Economics Homework Seven Answers - Student Sixteen

AmandaS.

1\. Identify the four elements of perfect competition.

1. Many buyers and sellers.
2. Goods and perfect substitutes for each other.
3. Perfect knowledge in the market.
4. Perfect mobility of resources.

Correct!

2\. Describe how you might use competition, perhaps even competing with yourself, to motivate you to achieve more.

For myself competition is very important. I am always striving to do my best, whether through sports or school. Competition gives me the motivation to work hard in order to succeed and do the best I can do.

Excellent.

3\. I don’t completely understand the concept of the short run and long run.

The short run is a period not long enough to adjust all your inputs as an owner in order to minimize all the costs. Instead, in the short run only some inputs can be adjusted in order to change output, such as using overtime to produce a few more units. The long run is a period long enough to adjust all inputs in an optimal way, as in building an entire new stadium for a baseball team rather than putting up some temporary extra bleachers.

4\. Do you think the converse of Gresham's Law is true with respect to speech and conversation, such that good speech or conversation (such as discussing the Bible) drives out bad? Explain. Yes, definitely. People tend to conform to the ways of their surroundings. For instance if someone is using foul language around a person who uses none, they are most likely going to feel uncomfortable and realize that there is no need for that type of speech, leading them to then think before they speak.

Terrific.

5\. Explain the difference between total cost, average cost, and marginal cost. The total cost is the overall price. The average cost is the cost per unit, and the marginal cost is the cost of one additional unit.

Correct again!

6\. Suppose you decide you could profitably set the price for a homeschool dance at $15 per ticket, and it would have attracted 150 people. You also determine that 50 out of the 150 people who would have attended would have paid $20 per ticket and 10 out of the 150 would have paid $25 per ticket, and 5 out of the 150 would have paid $30 per ticket, because they would have enjoyed and benefited so much from it. However, the homeschool dance was never held because no one "got around to it." What is the loss in wealth or consumer surplus due to the fact that the event was not held? 50x$5=$250. 10x$10=$100. 5x$15=$75. The total surplus is $425.00.

Fantastic, could have been the model answer!

Perfect score: 60/60. Congratulations!--Andy Schlafly 15:00, 2 November 2009 (EST)