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Test Bank for Economics 21st Edition by McConnell IBSN 1259723224

Test Bank for Economics 21st Edition by McConnell IBSN 1259723224 Full download: https://goo.gl/nTtwGD macroeconomics 21st edition pdf mcconnell brue flynn economics 21th edition pdf economics mcconnell economics mcconnell 20th edition economics 20th edition isbn 9781308250977 macroeconomics access code economics principles problems and policies 21st edition pdf macroeconomics, mcconnell 21st edition, isbn 9781259915673 pdf
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    Test Bank for Economics 21st Edition by McConnell IBSN 1259723224 Full download: http://downloadlink.org/p/test-bank-for-economics-21st-edition-by-mcconnell-ibsn-1259723224/  Solutions Manual for Economics 21st Edition by McConnell IBSN 1259723224 Full download: http://downloadlink.org/p/solutions-manual-for-economics-21st-edition-by-mcconnell-ibsn-1259723224/  CHAPTER  2   The Market System and the Circular Flow   A. Short-Answer, Essays, and Problems 1. Define the term economic system. Discuss the two ways in which economic systems can differ. 2. Explain the term “laissez faire capitalism.”  3. Explain what is meant by a command economy. 4. Evaluate the statement: “The government should have no place in a capitalistic market system.”  5. List nine characteristics of the market system. 6. Why is the right of private property an essential characteristic of a market system? 7. What role does freedom play in capitalism? How important is it to the operation of a competitive market economy? 8. Explain the importance of self-interest in the operation of a market system. 9. What is the importance of competition in relation to self-interest in a market system? 10. What conditions are necessary for economic competition to exist? 11. “The regulatory force in the market system bears the seeds of its own destruction.” Explain and evaluate.  12. Explain why the market system is an organizing mechanism. 13. Respond to the following question: “Producing capital goods or advanced technology takes time, so how can that be a more efficient form of production of consumer goods?”      14. Describe two types of specialization in production. 15. What are the economic advantages of specialization? 16. Describe three ways that human specialization contributes to society’s output.  17. What advantage does a money economy have over a barter economy? 18. How does the use of money differ from the use of barter in the exchange of goods and services? 19. What is money and what important function does it perform? Explain how it overcomes the disadvantages associated with barter. What conditions are necessary for people to accept paper currency in exchange for the goods and services which they sell?    20. Suppose Tom, Dick, and Harry live in a barter economy. Tom produces wine, Dick bakes bread, and Harry makes cheese. Tom wants some bread to go with his wine and is willing to trade 1 gallon of wine for two loaves of bread. Dick wants some cheese to go with his bread and is willing to trade one loaf of bread for one- half pound of cheese. Harry doesn’t want bread, but wants some wine to go with his cheese and is willing to trade cheese for one gallon of wine. It is not possible for all three to meet together at one time. (a) Explain how this situation illustrates the difficulty with a barter economy. (b) Devise a money system using precious stones where four stones are equivalent in value to one gallon of wine. In other words tell how much bread and cheese would be worth in terms of stones in this economy. In this system, how much cheese must Harry sell in order to buy one gallon of wine? 21. What are the so-called Five Fundamental Questions that every economy must answer? 22. A firm has the choice between producing product A, B, or C. In producing the products the firm faces a weekly cost of $10 for product A, $130 for product B and $200 for product C. The prices received for each  product at different quantities are listed in the table below. Output Product A Product B Product C Profit A Profit B Profit C 5 $3.00 $15.00 $35.00 _____ _____ _____ 10 2.00 12.00 20.00 _____ _____ _____ 15 1.25 9.00 10.00 _____ _____ _____ (a) Compute the firm’s profit for A, B, and C and enter this data into the table. (b) Which product will the firm choose to produce and how much output will maximize profit? 23. Assume that a firm can produce product A, product B, or product C with the resources it currently employs. These resources cost the firm a total of $100 per week. Assume, for the purposes of this problem, that the firm’s costs cannot be changed. The market prices and the quantities of A, B, and C these resources can  produce are given as follows. Product Market price Output Profit  A $14.00 10 $_____ B 9.00 11 _____ C .50 300 _____ (a) Compute the firm’s profit when it produces A, B, or C and enter these data in the table.  (b) Which product will the firm produce? (c) If the price of A rose to $16, which product will the firm produce? (d) If the firm produces A at a price of $16, what would tend to happen to the number of firms  producing product A?    24. Assume that a firm can produce product A, product B, or product C with the resources it currently employs. These resources cost the firm a total of $100 per week. Assume, for the purposes of this problem, that the firm’s costs cannot be changed. The market prices and the quantities of A, B, a nd C these resources can  produce are given below. Product Market price Output Profit  A $10.00 6 $_____ B 5.00 19 _____ C 1.50 100 _____ (a) Compute the firm’s profit when it produces A, B, or C and enter these data in the table.  (b) Which product will the firm produce? (c) Suppose the quantity of product B the firm was able to produce with the same amount of inputs now rose to 25. Which product will the firm now produce? (d) As a result of the rise in quantity of product B to 25 that each firm can produce, what will happen to the number of firms producing product B? 25. How does ‘consumer sovereignty’ determine the types and quantities of the goods produced in an economy? 26. How does consumer choice differ from consumer sovereignty in a market system? 27. Explain in detail how a decrease in consumer demand for a product will result in less of the product being  produced and in fewer resources being allocated to its production. 28. (Consider This) How is consumer sovereignty at work at McDonalds? Give an example of a hit and a miss. 29. The demand for a resource is “derived” from the goods and services that the resource is used to produce. Give three examples. 30. Why does competition force firms to use the least-cost, most efficient, productive techniques? 31. Assume that a firm finds that its profits will be maximized (or losses minimized) when it produces $30 worth of product X. Each of these techniques shown in the following table will produce exactly $30 worth of X. Unit resource prices Method #1 Method #2 Method #3 Land $1 6 3 4 Labor 2 4 3 3 Capital 3 3 4 6 Entrepreneurship 4 2 4 1 (a) Which method is most efficient? Why? (b) Given the above prices, will the firm adopt a new method which involves 10 units of land, 3 of labor, 2 of capital, and 2 of entrepreneurial ability? (c) Suppose the price of capital falls to $1 without any other prices changing. Which of the methods will the firm now choose? Why?
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