouraging behavior that has positive effects Corrective Tax encourages behavior that has positive external effects No excludable good it is not possible to prevent an individual from using the good Rival consumption of the good by one person decreases the ability of other people to consume the good Private good a good that is rival in consumption and excludable Public good a good that is both nonrival in consumption and nonexcludable Common resource a good that is rival in consumption and nonexcludable Club good a goof that is nonrival in consumption and excludable Perfect complements a person who cares about consuming two goods in a specific proportion Perfect substitutes the marginal rate of substitution between two goods is constant Implicit costs refers to all costs the firms incur in production that do not involve any monetary transactions Explicit costs refers to all costs that require an outlay of money by the firm Rival in consumption if I consume the good you cant Excludable people can be prevented from consuming the good
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