Devry ECO312 full course [ all discussions all weekly assignments all homework midterm and final ]

.8181819915771px;”=””>all discussions.8181819915771px;”=””>WEEK 1Opportunity Cost (graded)Give an example of how the Principle of Opportunity Cost applies to your life. Think of a recent decision you made. It could be a decision as simple as whether to eat out or cook your own dinner, or it could be a decision to quit your job and go back to school. What alternatives did you consider? How did you arrive at your final decision? Did you implicitly weigh marginal cost and marginal benefit? How does the concept of opportunity cost apply to production possibilities curve (PPC) analysis? How can we use PPC analysis to examine what we do?Economic Systems (graded)Think of a business firm you recently visited (such as Walmart, Home Depot, Red Lobster, Barnes & Noble, McDonald’s, etc.). What motivated the producers of all the individual products in the store to make them and offer them for sale? How did the producers decide on the best combinations of resources to use? Who made those resources available, and why? How does the market determine who will get the goods and services? Who decides whether these particular products should continue to be produced and offered for sale? How do these decisions differ between capitalist and socialist systems?WEEK 2Demand, Supply, and Market EquilibriumThink about a product that you have purchased recently (e.g. soda, diapers, takeout meals, milk, shoes, manicure/pedicure, video game, etc.). Explain how the law of demand affected your purchase. Give specific examples of how the determinants of demand and supply affect this product (T-I-P-E-N and P-R-E-S-T). What happens to the demand curve and the supply curve when any of these determinants change? Give examples of scenarios that would cause a change in demand versus a movement along the same demand curve and supply curve for this product. Discuss the new equilibrium price and quantity that result from these changes. Can you demonstrate some of these changes graphically?This section lists options that can be used to view responses.Price Elasticity of DemandThink of another good that you have purchased recently (or you could continue with the good you selected in TDA I). Be specific (e.g. is it breakfast cereal in general or Cheerios cereal specifically). If the price of this item increases, how would this affect the quantity of the good that you consume? Is the Demand for this good Price elastic or Price inelastic? Justify your classification by talking about the determinants of elasticity as they apply to this product. Say price is on the rise for this product and you are the manager of a store, would you be thrilled to be selling this product? Under what circumstances would you want to own a business that sells this product? In other words, how does an increase in price for this good affect your Total Revenue? Using specific examples, relate the concepts of Cross Elasticity and Income Elasticity to this product.WEEK 3A Firm’s Shut Down Decision (graded)Say you are the manager of a perfectly competitive firm selling a product. Your business is making a loss because total revenue is less than total costs. What would you do–shut down or continue to operate? Use hypothetical numbers to explain. Information you need to provide include–state the product you are selling, the price of the product, the quantity of the product you produce, fixed costs, total cost, figure out total revenue, total and average variable costs. Then go ahead and make your decision. Explain carefully why it makes better sense to shut down rather than continue to operate or to continue to operate rather than shut down, as the case may be. How do fixed costs play a role in your analysis? What is the difference between shutting down and going out of business?Market Structure Classification (graded)Think about a firm that you have done business with recently. What industry does this firm belong to? For example, McDonald’s is a firm in the fast food industry. What market structure would this industry fall under? What are the names of other firms in this industry? Is it monopolistic competition, oligopoly, monopoly, or perfect competition? Justify your classification of the firm. Use the characteristics/features of the different market structure to determine which market structure to classify your chosen firm.WEEK 4GDP (graded)Go to the Bureau of Economic Analysis website, www.bea.gov, and access the BEA interactively by selecting “National Accounts” and then “National Income and Product Account Tables.” Select “Frequently Requested NIPA Tables,” and find Table 