Economics Homework Seven Answers - Student Eleven

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1. The four elements of perfect competition: 1. Many buyers and sellers 2. Goods that are perfect substitutes for each other 3. Perfect knowledge in the market 4. Perfect mobility of resources


2. Competition can be used to motivate you to achieve more. An example, if I were to apply for a scholarship for college. I would be competing with others to achieve the scholarship, so that I may receive more education in the future. The scholarship may require having high grades. This request would make me compete with myself to receive the highest grades possible to receive the scholarship.


3. Can you please clarify in more simplistic terms what the Coase theorem is?

Great question. The Coase theorem means that the free market will cause the best use of resources, as long as transaction costs do not interfere. Imagine a beautiful soccer field, and lots of kids who want to play. The owner of the field wants it to be used, and making some money is better than making no money from it. The players want to play, and are willing to pay something. The free market will result in the owner and players negotiating a fee or conditions for using the field, and the field will be used in a productive way by people playing games ... as long as there is not too much "red tape" or middlemen or other problems impeding that result. If, for example, the owner cannot be reached because no one can find him, or if he requires a 100 pages of forms to be filled out, or if the city restricts playing soccer there, then the transaction costs prevent the best use of the soccer field. But as long as there is not interference by transaction costs, there will be an efficient use of the field no matter who owns it, because the owner and players will reach an agreement for its best use.

4. Yes, good can drive out bad. Your suggestion as to discussing the Bible to enhance a conversation is an excellent example. The teachings of the Savior can bring people to be more humble, meek, and patient. In today’s world, we need these characteristics to survive. Another example could be if you had a bad thought, you could drive the evilness away by singing or humming an uplifting song.


5. Total cost is the sum of all the fixed and variable costs. Average cost is the total cost divided by quantity. Marginal cost is the change in total cost of producing one more unit.

Correct again!

6. The loss in consumer surplus due to the fact that event was not held is $ 425.


7. Homeschooling and public schools are not perfect competitors. I spent approximately five years in public schools and the rest of my education I have received through homeschooling. The main differences I have found is that being homeschooled allows you to have more freedom in choosing what academic areas you want to pursue. You are allowed to have more one- on- one time with the teacher (my mom, in this case) in effort to understand the concepts you are learning more fully. You are able to incorporate religion into your everyday lessons. The one draw- back of being homeschooled is the lack of social interaction on a daily basis; however, this draw- back can be minimized due to relationships with siblings, parents, and through homeschool groups.

Excellent answer, may use as a model answer!
Perfect! 70/70. Congratulations!!--Andy Schlafly 21:49, 31 October 2009 (EDT)