Economics Homework Twelve Answers - Student Two

TrishaM

1\. A monopsony is simply a single buyer of a good/service.

Correct!

2\. A "production possibilities curve" shows the amount of production possible for Good A when the production of Good B is increased or decreased.

That's a good, concise, and clear definition. Well done! May use as a model.

3\. When the demand the public has for a good a company is producing increases or decreases, the demand that the company has for the labor that produces that good increases or decreases accordingly.

You have the right idea, but you didn't fully connect it with the key term in the question: elasticity. (Minus 1). See model answers when available.

4\. The Lorenz curve shows the actual distribution of income among society as compared to an equal distribution of income in society. In my opinion, this should not be one of the government's high priorities. Philanthropists around the nation are already contributing greatly to the equal distribution of income since they are sharing their wealth with those who are poverty-stricken. The government has no right to try to forcefully take income away from the wealthy and give it to the poor. This money should be given willingly. The government should, instead, stick to giving people all the facts about goods/services and their benefits or hazards.

Superb answer! May use as a model.

By the way, I had an incorrect sentence in Lecture 12 about the shape of the actual distribution of income in a Lorenz curve. It looks like this (click here).

5\.

OK.

6\. AFC stands for the Average Fixed Cost - it is the amount of money that a company pays when the total output is 0, AVC stands for Average Variable Cost - it is the amount a company must pay when the production output is varied, it consists of the money to pay for materials, costs to run the factory, labor, etc., ATC stands for Average Total Cost which is the Average Fixed Cost + the Average Variable Cost.

No, this is not correct. The "average" means you have to divide by the output in each instance. See model answers. (Minus 1). Also, the question asked when a firm should shut down in the short run. (Minus 1).

7\. An improvement in technology or an increase in capital and workers is needed to shift the production possibilities curve outward.

Excellent!

57/60. Good work on a difficult homework assignment!--Andy Schlafly 18:34, 12 December 2009 (EST)