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Universities » Blinn College (BC) » Economics - Economics » Microeconomics 2 - Intermediate » Flash Cards

Eco- Test 2 - Flashcards

Flashcard Deck Information

Class:	ECON - Microeconomics 2 - Intermediate
Subject:	Economics
University:	Blinn College
Term:	--

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CORRECT

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One disadvantage of a sole proprietorship as a form of business organization is that?

Owners of sole proprietorships can lose all their personal assests if the business is sued or fails.

Click Card to flip

Brian is the sole proprietor ownder of Long Voyage Software. He started the business with an initial investment of $80,000. A faulty map causes one customer to get hopelessly lost. after her rescue and recuperation, she sues Long Voyage for $5,000,000. which of the following is true?

if $5,000,000 is awarded, brian is personally responsible for paying all of it.

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all of the following are advantages of partnerships except one. which one is the exception?

Their liability is limited by each partners share of the business

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stockholders share in the profits of a corporation

in proportion to their ownership of stock

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You own stockworth an estimated $1 million in the LPL corporation. in addition, you have personal assests worth another $2 mllion. LPL becomes insolvent, with debts exceeding assests by $15 million. your personal wealth will decline by?

$1 million

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in general, elasticity measures

the responsiveness of decision makers to changes in prices, income or other variables

Click Card to flip

price elasticity of demand is defined as

the percentage change in quantity demanded divided by the percentage change in price

Click Card to flip

the midpoint formula of elasticity solves the problem of

which price or quantity to use as a base for calculating percentage changes

Click Card to flip

demand is said to be elastic whenever

price elasticity has an absolute valur greater than 1

Click Card to flip

when demand is price elastic, total revenue is

a directly related quantity demand

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which of the following describes a situation in which demand mus be elastic?

total revenue decreases when the price of pencils rises

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an addicts demand curve for heroin is likely to be

highly inelastic

(no matter how expensive it gets they will still buy it)

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the demand for flounder(a specific fish) is

more elastic than the demand for fish because there are more substitutes for flounder than for fish in general

Click Card to flip

if price increases from $45 to $55, the market quantity supplied increases from 20 units per week to 30 units per week. the price elasticity of supply is

2.0

Es= %changeQs/%changeP

%change=difference/average

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goods with an income elasticity of demand greater than 1 are called

Luxuries

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if a good is inferior, then the income elasticity of demand for that good is?

negative

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suppose the cross-price elasticity of demand between quinces and muskmelons is 5. which of the following must be true?

quinces and muskmelons are substitutes

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a curve representing combinations of two goods that yield equal totaly utility is an

indifference curve

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a consumers indifference map is a depiction of

her preferences

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economists assume peoples tastes are

relatively stable over time

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the law of diminishing marginal utility states that

marginal utility falls as more of a good is consumed, other things constant

Click Card to flip

which of the following illustrates the law of diminishing marginal utility?

the marginal utility of dianes second coke is greater than the marginal utility of her third coke, other things contsant

Click Card to flip

newspaper vending machines illustrate that newspaper publishers believe

the marginal untility of a second identical newspaper is zero or less.

(MU does not decrease much between the first and second unit)

Click Card to flip

if the marginal utility is positive then total utility is

increasing

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if a good is offered to you free of charge, then you

stop consuming it when its marginal utility equal 0

Click Card to flip

if a consumer allocates income between good A and good B, total utility is maximized when

marginal utility of A/price of A = marginal utility of B/price of B

Click Card to flip

assume that you allocate you income to calzones and juice and that you have not yet spent your entire budget. if the marginal utility of a fourth calzone is 100 and the marginal utility of a third glass of juice is 50, you would

consider the relative prices of calzones and juice before deciding that to consume next

Click Card to flip

suppose that fernando allocates his lunch money between pizza and coke. a coke has a price of $1 and a slice of pizza has a price of $1.50. the marginal utility of the last slice of pizza fernando ate today was 30, and the marginal utility of his last coke was 25. fernando spend all of his lunch money from this information we can conclude that

fernandos total utility would have been higher if he had purchased more coke and less pizza

