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ECO 561 Final Exam Guide(NEW)

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1) Suppose that in the clothing market, production costs have fallen, but the equilibrium price and quantity purchased have both increased. Based on this information you can conclude that

A. the supply of clothing has grown faster than the demand for clothing

B. demand for clothing has grown faster than the supply of clothing

C. the supply of and demand for clothing have grown by the same proportion

D. there is no way to determine what has happened to supply and demand with this information

2) Camille’s Creations and Julia’s Jewels both sell beads in a competitive market. If at the market price of $5, both are running out of beads to sell (they can’t keep up with the quantity demanded at that price), then we would expect both Camille’s and Julia’s to:

A. raise their price and reduce their quantity supplied

B. raise their price and increase their quantity supplied

C. lower their price and reduce their quantity supplied

D. lower their price and increase their quantity supplied

3) In which of the following industries are economies of scale exhausted at relatively low levels of output?

A. Aircraft production

B. Automobile manufacturing

C. Concrete mixing

D. Newspaper printing

4) The average cost curves (AVC and ATC) should be minimized

A. where MC = ATC and MC = AVC

B. where FC = ATC and FC = AVC

C. where TC starts to increase at a faster rate

D. where ATC = AVC

5) If the wage rate increases,

A. a purely competitive producer will hire less labour, but an imperfectly competitive producer will not

B. an imperfectly competitive producer will hire less labour, but a purely competitive producer will not

C. a purely competitive and an imperfectly competitive producer will both hire less labour

D. an imperfectly competitive producer may find it profitable to hire either more or less labour

6) The real wage will rise if the nominal wage

A. falls more rapidly than the general price level

B. increases at the same rate as labor productivity

C. increases more rapidly than the general price level

D. falls at the same rate as the general price level

7) Construction workers frequently sponsor political lobbying in support of greater public spending on highways and public buildings. One reason they do this is to

A. restrict the supply of construction workers

B. increase the elasticity of demand for construction workers

C. increase the demand for construction workers

D. increase the price of substitute inputs

8) Paying an above-equilibrium wage rate might reduce unit labour costs by

A. permitting the firm to attract lower-quality labour

B. increasing the cost to workers of being fired for shirking

C. increasing voluntary worker turnover

D. increasing the supply of labour

9) A good real-world example of monopolistic competition is

A. lawyers

B. gas stations

C. Time Warner Cable

D. groceries store

10) An industry comprising a small number of firms, each of which considers the potential reactions of its rivals in making price-output decisions, is called

A. monopolistic competition

B. oligopoly

C. pure monopoly

D. pure competition

11) Price is constant or given to the individual firm selling in a purely competitive market because

A. the firm’s demand curve is downward sloping

B. of product differentiation reinforced by extensive advertising

C. each seller supplies a negligible fraction of total supply

D. there are no good substitutes for its product

12) The most important pricing strategy for a perfectly competitive firm is

A. minimizing cost

B. maximizing sales

C. product differentiation

D. advertising

13) Which of the following is a nonprice barrier of entry?

A. Huge sunk cost

B. Discounts

C. Product differentiation

D. Advertising

14) A third-degree price discrimination can be applied to which of the following market structures?

A. A monopoly

B. An oligopoly

C. A monopolistic competition

D. A perfect competition

15) Investing in R&D is more likely to occur in markets where

A. firms have monopoly power protected by regulatory barriers

B. markets are closely competitive markets with close to zero economic profits

C. markets are oligopoly markets with strong collusion agreements

D. markets are monopolistic competitive markets

16) All economies of scale are achieved at the minimum of

A. average total cost

B. total cost

C. average variable cost

D. average fixed cost

17) Inflation is undesirable because it

A. arbitrarily redistributes real income and wealth

B. invariably leads to hyperinflation

C. usually is accompanied by declining real GDP

D. reduces everyone’s standard of living in the same pro

portion

18) An economy’s aggregate demand curve shifts leftward or rightward by more than changes in initial spending because of the

A. net export effect

B. wealth effect

C. real-balances effect

D. multiplier effect

19) Suppose productivity rises in a particular economy, but wages stay the same. Other things equal,

A. the demand curve will shift leftward

B. the supply curve will shift rightward

C. the supply curve will shift leftward

D. expenditures curve will shift rightward

20) If personal taxes were decreased and resource productivity increased simultaneously, the equilibrium

