Seth P.
1.A monopsony is one buyer.
2.A production possibilities curve is a way to graph all the different possibilities you have for spending your time, resources and energy.
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4.No, I don't think government policy should give high priority to the Lorenz curve. A Lorenz curve addresses the issue of equal distribution of wealth in a society. No, I don't think that should be a high priority of government economic policy because if they do this it will cause more problems than it will fix.
5.On figure A, shifting production from B to C would make them lose money because they are above the demand.
6.AFC, average fixed cost, is the fixed cost divided by the output. AVC, average variable cost, is the variable cost divided by the output. ATC, average total cost, is total cost divided by output. AFC and AVC when added together should equal the ATC. A firm should shut down in the short run when their ATC is greater than their revenue.
7.A production possibilities curve would shift outward if someone made a lot more factories and could produce more, or if there was an advancement in technology which allowed factories to make way more stuff than they did before.
8.In figure C, total revenue is maximized at point D.
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10.No, I would not hire the tenth worker because I would lose $4/hr.
11.In comparative advantage they are comparing the one countries two goods to see which one they can make more efficiently, so they can figure out what they are best at making. Then trade with a different country for other stuff they are not as good at making.
Categories: [Economics Homework Twelve Answers]