Click Card to flip

if by purchasing a little more milk and a little less ice cream you could increase you total utility,

the MU/P of milk must be greater than that of ice cream

Click Card to flip

firms want to maximize profit because

it is the entrepreneurs source of income and it improves the firms chances of survival

Click Card to flip

which of the following is not an explicit cost?

the value of the firm owners time

-explicit cost is something you would write a check for

Click Card to flip

accounting profit equals

economic profit plus implicit costs

Click Card to flip

inputs that can be increased or decreased in the short run are called

variable inputs

Click Card to flip

which of the following is most likely to be a fixed resource for Pauls contry fresh pies, inc?

ovens

Click Card to flip

the short run is a period of time

during which atleast one resource is fixed

Click Card to flip

the additional output obtained by adding another unit of labor to the production process is called

the marginal product of labor

Click Card to flip

the law of diminishing returns explains why

shortrun MC and AVC curves are U-shaped

Click Card to flip

when diminishing marginal returns set in, marginal product is

positive and decreasing

Click Card to flip

which of the following is a fixed cose of driving a car?

license plates

Click Card to flip

what is the relationship between marginal cost and marginal product

when marginal product increases, marginal cost falls.

Click Card to flip

the toys-r-danger-us toy company can produce 500 water pistols for a total cost of $1,400. if the variable cost of producing 500 water pistols is $1,300, then

a fixed cost much be $100

Click Card to flip

suppose guild produces 5,000 quiatrs per year. its average total cost is $90, and its fixed cost is $250,000. what is its variable cost?

$200,000

Click Card to flip

the average total cost curve and the average variable cost curve

are closer together as output increases, with average variable cost reaching its minimum level first

Click Card to flip

if marginal cost exceeds average variable cost,

average variable cost is negative

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One disadvantage of a sole proprietorship as a form of business organization is that?	Owners of sole proprietorships can lose all their personal assests if the business is sued or fails.
Brian is the sole proprietor ownder of Long Voyage Software. He started the business with an initial investment of $80,000. A faulty map causes one customer to get hopelessly lost. after her rescue and recuperation, she sues Long Voyage for $5,000,000. which of the following is true?	if $5,000,000 is awarded, brian is personally responsible for paying all of it.
all of the following are advantages of partnerships except one. which one is the exception?	Their liability is limited by each partners share of the business
stockholders share in the profits of a corporation	in proportion to their ownership of stock

Generated by

Koofers.com

You own stockworth an estimated $1 million in the LPL corporation. in addition, you have personal assests worth another $2 mllion. LPL becomes insolvent, with debts exceeding assests by $15 million. your personal wealth will decline by?	$1 million
in general, elasticity measures	the responsiveness of decision makers to changes in prices, income or other variables
price elasticity of demand is defined as	the percentage change in quantity demanded divided by the percentage change in price
the midpoint formula of elasticity solves the problem of	which price or quantity to use as a base for calculating percentage changes

Generated by

Koofers.com

demand is said to be elastic whenever	price elasticity has an absolute valur greater than 1
when demand is price elastic, total revenue is	a directly related quantity demand
which of the following describes a situation in which demand mus be elastic?	total revenue decreases when the price of pencils rises
an addicts demand curve for heroin is likely to be	highly inelastic (no matter how expensive it gets they will still buy it)

Generated by

Koofers.com

the demand for flounder(a specific fish) is	more elastic than the demand for fish because there are more substitutes for flounder than for fish in general
if price increases from $45 to $55, the market quantity supplied increases from 20 units per week to 30 units per week. the price elasticity of supply is	2.0 Es= %changeQs/%changeP %change=difference/average
goods with an income elasticity of demand greater than 1 are called	Luxuries
if a good is inferior, then the income elasticity of demand for that good is?	negative

Generated by

Koofers.com

suppose the cross-price elasticity of demand between quinces and muskmelons is 5. which of the following must be true?	quinces and muskmelons are substitutes
a curve representing combinations of two goods that yield equal totaly utility is an	indifference curve
a consumers indifference map is a depiction of	her preferences
economists assume peoples tastes are	relatively stable over time