A. output would rise

B. output would fall

C. price level would necessarily fall

D. price level would necessarily rise

21) Expansionary fiscal policy is so named because it

A. involves an expansion of the nation’s money supply

B. can only be attained by expanding government consumption

C. is aimed at achieving greater price stability

D. can motivate an expansion of real GDP

22) Suppose the price level is fixed, the MPC is .5, and the GDP gap is a negative$100 billion. To achieve full-employment output (exactly), government should

A. increase government expenditures by $100 billion

B. increase government expenditures by $50 billion

C. reduce taxes by $50 billion

D. reduce taxes by $200 billion

23) GDP understates the value of output produced by an economy because it

A. includes transactions that do not take place in organized markets, such as home cooked meals

B. includes environmental degradation caused by increased output production

C. excludes value added from the underground economy, such as tips taken under the table

D. excludes the value of the wages and benefits of government employee

24) Other things equal, a decrease in the real interest rate will

A. shift the investment demand curve to the right

B. shift the investment demand curve to the left

C. move the economy upward along its existing investment demand curve

D. move the economy downward along its existing investment demand curve

25) Other things equal, a decrease in corporate income taxes will

A. decrease the market price of real capital goods

B. have no effect on the location of the investment demand curve

C. shift the investment demand curve to the right

D. shift the investment demand curve to the left

26) Inflation in U.S. prices will cause

A. an increase in the demand for U.S. dollars and an appreciation in the exchange rate

B. an increase in the supply of U.S. dollars and a depreciation in the exchange rate

C. a decrease in the demand for U.S. dollars and a depreciation in the exchange rate

D. a decrease in the supply of U.S. dollars and an appreciation in the exchange rate

27) The quantity theory of money states that

A. the money supply divided by the velocity of money equals the price level divided by real output

B. the money supply times the velocity of money equals the price level times real output

C. the money supply times the price level equals real output divided by the velocity of money

D. the money supply times the price level equals real output times the velocity of money

28) Suppose that U.S. prices rise 4% over the next year while prices in Mexicorise 6%. According to the purchasing power parity theory of exchange rates,what should happen to the exchange rate between the dollar and the peso?

A. The dollar should depreciate.

B. The peso should appreciate.

C. The peso should depreciate.

D. The dollar will be revalued.

29) A rise in the domestic interest rate leads to capital

A. outflows and exchange rate appreciation

B. outflows and exchange rate depreciation

C. inflows and exchange rate depreciation

D. inflows and exchange rate appreciation

30) A firm under monopolistic competition will earn

A. a positive economic profit as it has some monopoly power

B. zero economic profit as it sets P = MC

C. zero economic profit as its P = ATC

D. a positive economic profit as it sets MC = MR

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ECO 561 Final Exam Guide

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1) In a market economy the distribution of output will be determined primarily by:

A. a social consensus as to what distribution of income is most equitable. B.

consumer needs and preferences. C. the quantities and prices of the resources

that households supply. D. government regulations that provide a minimum

income for all.

2) In a competitive market economy firms will select the least-cost production

technique because: A. “dollar voting” by consumers mandates such a choice. B. such

choices will result in the full employment of available resources. C. to do so will

maximize the firms’ profits. D. this will prevent new firms from entering the

industry.

3) A leftward shift in the supply curve of product X will increase equilibrium price to

a greater extent the: A. more inelastic the demand for the product. B. more

elastic the supply curve. C. larger the elasticity of demand coefficient. D. more elastic

the demand for the product.

4) Which of the following statements is true about productive and allocative

efficiency? A. Realizing allocative efficiency implies that productive efficiency

has been realized. B. Productive efficiency can only occur if there is also allocative

efficiency. C. Productive efficiency and allocative efficiency can only occur together;

neither can occur without the other. D. Society can achieve either productive

efficiency or allocative efficiency, but not both simultaneously.

5) Since their introduction, prices of DVD players have fallen and the quantity

purchased has increased. This statement: A. suggests that the supply of DVD

players has increased. B. suggests that the demand for DVD players has increased.

C. constitutes an exception to the law of supply in that they suggest a downward

sloping supply curve. D. constitutes an exception to the law of demand in that they

suggest an upward sloping demand curve.

6) Camille’s Creations and Julia’s Jewels both sell beads in a competitive market. If at

the market price of $5, both are running out of beads to sell (they can’t keep up with

the quantity demanded at that price), then we would expect both Camille’s and

Julia’s to: A. raise their price and reduce their quantity supplied. B. raise their price

and increase their quantity supplied. C. lower their price and increase their

quantity supplied. D. lower their price and reduce their quantity supplied.

