New version page

FSU ECO 2023 - Exam Study Guide

Documents in this Course
Chapter 1

Chapter 1

35 pages

Chapter 1

Chapter 1

27 pages

Chapter 1

Chapter 1

27 pages

Chapter 9

Chapter 9

16 pages

Exam 3

Exam 3

6 pages

Test 1

Test 1

8 pages

Chapter 1

Chapter 1

70 pages

Chapter 1

Chapter 1

70 pages

Chapter 1

Chapter 1

23 pages

Chapter 1

Chapter 1

14 pages

Exam 3

Exam 3

15 pages

Notes

Notes

1 pages

Chapter 1

Chapter 1

21 pages

Load more
Upgrade to remove ads

This preview shows page 1-2-24-25 out of 25 pages.

Save
View Full Document
Premium Document
Do you want full access? Go Premium and unlock all 25 pages.
Access to all documents
Download any document
Ad free experience
Premium Document
Do you want full access? Go Premium and unlock all 25 pages.
Access to all documents
Download any document
Ad free experience
Premium Document
Do you want full access? Go Premium and unlock all 25 pages.
Access to all documents
Download any document
Ad free experience
Premium Document
Do you want full access? Go Premium and unlock all 25 pages.
Access to all documents
Download any document
Ad free experience

Upgrade to remove ads
Unformatted text preview:

ECO2023: Exam Study GuideMaterial from 1st Exam:ECO2023: Exam Study GuideMaterial from 1st Exam:If price rises, what happens to the demand for a product?-It does not changeWhich of the following events would increase producer surplus?- Sellers' costs stay the same and the price of the good increasesA decrease in demand will cause?- A decrease in quantity suppliedSuppose Katie, Kendra, and Kristen each purchase a particular type of cell phone at a price of $80. Katie's willingness to pay was $100, Kendra's willingness to pay was $95, and Kristen's willingness to pay was $80. What is the combined consumer surplus for the three girls?- $35Suppose an economy produces only two goods, computers and TVs. If the economy operates at a point on its production possibilities curve, it can produce more computers only if- Resource owners will conserve vital resources for the future, particularly if they expect the resource to increase in valueWhich of the following about economic thinking is true?- Changes in personal costs and benefits will exert a predictable influence on the choices of people.Economists use the term ceteris paribus to indicate which of the following?-Other things are assumed to be constantHarry, a wheat farmer, is deciding whether or not to add fertilizer to his crops. If he adds 1 pound of fertilizer per acre, the value of the resulting crops rises from $80 to $100 per acre. According to marginal analysis, Harry should add fertilizer if it costs less than how much?-$20 per poundA local restaurant offers an "all you can eat" Sunday brunch for $12. Susan eats four servings but leaves half of a fifth helping uneaten. Why?-Her marginal value of food has fallen to zeroBecause information is costly to acquire, how does the cost change decision making?- People will rationally choose not to become fully informed when making decisions"There is no such thing as a free lunch." This statement best reflects which of the following statements?- An opportunity cost is always present when scarce resources are used to produce a good.Economics is primarily the study of- The allocation of scarce resources in an effort to satisfy wants that are virtually unlimited.What do individuals have a strong incentive to do when price is the rationing criterion?- Provide services to others in exchange for incomeCriteria for rationing goods and resources must be established due to which of the following?-Scarcity imposed by natureThe fallacy of composition is the fallacious view that-What is true for the individual will also be true for the group.What is meant by “scientific method”?- The dispassionate development and testing of theories about how the world works.Material From Exam #2Chapter 4The Labor Market- Wage: Price for employment- Employment: Quantity of labor - *Note that is works just like the market for goods, just with a different name for price (wage) and quantity (employment)- Supply goes up, employment goes up and wage goes down- Demand goes up, employment goes up and wage goes upLabor Demand- Firms demand labor- Labor demand curve is downward sloping because as wage decrease, firms will want to employ more peopleLabor Supply- Workers supply labor- Labor supply curve is upward sloping because as wage increase, people want to work moreChanges in Labor Demand- An increase in labor demand, labor demand curve shift right- A decrease in labor demand, labor demand curve shifts leftChanges in Labor Supply- Increase in labor supply, labor supply curve shifts right- Decrease in labor supply, labor supply curve shifts leftLinking the Markets- There is a close relationship between the demand for the products and demand for the resources used to make those productsPrice Floor- A price floor is a legally established minimum buyers must pay for a good or resource - A price floor above price equilibrium does creates a surplus- A price floor below price equilibrium does nothing- We were not going to have the price that low anyways so it doesn't effect anything- When it is below or “on the floor” it is okExample: Minimum Wage- Minimum wage is an example of a price floor- Raising the minimum wage increase excess labor supply (unemployment)Price Ceiling- A price ceiling is a legally established maximum price sellers can charge for a good or resource - Price ceiling below price equilibrium creates a shortage - Price ceiling above price equilibrium does nothing- When price ceiling is above it is okExample: Rent Control- Rent controls lead to shortages as well- 1. Black Markets: paying above the legal price and not having the ability to go police enforcement- 2. Decline in the supply of future rental housing: you dont have as much incentive to make a new rental complex at 400 then you would at 600- 3. Decline in the quality rental housing: when you get charged a lot for your apartment you have an incentive to keep it nice, but when its cheap you don’t- 4. Shortage of non-price methods of rationing: you have an incentive to rent the apartment to whoever will pay the most, you can be more selective, not with rent control- 5. Inefficient housing match ups: a new family needs to expand in living space but cannot because there isa shortage of bigger onesImpact of a Tax- A tax on a product will cause the supply curve to shift left by the amount of the tax- Raises the price that buyers must pay- Reduces the quantity sold- Creates government revenue- Reduces the mount sellers receive- Creates deadweight lossDeadweight Loss- The loss to society that results from the loss of gains to trades that did not occur because a tax was imposed - Void that used to have something but now doesn't have anythingTax Incidence/Tax Burden- The Tax Incidence is the way the burden of a tax is distributed among economic units- It DOES NOT depend on whom the tax is imposed- Doesn't matter if the buyer or seller has to pay the tax- It DOES depend on society- The burden of the tax will fall on those who are relatively inelastic- Sellers can raise the price a whole lot knowing they will still sell- If it is elastic, the sellers will raise the price but nobody would buy- Deadweight loss will lower if taxes are placed on goods that are inelastic- It is good because trade are still happening with value being madeThe Tax System- Average Tax Rate (ATR) is the percentage of income paid in taxes- ATR is equal to tax liability divided by taxable income - Make $100 Taxed $5 ATR = 5%- Make $200 Taxed $20 ATR= 5%- Make


View Full Document
Download Exam Study Guide
Our administrator received your request to download this document. We will send you the file to your email shortly.
Loading Unlocking...
Login

Join to view Exam Study Guide and access 3M+ class-specific study document.

or
We will never post anything without your permission.
Don't have an account?
Sign Up

Join to view Exam Study Guide 2 2 and access 3M+ class-specific study document.

or

By creating an account you agree to our Privacy Policy and Terms Of Use

Already a member?