Essay about Economics Question and Answers - 1254 Words

Chapter 1: The Power of Markets What are the two basic assumptions that economists make about individuals and firms? Economists have two basic assumptions which keeps the economy in check. One is that people try to make themselves as versatile as possible maximizing their overall potential. The other is that a firm would do what it needs to make the most profit possible. What is the role and significance of prices in the market economy? Prices in a market economy are very important. Price allows us to give out goods appropriately to those who are able to pay. What’s so great about a market economy anyway? Market economies are great for many reasons. A market economy makes our lives better through competition either through lowering†¦show more content†¦Chapter 4: Government and the Economy II What are the main reasons why government should take only a limited role in a market economy? There are many reasons why government should have a light touch in market economies. Some government programs may be to costly and in the end backfire if not planned through thoroughly or may of even been thought up by corrupt politicians. The government also makes the struggle as a poor family harder to bare as taxes are more often then not, in the government, in favor of keeping the money where it is. Chapter 5: Economics of Information Basic economic models assume that all parties have â€Å"perfect information.† How does â€Å"informational asymmetry† undermine our market economy? Information asymmetry is great for some and awful for others. It also leads to rational and irrational discrimination. For example, it could lead to hiring a male over female, a Caucasian over African American, and other discriminatory decisions, in these cases are understandable.(Women have maternity leave; African Americans are 28% more likely to of gone to jail.) Chapter 6: Productivity and Human Capital After reading Whelan’s argument, do you agree that Bill Gates should be so much richer than you? Why? Not Mentioned. Evaluate the following statement from pg. 113: â€Å"We should not care about the gap between the rich and the poor as long as everyone is living better.† I believe this statement has one solidShow MoreRelatedQuestions and Answers on Economics1436 Words   |  6 Pagesï » ¿Question 1 Economics and Alcohol Abuse - When economists think about a product in general, they think supply and demand. If there is no demand for the product, then there will likely be a smaller supply. If the item is rare and there is a high demand, then the product will be expensive. One political and economic idea about reducing alcohol abuse is to target the youth market where alcohol is prevalent, if illegal. The youth market, that is 14-17 years of age, are more likely to be more affectedRead MoreQuestions And Answers On Economics And Economics : Questions On The Financial Market1030 Words   |  5 Pagesclass to support your answer. GDP is not a measure of well-being, it is a number. As Whitehouse pointed out, â€Å"for measuring the success of policy, GDP is far from ideal.† He furthered his claim by giving a rather radical scenario of everyone working 120 hours and its impact on GDP. If all you use is GDP to make policies you will end up in a world that forgoes any happiness for a dollar. GDP does partially coincide with the standard of living, but its not the singular answer. Whitehouse wrote aboutRead MoreBusiness Economics: Questions and Answers968 Words   |  4 Pagesconsolidated financial statements is restricted to the amount by which the cost of the investment is more or less than the book value of the net assets acquired. Noncontrolling interest in net assets is unaffected by such writeups or writedowns. The economic unit concept supports the writeup or writedown of the net assets of the subsidiary by an amount equal to the entire difference between the fair value and the book value of the net assets on the date of acquisition. In this case, noncontrolling interestRead MoreSome questions with answers managerial economics5554 Words   |  23 PagesManagerial Economics Q.1.0) For each of the following events, assume that either the supply curve or the demand curve (not both shifted). Explain which curve shifted and indicate the direction of the shift. a.From 1950 to 1979 the wages paid to fruit pickers increased while the number of fruit pickers employed decreased. b.During the same period the price of radio sets declined, while the number of radio sets purchased increased. c.Housing prices are rising but more houses are sold. d.AustralianRead MoreEssay about Marginal Cost and Correct Answer1404 Words   |  6 PagesQuestion 1 5 out of 5 points Economic profit is defined as the difference between revenue and ____. Answer Selected Answer: total economic cost Correct Answer: total economic cost Question 2 5 out of 5 points Recently, the American Medical Association changed its recommendations on the frequency of pap-smear exams for women. The new frequency recommendation was designed to address the family histories of the patients. The optimal frequency should be where the marginal benefit of anRead MoreEssay about Econ Ch.1728 Words   |  3 PagesLimits, Alternatives, and Choice Multiple Choice [QUESTION] 1. Economics is a social science that studies how individuals, institutions, and society may: A) Expand the amount of productive resources available to them B) Attain a minimum level of unemployment C) Best use scarce resources to achieve the maximum satisfaction of economic wants D) Reduce the prices of goods and services to consumers Answer: C Topic: The Economic Perspective Difficulty: 2 Medium Learning Objective: 01-01 Read MoreEconomic Questions Essay645 Words   |  3 PagesEconomic Questions â€Å"Why would a developing nation answer the three basic economic questions differently than a country like the United States?† There are three basic economic questions that each and every society must answer to. The way that the society answers to these questions shape and define their economic system. The first economic question that they must answer to is â€Å"What Goods and Services Should We Produce?† The second question is â€Å"How Should We Produce Goods andRead MoreAnalysis Of Ibn Haldun And Adam Smith And David Hume And Karl Marx852 Words   |  4 Pages It is one of the hardest questions and unfortunately still unknown in the living world in despite of a myriad of academic studies. Many scholars from all around world asked this magic question in different time over the history. From Ibn Haldun and Adam Smith to David Hume and Karl Marx, from Alfred Marshall and Robert Solow to Paul Romer and Daron Acemoglu, there have been so many prominent and distinguished scholars who tried to find an answer to this question in order to understand the worldRead MoreEco 550 Quiz 1 (2013) Essay examples691 Words   |  3 PagesQuestion 1 3 out of 3 points To reduce Agency Problems, executive compensation should be designed to: Correct Answer: create incentives so that managers act like owners of the firm. Question 2 3 out of 3 points In the shareholder wealth maximization model, the value of a firms stock is equal to the present value of all expected future ____ discounted at the stockholders required rate of return. Correct Answer: profits (cash flows) Question 3 3 out of 3 points TheRead MoreEconomic: Economics and Correct Answer824 Words   |  4 PagesLinh Question 1 10 out of 10 points A monopoly will usually produce Answer Selected Answer: where its demand curve is elastic. Correct Answer: where its demand curve is elastic. Question 2 10 out of 10 points Suppose a firm is currently maximizing its profits (i.e., following the MR=MC rule). Assuming that it wants to continue maximizing its profits, if its fixed costs increase, it should Answer Selected Answer: maintain the same price. Correct Answer: maintain