1.1.1 on GDP. What is the current GDP growth rate for the U.S.? Examine the trend over the past few years. What trends interest you? What stage of the Business Cycle would the U.S. economy be in currently given the trends? Why might GDP not be considered an accurate measure of economic well-being of a country? Identify at least three limitations of GDP as a measure of economic well-being. There is a handy handout in the drop box for using the Government website, be sure to check it out it will take you step by step.Unemployment and Inflation (graded)Go to the Bureau of Labor Statistics website, www.bls.gov/news.release/empsit.toc.htm, and click on “Employment Situation Summary” to get the most up-to-date summary of unemployment in the U.S. or the “Employment Situation Summary Table A. Household data, seasonally adjusted.” What interests or surprises you about the summary table? How does that rate compare with the rate in the previous month or quarter? Discuss the differences in unemployment rates by gender, age, education, etc.This section lists options that can be used to view responses.WEEK 5Aggregate Demand and Aggregate Supply (graded)Go to the BEA website www.bea.gov. On the left tab under Publications, go to the Interactive Data Tables. Select National Income and Product Accounts. From Table 1.1.6 and 1.1.7 examine all four components of GDP (C, I, G, and Xn). Which of these four components of AD declined the most during the 2007 and 2009 recession? Do you think an increase in government’s spending (G) can boost the Aggregate Demand (AD) in a recession? Analyze why the economy may operate below full-employment GDP in the short run. How can the multiplier have a negative effect? What is the relationship between the multiplier and the marginal propensities? Explain.This section lists options that can be used to view responses.Fiscal Policy (graded)Give an example of an event or incident that has taken place in the U.S. economy which has a major economic impact–be specific, e.g., 9/11 attack, natural disaster, rise or fall in oil prices due to OPEC policies, consumer optimism or pessimism about an expected economic expansion or downturn, increase in government spending on healthcare, tightening of the legal and institutional environment, and so forth. What effect would this event have on AD or AS, other things being constant? What would be the resulting effect on equilibrium price level? Explain. What will be the effect of the different tools of fiscal policy to stabilize the economy? Give an example of a built-in stabilizer and explain how it would work to reduce this rise or fall in the level of AD.This section lists options that can be used to view responses.WEEK 6Money and Banking (graded)What factors led to the mortgage default crisis? How did mortgage defaults affect banks involved in mortgage lending and mortgage investing? Securitization? TARP? What do these mean? How did mortgage-backed securities spread losses during the mortgage default crisis? How does TARP illustrate the problem of moral hazard? What did the Federal Reserve do during the financial crisis of 2008 and 2009? How did the recent financial crisis affect the financial services industry? What are some of the major provisions of the Wall Street Reform and Consumer Protection Act?Monetary Policy and the Federal Reserve (graded)What is the Federal Reserve (Fed) all about? Which Federal Reserve District Bank is closest to you? Who is the current Chairman of the Fed? Should the Fed remain independent from political authority or should the President and Congress have a say in their operations? Why? Why not? What is FOMC? What is the current Federal Funds Rate? How does the Fed implement monetary policy to manage the economy? At the last meeting of the FOMC, what was done to the federal funds rate–increased, decreased, or no change from previous meeting? Given the current state of the U.S. economy, should the Fed be using expansionary monetary policy or contractionary monetary policy? Why? Why Not?This section lists options that can be used to view responses.WEEK 7Free Trade (graded)Are you for or against free trade? Are you for or against NAFTA? What is the economic basis for trade? Explain the underlying facts that support free trade and give an example of a good that you purchased recently that is based on resource differences. What are some examples of goods that the U.S. has comparative advantage in producing? Take a look at the tag of the shirt/dress/pants you are wearing today. Where was it made? Anyone wearing “Made in America” items of clothing today? We sometimes hear people say “Buy American.” Why don’t we? What is the