ECO 365T: Principles of Microeconomics – Full Course Solution

ECO 365T: Entire Course

ECO 365T Week 1 Discussion – Limits, Alternatives, Choices, and Market System

Post a total of 3 substantive responses over 2 separate days for full participation. This includes your initial post and 2 replies to classmates or your faculty member.

Due Day 3

Respond to the following in a minimum of 175 words:

In your own words, define scarcity in economics, and provide an example. What is the impact of technology and innovation on scarcity?

Due Day 7

Post 2 replies to classmates or your faculty member. Be constructive and professional.

ECO 365T Week 2 Discussion – Supply, Demand, Equilibrium, and Market Failures

Post a total of 3 substantive responses over 2 separate days for full participation. This includes your initial post and 2 replies to classmates or your faculty member.

Due Day 3

Respond to the following in a minimum of 175 words:

• How has the supply and demand for a specific product affected your or your family’s purchasing decisions?
• Which variables most affect your decision to either buy or not buy a good or service?

Due Day 7

Post 2 replies to classmates or your faculty member. Be constructive and professional.

ECO 365T Week 3 Discussion – Public Goods and Elasticity

Post a total of 3 substantive responses over 2 separate days for full participation. This includes your initial post and 2 replies to classmates or your faculty member.

Due Day 3

Respond to the following in a minimum of 175 words:

• How do you think income elasticity affects a normal good versus an inferior good? Provide an example.

Due Day 7

Post 2 replies to classmates or your faculty member. Be constructive and professional.

ECO 365T Week 4 Discussion – Utility Maximization and Behavioral Economics

Post a total of 3 substantive responses over 2 separate days for full participation. This includes your initial post and 2 replies to classmates or your faculty member.

Due Day 3

Respond to the following in a minimum of 175 words:

• Discuss how the utility-maximization model helps highlight the income and substitution effects of a price change. Provide an example.

Due Day 7

Post 2 replies to classmates or your faculty member. Be constructive and professional.

ECO 365T Week 5 Discussion – Businesses and the Costs of Production

Post a total of 3 substantive responses over 2 separate days for full participation. This includes your initial post and 2 replies to classmates or your faculty member.

Due Day 3

Respond to the following in a minimum of 175 words:

• Differentiate between explicit and implicit costs.
• Explain the importance of considering both types of costs to make economic decision.
• Provide examples of at least 2 explicit costs and 2 implicit costs.

Due Day 7

Post 2 replies to classmates or your faculty member. Be constructive and professional.

ECO 365 Week 1 Economic Definitions Worksheet

Economics – Definitions

Complete the following.  Include your references using APA formatting.

Write the definition for each of the following:

1. Law of Demand
2. Law of Supply
3. Price Elasticity of Demand
4. Macroeconomics
5. Microeconomics

Identify 2 Products whose demand is price elastic.

Identify 2 products whose demand is price inelastic.

Which of the following graphs best demonstrates the law of demand?

1. I
2. II
3. III
4. IV

Which of the following graphs best demonstrates the law of supply?

1. I
2. II
3. III
4. IV

ECO 365 Week 2 Microeconomics and the Laws of Supply and Demand

Complete the Supply and Demand Simulation located on the student website.

-OR-

Watch the Khan Academy Video “Changes in Market Equilibrium” located in the Week 1 Khan Academy Videos.

Write a 1,050- to 1,400-word paper summarizing the content of the simulation and address the following: 

• Identify two microeconomics and two macroeconomics principles or concepts from the simulation/video.
• Explain why you have categorized these selected principles or concepts as microeconomics or macroeconomics.
• Identify at least one shift of the supply curve and one shift of the demand curve in the simulation/video.
• Explain what causes the shifts, and how each shift affects the price, quantity, and decision making.

Include responses to the following:

• How might you apply what you learned about supply and demand from the simulation/video to your workplace or your understanding of a real-world product with which you are familiar?
• How do the concepts of microeconomics help you understand the factors that affect shifts in supply and demand on equilibrium price and quantity?
• How do the concepts of macroeconomics help you understand the factors that affect shifts in supply and demand on the equilibrium price and quantity?
• How does the price elasticity of demand affect a consumer’s purchasing and the firm’s pricing strategy as it relates to the simulation/video?

Cite a minimum of 3 peer reviewed sources.

Click the Assignment Files tab to submit your assignment.

ECO 365 Week 3 Current Market Conditions Competitive Analysis

Imagine you are part of a strategic planning group at a large corporation that is considering developing a new proposed product. The marketing director has asked your team to do a competitive market analysis to determine the product’s potential success. The analysis will focus on your primary competitor in the product’s market.

Select a potential competitive organization and a product in that organization.

Write a 1,400- to 1,750-word paper analyzing the current market conditions. Address the following topics:

• A short history of the organization and a description of their product
• Factors that affect demand, supply, and prices in the market in which the competitor organization operates
• Define the market for your chosen product, including an analysis of its competitors, and customers.
• Any issues or opportunities your organization faces that affect its competitiveness and long-term profitability with regards to your product: This may include but is not limited to the following elements:
  • Price elasticity of demand
  • Technological innovation
  • The relationship between the amount of labor & capital employed and the law of diminishing marginal productivity
  • Cost structure
• Factors affecting variable costs, including productivity and others that change the supply of and demand for labor
• Factors affecting fixed costs

Make recommendations on how your organization can maximize their profit-making potential and successfully compete in the new market. Consider the effect your recommendations may have on marginal revenues and costs.

Use a minimum of 3 peer reviewed sources.

Format your paper consistent with APA guidelines.

Click the Assignment Files tab to submit your assignment.

