Economics Homework Eleven Answers - Student Two

Seth P.

1.I would want someone to pay me interest back if I loaned him money because I want a profit from the transaction.

Good.

2.The total I would repay is $1,102.50.

Correct!

3.The cost of the bus for a trip to D.C. is a fixed cost, because the price of the bus won't change whether one person goes down or the bus is full.

Right. Superb.

4.I think the concept in economics that is the best self-motivator is competition, because competition usually brings out the potential someone has.

Excellent!

5.

6.Question 11 was what is the marginal cost for the 3rd unit? The answer is $200 because the cost for 2 units is $1900, the cost for 3 units is $2100. So $2100 - $1900 is $200.

Well done. That's an important question that will be asked in a different form again and again on economics exams.

7.Economic rent is when a seller has something unique to sell and it cost him like a $1000 to make it, he can raise the price because people who want that will pay whatever price they can and he can raise the price as high as he wants until the law of demand stop him. So the economic rent is the difference between the price he wants to sell it for and the $1000 it cost to make.

Correct!

8.

9.The Law of Demand is my favorite concept because it is the easiest to understand, for me anyway.

It's the most important, too. Good answer.

10.The two gas stations across the street from each other reach their equilibrium by one gas station raising or lowering its price, then the other gas station counters by also raising or lowering its price until the law of demand makes them stay at a certain price so that both gas stations get the most efficient business.

Close, but doesn't full explain where the Nash equilibrium is for the oligopoly. See model answers when available.

Some terrific answers. 79/80. Congratulations!