Economics Homework Seven Answers - Student Nine

Economics Homework 7

Mark B.

1. a) Many buyers and sellers; b) goods that are perfect substitutes for each other; c) perfect knowledge in the market; and d) perfect mobility of resources.

Correct.

2. I could use competition to motivate me to be a better runner. If, in practice, I can run a mile in 5:50, and in a race I can do it in 5:30, the other people running with me increase the competition and push me to run harder.

Those are fast times! My best mile is 6 minutes. Your point is excellent.

3. skipped

Free pass on a question.

4. The good conversation sometimes drives out the bad and sometimes it goes the other way. It depends on who's involved in the conversation, and also on whether or not the bad talkers have the have open minds to good conversation.

Superb point about the importance of an "open mind." ("whose", not "who's")

5. Total costs is your fixed cost and variable cost added together. Average cost is the total cost divided by quantity. Marginal cost is the cost it takes to make one more unit.

Correct!

6. Loss in wealth = ($15x85)+(50x$20)+(10x$25)+(5x$30), therefore loss in wealth is $2675.

Nope. See model answer. (Minus 2).

7. There is not perfect competition: a) there are many buyers, but few sellers; b) they are not perfect substitutes- homeschooling has 1 on 1 teaching and public schools do not; c) there is not perfect knowledge- the buyers (parents) do not know what homeschooling is usually like; d) there are not identical costs.

Terrific analysis on all four elements. Could use as a model answer.

68/70. Superb!--Andy Schlafly 21:25, 31 October 2009 (EDT)