ECO 365 Week 4 Differentiating Between Market Structures

You will apply important microeconomics concepts toward the competitive strategies of an organization that operates in an industry of your choice. You will evaluate the differences between market structures and identify a group of competitive strategies consistent with the market structure that best aligns with the market in which the organization competes. You will assess how the market structure positively and negatively affects the organization’s ability to earn an economic profit over time and evaluate the effectiveness of the organization’s competitive strategies.

Select an industry. Identify an organization in that industry. Your selected organization must be submitted for instructor approval.

Identify the market structure in which this organization competes. Clearly indicate why the market structure was decided upon and how this market structure differentiates from the other alternatives.

Describe the level of competition the organization will face if under each of the following market structures:

• Oligopoly
• Perfect competition
• Monopoly
• Monopolistic competition

Identify three or more competitive strategies of your choice that may be used by the organization to maximize its profits over the long run. Evaluate the effectiveness of these strategies in the market structure you identified. Consider the following:

• Expected changes in supply and demand
• Price elasticity of demand
• Market structure
• Government regulations

Make recommendations related to the strategies the organization might consider to maximize its profits and consider the following:

• What are the ethical implications of these strategies?
• Does this strategy align with the organization’s current values?
• Does this strategy align with your own values?

Cite a minimum of 3 peer reviewed sources.

Select one of the following two assignment options:

Option 1: Paper

Write a 1,400- to 1,750-word paper.

Format consistent with APA guidelines.

Clickthe Assignment Files tab to submit your assignment.

Option 2: PowerPoint® Presentation:

Create a 15- to 20-slide Microsoft® PowerPoint® presentation including detailed speaker notes.

Click the Assignment Files tab to submit your assignment.

Read more on; 17 Best Business Administration Courses Offered at University of Phoenix.

ECO 365 Week 5 Competitive Strategies and Government Policies

Select an organization the team is familiar with and which has a global presence.

Management in the team’s organization has recognized the effect of changes in the real-world competitive environment and government policies on other industries and anticipates similar events occurring in their industry, so they ask you for a report considering the following points.

Create a 12- to 16-slide PowerPoint® presentation in which you describe how each of the following are or potentially will affect your industry or one with which you are familiar:

• The impact of new companies entering the market, mergers, globalization on the market structure, price elasticity of demand, pricing, and the sustainability of profits
• The impact of current and expected government policies and regulations, including taxes and regulations in place to address issues related to externalities
• The effect of global competition on the decisions made by management with regards to change in labor demand, supply, relations with unions, and rules and regulations in your chosen industry

Recommend how the organization you chose may respond to each of the previous points.

Cite a minimum of 3 peer reviewed sources.

Click the Assignment Files tab to submit your assignment.

ECO 365 Week 5 Final Exam

Question 1

​Penelope has recently started a printing business in Duluth. She had to pay a fee to obtain a trade license from the Minnesota government and took a loan from the local bank to purchase inkjet printers, laser printers, and screen printers. She employs 20 workers who are paid a wage of $30 per hour. She is also a trained ballet dancer who used to earn an average of $50,000 a year. Penelope’s implicit cost of running the business is:

​$72,000 per annum.

​the amount she used to earn as a ballet dancer.

​the interest she has to pay on the loan.

​the fee paid to the government.

Question 2

Suppose Timothy consumes two goods, soda and chips. The slope of his indifference curve for these two goods reflects:​

​the rate at which he is willing to substitute one good for the other.

​the total utility he gets from the consumption of the two goods.

​the relative price of soda.

​the relative price of chips.

Question 3

​Which of the following is an example of a negative externality?

​Christina accepting a payment in cash rather than in check for her laundry services

​Smith reducing the consumption of imported wine following an increase in the price of imported wine

​Tom playing music loudly in his room, disturbing his roommate who has an exam the next day

​Phoebe refusing to contribute to the building of a children’s park in her neighborhood

Question 4

The exhibit given below shows the demand curve for and the supply curve of laptops, D and S1. The government decides to impose a price ceiling on the price of laptops. At the same time, the price of inverter boards that provide power to backlight lamps inside laptop screens increases. Identify the correct statement.

​At a price ceiling of P1, the quantity demand and supplied in the market will be Q2.

​A price ceiling above P3 will eliminate shortage in the market.

​The government should set the price ceiling at P1 to eliminate shortage.

​A price of P2 will be binding in this market.

Question 5

Which of the following reflects the law of demand?​

​John purchasing a bigger apartment after an increase in his salary

​Jimmy’s demand for donuts decreasing from 4 per week to 2 per week after its price decreased from $1 to $0.5 per donut

​Jacques purchasing 4 bottles of lemonade instead of 3 when its price decreased from $12 to $10 per bottle

​Jonathan, a coffee drinker, switching to green tea after a fall in the price of green tea

Question 6

The Rhodes and Samson families, with annual incomes of $100,000 and $120,000, respectively, live in a society where the primary objective of the government is to maximize the sum of the utility attained by everyone in the society. Which of the following is likely to be true in such a society?​

​The government will redistribute income between the two families in such a way that the welfare of the Rhodes family improves.

​The government will tax the Samson family and provide income transfers to the Rhodes family, but there will exist an inequality of income between the two families.

​The government will tax the Rhodes family and provide income transfers to the Samson family to maximize total utility.

​The government will redistribute income between the two families in such a way that both the families will have the same level of post-tax income.

Question 7

Which of the following is an example of adverse selection?​

​Thomas refuses to pay for the construction of a swimming pool in his neighborhood that will be open to the public free of cost.

​Patrick uses the service of a mechanic to inspect the condition of a second-hand Dodge he is interested in buying.

