Question 1

Consider building a model trying to explain the appearance of a new radio station in a city. The explanation sought here is the reason for choosing a particular format for the radio station and a particular theme. Discuss how the location model might be appropriate for this endeavor.

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The answer of Consider building a model trying to explain...

Question 2

Normative economics:

Accepted Answer

Normative economics is concerned with making value judgments and prescribing what should be, rather than describing what is or will be. Therefore, option B is the correct answer. Option A is incorrect because normative economics does not describe what has been, is, and will be, but rather what should be. Option C is partly correct, as normative economics does involve determining which social state is most desirable, but this is not the sole focus. Option D is incorrect because normative economics does not establish fixed standards for behavior, but rather prescribes what should be done based on value judgments.

Question 3

Comment on the following statement: "Pure positive economic analysis does not exist. In building their models economists use some of the inherent biases they possess."

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The answer of Comment on the following statement: "Pure positive...

Question 4

Which of the following is not part of economics?

Accepted Answer

Economics is a social science that studies the production, distribution, and consumption of goods and services. While increasing individual wealth could be a result of economic activity, it is not a fundamental concept or part of economics itself.

Question 5

In what way is drinking water a scarce resource?

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The answer of In what way is drinking water a...

Question 6

What is the self- interest theory or assumption? What is the main argument for using this theory? Provide a real- life example illustrating the usefulness of self- interest in gaining economic insight.

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The answer of What is the self- interest theory or...

Question 7

Normative economics:

Accepted Answer

Normative economics involves making value judgments about what economic outcomes are desirable or undesirable. It is concerned with what ought to be, rather than what is.

Question 8

Define cost- benefit analysis and discuss a couple of its limitations .

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The answer of Define cost- benefit analysis and discuss a...

Question 9

Define the competitive equilibrium. Explain how market forces push the price towards this equilibrium.

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The answer of Define the competitive equilibrium. Explain how market...

Question 10

Explain how the resource endowment is important for an economy. Does that mean that an economy with no significant natural resources has little chances to do well?

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The answer of Explain how the resource endowment is important...

Question 11

Useful economic models have all of the following characteristics except:

Accepted Answer

Abstractness is actually a characteristic of useful economic models, not an exception. These models often simplify complex economic processes by abstracting from the details to focus on key relationships and outcomes.

Question 12

A market supply curve tells us how many units:

Accepted Answer

A market supply curve shows the total quantity of a good that all firms in the market are willing to sell at various prices.

Question 13

Suppose that the demand for butter can be expressed by the equation Q^d=150- 15P and the supply for butter can be expressed by the equation Q^s=- 15+30P ^{where Q is measured in} millions of kilograms and P is the price per kilogram. What is the equilibrium price for butter? If the government institutes a price support of $6 per kilogram, how much butter will the government have to purchase?

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The answer of Suppose that the demand for butter can...

Question 14

Present a real- life example that would illustrate the common property problem.

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The answer of Present a real- life example that would...

Question 15

A market is characterized by the demand and supply curves: X_D= 40 - 4p and X_S= 2 + p, respectively. Which of the following is an appropriate designated support price under a price subsidy program?

Accepted Answer

To find the appropriate designated support price under a price subsidy program, we first need to find the equilibrium price where demand equals supply. Setting the demand and supply equations equal to each other: $40 - 4p = 2 + p$. Solving for $p$, we get $5p = 38$, so $p = 7.6$. A support price under a price subsidy program would need to be higher than the equilibrium price to be effective, making $9 the only option that is higher than the equilibrium price of $7.6.

Question 16

Explain the difference between the buy- and- store program and the price subsidy program instituted by the government.

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Question 17

Discuss the following remark from an economist's point of view: "Safe driving is the only concern in today's busy streets."

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Question 18

Consider the water shortage problem described in Chapter 1. Compare and contrast the metered and non- metered schemes used to address the shortage issue.

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The answer of Consider the water shortage problem described in...

Quiz 1: Microeconomics: a Working Methodology

Consider building a model trying to explain the appearance of a new radio station in a city. The explanation sought here is the reason for choosing a particular format for the radio station and a particular theme. Discuss how the location model might be appropriate for this endeavor.

Normative economics:

Comment on the following statement: "Pure positive economic analysis does not exist. In building their models economists use some of the inherent biases they possess."

Which of the following is not part of economics?

In what way is drinking water a scarce resource?

What is the self- interest theory or assumption? What is the main argument for using this theory? Provide a real- life example illustrating the usefulness of self- interest in gaining economic insight.

Normative economics:

Define cost- benefit analysis and discuss a couple of its limitations .

Define the competitive equilibrium. Explain how market forces push the price towards this equilibrium.

Explain how the resource endowment is important for an economy. Does that mean that an economy with no significant natural resources has little chances to do well?

Useful economic models have all of the following characteristics except:

A market supply curve tells us how many units:

Present a real- life example that would illustrate the common property problem.

A market is characterized by the demand and supply curves: XD = 40 - 4p and XS = 2 + p, respectively. Which of the following is an appropriate designated support price under a price subsidy program?

Explain the difference between the buy- and- store program and the price subsidy program instituted by the government.

Discuss the following remark from an economist's point of view: "Safe driving is the only concern in today's busy streets."

Consider the water shortage problem described in Chapter 1. Compare and contrast the metered and non- metered schemes used to address the shortage issue.

A market is characterized by the demand and supply curves: X_D= 40 - 4p and X_S= 2 + p, respectively. Which of the following is an appropriate designated support price under a price subsidy program?