名解
Deadweight loss
Scarcity
Economics
Efficiency
Equity初步
Opportunity cost
Market failure
Externality
Market power
Phillips curve
Absolute advantage,
Opportunity cost
Comparative advantage
Substitutes
Complements
Law of supply
Supply curve
Law of supply and demand
Price elasticity of demand
Price elasticity of supply
Consumer surplus
Externality
Coa theorem corrective tax：
Welfare economics:
Tax incidence: productivity：
导气汤Questions for Review简答
1. Explain the two main caus of market failure and give an example of each.
The two main caus of market failure are externalities and market power. An externality is the impact of one person’s actions on the well-being of a bystander, such as from pollution or the creation of knowledge. Market power refers to the ability of a single person (or small group of people) to unduly influence market prices, such as in a town with only one well or only one cable television company. In addition, a market economy also leads to an unequal distribution of income.
2 U a production possibilities frontier to describe the idea of “efficiency.”
The idea of efficiency is that an outcome is efficient if the economy is getting all it can from the scarce resources it has available. In terms of the production possibilities frontier, an efficient point is a point on the frontier, such as point A in Figure 4. A point inside the frontier, such as point B, is inefficient since more of one good could be produced without reducing the production of another good.
Figure 4
3. Explain how absolute advantage and comparative advantages differ.
Absolute advantage reflects a comparison of the productivity of one person, firm, or nation to that of another, while comparative advantage is bad on the relative opportunity costs of the persons, firms, or nations. While a person, firm, or nation may have an absolute advantage in producing every good, they can't have a comparative advantage in every good.
4. Define the equilibrium of a market. Describe the forces that move a
market toward its equilibrium.
The equilibrium of a market is the point at which the quantity demanded is equal to quantity supplied. If the price is above the equilibrium price, llers want to ll more than buyers want to buy, so there is a surplus. Sellers try to increa their sales by cutting prices. That continues until they reach the equilibrium price. If the price is below the equilibrium price, buyers want to buy more than llers want to ll, so there is a shortage. Sellers can rai their price without losing customers. That continues until they reach the equilibrium price.
强烈反义词
5. Beer and pizza are complements becau they are often enjoyed together. When the price of beer ris, what happens to the supply, demand, quantity supplied, quantity demanded, and the price in the market for pizza?
When the price of beer ris, the demand for pizza declines, becau beer and pizza are complements and people want to buy less beer. When we say the demand for pizza declines, we mean that the demand curve for pizza shifts to the left as in Figure 5. The supply curve for pizza is not affected. With a shift to the left in the demand curve, the equilibrium price and quantity both decline, as the figure shows. Thus the quantity of pizza supplied and demanded both fall. In sum, supply is unchanged, demand is decread, quantity supplied declines, quantity demanded declines, and the price falls.
罗汉鱼
Figure 5
6. In the 1970s, OPEC caud a dramatic increa in the price of oil. What prevented it from maintaining this high price through the 1980s?
月诗句
OPEC was unable to maintain a high price through the 1980s becau the elasticity of supply and demand was more elastic in the long run. When the price of oil ro, producers of oil outside of OPEC incread oil exploration and built new extraction capacity. Consumers responded with greater conrvation efforts. As a result, supply incread and demand fell, leading to a lower price for oil in the long run.
7. What determines how the burden of a tax is divided between buyers and llers? Why?
The burden of a tax is divided between buyers and llers depending on
the elasticity of demand and supply. Elasticity reprents the willingness of buyers or llers to leave the market, which in turns depends on their alternatives. When a good is taxed, the side of the market with fewer good alternatives cannot easily leave the market and thus bears more of the burden of the tax.
8. Explain how llers’ costs, producer surplus, and the supply curve are related.
Sellers' costs, producer surplus, and the supply curve are all cloly related. The height of the supply curve reprents the costs of the llers. Producer surplus is the area below the price and above the supply curve, which equals the price minus each llers' costs.
番茄冬瓜汤
Figure 4
9. Draw a supply-and-demand diagram with a tax on the sale of the good. Show the dead weight loss. Show the tax revenue.
服务协议Figure 2 illustrates the deadweight loss and tax revenue from a tax on the sale of a good. Without a tax, the equilibrium quantity would be Q1, the
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