​When the National Museum increased its entry fee, there was a reduction in its sale of tickets.

​Harry refuses to buy health insurance at high premiums because he feels that he is in good health.

Question 8

​Moonlife LLC. observed that its total revenue is proportional to the quantity of good sold. It is likely that Moonlife LLC. is a:

​perfectly competitive firm.

​monopoly.

​monopsony.

​monopolistic competitor.

Question 9

Suppose both Ross and Vivian produce butter and cheese. When Ross works for 10 hours a day, he produces 6 pounds of butter and 24 pounds of cheese. When Vivian works for the same hours, she produces 20 pounds of cheese and 40 pounds of butter. Ross’s opportunity cost of producing a pound of butter is:​

​5 pounds of cheese.

​4 pounds of cheese.

​18 pounds of cheese.

1/4 pounds of cheese.​

Question 10

Scarcity occurs because of:​

​the excess of quantity supplied over quantity demanded.

​limited human needs and wants.

​the limited supply of resources.

​overutilization of labor.

Question 11

​A sudden increase in the demand for air conditioners increased the earnings of the workers employed in air conditioner-manufacturing firms and attracted workers from other sectors. Which of the following will be true in the market for workers employed in air conditioner-manufacturing firms?

​There will be a rightward shift of the labor supply curve, leading to an increase in the equilibrium wage and employment.

​There will be a leftward shift of the labor supply curve, leading to a decrease in the equilibrium wage and employment.

​There will be a rightward shift of the labor supply curve, leading to a decrease in the equilibrium wage and an increase in employment.

​There will be a leftward shift of the labor supply curve, leading to an increase in the equilibrium wage and a decrease in employment.

Question 12

The exhibit given below shows the market for wheat in Zenetia. At a price of p, the profit-maximizing quantity for a wheat producer is _____.

​Q’

​Q

​Q”

​between Q and Q’

Question 13

​Mike sells navel oranges in a market where there are a lot of other sellers and faces a perfectly elastic demand curve for oranges. He hires 10 workers in a perfectly competitive market to help him with picking oranges. Given this information, it can be said that:

​Mike can employ only 10 workers as the supply of workers is fixed in a perfectly competitive labor market.

​the demand for workers is a positive function of the prevailing market wage rate.

​the demand curve for orange pickers is vertical.

​Mike cannot bargain with the workers over their wage rates.

Question 14

​The table given below shows three buyers’ willingness to pay for an antique necklace. At a market price of $25,000, the total consumer surplus in the market is _____.

​$30,000

​$7,000

​$26,000

​$6,000

Question 15

A perfectly competitive firm sells 10 units of Good X at a price of $2 per unit. It incurs a fixed cost of $5 and a variable cost of $40 to produce the good. Which of the following is true?​

​The average revenue of the firm is $20.

​The firm should operate in the short run but shut down in the long run.

​The firm should shut down.

​The marginal cost of the good is $4.

Question 16

Given an increase in the market demand for its product, a firm decides to hire an additional worker. The amount of output produced by 25 workers is 80 units. The marginal product of the 26th worker is 15 units. After the 26th worker is hired, the total output would increase to _____.​

​6 units

​95 units

​1,200 units

​15 units

Question 17

Bryan is trying to decide whether he should give up his job as a software programmer and invest in a start-up. Bryan earns an annual salary of $80,000 and has a saving of $50,000. The start-up would require an initial investment of $600,000. Bryan plans to take a loan from Trust Bank, a local commercial bank, which charges an interest rate of 5 percent on loans and provides an interest of 7 percent on savings deposits. Which of the following is true in this case?​

​Bryan should invest in the start-up as he has to pay a lower interest rate on loans than he receives on his savings deposits.

​Bryan should not invest in the start-up as his economic profit is lower than his accounting profit.

​The interest rate of 5 percent on loans is a part of the implicit cost of setting up the start-up and will be included in the calculation of his accounting profit.

​The 7 percent interest that Bryan could have earned on his savings will be included in the calculation of his economic profit.

Question 18

Squeeze Inc. sells orange juice in a market where there are a large number of consumers and sellers. New firms can enter the market easily and also exit whenever they want to. It sells 40 bottles in a month at a price of $4 per bottle and incurs a cost of $5 per bottle. The average revenue of the firm:​

​will be greater than the marginal revenue.

​will be less than the marginal revenue.

​is $4, which is equal to the marginal revenue.

​is $2, which is less than the market price.

Question 19

​The state government of Dalmatia noticed that whenever its baseball team played a match in any of the local stadiums, the prices of tickets became too high. It decided to impose a price ceiling on the ticket prices. The exhibit given below shows the demand curve for and the supply curve of baseball game tickets in Dalmatia. If the government were to impose a binding price ceiling, it should set the price at:

​$80 per ticket, which would give rise to a shortage of 16,000 tickets.

​$80 per ticket, which would give rise to a surplus of 8,000 tickets.

​$120 per ticket, which would give rise to a shortage of 10,000 tickets.

​$120 per ticket, which would give rise to a surplus of 20,000 tickets.

Question 20

The exhibit given below shows the demand curve for Good X, labeled D. At a price of $6 per unit, the quantity demanded of Good X is 5 units. A decrease in price to $4 per unit increases the quantity demanded to 8 units. Assuming that a decrease in price leads to new consumers buying the good, what is the consumer surplus received by the new consumers in the market?

​$10

​$3

​$13

​$2

Question 21

​The exhibit given below shows the supply curve of printing machines. At a price of $400 per machine, the producer surplus is:

​$100.

​$300.

​$400.

​$200.