7) If a firm in a purely competitive industry is confronted with an equilibrium price

of $5, its marginal revenue: A. may be either greater or less than $5. B. will also be

$5. C. will be greater than $5. D. will be less than $5.

8) If technology dictates that labor and capital must be used in fixed proportions, an

increase in the price of capital will cause a firm to use: A. more labor as a

consequence of the substitution effect. B. more labor as a consequence of the output

effect. C. less labor as a consequence of the output effect. D. less labor as a

consequence of the substitution effect.

9) If a firm is selling in an imperfectly competitive product market, then: A. A.

average product will be less than marginal product for any number of workers

hired. B. the marginal products of successive workers must be sold at lower prices.

C. the marginal products of successive workers can be sold at a constant price. D. the

marginal products of successive workers can be sold at higher prices.

10) In the short run the Sure-Screen T-Shirt Company is producing 500 units of

output. Its average variable costs are $2.00 and its average fixed costs are $.50. The

firm’s total costs: A. are $2.50. B. are $1,250. C. are $1,100. D. are $750.

11) What do wages paid to blue-collar workers, interest paid on a bank loan,

forgone interest, and the purchase of component parts have in common? A. None are

either implicit or explicit costs. B. All are opportunity costs. C. All are implicit costs. D.

All are explicit costs.

12) Which of the following represents a long-run adjustment? A. a steel

manufacturer cuts back on its purchases of coke and iron ore B. a farmer uses an

extra dose of fertilizer on his corn crop C. unable to meet foreign competition, a

U.S. watch manufacturer sells one of its branch plants D. a supermarket hires

four additional clerks

13) If the wage rate increases: A. a purely competitive and an imperfectly

competitive producer will both hire less labor. B. a purely competitive producer

will hire less labor, but an imperfectly competitive producer will not. C. an

imperfectly competitive producer will hire less labor, but a purely competitive

producer will not. D. an imperfectly competitive producer may find it profitable to

hire either more or less labor.

14) Construction workers frequently sponsor political lobbying in support of

greater public spending on highways and public buildings. One reason they do this

is to: A. increase the demand for construction workers. B. restrict the supply of

construction workers. C. increase the elasticity of demand for construction workers.

D. increase the price of substitute inputs.

15) A firm can hire six workers at a wage rate of $8 per hour but must pay $9 per

hour to all of its employees to attract a seventh worker. The marginal wage cost of

the seventh worker is: A. $15. B. $9. C. $10. D. $21.

16) Oligopoly is difficult to analyze primarily because: A. output may be either

homogenous or differentiated. B. the number of firms is too large to make collusion

understandable. C. the price and output decisions of any one firm depend on the

reactions of its rivals. D. neither allocative nor productive efficiency is achieved.

17) A competitive firm will maximize profits at that output at which: A. total

revenue exceeds total cost by the greatest amount. B. total revenue and total

cost are equal. C. price exceeds average total cost by the largest amount. D. the

difference between marginal revenue and price is at a maximum.

18) An industry comprised of a small number of firms, each of which considers the

potential reactions of its rivals in making price-output decisions is called: A.

monopolistic competition. B. oligopoly. C. pure monopoly. D. pure competition.

19) Advertising can impede economic efficiency when it: A. increases entry barriers.

B. reduces brand loyalty. C. enables firms to achieve substantial economies of scale.

D. increases consumer awareness of substitute products.

20) Nonprice competition refers to: A. advertising, product promotion, and

changes in the real or perceived characteristics of a product. B. competition

between products of different industries, for example, competition between

aluminum and steel in the manufacture of automobile parts. C. reductions in

production costs that are not reflected in price reductions. D. price increases by a

firm that are ignored by its rivals.

21) Which of the following is not a possible source of natural monopoly? A. greater

use of specialized inputs B. large-scale network effects C. rent-seeking behavior D.

simultaneous consumption

22) A monopolistically competitive industry combines elements of both competition

and monopoly. The monopoly element results from: A. product differentiation. B.

the likelihood of collusion. C. mutual interdependence in decision making. D. high

entry barriers.

23) The term oligopoly indicates: A. a few firms producing either a differentiated

or a homogeneous product. B. a one-firm industry. C. an industry whose four-firm

concentration ratio is low. D. many producers of a differentiated product.

24) Suppose that an industry is characterized by a few firms and price leadership.

We would expect that: A. price would exceed both marginal cost and average

total cost. B. price would equal marginal cost. C. marginal revenue would exceed

marginal cost. D. price would equal average total cost.

