Economics Questions and Answers

Economics

Our money supply isn’t backed by anything. There was a time when we could turn paper money into the government for gold coins, but that practice ended in 1934 when Congress changed the wording of...

Latest answer posted May 1, 2016 9:36 pm UTC

2 educator answers

Economics

Investopedia defines a normal good as one that “experiences an increase in quantity demanded” when there is an increase in the income of an individual. Inferior goods, on the other hand, are...

Latest answer posted March 21, 2018 12:25 pm UTC

2 educator answers

Economics

When a firm is making the decision about whether to shut down, it considers only one kind of cost. In addition, it considers one aspect of revenue. The only cost that a firm should consider when...

Latest answer posted January 11, 2013 7:54 pm UTC

1 educator answer

Economics

Because the concept of an "opportunity cost" extends beyond economics, it is possible to suggest such "costs" that do not involve money. Opportunity costs represent, to put it in psychological or...

Latest answer posted April 25, 2017 2:16 am UTC

2 educator answers

Economics

If you are going to determine the opportunity cost for the trip, you have to include two things. First, you have to include the actual cost of making the trip. Then, you have to factor in what...

Latest answer posted February 23, 2012 1:14 pm UTC

1 educator answer

Economics

If a firm finds that the marginal product of capital is 60 and the marginal product of labor is 20, it will recognize that each dollar spent on capital resources will produce more than a dollar...

Latest answer posted June 27, 2020 10:46 am UTC

5 educator answers

Economics

In answering this, we must first recognize that not everyone will agree on the answer to this question. Conservatives will tend to argue that there are few or no benefits to government...

Latest answer posted October 31, 2013 7:35 pm UTC

1 educator answer

Economics

Externalities are the effects of economic activity on third parties. Any activity is likely to affect others in some way, and the more significant the activity, the greater the externalities. If a...

Latest answer posted September 12, 2020 8:05 am UTC

1 educator answer

Economics

Labor supply elasticity refers to what happens to the supply of workers when the overall compensation for a job changes. If a job is very elastic, the number of people willing to work will increase...

Latest answer posted September 28, 2016 7:47 pm UTC

2 educator answers

Economics

Land, labor, capital and entrepreneurship are factors of production. They are resources employed towards the development of products and services. Their combination is expected to yield an economic...

Latest answer posted February 2, 2016 9:59 am UTC

2 educator answers

Economics

Zero unemployment is theoretically possible, but economists would say that it is a bad idea. It would be possible to ensure that everyone had a job. All that would have to happen is that the...

Latest answer posted November 12, 2012 5:59 pm UTC

1 educator answer

Economics

There are many industries in which economies of scale can be found. These can range from relatively small industries such as a single movie theater to large industries such as the production of...

Latest answer posted April 6, 2013 8:51 pm UTC

1 educator answer

Economics

I would argue that entrepreneurship is the most important of these factors of production. The second most important would be labor. Land and capital are much less important. They are necessary,...

Latest answer posted March 12, 2013 2:05 am UTC

1 educator answer

Economics

Opportunity Cost can also be viewed as "Cost of Choice." If you have a choice between going to Florida during spring break and staying home to work, it is prudent to calculate the cost of each...

Latest answer posted August 10, 2018 2:28 am UTC

4 educator answers

Economics

Public finance generally refers to the financial activities of public administration, or in other words, how a government plays a role in its economy. The economist Jonathan Gruber developed a...

Latest answer posted August 26, 2020 2:24 am UTC

1 educator answer

Economics

Of these options, the only one that is true of the firm is the first one. Its total costs and its fixed costs will be the same. To understand this, we must look at the two kinds of costs that go...

Latest answer posted December 6, 2012 1:54 am UTC

1 educator answer

Economics

The demand for Caffeine-Free Diet Coke should be more elastic than the demand for soda in general. This is because there are more substitutes for this particular kind of soda than there are for...