Question 22

​Paula wants to buy 3 packs of frozen yoghurt when it is priced at $2 per pack. When the price increases to $3.50 per pack, she wants to buy 2 packs. This reflects the:

​law of diminishing marginal utility.

​maximization of total utility by Paula.

​law of demand.

​maximization of marginal utility by Paula.

Question 23

Color Mate Inc., a company that produces interior and wall paints, dumps its chemical waste in a river. Which of the following is likely to be true in this case?​

​The social cost of the company is lower than the private cost, and the equilibrium quantity of paints produced is larger than the social optimum.

​The social cost of the company is higher than the private cost, and the equilibrium quantity of paints produced is larger than the social optimum.

​The social cost of the company is higher than the private cost, and the equilibrium quantity of paints produced is less than the social optimum.

​The social cost of the company is lower than the private cost, and the equilibrium quantity of paints produced is less than the social optimum.

Question 24

Which of the following is a difference between liberalism and libertarianism?​

​Libertarians believe that the government should redistribute income from the rich to the poor, while the liberals believe that the government should not redistribute income.

​Libertarians believe that equality of opportunities is more important than the equality of incomes, while liberals believe in policies that equalize the distribution of income.

​Libertarians argue that the government should maximize total utility, while liberals argue that the average utility of members of society should be maximized.

​Libertarians emphasize the importance of the maximin criterion, while liberals emphasize the importance of an egalitarian society.

Question 25

Adrianne and Joanna love watching plays on Broadway. Adrianne values a play at $85, and Joanna values it as $82. When the price of tickets increased from $80 to $83 following the imposition of a tax, Joanna stopped watching plays on Broadway, while Adrianne continued to buy tickets. Identify the correct statement.​

​Total consumer surplus decreased by less than the tax revenue.

​The decrease in Adrianne’s surplus is equal to the tax revenue.

​The deadweight loss is $3.

​The decrease in Adrianne’s consumer surplus is equal to the deadweight loss.

Question 26

​During the winter break, Sam decides to go for a skiing vacation in Aspen instead of taking piano lessons. The opportunity cost of the skiing vacation is the:

​amount paid to the skiing instructor.

​value of piano lessons.

​cost of accommodation and food in Aspen.

​cost of buying a piano.

Question 27

​Liz starts driving rashly after buying insurance. This is an example of a(n):

​moral-hazard problem.

​common-resource problem.

​free-rider problem.

​negative externality.

Question 28

​The exhibit given below shows Melanie’s budget constraint for two goods, wine and cheese. The slope of the budget constraint equals:

​2

​2/3

​3

​3/2

Question 29

Suppose both Monica and Edith grow roses and make guns. If Monica devotes 10 hours to growing roses, she grows 16 roses, and if she devotes 10 hours to making guns, she produces 4 guns. If Edith divides her 10 hours equally, she produces 12 roses and 6 guns. Identify the correct statement.​

​Monica has an absolute advantage in growing roses, and Edith has an absolute advantage in making guns.

​Monica has an absolute advantage in both growing roses and making guns.

​Monica has an absolute advantage in making guns, and Edith has an absolute advantage in growing roses.

​Edith has an absolute advantage in both growing roses and making guns.

Question 30

Recent political unrest has caused many citizens of Serria to flee the country. This is likely to:​

​shift the labor demand curve in Serria to the left.

​increase labor employment in Serria.

​shift the labor supply curve in Serria to the right.

​increase the equilibrium wage rate in the labor market in Serria.

ECO 365T: Principles of Microeconomics – Version 2

ECO 365 Week 1 Principles of Microeconomics: Ten Principles of Economics and How Markets Work

As part of a marketing research committee for your organization, you have been assigned the task of preparing a 700-1,050 word research paper about current microeconomic thought and theory.
Use Principles of Microeconomics, Chs. 1, 2, 3, 4, 5, and 6, as the source for all your information.

Identify the fundamental lessons the Ten Principles of Economics teach about:
• How people make decisions
• How people interact
• How the economy as a whole works

Explain the following to help the committee members understand how markets work:

• How society manages its scarce resources and benefits from economic interdependence
• Why the demand curve slopes downward and the supply curve slopes upward
• Where is the point of equilibrium and what does it determine?
• The impact of price controls, taxes, and elasticity on changes in supply, demand and equilibrium prices

Format consistent with APA guidelines.
Click the Assignment Files tab to submit your assignment.

ECO 365 Supporting Activity: Ten Principles of Economics

Discuss the Ten Principles of Economics.

ECO 365 Supporting Activity: Law of Supply

Describe the Law of Supply. What is the difference between a movement along the supply curve and a shift in the supply curve?

ECO 365 Supporting Activity: Law of Demand

Describe the Law of Demand. What is the difference between a movement along the curve and a shift in the curve?

ECO 365 Supporting Activity: The Invisible Hand

What does the saying, ” Theres no such this as a free lunch” mean?

ECO 365 Week 2 Principles of Microeconomics: Markets and the Economics of the Public Sector

You have been assigned to a team that has the responsibility of preparing a paper consisting of 1,750 words for the governor’s next economic conference. Your paper should address the following:

• Explain why equilibrium of supply and demand is desirable.

Explain the following concepts using the concept of consumer and producer surplus:

• Efficiency of markets
• Costs of taxation
• Benefits of international trade
• Discuss how externalities may prevent market equilibrium and the various governments policies used to remedy the inefficiencies in markets caused by externalities.
• Analyze the difference between the efficiency of a tax system and the equity of a tax system as it refers to the costs imposed on taxpayers using the benefits principles.