25) When economists view technological change as internal to the economy, they

mean that it: A. arises deliberately from the profit motive and competition. B.

occurs randomly. C. arises mainly from government subsidies. D. occurs

accidentally.

26) Firm X develops a new product and gets a head start in its production. Other

firms try to produce a similar product but discover they have higher average total

costs than the existing firm. This situation illustrates: A. learning-by-doing. B.

diseconomies of scale. C. spillover costs. D. diminishing marginal returns.

27) In the long run a pure monopolist will maximize profits by producing that

output at which marginal cost is equal to: A. average variable cost. B. average total

cost. C. average cost. D. marginal revenue.

28) If the U.S. unemployment rate is 9 percent, we can infer that: A. the economy is

in the expansion phase of the business cycle. B. actual GDP is equal to potential GDP.

C. potential GDP is in excess of actual GDP. D. actual GDP is in excess of potential

GDP.

29) The industries or sectors of the economy in which business cycle fluctuations

tend to affect output the most are: A. military goods and capital goods. B. capital

goods and durable consumer goods. C. services and nondurable consumer goods.

D. clothing and education.

30) Inflation is undesirable because it: A. arbitrarily redistributes real income

and wealth. B. reduces everyone’s standard of living. C. invariably leads to

hyperinflation. D. usually is accompanied by declining real GDP.

31) Kara voluntarily quit her job as an insurance agent to return to school full-time

to earn an MBA degree. With degree in hand she is now searching for a position in

management. Kara presently is: A. cyclically unemployed. B. not a member of the

labor force. C. structurally unemployed. D. frictionally unemployed.

32) Expansionary fiscal policy is so named because it: A. involves an expansion of

the nation’s money supply. B. is designed to expand real GDP. C. necessarily

expands the size of government. D. is aimed at achieving greater price stability.

33) Suppose the price level is fixed, the MPC is .5, and the GDP gap is a negative

$100 billion. To achieve full-employment output (exactly), government should: A.

increase government expenditures by $100 billion. B. reduce taxes by $200 billion.

C. increase government expenditures by $50 billion. D. reduce taxes by $50

billion.

34) Assume the Standard Internet Company negotiates a loan for $5,000 from the

Metro National Bank and receives a checkable deposit for that amount in exchange

for its promissory note (IOU). As a result of this transaction: A. the supply of

money is increased by $5,000. B. the Metro Bank acquires reserves from other

banks. C. the supply of money declines by the amount of the loan. D. a claim has been

“demonetized.”

35) If the Fed were to purchase government securities in the open market, we

would anticipate: A. higher interest rates, a contracted GDP, and depreciation of the

dollar. B. lower interest rates, a contracted GDP, and appreciation of the dollar. C.

lower interest rates, an expanded GDP, and appreciation of the dollar. D. lower

interest rates, an expanded GDP, and depreciation of the dollar.

36) Other things equal, a 10 percent decrease in corporate income taxes will: A.

shift the investment-demand curve to the right. B. shift the investment-demand

curve to the left. C. have no effect on the location of the investment-demand curve.

D. decrease the market price of real capital goods.

37) The quantity theory of the demand for money states that a country’s money

supply is proportional to: A. The exchange rate. B. The money value of gross

domestic product. C. The real level of gross domestic product. D. The domestic

interest rate.

38) Suppose that US prices rise 4 percent over the next year while prices in Mexico

rise 6%. According to the purchasing power parity theory of exchange rates, what

should happen to the exchange rate between the dollar and the peso? A. The peso

should depreciate. B. The dollar will be revalued. C. The peso should appreciate. D.

The dollar should depreciate.

39) Exchange rates are determined in the long-run by: A. Purchasing power parity.

B. Financial asset pricing. C. Real growth rates. D. Interest rate differentials.

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ECO 561 Week 1 DQ 1

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What kinds of changes in underlying conditions can cause the supply and demand curves to shift? Give examples and explain the direction in which the curves shift.

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ECO 561 Week 1 DQ 2

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What is price elasticity? Give examples of five products whose demand is price elastic, and five products whose demand is price inelastic and elaborate on the choices you make.

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ECO 561 Week 1 Economic Choice & Economic Decision Making (2 Papers)

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THIS TUTORIAL CONTAINS 2 PAPERS

Consider your last vehicle purchase and the decision making process you engaged in while deciding what vehicle to purchase or if a new vehicle was the right decision. While analyzing your decision, keep in mind that everything from the interest rates to the price of gasoline is driven by the economy in one way or another.