basis of international trade? What are the benefits and the costs? Under what conditions would you advocate for trade restrictions?Foreign Exchange (graded)What is happening to the value of the U.S. dollar these days? What causes the value of the U.S. dollar to rise or fall? Who demands U.S. dollar? Who supplies U.S. dollar? When we purchase German products, does our demand for euro go up or down? What are freely floating exchange rates all about, and how do they work? How can the falling U.S. dollar impact your travel expenses? Why would a cheap dollar relative to other nations’ currencies be good or bad for U.S. trade.8181819915771px;”=””>weekly assignments .8181819915771px;”=””>week 1.8181819915771px;”=””>.8181819915771px;”=””>(TCO 1) The general concern of economics is with the study of the: degree of competition in stock and bond markets in the economy.efficient use of limited productive resources to satisfy economic wants.issue of equality in the distribution of income and wealth among households.budget deficits in the domestic economy and trade deficits in the international economy.Instructor Explanation: Chapter 1.Points Received: 1 of 1Comments:Question 2. Question :(TCO 1) The basic economic problem is essentially one of deciding how to make the best use of: limited resources to satisfy limited economic wants.limited resources to satisfy unlimited economic wants.unlimited resources to satisfy unlimited economic wants.unlimited resources to satisfy limited economic wants.Points Received:Comments:Question 3. Question :(TCO 1) Are the goods that businesses offer for “free” to consumers also free to society?: Yes, because the individual consumer does not have to pay for them.Yes, because the marginal benefit is greater than the marginal cost.No, because scarce resources were used to produce the free goods.No, because society does not assign a value to free goods.Instructor Explanation: Chapter 1.Points Received: 1 of 1Comments:Question 4. Question :(TCO 1) The individual who brings together economic resources and assumes the risk in a capitalist economy is called the: manager.entrepreneur.stockbroker.banker.Instructor Explanation: Chapter 1.Points Received: 1 of 1Comments:Question 5. Question :(TCO 1) A movement along the production possibilities curve would imply that: the labor force has grown.productivity has increased.productivity has declined.society has chosen a different set of outputs.Instructor Explanation: Chapter 1.Points Received: 0 of 1Comments:Points Received: 1 of 1Comments:Question 8. Question :(TCO 1) Which of the following would be primarily determined in the resource market?: The price of compact discsThe wage rates for electriciansThe number of automobiles producedThe amount of money in circulationInstructor Explanation: Chapter 2.Points Received: 0 of 1Comments:Question 9. Question :(TCO 1) Which is a major feature of the market system?: Government set prices in all marketsReallocation of all resources from private to public usesThe right to own private property and control resource useCentral planning by government to provide goods and servicesQuestion 10. Question :(TCO 1) Consider a barter situation where you have pens and you want pencils. To achieve your objective, there must be a(n)use of capital goods.entry and exit from the market.large number of sellers.coincidence of wants.Instructor Explanation: Chapter 2.Points Received: 0 of 1Comments:Question 11. Question :(TCO 1) Tammie makes $150 a day as a bank clerk. She takes off two days of work without pay to fly to another city to attend the concert of her favorite music group. The cost of transportation for the trip is $250. The cost of the concert ticket is $50. What is the opportunity cost of Tammie’s trip to the concert? Show your calculations:Question 12. Question :(TCO 1) Identify some intrinsic qualities of capitalist and command economic systems. Identify two countries that practice each.:week 2question 1. Question :(TCO 2) Economists use the term “demand” to refer to: a particular price-quantity combination on a stable demand curve.the total amount spent on a particular commodity over a stipulated time period.an upsloping line on a graph that relates consumer purchases and product price.a schedule of various combinations of market prices and quantities-demanded.Question 2. Question :(TCO 2) Which of the following will not cause the demand for product K to change?: A change in the price of close-substitute product JAn increase in consumer incomesA change in the price of KA change in consumer tastesQuestion 3. Question :(TCO 2) If X is a normal good, a rise in money income will shift the: supply curve for X to the