Generated by

Koofers.com

the law of diminishing marginal utility states that	marginal utility falls as more of a good is consumed, other things constant
which of the following illustrates the law of diminishing marginal utility?	the marginal utility of dianes second coke is greater than the marginal utility of her third coke, other things contsant
newspaper vending machines illustrate that newspaper publishers believe	the marginal untility of a second identical newspaper is zero or less. (MU does not decrease much between the first and second unit)
if the marginal utility is positive then total utility is	increasing

Generated by

Koofers.com

if a good is offered to you free of charge, then you	stop consuming it when its marginal utility equal 0
if a consumer allocates income between good A and good B, total utility is maximized when	marginal utility of A/price of A = marginal utility of B/price of B
assume that you allocate you income to calzones and juice and that you have not yet spent your entire budget. if the marginal utility of a fourth calzone is 100 and the marginal utility of a third glass of juice is 50, you would	consider the relative prices of calzones and juice before deciding that to consume next
suppose that fernando allocates his lunch money between pizza and coke. a coke has a price of $1 and a slice of pizza has a price of $1.50. the marginal utility of the last slice of pizza fernando ate today was 30, and the marginal utility of his last coke was 25. fernando spend all of his lunch money from this information we can conclude that	fernandos total utility would have been higher if he had purchased more coke and less pizza

Generated by

Koofers.com

if by purchasing a little more milk and a little less ice cream you could increase you total utility,	the MU/P of milk must be greater than that of ice cream
firms want to maximize profit because	it is the entrepreneurs source of income and it improves the firms chances of survival
which of the following is not an explicit cost?	the value of the firm owners time -explicit cost is something you would write a check for
accounting profit equals	economic profit plus implicit costs

Generated by

Koofers.com

inputs that can be increased or decreased in the short run are called	variable inputs
which of the following is most likely to be a fixed resource for Pauls contry fresh pies, inc?	ovens
the short run is a period of time	during which atleast one resource is fixed
the additional output obtained by adding another unit of labor to the production process is called	the marginal product of labor

Generated by

Koofers.com

the law of diminishing returns explains why	shortrun MC and AVC curves are U-shaped
when diminishing marginal returns set in, marginal product is	positive and decreasing
which of the following is a fixed cose of driving a car?	license plates
what is the relationship between marginal cost and marginal product	when marginal product increases, marginal cost falls.

Generated by

Koofers.com

the toys-r-danger-us toy company can produce 500 water pistols for a total cost of $1,400. if the variable cost of producing 500 water pistols is $1,300, then	a fixed cost much be $100
suppose guild produces 5,000 quiatrs per year. its average total cost is $90, and its fixed cost is $250,000. what is its variable cost?	$200,000
the average total cost curve and the average variable cost curve	are closer together as output increases, with average variable cost reaching its minimum level first
if marginal cost exceeds average variable cost,	average variable cost is negative