Cite a minimum of 3 peer-reviewed sources, not including your textbook.
Format consistent with APA guidelines.
Click the Assignment Files tab to submit your assignment.

ECO 365 Supporting Activity: Market Equilibrium

Why is market equilibrium most desirable?

ECO 365 Supporting Activity: Surplus

Describe Consumer and producer surplus? What do they measure?

ECO 365 Supporting Activity: International Trade

Discuss the pros and cons of globalization and international trade.

ECO 365 Supporting Activity: Externalities

What are externalities? What are some of the policies against them?

ECO 365 Supporting Activity: Supply & Demand

How are the concepts and demand and supply relevant to your employer or a company that you are familiar with?

ECO 365 Week 3 Principles of Microeconomics: Current Market Conditions Competitive Analysis

You have been given the responsibility of working with your organization’s CEO to do a competitive market analysis of the potential success of one of their existing products.
Select your organization and a product produced by that organization from Industry Week.
Write a 2,100-word analysis of the current market conditions facing your product, making sure that you address the following topics:

• Define the type of market in which your selected product will compete, along with an analysis of competitors and customers.
• Analyze any comparative advantages and international trade opportunities.
• Explain the factors that will affect demand, supply, and prices of that product.

Examine factors that will affect Total Revenue, including but not limited to:

• Price elasticity of demand
• Factors that influence productivity
• Various measures of costs, including opportunity costs
• Externalities and government public policy and their effect on marginal revenue and marginal cost.
• Recommend how your organization can maximize their profit-making potential and increase their presence within the market served by the product.

Use a minimum of 3 peer-reviewed sources from the University Library.
Format your paper consistent with APA guidelines.
Click the Assignment Files tab to submit your assignment.

ECO 365 Supporting Activity: Economic vs Accounting profit

What is the difference between economic and accounting profit? Is one method better than the other? Why or why not?

ECO 365 Supporting Activity: Perfect Competition

What is perfect competition? Does it exist in the real world? Why or why not?

ECO 365 Supporting Activity: Monopoly vs Monopolistic Competition

Compare and contrast monopoly and monopolistic competition.

ECO 365 Supporting Activity: Oligopoly

What are the characteristics of an oligopoly? Describe an industry that falls into this market structure.

ECO 365 Week 4 Principles of Microeconomics: The Economics of Labor Markets Presentation

Select an organization your team is familiar with or an organization where a team member works.
Develop a 15- to 20-slide Microsoft PowerPoint presentation to be presented to the CEO’s executive committee that addresses how your chosen organization determines what quantity of labor to demand and what events could shift the demand and supply of that labor.
Explain the following in your presentation:

• How your organization’s production function is related to its marginal product of labor
• How your organization’s marginal product of labor is related to the value of its marginal product
• How your organization’s marginal product is related to its demand for labor
• Examples of events that could shift the demand or supply of labor and why they do so
• Reasons a worker’s wages might be above the level that balances supply and demand
• An analysis of the impact that government policies addressing income inequity and poverty could have on labor demand or supply Cite a minimum of 3 peer-reviewed sources not including your textbook.

Format consistent with APA guidelines.
Click the Assignment Files tab to submit your assignment.

View the answers to; COM 295T entire course.

ECO 365 Week 5 Principles of Microeconomics: Theory of Consumer Choice and Frontiers of Microeconomics

Your team been asked to assist your organization’s marketing department to better understand how consumers make economic decisions.
Write a 1,500-word analysis that identifies and describes your firm, and includes the following:

• The impact the theory of consumer choice has on:
  • Demand curves
  • Higher wages
  • Higher interest rates
  • The role asymmetric information has in many economic transactions
  • The Condorcet Paradox and Arrow’s Impossibility Theorem in the political economy
  • People not being rational in behavioral economics

Cite a minimum of 3 peer-reviewed sources not including your textbook.
Format consistent with APA guidelines.
Click the Assignment Files tab to submit your assignment.

ECO 365 FINAL EXAM

Economic Competitive Structures

1. A perfectly competitive firm sells 10 units of Good X at a price of $2 per unit. It incurs a fixed cost of $5 and a variable cost of $40 to produce the good. Which of the following is true?
2. Mike sells navel oranges in a market where there are a lot of other sellers and faces a perfectly elastic demand curve for Oranges. He hires 10 Workers in a perfectly competitive market to help him with picking Oranges. Given this information, it can be said that
3. Moonlife LLC. observed that its total revenue is proportional to the quantity of good sold. It is likely that Moonlife LLC. is a:
4. Squeeze Inc. sells orange juice in a market where there are a large number of consumers and sellers. New firms can enter the market easily and also exit whenever they want to. It sells 40 bottles in a month at a price of $4 per bottle and incurs a cost of $5 per bottle. The average revenue of the firm is:

Business and Profit Maximization

1. Penelope has recently started a printing business in Duluth. She had to pay a fee to obtain a trade license from the Minnesota government and took a loan from the local bank to purchase inkjet printers, laser printers, and screen printers. She employs 20 workers who are paid a wage of $30 per hour. She is also a trained ballet dancer who used to earn an average of $50,000 a year. Penelope’s implicit cost of running the business is:
2. he exhibit given below shows the market for wheat in Zenetia. At a price of p, the profit-maximizing quantity for a wheat producer is:
3. Bryan is trying to decide whether he should give up his job as a software programmer and invest in a start-up. Bryan earns an annual salary of $80,000 and has a saving of$50,000. The start-up would require an initial investment of
   $600,000. Bryan plans to take a loan from Trust Bank, a local commercial bank, which charges an interest rate of 5 percent on loans and provides an interest of 7 percent on savings deposits. Which of the following is true in this case?
4. The exhibit given below shows Melanie’s budget constraint for two goods, wine and cheese. The slope of the budget constraint equals