left.supply curve for X to the right.demand curve for X to the left.demand curve for X to the right.Question 4. Question :(TCO 2) Which of the following would mostly likely increase the demand for gasoline?: The expectation by consumers that gasoline prices will be higher in the futureThe expectation by consumers that gasoline prices will be lower in the futureA widespread shift in car ownership from SUVs to hybrid sedansA decrease in the price of public transportation:Question 5. Question :(TCO 2) The supply curve shows the relationship between: price and quantity supplied.production costs and the amount demanded.total business revenues and quantity supplied.physical inputs of resources and the resulting units of output.Question 6. Question :(TCO 2) If the demand for bacon is relatively elastic, a 10% decline in the price of bacon will: decrease the amount demanded by more than 10%.increase the amount demanded by more than 10%.decrease the amount demanded by less than 10%.increase the amount demanded by less than 10%.week 3Question 1. Question :(TCO 3) Which of the following constitutes an implicit cost to the Johnston Manufacturing Company?Payments of wages to its office workersRent paid for the use of equipment owned by the Schultz Machinery CompanyUse of savings to pay operating expenses instead of generating interest incomeEconomic profits resulting from current productionQuestion 2. Question :(TCO 3) The long run is characterized bythe relevance of the law of diminishing returns.at least one fixed input.insufficient time for firms to enter or leave the industry.the ability of the firm to change its plant size.Question 3. Question :(TCO 3) Economists would describe the U.S. automobile industry aspurely competitive.an oligopoly.monopolistically competitive.a pure monopoly.Question 4. Question :(TCO 3) If a firm in a purely competitive industry is confronted with an equilibrium price of $5, its marginal revenuemay be either greater or less than $5.will also be $5.will be less than $5.will be greater than $5.Question 5. Question :(TCO 3) Which of the following is a characteristic of pure monopoly?Close substitute productsBarriers to entryThe absence of market power”Price taking”Advertising expendituresProduct differentiationNonprice competitionQuestion 10. Question :(TCO 3) If the four-firm concentration ratio for industry X is 80the four largest firms account for 80% of total sales.each of the four largest firms accounts for 20% of total sales.the four largest firms account for 20% of total sales.the industry is monopolistically competitive.Question 11. Question :(TCO 3) What is the difference between ACCOUNTING PROFIT, ECONOMIC PROFIT, and NORMAL PROFIT?Question 12. Question :(TCO 3) Identify the primary characteristics of perfect competition and monopolistic competition. Give examples of each.  weel 5Question 1. Question :(TCO 6) Discretionary fiscal policy refers toany change in government spending or taxes that destabilizes the economy.the authority that the President has to change personal income tax rates.intentional changes in taxes and government expenditures made by Congress to stabilize the economy.the changes in taxes and transfers that occur as GDP changes.Question 2. Question :(TCO 6) Suppose that the economy is in the midst of a recession. Which of the following policies would most likely end the recession and stimulate output growth?A Congressional proposal to incur a Federal surplus to be used for the retirement of public debt.Reductions in agricultural subsidies and veterans’ benefits.Postponement of a highway construction program.Reductions in Federal tax rates on personal and corporate income.Question 3. Question :(TCO 6) The financing of a government deficit increases interest rates and, as a result, reduces investment spending. This statement describesthe supply-side effects of fiscal policy.ation4. Small-denominated (less than $100,000) time deposits5. Stock certificates6. Checkable deposits7. Money market deposit accounts8. Money market mutual fund balances held by individuals9. Money market mutual fund balances held by businesses10. Currency held in bank vaultsRefer to the above list. The M1 definition of money comprises item(s)6 only.3, 4, and 6.3 and 6.3, 6, and 10.Question 4. Question :(TCO 7) Assume the Standard Internet Company negotiates a loan for $5,000 from the Metro National Bank and receives a checkable deposit for that amount in exchange for its promissory note (IOU). As a result of this transactionthe supply of money is increased by $5,000.the supply of money declines by the amount of the loan.a claim has been “demonetized.”the Metro Bank acquires reserves