Tag: Economics – Others

Real income is income adjusted for changes in price level.We often compare whether income is rising faster or slower than inflation to determine people’s economic well-being. If inflation is rising faster than the rise in income, then that nerson is betteroff

Which of the following best describes a household?
a.A group of people who work together.
b.A family that lives together and makes economic decisions.
c.Any individual who make economic decisions for other people.
d.A basic economic unit that utilises factors of productio

Question 22 (5 points)
Explain the pros and cons of using marginal cost pricing to regulate a natural monopoly. Explain the pros and cons of using average cost pricing to regulate a natural monopoly. Which one do you think is better in the long run for consumers?

Draw the following graphs:
(2 points) – Present a PPC for guns and butter showing a recession. Label the point X.
(4 points) – Present an AD-AS graph showing a recession. Identify:ADSRASLRASPrice Level PL1Full Employment-NRU-Potential RGDPActual RDGP output and PL1

Consider the supply curve for bottles of soda. Identify each event as causing either a shift in supply or a movement along the supply curve.
Shift in supply
Movement along curve
The government taxes sugar to decrease soda consumption.
The price of soda increases by $0.50.

Question 25: To rebuild war-torn Europe and prevent escalation of communism was the United States’ primary motive for introducing the
North American Free Trade Agreement
inception of the Strategic Defense Initiative
Truman Doctrine and Marshall Plan
atomic bomb

In 2008, at the depth of the Great Recession, the Fed moved toward a ZIRP when it aimed to keep the federal funds rate between Multiple Choice?
2.5 percent and 3.0 percent.
2 percemt and 2.5 percent.
1.0 percent and 125 percent.
0 and 0.25 percemt.

Specialization and trade lead to contraction of less efficient industries, which may result in job losses as part of the adjustment process. With market adjustment programs governments can help those affected, transition to expanding sectors.
Question 26AnswerTrueFalse
True
False

Compete the table and use the data to answer the question
Units of labour (N)
Total product (TP)
Average product (AP)
Marginal product (MP)
1
20
20.00
20
2
45
22.50
25
3
66
22.00
21
4
21
5.25
-45
5
100
20.00
79
6
14
2.33
-86
The marginal product of the fifth unit is (4 marks) a) 14 b) 16 d) 25
Answer:
Marginal product of the 5th unit = TP5 − TP4 = 100 − 21 = 79. None of the given options match.

What role do social norms play in influencing market behavior according to behavioral economics
They ensure perfect competition in markets
They are irrelevant in economic analysis
They can shape preferences and influence choices
They have no impact on individual decisions