Develop a 1,400-word analysis of your decision-making process in which you include the following:

Discuss the role of the interest rate and the cost of financing on your purchase decision. Interest rates are derived from the supply and demand for money and the actions of the Federal Reserve System. What was the rate of interest you paid on your vehicle loan? Were interest rates rising or falling at the time of your decision?

Examine the influence of gasoline prices on the choice of vehicle you selected. Gasoline prices rise and fall dramatically based on economic supply of and demand for crude oil. When gasoline prices are low, Americans buy larger, heavier autos, SUV’s and pick-up trucks. When gas prices are high, Americans purchase more compact and fuel efficient vehicles. When you purchased your last vehicle, were crude oil and gasoline prices rising or falling?

Discuss the following in regard to your household at the time of your purchase:

Were you employed?

Was the economy growing or contracting (recession)?

If you were employed, did you take into consideration the risk that you might lose your job if a recession occurred during the period of your loan pay-back?

A basic assumption of consumers making purchases of large items requiring financing is that their household cash flow will be adequate to cover the monthly loan payments. For most Americans, this also means assuming continuation of their present wages. But many jobs are sensitive to rises and falls in the business cycle, as witnessed by the 10% unemployment rate of the past “Great Recession.”

Evaluate the financial trade-offs made when making your purchase. This includes lower maintenance costs for a newer vehicle versus a car payment and higher insurance among other factors.

Discuss the influence of any of these Federal or state level programs on your decision to purchase a vehicle; or if these did not factor into your decision, explain why or why not:

Buying fuel efficient vehicles such as Flex fuel, hybrids and electrics

Converting existing vehicles to use alternative fuels (Flex fuel)

Removing old, fuel inefficient, and high polluting vehicles from the highways

Explain the influence of environmental factors such as emissions and health concerns on your decision.

Discuss the ways in which your purchase illustrates one piece of the circular flow model of economic activity. What are the other parts?

Develop conclusions about the economy’s influence on personal and business decision making such as purchases, investments, and so forth.

Cite a minimum of three peer reviewed sources.

Format your paper consistent with APA guidelines.

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ECO 561 Week 1 Individual Assignment Market Equilibrating Process Paper

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We have another paper on Market Equilibration Process Paper with different course description which could be found on this link

http://www.uophelp.com/ECO-561/ECO-561-Week-2-Individual-Assignment-Market-Equilibration-Process-Paper

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ECO 561 Week 1 Knowledge Check (Quiz)

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1. Revenue increases when

2. An increase in the price of an inelastic good

3. Price elasticity of demand increases when

4. The purpose of a market in a market system is to

5. By specializing in the production of one good, a company is able to benefit from economics of scale which increases its revenue. Which of the following is an attribute of specialization?

6. The market system promotes progress by

7. Productive efficiency is achieved when

8. The market is asid to be in equilibrium when

9. The market will move to a higher equilibrium price if

10. The intersection of supply and demand will be at a lower equilibrium price but a higher equilibrium quantity if

11. When a price ceiling occurs

12. Because the goals of firms, entrepreneurs, and workers have different incentives, which of the following principles applies?

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ECO 561 Week 2 DQ 1

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Cost is a big issue with every company, and changing the technology is the biggest cost for most companies, how your company was able to cope with this problem and maintain the level of profit in a very competitive market?

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ECO 561 Week 2 DQ 2

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Among the types of costs faced by a firm (short-run costs, fixed and variable, as well as long-run costs), how can technology help firms to lower their costs? What are some specific examples of how firms have used technology to lower costs?

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ECO 561 Week 2 Government Interventions vs. Market Based Solutions (2 PPT)

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THIS TUTORIAL CONTAINS 2 PPT

ECO 561 WEEK 2 GOVERNMENT INTERVENTIONS VS. MARKET BASED SOLUTIONS

The theory of market economies emphasizes freedom of choice and limited government intervention. The classic argument for government intervention is market failure — the inability of the market economy to correct itself from a dysfunctional state (such as the Great Depression).

Examine one case of significant government intervention as it relates to your current industry of employment or an industry in which you are interested in working.

Examples of intervention programs include, but are not limited to:

US agriculture support programs

Low income support programs (Food Stamps, Earned Income Tax Credit, Child Tax Credit, and Temporary Assistance to Needy Families)

Medicaid, Children’s Health Insurance Program, Obamacare

Low income rent controls and housing vouchers

Government promoting renewable energy sources, discouraging fossil fuel sources

Develop a 16-slide presentation including detailed speaker notes or voiceover including the following:

Describe the intervention and detail its history.