Labor Curve and Workforce Topics

1. Suppose both Ross and Vivian produce butter and cheese. When Ross works for
   10 hours a day, he produces 6 pounds of butter and 24 pounds of cheese. When
   Vivian works for the same hours, she produces 20 pounds of cheese and 40
   pounds of butter. Ross’s opportunity cost of producing a pound of butter is:
2. Given an increase in the market demand for its product, a firm decides to hire an
   additional worker. The amount of output produced by 25 workers is 80 units. The
   marginal product of the 26 worker is 15 units. After the 26 worker is hired, the
   total output would increase to
3. Recent political unrest has caused many citizens of Serria to flee the country.
   This is likely to
4. Suppose both Monica and Edith grow roses and make guns. If Monica devotes 10
   hours to growing roses, she grows 16 roses, and if she devotes 10 hours to
   making guns, she produces 4 guns. If Edith divides her 10 hours equally, she
   produces 12 roses and 6 guns. Identify the correct statement.

Consumer Surplus Topics

1. The exhibit given below shows the demand curve for Good X, labeled D. At a price of $8 per unit, the quantity demanded of Good X is 5 units. A decrease in price to $4 per unit increases the quantity demanded to 8 units. Assuming that a decrease in price leads to new consumers buying the good, what is the consumer surplus received by the new consumers in the market?
2. The table given below shows three buyers willingness to pay for an antique necklace. At a market price of $25,000, the total consumer surplus in the market is:
3. Adrianne values a play at $85, and Joanna values it as $82. When the price of tickets increased from $80 to $83 following the imposition of a tax, Joanna stopped watching plays on Broadway, while Adrianne continued to buy tickets. Identify the correct
   statement

Supply Curves and Demand Curves

1. The exhibit given below shows the supply curve of printing machines. At a price of
   $400 per machine, the producer surplus is
2. A sudden increase in the demand for air conditioners increased the earnings of the
   workers employed in air conditioner-manufacturing firms and attracted workers from
   other sectors. Which of the following will be true in the market for workers employed
   in air conditioner-manufacturing firms?
3. Suppose Timothy consumes two goods, soda and chips. The slope of his indifference
   curve for these two goods reflects
4. Which of the following reflects the law of
   demand?

Government and Society

1. The Rhodes and Samson families, with annual incomes of $100,000 and $120,000,
   respectively, live in a society where the primary objective of the government is to
   maximize the sum of the utility attained by everyone in the Society. Which of the
   following is likely to be true in such a society?
2. Which of the following is a difference between
   liberalism and libertarianism?
3. The state government of Dalmatia noticed that whenever its baseball team played a match in any of the local stadiums, the prices of tickets became too high. It decided to impose a price ceiling on the ticket prices. The exhibit given below shows the demand curve for and the supply curve of baseball game.
4. The exhibit given below shows the demand curve for and the supply curve of laptops, D and S. The government decides to impose a price ceiling on the price of laptops. At the same time, the price of inverter boards that provide power to backlight lamps inside laptop screens increases. identify the correct statement:
5. Color Mate Inc., a company that produces interior and wall paints, dumps its chemical waste in a river. Which of the following is likely to be true in this case?

ECO 365 Final Exam – SET#1

1. George Davis and Michael Wohlgenant estimate that for every 1 percent increase in the price of Christmas trees, quantity demanded falls by 0.6 percent. The demand for Christmas trees is __________________.
2. A Wall Street Journal headline reads: “Cigar Shortage Draws New Brands into Market.” The shortage resulted from a renewed interest in smoking cigars. What best describes the facts behind the headline?
3. State what type of business combination is occurring in the following scenario: Samsung and Sony become partners in a flat screen manufacturing company.
4. The price of a ticket to a rock concert is set at $35. All the tickets for the concert sell out 1 hour after they go on sale and there are still 1,000 fans who want to buy tickets. It follows that
5. According to the text, Microeconomics, Colander (2013), economics is the study of how
6. Suppose a firm finds that an additional dollar spent on labor increases output more than does an additional dollar spent on machines. Under these conditions, the firm
7. Which of the following is the best example of a macroeconomic externality?
8. Refer to the graph shown. The figure shows the demand and supply curves for eggs and shows two equilibrium points, E1 and E2. An increase in demand from D1 to D2 would cause
9. State what type of business combination is occurring in the following scenario: A tobacco producer buys a carbonated beverage plant.
10. A resource is said to have a comparative advantage if
11. Refer to the graph shown. If hamburger dinners are produced by a perfectly competitive industry with a market demand D:
12. Oligopoly is characterized by
13. Refer to the table shown. Diminishing marginal productivity begins when the
14. When Ross Perot ran for president as a third party candidate in 1992, he argued that free trade with Mexico would result in massive job losses in the United States because Mexican wages were so low. Which of the following is the best explanation for why few economists agreed with Perot?
15. If MR < MC, a monopolist should:
16. Refer to the graph shown. At which point is elasticity zero?
17. Refer to the table shown. The average product when eight workers are employed is
18. Germany restricts the use of nonrefillable bottles and cans. The European Union argues that the rules aren’t just protecting the environment; they also are protecting German beverage makers from competition. The EU sees Germany’s environmentalism as _____________________.
19. Refer to the table shown. At what level of employment is the marginal product of labor seven?
20. The morel is a prized mushroom that is often abundant in the Western United States in years after forest fires. Suppose two companies are buying morels from workers willing to find them. One company offers to pay workers $5.00 per pound, and the other company will pay workers only $4.00 per pound. Economists would say that
21. Economists and laypeople see the pros and cons of international trade in different ways. Which of the following is one of those ways?
22. Which of the following statements is true?
23. Because you can only obtain more of one good by giving up some of another good, the shape of a production possibility curve is _______________.
24. Refer to the graph shown. Initially, the market is in equilibrium with price equal to $3 and quantity equal to 100. Government imposes a tax on suppliers of $1 per unit. The effect of the tax is to
25. Refer to the graph shown. If this monopolistically competitive firm maximizes profit, it will
26. Suppose the minimum possible price of constructing homes is $50 per square foot. As a result of a sharp drop in the demand for home construction, the equilibrium price of home construction falls to $40 per square foot. Assuming the home construction industry is perfectly competitive and there are no specialized inputs, firms will
27. Opponents of government intervention in the economy argue that externalities
28. State what type of business combination is occurring in the following scenario: IBP meat processing firm buys American Cattle, a very large cattle ranch.
29. State what type of business combination is occurring in the following scenario: Golf Smith, a golf supply retailer buys its competitor, Vango golf.
30. Oligopoly is probably the best market for technological change because