from other banks.Question 5. Question :(TCO 7) A bank temporarily short of required reserves may be able to remedy this situation byborrowing funds in the federal funds market.granting new loans.shifting some of its vault cash to its reserve account at the Federal Reserve.buying bonds from the public.Question 6. Question :(TCO 7) Money is destroyed whenloans are made.checks written on one bank are deposited in another bank.loans are repaid.the net worth of the banking system declines.Question 7. Question :(TCO 7) The asset demand for moneyis unrelated to both the interest rate and the level of GDP.varies inversely with the rate of interest.varies inversely with the level of real GDP.varies directly with the level of nominal GDP.Question 8. Question :(TCO 7) If the quantity of money demanded exceeds the quantity suppliedthe supply-of-money curve will shift to the left.the demand-for-money curve will shift to the right.the interest rate will rise.the interest rate will fall.relative levels of GDP.comparative advantage.relative exchange rates.relative inflation rates.Question 2. Question :(TCO 8) The World Trade Organizationis also known as the International Monetary Fund (IMF).is also known as NAFTA.was established to resolve disputes arising under world trade rules.enhances world trade by providing interest rate subsidies to foreign borrowers who buy exports on credit.Question 3. Question :(TCO 9) The current account in a nation’s balance of payments includesits goods exports and imports, and its services exports and imports.foreign purchases of domestic assets.purchases of foreign assets.All of theseQuestion 4. Question :(TCO 9) If the exchange rate between the U.S. dollar and the Japanese yen is $1 = 200 yen, then the dollar price of the yen isStudent Answer: CORRECT $.005.$.05.$.50.$5.Question 5. Question :(TCO 9) In recent years, the United States has had largecurrent account surpluses.capital and financial account deficits.balance-of-trade deficits.balance-of-payments surpluses.Question 6. Question :(TCO 9) When the U.S. dollar decreases in value relative to foreign currencies the:Demand for U.S. exports will decreaseSupply of U.S. exports will decreaseDemand for U.S. exports will increaseSupply of U.S. exports will remain constantQuestion 7. Question :(TCO 8) If a nation has a comparative advantage in the production of X, this means the nationcannot benefit by producing and trading this product.must give up less of other goods than other nations in producing a unit of X.has a production possibilities curve identical to those of other nations.is not subject to increasing opportunity costs.Question 8. Question :(TCO 8) Refer to the graphs below. These production-possibilities curvesGraph Descriptiondemonstrate that there can be gains from specialization and trade between the two nations.reflect the law-of-increasing-opportunity costs.reflect the law-of-diminishing-marginal utility.imply that specialization will be incomplete.Question 9. Question :Question 11. Question :(TCO 8 and 10) Evaluate the statement: “Restricting imports from other nations will save U.S. jobs.” Include both advantages and disadvantages in you argument.Question 12. Question :(TCO 9) How would a substantial appreciation in the European euro in the foreign exchange market affect the quantity of imports of European products by the U.S.? How would such an appreciation of the European euro affect travel by Americans to Europe?midtermQuestion . Question : (TCO ) What is the economic meaning of the expression that “There is no such thing as a free lunch?”It refers to “free-riders,” who do not pay for the cost of a product but who receive the benefit from it.It means that economic freedom is limited by the amount of income available to the consumer.It means that there is an opportunity cost when resources are used to provide “free” products.It indicates that products only have value because people are willing to pay for them.Question. Question : (TCO ) Henry wants to buy a book. The economic perspective suggests that Henry will buy the book ifthe book will give him utility.his income is high.the marginal cost of the book is greater than its marginal benefit.the marginal benefit of the book is greater than its marginal cost.0 of 3Question 3. Question : (TCO ) Which situation would most likely cause a nation’s production possibilities curve to shift inward?The construction of more capital goodsAn increase in discrimination based on raceAn increase in the number of skilled immigrant workersThe destruction from bombing and warfare in a losing military conflictQuestion 4. Question : (TCO ) Which expression is another way of saying “marginal