Analyze the arguments for government intervention as opposed to arguments for market-based solutions.

Examine who may be helped and who may be hurt by the selected government intervention.

Examine externalities and/or unintended consequences of such intervention.

Determine the cost trend of the intervention program since its implementation.

Evaluate the success or failure of the intervention in achieving its objectives and develop conclusions.

Defend the use of or discontinuation of the selected intervention.

Note: The use of tables and/or charts to display economic data over the time period discussed is highly encouraged.

Cite a minimum of three scholarly references.

Format your paper consistent with APA guidelines.

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ECO 561 Week 2 Individual Assignment Market Equilibration Process Paper

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Equilibration is the process of moving between two equilibrium points as a result of some change in supply or demand. Understanding how market equilibrium is sought following such a change is essential for business managers. It is important to understand how economic principles, and specifically supply, demand, and their determents are a part of your everyday business decisions.

Write a paper, or create a PowerPoint presentation using a real world experience in a free market (not government regulated) to describe a change that occurred in supply or demand as a result of world events that led to the need for a move between two equilibrium states. Explain the process of how that movement occurred using behaviors of consumers and suppliers. Graph the movement between the two points as well.

Required Elements:

Include academic research to support your ideas

Consider the Law of demand and the determinants of demand

Consider the Law of supply and the determinants of supply

Describe Efficient markets theory

Explain Surplus and shortage

Deliver the content in no more than a 700-word paper, OR 7- to 10-slide Microsoft PowerPoint presentation (Please choose one of these choices, not both)

Use University of Phoenix Material: Appendix A to create graphs illustrating the movement between the two equilibrium points and include this in the body of the assignment.

Your assignment is consistent with APA guidelines.

Click the Assignment Files tab to submit your assignment

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ECO 561 Week 2 Knowledge Check (Quiz)

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1. Purely competitve firms increase total revenue by

2. What are two ways for a competitve firm to determine the optimal level of production, that is, the level of production that will maximize profit or minimize losses?

3. Suppose that a firm determines that its marginal revenue is greater than its marginal cost, it would be better to

4. It is profitable for a firm to continue employing additional resources as long as

5. As additional units are produced, the marginal revenue product falls for all firms because marginal product decreases. For firms operating in industries that are not perfectly competitve, marginal revenue product also falls because

6. All things being equal, an increase in demand for a product,

7. Marginal cost can be defind as the additon to — — — — — — — — — — -of one more unit of output.

8. If a firm stars small and, over time, builds successively larger plant sizes or adds additonal work space in an office, average total costs are most likely to

9. Demand for resources, including labor, depend on its

10. The primary difference between increasing-and decreasing-cost industries lies in

11. When adding labor or other factors of production, buisnesses may see their total product rise, but see their per-unit increase in return for each additional unit diminish. This phenomenon

12. In the short run, firms should shut down if

13. When you are considering the value of a resource in its next best use, you are considering its

14. Of the four major market structures-perfectly competitive, monopolistic competition, oligopoly, monopoly-reducing variable costs of production

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ECO 561 Week 2 Learning Team Reflection

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ECO 561 Week 2 Learning Team Deliverable

The learning objectives of week 2 were to identify production level to maximize profits, explain how to balance fixed and variable costs, and to apply economic cost concepts in making business decisions.

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ECO 561 Week 2 Team Assignment Learning Team Project Product Pricing Component (Apple)

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Learning Team Assignment: Learning Team Project Product Pricing Component

Select an organization with which you are familiar or in which you are interested that provides a private good or service. You will want to focus on the same firm or organization as you work on each Learning Team Project assignment in this class as you build the final paper due Week 6.Examples of good firms to use as a subject include Southwest Airlines (a very successful airline), Ford (they have not declared bankruptcy), Pulte (a successful homebuilder with a historical track record), Whirlpool (their performance is very dependent on the economy), Caterpillar, Microsoft, Apple Computer, etc.

Describe the utility of that good or service to the immediate consumer (which may or may not be another organization) and the consumer needs that the product or service meets.

Discuss the number and closeness of substitute and complementary products and their impact on the pricing decision.