ECO 365 Final Exam – Set #2

1. An economist who is studying the relationship between the money supply, interest rates, and the rate of inflation is engaged in
2. A basic difference between microeconomics and macroeconomics is that microeconomics
3. The distinction between supply and the quantity supplied is best made by saying that
4. After several years of slow economic growth, world demand for petroleum began to rise rapidly in the 1990s. Much of the increase in demand was met by additional supplies from sources outside the Organization of Petroleum Exporting Countries (OPEC). OPEC, during this time, was unable to restrain output among members in its effort to lift oil prices. What best describes these events?
5. Price elasticity of demand is the:
6. If average movie ticket prices rise by about 5 percent and attendance falls by about 2 percent, other things being equal, the elasticity of demand for movie tickets is about:
7. When labor is the variable input, the average product equals the
8. The increase in output obtained by hiring an additional worker is known as
9. Which of the following is the best example of a long-run decision?
10. Other things being equal, when average productivity falls,
11. According to economist Colin Camerer of the California Institute of Technology, many New York taxi drivers decide when to finish work by setting an income goal for themselves. If this is true, then on busy days when the effective hourly wage is higher, taxi drivers will
12. A firm’s demand for labor is derived from the
13. Owen runs a delivery business and currently employs three drivers. He owns three vans that employees use to make deliveries, but he is considering hiring a fourth driver. If he hires a fourth driver, he can schedule breaks and lunch hours so all three vans are in constant use, allowing him to increase deliveries per day from 60 to 75. This will cost an additional $75 per day to hire the fourth driver. The marginal cost per delivery of increasing output beyond 60 deliveries per day
14. Expected economic profit per unit is equal to
15. If a firm in a perfectly competitive market experiences a technological breakthrough,
16. A significant difference between monopoly and perfect competition is that
17. A monopoly firm is different from a competitive firm in that
18. The difference between a perfectly competitive firm and a monopolistically competitive firm is that a monopolistically competitive firm faces a
19. As long as marginal cost is below marginal revenue, a perfectly competitive firm should
20. Because a monopolistic competitor has some monopoly power, advertising to increase that monopoly power makes sense as long as the marginal
21. In the Flint Hills area of Kansas, proposals to build wind turbines to generate electricity have pitted environmentalist against environmentalist. Members of the Kansas Sierra Club support the turbines as a way to reduce fossil fuel usage, while local chapters of the Nature Conservancy say they will befoul the landscape. The Sierra Club argues that wind turbines
22. When negative externalities are present, market failure often occurs because
23. A merger between a textile mill and a clothing manufacturing company would be considered a
24. A merger between a baby food company and a life insurance company would be considered a
25. From the point of view of consumer and producer surplus, what problem may be created when a country subsidizes the cost of energy to consumers to help alleviate the burden of higher energy costs?
26. Suppose people freely choose to spend 40 percent of their income on health care, but the government decides to tax 40 percent of a person’s income to provide the same level of coverage as before. What can be said about deadweight loss in each case?
27. The U.S. textile industry is relatively small because the US imports most of its clothing. A clear result of the importation of clothing is
28. Countries can expect to gain from international trade as long as they
29. Which of the following is an example of the law of one price?
30. The fact that U.S. managers’ salaries are substantially greater than those of comparable managers in Japan may be related to.