Latest answer posted October 23, 2012 9:15 pm UTC

2 educator answers

Economics

If interest rates rise in the United States, this will generally cause exchange rates to rise. The strength of the dollar is not straightforwardly linked to the health of the US economy because the...

Latest answer posted September 29, 2020 4:50 pm UTC

1 educator answer

Economics

Strictly speaking, the basic economic problem of scarcity can never truly be solved. This is because scarcity is a fact of social, and therefore of economic, life. However, the price mechanism can...

Latest answer posted July 5, 2020 11:29 am UTC

4 educator answers

Economics

The answer to this is that only Firm C is experiencing diseconomies of scale. A diseconomy of scale occurs when a firm's per unit costs increase as the firm produces more and more of a given good...

Latest answer posted October 16, 2011 12:32 pm UTC

1 educator answer

Economics

There are several reasons why such a motel might shut down. One reason is that the cost of operating the motel might go up in this scenario. As economic development grows in the area, the land the...

Latest answer posted November 27, 2017 5:38 pm UTC

3 educator answers

Economics

While monopolies can often charge more than a non-monopolistic firm could, they do not necessarily charge the highest price possible. This is for a number of reasons. First of all, charging a price...

Latest answer posted January 16, 2020 3:20 pm UTC

4 educator answers

Economics

With positive externalities, less is produced and consumed than the socially optimal level. (B. Taylor, "Positive Externalities") Positive Externalities The reason it may be said that government...

Latest answer posted May 10, 2015 7:41 pm UTC

2 educator answers

Economics

There are several factors that might limit long term growth in the United States. One that is increasingly worrisome is global climate change. Many of the most productive cities in the United...

Latest answer posted March 1, 2019 2:57 pm UTC

2 educator answers

Economics

In American society, division of labor is extremely valuable, as it allows for increased efficiency, productivity, and profitability. When division of labor exists, work is divided among...

Latest answer posted August 14, 2018 6:20 pm UTC

3 educator answers

Economics

By July, 1987, the Single European Act (SEA) had been ratified by all the Parliaments of European Union member states and drafted into law. The SEA was directed at creating a single, unified...

Latest answer posted July 6, 2020 5:56 pm UTC

3 educator answers

Economics

Mercantilism was the dominant school of thought in economics between 1500 and 1750 throughout most of Europe. The main policies advocated by mercantilist thinkers were to retain as much hard...

Latest answer posted February 19, 2021 10:07 pm UTC

1 educator answer

Economics

The question is one of comparative advantage and specialization. Each region of the nation of Leisureland has a comparative advantage in producing one of the two products that Leisureland must...

Latest answer posted July 5, 2020 1:00 pm UTC

3 educator answers

Economics

There is a connection between purchasing power and the price of items. When the price of products drops, purchasing power increases. When prices are lower, people are able to buy more products with...

Latest answer posted January 3, 2016 10:09 pm UTC

2 educator answers

Economics

When the Federal Reserve raises interest rates, the entire American economy is affected. Generally speaking, when interest rates increase, consumers choose not to spend as much as they might...

Latest answer posted December 2, 2019 7:58 pm UTC

4 educator answers

Economics

China does impose trade barriers, including tariffs, quotas, and other measures designed to restrict free trade. To get a sense of how China has trade barriers, let’s look specifically at the film...

Latest answer posted January 12, 2020 8:04 pm UTC

5 educator answers

Economics

This choice affects an economy's ability to produce in the future because investment in capital goods builds the economy's future production potential. If an economy chooses to spend its money on...

Latest answer posted August 27, 2012 4:29 pm UTC

1 educator answer

Economics

Great question! In purely economic terms, using the decision-making framework of opportunity cost is an effective method for analyzing future potential or consequence of a choice. However, it is...

Latest answer posted February 7, 2019 2:25 pm UTC

2 educator answers

Economics

If we consider the long run, when capital stock increases (and all other things remain equal), there will be an increase in the gross domestic product (GDP), and the price level will drop. The...