Generated by

Koofers.com

List View: Terms & Definitions

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	One disadvantage of a sole proprietorship as a form of business organization is that?	Owners of sole proprietorships can lose all their personal assests if the business is sued or fails.
	Brian is the sole proprietor ownder of Long Voyage Software. He started the business with an initial investment of $80,000. A faulty map causes one customer to get hopelessly lost. after her rescue and recuperation, she sues Long Voyage for $5,000,000. which of the following is true?	if $5,000,000 is awarded, brian is personally responsible for paying all of it.
	all of the following are advantages of partnerships except one. which one is the exception?	Their liability is limited by each partners share of the business
	stockholders share in the profits of a corporation	in proportion to their ownership of stock
	You own stockworth an estimated $1 million in the LPL corporation. in addition, you have personal assests worth another $2 mllion. LPL becomes insolvent, with debts exceeding assests by $15 million. your personal wealth will decline by?	$1 million
	in general, elasticity measures	the responsiveness of decision makers to changes in prices, income or other variables
	price elasticity of demand is defined as	the percentage change in quantity demanded divided by the percentage change in price
	the midpoint formula of elasticity solves the problem of	which price or quantity to use as a base for calculating percentage changes
	demand is said to be elastic whenever	price elasticity has an absolute valur greater than 1
	when demand is price elastic, total revenue is	a directly related quantity demand
	which of the following describes a situation in which demand mus be elastic?	total revenue decreases when the price of pencils rises
	an addicts demand curve for heroin is likely to be	highly inelastic (no matter how expensive it gets they will still buy it)
	the demand for flounder(a specific fish) is	more elastic than the demand for fish because there are more substitutes for flounder than for fish in general
	if price increases from $45 to $55, the market quantity supplied increases from 20 units per week to 30 units per week. the price elasticity of supply is	2.0 Es= %changeQs/%changeP %change=difference/average
	goods with an income elasticity of demand greater than 1 are called	Luxuries
	if a good is inferior, then the income elasticity of demand for that good is?	negative
	suppose the cross-price elasticity of demand between quinces and muskmelons is 5. which of the following must be true?	quinces and muskmelons are substitutes
	a curve representing combinations of two goods that yield equal totaly utility is an	indifference curve
	a consumers indifference map is a depiction of	her preferences
	economists assume peoples tastes are	relatively stable over time
	the law of diminishing marginal utility states that	marginal utility falls as more of a good is consumed, other things constant
	which of the following illustrates the law of diminishing marginal utility?	the marginal utility of dianes second coke is greater than the marginal utility of her third coke, other things contsant
	newspaper vending machines illustrate that newspaper publishers believe	the marginal untility of a second identical newspaper is zero or less. (MU does not decrease much between the first and second unit)
	if the marginal utility is positive then total utility is	increasing
	if a good is offered to you free of charge, then you	stop consuming it when its marginal utility equal 0
	if a consumer allocates income between good A and good B, total utility is maximized when	marginal utility of A/price of A = marginal utility of B/price of B
	assume that you allocate you income to calzones and juice and that you have not yet spent your entire budget. if the marginal utility of a fourth calzone is 100 and the marginal utility of a third glass of juice is 50, you would	consider the relative prices of calzones and juice before deciding that to consume next
	suppose that fernando allocates his lunch money between pizza and coke. a coke has a price of $1 and a slice of pizza has a price of $1.50. the marginal utility of the last slice of pizza fernando ate today was 30, and the marginal utility of his last coke was 25. fernando spend all of his lunch money from this information we can conclude that	fernandos total utility would have been higher if he had purchased more coke and less pizza
	if by purchasing a little more milk and a little less ice cream you could increase you total utility,	the MU/P of milk must be greater than that of ice cream
	firms want to maximize profit because	it is the entrepreneurs source of income and it improves the firms chances of survival
	which of the following is not an explicit cost?	the value of the firm owners time -explicit cost is something you would write a check for
	accounting profit equals	economic profit plus implicit costs
	inputs that can be increased or decreased in the short run are called	variable inputs
	which of the following is most likely to be a fixed resource for Pauls contry fresh pies, inc?	ovens
	the short run is a period of time	during which atleast one resource is fixed
	the additional output obtained by adding another unit of labor to the production process is called	the marginal product of labor
	the law of diminishing returns explains why	shortrun MC and AVC curves are U-shaped
	when diminishing marginal returns set in, marginal product is	positive and decreasing
	which of the following is a fixed cose of driving a car?	license plates
	what is the relationship between marginal cost and marginal product	when marginal product increases, marginal cost falls.
	the toys-r-danger-us toy company can produce 500 water pistols for a total cost of $1,400. if the variable cost of producing 500 water pistols is $1,300, then	a fixed cost much be $100
	suppose guild produces 5,000 quiatrs per year. its average total cost is $90, and its fixed cost is $250,000. what is its variable cost?	$200,000
	the average total cost curve and the average variable cost curve	are closer together as output increases, with average variable cost reaching its minimum level first
	if marginal cost exceeds average variable cost,	average variable cost is negative

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