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ECO 365 Final Exam – Set #3

1. Which of the following statements is true about a downward-sloping demand curve that is a straight line?
2. The best example of positive externality is:
3. Suppose that college tuition is higher this year than last and that more students are enrolled in college this year than last year.  Based on this information, we can best conclude that:
4. Suppose foreign shrimp prices drop by 32 percent and importers gain a 90 percent market share.  From this information, what would economists strongly suspect about this industry?
5. The theory that quantity supplied and price are positively related, other things constant, is referred to as the law of:
6. At one time, sea lions were depleting the stock of steelhead trout. One idea to scare sea lions away from the Washington coast was to launch fake killer whales, which are predators of sea lions. The cost of making the first whale is $16,000 ($5,000 for materials and $11,000 for the mold). The mold can be reused to make additional whales, and so additional whales cost $5,000 each. Based on these numbers, the production of fake killer whales exhibits:
7. Using 100 workers and 10 machines, a firm can produce 10,000 units of output; using 250 workers and 25 machines, the firm produces 21,000 units of output. These facts are best explained by:
8. Cartels are organizations that:
9. Price elasticity of demand is the:
10. ​For a monopolist, the price of a product:
11. A perfectly competitive firm facing a price of $50 decides to produce 500 widgets. Its marginal cost of producing the last widget is $50. If the firm’s goal is to maximize profit, it should:
12. Microeconomics is the study of:
13. When Ross Perot ran for president as a third party candidate in 1992, he argued that free trade with Mexico would result in massive job losses in the United States because Mexican wages were so low. Which of the following is the best explanation of why few economists agreed with Perot?
14. Suppose OPEC announces it will increase production. Using supply and demand analysis to predict the effect of increased production on equilibrium price and quantity, the first step is to show the:
15. ​The law of diminishing marginal productivity implies that the marginal product of a variable input:
16. In 1997, the federal government reinstated a 10 percent excise tax on airline tickets. The industry tried to pass on the full 10 percent ticket tax to consumers but was able to boost fares by only 4 percent. From this you can conclude that the:
17. Graphically, a change in price causes:
18. Microeconomics and macroeconomics are:
19. Suppose people freely choose to spend 40 percent of their income on health care, but then the government decides to tax 40 percent of that person’s income to provide the same level of coverage as before. What can be said about deadweight loss in each case?
20. Mr. Woodward’s cabinet shop is experiencing rapid growth in sales. As sales have increased, Mr. Woodward has found it necessary to hire more workers. However, he has observed that doubling the number of workers has less than doubled his output. What is the likely explanation?
21. The DeBeers company is a profit-maximizing monopolist that exercises monopoly power in the distribution of diamonds. If the company earns positive economic profits this year, the price of diamonds will:
22. Oligopoly is probably the best market for technological change because:
23. ​A monopoly firm is different from a perfectly competitive firm in that:
24. Many call centers that provide telephone customer services for U.S. companies have been established in India, but few or none have been established in China. Why?
25. Other things held constant in a competitive labor market, if workers negotiate a contract in which the employer agrees to pay an hourly of $17.85 while the market equilibrium hour rate is $16.50, the:
26. Alex is playing his music at full volume in his dorm room. The other people living on his floor found this to be a nuisance, but Alex doesn’t care. Alex’s music playing is an example of:
27. In 2011, the Department of Justice sued AT&T to block its merger with the cell phone service provider T-Mobile. To defend itself against the charge, AT&T argued that the:
28. A reduction in the supply of labor will cause wages to:
29. There are many restaurants in the city of Raleigh, each one offering food and services that differ from those of its competitors.  There is also free entry of sellers into the market, and each seller serves a very small fraction of the total number of meals served each day.  The restaurant industry in Raleigh is best characterized as:
30. Strategic decision making is most important in:

ECO 365 FINAL EXAM – SET #4

1. Because you can only obtain more of one good by giving up some of another good, the shape of a production possibility curve is:
2. Refer to the table shown. The average product when eight workers are employed is:
3. A resource is said to have a comparative advantage if:
4. Refer to the graph shown. Initially, the market is in equilibrium with price equal to $3 and quantity equal to 100. Government imposes a tax on suppliers of $1 per unit. The effect of the tax is to:
5. Refer to the table shown. Diminishing marginal productivity begins when the:
6. Refer to the graph shown. If this monopolistically competitive firm maximizes profit, it will
7. The price of a ticket to a rock concert is set at $35. All the tickets for the concert sell out 1 hour after they go on sale and there are still 1,000 fans who want to buy tickets. It follows that:
8. Which of the following statements is true?
9. State what type of business combination is occurring in the following scenario: Samsung and Sony become partners in a flat screen manufacturing company.
10. Suppose a firm finds that an additional dollar spent on labor increases output more than does an additional dollar spent on machines. Under these conditions, the firm should substituted machines for labor if it:
11. Economists and laypeople see the pros and cons of international trade in different ways. Which of the following is one of those ways?
12. The morel is a prized mushroom that is often abundant in the Western United States in years after forest fires.
13. Which of the following is the best example of a macroeconomic externality?
14. If MR < MC, a monopolist should:
15. Opponents of government intervention in the economy argue that externalities:
16. State what type of business combination is occurring in the following scenario: IBP meat processing firm buys American Cattle, a very large cattle ranch.
17. Refer to the graph shown. At which point is elasticity zero?
18. A Wall Street Journal headline reads: “Cigar Shortage Draws New Brands into Market”. The shortage resulted from a renewed interest in smoking cigars. What best describes the facts behind the headline?
19. Refer to the graph shown. If hamburger dinners are produced by a perfectly competitive industry with a market demand:
20. State what type of business combination is occurring in the following scenario: Golf Smith, a golf supply retailer busy its competitor, Vango golf.
21. According to the text, Microeconomics, Colander (2013), economics is the study of how:
22. Oligopoly is characterized by
23. When Ross Perot ran for president as a third party candidate in 1992, he argued that free trade with Mexico would result in massive job losses in the United States because Mexican wages were so low.  Which of the following is the best explanation for why few economists agreed with Perot?
24. Refer to the graph shown.
25. Germany restricts the use of nonrefillable bottles and cans.
26. Oligopoly is probably the best market for technological change because
    27. George Davis and Michael Wohlgenant estimate that for every 1 percent increase in the price of Christmas trees, quantity demanded falls by 0.6 percent.
    28. State what type of business combination is occurring in the following scenario: A tobacco producer busy a carbonated beverage plant.
    29. Suppose the minimum possible price of constructing homes if $50 per square foot.  As a result of a sharp drop in the demand for home construction, the equilibrium price of home construction falls to $40 per square foot. Assuming the home construction industry is perfectly competitive and there are no specialized inputs, firms will:
    30. Refer to the table shown.  At what level of employment is the marginal product of labor seven?

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