benefit”?Benefits given upUnintended gainEmployment benefitsExtra benefitQuestion 5. Question : (TCO ) Which would not be considered as a capital resource of a business by an economist?A van used by a mother to transport the family aroundAn office computer used by an accountantA crane used by a building contractorA razor used by a barberQuestion 6. Question : (TCO ) Another term for capitalism isthe command system.the socialist economy.the market system.the system of inputs and outputs.Question 7. Question : (TCO ) Markets in which firms sell their output of goods and services are calledresource markets.product markets.command markets.mixed markets.Question 8. Question : (TCO ) By free enterprise, we mean thatproducts are provided free to those who can’t afford to buy them.individuals may obtain resources, organize production, and sell the resulting output in any legal way they choose.individual producers are free to produce whatever the government decides is needed by the society.individuals are free to buy whatever products will satisfy their needs the most.Question 8. Question : (TCO) You are the sales manager for a software company and have been informed that the price elasticity of demand for your most popular software is less than . To increase total revenues, you should:increase the price of the software.decrease the price of the software.hold the price of the software constant.increase the supply of the software.4Question 9. Question : (TCO) If the demand for a product is elastic, thena higher tax on the product will generate more tax revenue.a higher tax on the product will generate less tax revenue.total revenue will decrease as price decreases.total revenue will remain constant as price increases.4Question0. Question : (TCO) Airlines charge business travelers more than leisure travelers because there is a moreelastic supply of business travel.inelastic supply of business travel.elastic demand for business travel.inelastic demand for business travel.4Question. Question : (TCO 3) Suppose that you could prepare your own tax return in 5 hours, or you could hire a tax specialist to prepare it for you in two hours. You value your time at $ an hour. The tax specialist will charge you $55 an hour. The opportunity cost of preparing your own tax return is$40.$55.$0.$65.7Question2. Question : (TCO 3) Economic profits are equal tototal revenues minus fixed costs.total revenues minus the costs of raw materials.total revenues minus the opportunity costs of all inputs.gross profit minus selling and operating expenses.7Question3. Question : (TCO 3) In the short runa firm cannot vary its output level.all factors of production can be varied.a firm can change its fixed inputs.output is raised or reduced by changing the levels of variable inputs.7Question4. Question : (TCO 3) Variable costs aresunk costs.costs that change every day.costs that change with the level of production.the change in total cost due to the production of an additional unit of output.7Question5. Question : (TCO 3) At an output of0,000 units per year, a firm’s variable costs are $80,000 and its average fixed costs are $3. The total costs per year for the firm are:$80,000.$00,000.$40,000.$240,000.7Question6. Question : (TCO 3) If you know that total fixed cost is $200, total variable cost is $600, and total product is four units, then average total cost must be:$200.$250.$800.$3200.7Page:* Times are displayed in (GMT-07:00) Mountain Time (US & Canada)to entryusually result in pure competition.can result from government regulation.exist in economic theory but not in the real world.are typically the result of wrongdoing on the part of a firm.0Question 0. Question : (TCO 3) The demand curve confronting a nondiscriminating, pure monopolist ishorizontal.the same as the industry’s demand curve.more elastic than the demand curve confronting a competitive firm.derived by vertically summing the individual demand curves for the buyers.0Question. Question : (TCO 3) Which is the best example of price discrimination?An airline company charging lower fares per pound for air freight than for passengers.A telephone company charging lower rates to weekend users than weekday users.A supermarket charging lower prices in its inner city store than its out-of-town store.A private doctor charging higher fees to patients receiving special services than patients receiving regular services.0Question 2. Question : (TCO 3) Monopolistic competition is characterized by firmsproducing differentiated products.making economic profits in the long run.producing at optimal productive efficiency.producing where price equals marginal cost.Question 3. Question : (TCO 3) Assume