Latest answer posted November 22, 2018 3:28 pm UTC

2 educator answers

Economics

Supply and demand are essential to understanding pricing in a market economy. In a market economy, the government does not play a major role in the economy. This is contrary to a command economy in...

Latest answer posted July 24, 2018 12:44 am UTC

2 educator answers

Economics

Resource scarcity is an economic problem, and economic practice and principles attempt to satisfy human needs and wants using the scarce resources. However, the principles and practice have to...

Latest answer posted February 9, 2016 9:51 am UTC

2 educator answers

Economics

The best answer to this is that the availability of resources is the major determinant of supply in an economy that is growing rapidly. This is true both for the supply of individual goods and for...

Latest answer posted February 5, 2013 2:18 am UTC

1 educator answer

Economics

The indifference curve is a curve drawn with the number of units of a product A on the x-axis and number of units of another product B on the y-axis. Along the curve, the sum of the total utility...

Latest answer posted October 16, 2011 11:39 pm UTC

1 educator answer

Economics

Market economies are most often associated with capitalism. Capitalism is defined by the privatization of forces of supply and demand. The effects of supply and demand transfer capital from less...

Latest answer posted August 6, 2019 11:51 am UTC

4 educator answers

Economics

Of these two, bottled water has the more elastic demand. There are two reasons for this. First, products tend to have elastic demand if there is a substitute for them that is lower in price. If...

Latest answer posted October 23, 2012 9:03 pm UTC

1 educator answer

Economics

When people are so poor that they lack the basic necessities, they might see socialism as a positive alternative. The grass is always greener on the other side. Perhaps the people feel that...

Latest answer posted June 22, 2011 1:44 pm UTC

8 educator answers

Economics

The fact that there is a minimum wage is not very controversial by itself. Most people realize that, to keep businesses from exploiting certain workers in certain situations, there must be a level...

Latest answer posted July 31, 2012 2:59 pm UTC

2 educator answers

Economics

Real GDP is calculated using historical values. Using these values, we can more accurately measure and understand inflation, because these measurements have already been completed and we know how...

Latest answer posted July 22, 2019 12:58 pm UTC

3 educator answers

Economics

CompareOligopoly is a market structure; monopolistic competition is another market structure. They compare in that each is a type of market structure. Both operate in markets with imperfect...

Latest answer posted July 11, 2016 12:49 am UTC

3 educator answers

Economics

The supply of loanable funds comes from two things: Savings, and fractional-reserve banking.When people save money in banks, that money is available to be loaned. But this is relatively unimportant...

Latest answer posted May 3, 2016 8:54 pm UTC

1 educator answer

Economics

Of the examples given here, only the last has mainly to do with macroeconomics. Macroeconomics is the study of economic issues that affect an entire economy. By contrast, microeconomics is...

Latest answer posted September 16, 2012 6:58 pm UTC

1 educator answer

Economics

The aim of this question is to ensure you can spot the difference between normative and positive economics. While the names may be a bit counterintuitive, positive economics only focuses on...

Latest answer posted February 8, 2019 9:50 pm UTC

2 educator answers

Economics

All other things being equal, if the dollar depreciates relative to foreign currencies, Americans will buy fewer imports and foreigners will buy more goods and services that are exported from the...

Latest answer posted June 18, 2012 7:31 pm UTC

1 educator answer

Economics

There are three major reasons why the short run aggregate supply curve (SRAS) slopes upward. First, it does so because resource prices are sticky and it can be easier for firms to reduce production...

Latest answer posted November 28, 2012 6:18 am UTC

1 educator answer

Economics

The major factors of production in the United Arab Emirates can only be considered in relative terms and, as the student's question references Lebanon, another country in the Middle East, such a...

Latest answer posted September 15, 2015 4:46 pm UTC

1 educator answer

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