Explain why the demand for the product or service is relatively price elastic or relatively price inelastic. Address the following;

1) The effect on revenue when there is a change in price (assuming competitors do not follow);

2) Determine whether demand for the product or service is relatively price elastic or relatively price inelastic based on conclusions from peer reviewed or other reputable resources. You will want to consider the number and closeness of substitutes (including foreign substitutes). Justify your conclusion.

Describe the issues that affect consumer demand and the price. Describe issues related to the cost of doing business which may affect the firm’s pricing decisions.

Focus on issues related to the cost of doing business that affect the firms average and marginal costs, and the pricing decisions of the firm

Suggest strategies to enhance revenue based upon all of the above information.

This document should be 1,050–1,400 words in length. APA format is required. One note; these word count figures are meant to be a guideline, but feel free to exceed this if you find it is necessary to adequately provide relevant details and clarify important points.

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ECO 561 Week 3 DQ 1

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Do you think that competition can be counted on to discipline the industrial business firms of a modern economy? Explain.

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ECO 561 Week 3 DQ 2

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In your industry, would you support regulation or deregulation and why or why not?

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ECO 561 Week 3 Knowledge Check (Quiz)

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1. A purely- or perfectly-competitive firm would be characterized by which of the following?

2. For a purely-competitive firm, price must be

3. What will excessive or economic profits induce for a firm in any industry structure?

4. A pure-monopoly firm’s demand curve is also the market demand curve. This kind of firm may successfully engage in price discrimination to increase its total profit if it

5. Oligopolies are characterized by a small number of firms where the top three firms hold the majority of the market. If in an oligopoly market, firm A ia almost twice as big as firm B and firm C then

6. In a monopolistic competiton industry, if one firm appreciably increased its price from the existing equilibrium price, which of the following outcomes would most likely ensue?

7. Which factor charcterizes the competitive relationship between firms in an oligopoly market structure?

8. Unregulated (natural) monopolies maintain their status through a variety of measures. Whether any particular measure can effectively constrain new firms from entering the market depends on

9. Regulated monopolies are empowered by public authority for which specific reason?

10. Using a significantly greater economy of scale — with attendant lower, long-run average total costs — to restrict the market entry of new competitors

11. In technology-intensive oligopolies — charcterized by dynamically evolving product design — restricting the entry additional firms is

12. Whether the market structure is monopolistic or oligopolistic, a firm may increase consumer demand for its product as an overall portion of market share if

13. One difference between firms already established in a monopolistic competition industry and those attempting to enter it is that

14. An average firm in an industry characterized by a homogeneous product, relatively low barriers to entry, and a low concentration ratio

15. A monopolistic firm may operate in a relatively mature market with little likelihood for significant change in technology or process efficiencies. To maximize its profits, such a firm might

16. Production differentiation can effectively be achieved by

17. While mass retail industries have one or several dominat producers, smaller firms have a limited set of nonpricing options. The most feasible of these inlude

18. In monopolistic competitoninductries, effective product differentiation is illustrated by

19. Differrntiation strategies vary in degree of effectiveness form one type of market structure to another. For firms other than perfect competition

20. If a firm’s industry developed from a monopolistic competiton into an oligopolistic structure, the firm would discover that

21. A firm can increase both profit and per-unit profit margin by lowering production costs. To make this a long-term outcome, the firm should

22. A firm’s cost-reduction strategies may span multiple stages, from acquisition of production input factors to product service and maintenance. When seeking to lower cost in the short term, firms should

23. Firms can shift their marginal cost curves to the right, resulting in higher outputs at the same or lower maximum-profit prices. This can be done by

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ECO 561 Week 3 Learning Team Reflection

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ECO 561 Week 3 Learning Team Reflection/Deliverable

The learning objectives of week 3 were to determine pricing strategy to meet organizational goals, determine ways to create non price barriers to entry based on market structure, determine ways to increase product differentiation based on market structure, and to determine ways to reduce costs for an organization.

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ECO 561 Week 3 Market Structure And Pricing Power

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ECO 561 WEEK 3 MARKET STRUCTURE AND PRICING POWER

Select a new, realistic good or service for an existing industry, preferably an industry you current work in or one in which you are interested in working.

Develop a 1,400-word evaluation of pricing strategies available producers of your selected product. This will include statements about the market structure and the elasticity of demand for the product, based on text book principles and real world products under development.

Identify the market structure of the industry (monopoly, oligopoly, competitive monopoly).

Determine elasticity of demand for various quality ranges of the product based on textbook theory and judgments about the degree of luxury vs. necessity represented by various brands (e.g. a luxury car vs an economy car).