that in a monopolistically competitive industry, firms are earning economic profit. This situation willreduce the excess capacity in the industry as firms expand production.attract other firms to enter the industry, causing the firm’s profits to shrink.cause firms to standardize their product to limit the degree of competition.make the industry allocatively efficient as each firm seeks to maintain its profits.Question 4. Question : (TCO 3) A unique feature of an oligopolistic industry islow barriers to entry.standardized products.diminishing marginal returns.mutual interdependence.Question 5. Question : (TCO 3) A low concentration ratio means thatthere is a low probability of entering the industry.there is a low probability of success in the industry.each firm accounts for a small market share of the industry.each firm accounts for a large market share of the industry..set ticket prices at $5.set ticket prices at $9.4Question. Question : (TCO) Which type of goods is most adversely affected by recessions?Goods for which the income-elasticity coefficient is relatively low or negative.Goods for which the income-elasticity coefficient is relatively high and positive.Goods for which the cross-elasticity coefficient is positive.Goods for which the cross-elasticity coefficient is negative.4Question2. Question : (TCO 3) In the figure, Curves ,, 3, and 4 represent theGraph DescriptionATC, MC, AFC, and AVC curves, respectively.MC, AFC, AVC, and ATC curves, respectively.MC, ATC, AVC, and AFC curves, respectively.ATC, AVC, AFC, and MC curves, respectively.7Question3. Question : (TCO ) Refer to the diagram. If society is producing nine units of bicycles and four units of computers and it now decides to increase computer output to six, the costGraph Descriptionwill be four units of bicycles.will be two units of bicycles.will be zero because unemployed resources are available.of doing so cannot be determined from the information given.Question4. Question : (TCO 3) What type of barrier to entry was used by De Beers throughout much of its history to maintain its monopoly position?Patent protectionGovernment regulationEconomies of scaleOwnership of an essential resourceQuestion5. Question : (TCO 3) a.) A pure monopolist determines that at the current level of output the marginal cost of production is $2, average variable costs are $2.75, and average total costs are $2.95. The marginal revenue is $2.75. What would you recommend that the monopolist do to maximize profits? b.) Why might a business owner keep their business open but let it deteriorate, rather than shut it down? Will this profitability last?Question6. Question : (TCO) Evaluate how the following situations will affect the demand curve for iPods.(a) Income statistics show that income of 8–25-year-olds have increased by 0 percent over the last year.(b) Efforts of music artists wanting greater protection of their music result in more stringent enforcement of copyrights and the shutdown of numerous illegal downloading sites.(c) Believing that it has significant control of the market for portable digital music players, Apple decides to raise the price of iPods with the goal of increasing profits.(d) The price of milk decreases.finalQuestion 1. 1. (TCO 1) When a state government chooses to build more roads, the required resources are no longer available for spending on public education. This dilemma illustrates the concept of (Points : 4)production expenses.unemployment issues.unintended consequences.opportunity cost.Question 2. 2. (TCO1) Which is not a factor of production? (Points : 4)MoneyLandLaborCapitalQuestion 3. 3. (TCO1) A point on the production possibilities curve is (Points : 4)attainable and resources are fully employed.attainable, but resources are unemployed.unattainable, but resources are unemployed.unattainable and resources are fully employed.Question 4. 4. (TCO1) A basic characteristic of a command system is that (Points : 4)wages paid to labor are higher.government owns most economic resources.free markets are never permitted in a command economy.government planners play a limited role in deciding what goods will be produced.Question 5. 5. (TCO 2) The demand curve is a representation of the relationship between the quantity of a product demanded and (Points : 4)supply.wealth.price.income.Question 6. 6. (TCO 2) A decrease in supply and a decrease in demand will (Points : 4)increase price and affect the equilibrium quantity in an indeterminate way.decrease the equilibrium quantity and decrease price.increase the equilibrium quantity and affect price in an indeterminate way.decrease the equilibrium quantity and affect price in an indeterminate w