Determine how pricing relates to elasticity of demand for competing models.

Explain how changes in the quantity supplied as a result of pricing decisions might affect the company’s marginal cost, marginal revenue, and market share as production volume rises. What reaction might be expected by other producers if one producer changes its pricing strategy?

Determine strategies that a company might use to develop product differentiation and market segmentation. What alternative non-pricing strategies are available? What alternative non-pricing strategies can be used to increase barriers to entry?

Discuss how producers might alter the mix of fixed and variable costs to support their pricing strategy.

Format the assignment consistent with APA guidelines.

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ECO 561 Week 3 Team Assignment Market Structures Simulation (Apple)

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Learning Team Assignment: Market Structures Simulation

Write a 1,050- to 1,400- word paper where you explain the following in the context of the simulation. One note; these word count figures are meant to be a guideline, but feel free to exceed this if you find it is necessary to adequately provide relevant details and clarify important points.

Create a solution using strategic variables available to you to sustain the economic profits the firm can earn.

What are some of the pricing strategies that you would recommend?

What are some of the non-pricing strategies that you would recommend?

What kind of innovations would you propose to sustain the organization’s uniqueness?

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ECO 561 Week 4 DQ 1

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How does the Federal Reserve’s monetary policy affect your industry’s, or company’s growth?

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ECO 561 Week 4 DQ 2

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How would you evaluate monetary policy today? Is monetary policy contradictory with fiscal policy? Why or Why not? Support your analysis with examples.

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ECO 561 Week 4 Knowledge Check (Quiz)

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1. Business cycles occur when output

2. Which of these statements best describes a complete individual buisness cycle?

3. During the buisness cycle, the period between the point at which output reaches a high and the point at which it reaches a low is called

4. Which of the following equals the market value of all final goods and services produced in an economy, stated in the prices of a specific base year?

5. Imagine a country has a population of 210 million. Within the country there are 95 million people who are employed workers. 50 million people incapable of working, and 60 million people capable of working, but not actively looking. Based on this information, what is the unemployment rate?

6. The unemployment produced by fluctuations in economy activity is called

7. New college graduates are most likely to experience

8. The natural rate of unemployment is defind as the

9. The Consumer Price Indx (CPI) is based on

10. Unanticipated inflation is a problem for society because it

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ECO 561 Week 4 Learning Team Project Macroeconomic Forecast Outline (Apple)

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Learning Team Assignment: Learning Team Project Macroeconomic Forecast Outline: Prepare a brief outline of the Week 5 Learning Team Project Macroeconomic Forecast Component in which you answer the following questions:

1. What are the economic indicators for which you will be providing forecasts?

2. It is important to evaluate the historical relationship between variables in order to explain how one indicator or variable may impact another. With this in mind, what sources will you use to obtain historical data for the economic indicators that you have selected?

3. What sources will you use to obtain forecasts related to your selected economic indicators?

4. Why do you think that professional forecasters rely so heavily on past data and trends?

5. Include any details you feel are necessary that support your outline in order to justify your choices of economic indicators, and sources for data and forecasts.

See my feedback on your Week 2 Learning Team Assignment for details that will help with this assignment. See also the Resources on the Internet posted in the Week 1 Recommended Activities for sources of historical economic data, and also sources for economic forecasts

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ECO 561 Week 4 Team Assignment Business Cycles, Economic Shocks, And Restoring Equilibrium

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ECO 561 WEEK 4 TEAM ASSIGNMENT BUSINESS CYCLES, ECONOMIC SHOCKS, AND RESTORING EQUILIBRIUM

As a manager, it is important to understand how the business cycle affects supply and demand, prices, and how economic shocks will impact your company’s markets, supply chain, and financing. The recent collapse of the housing market, the near failure of our financial system, the wild swings in commodity and stock prices, and the deep recession of 2007–2009 provide a virtual laboratory for the study of the economic shocks and stabilization measures taken to restore equilibrium.

Create a 1,400-word analysis based on the team’s assigned market in which you include the following:

Analyze the economic and sociological forces that drove the market equilibrium to unsustainable heights and the shocks that brought the markets back down. What might be done to moderate the effects of these economic swings?

Discuss specific changes in supply and demand.

Examine prior government policies and legislation that exacerbated the impact of the shocks.

Evaluate the actions of the federal government and the Federal Reserve to restore equilibrium. How effective were these counter-cyclical policies?

Cite a minimum of three peer reviewed sources not including the text.

Format the assignment consistent with APA guidelines.