Economics Homework Seven Answers - Student Four

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Anna M

1. Identify 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.

Correct!

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

Competition makes people want to achieve. There is a part of the human nature that needs to be recognized,and competition is a way to fulfill its desire. Everyone wants to be the best in their skill area, and competition inspires people to do their best.

Excellent points.

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.

In some cases, maybe. If you are discussing good things in company made up of a majority of "good" people, then there is a good possibility that it can drive out the bad. However, a lone voice of truth very rarely can drive out bad conversation in bad company.

Superb, but the power of a lone voice or dissent may be greater than you expect.

5. Explain the difference between total cost, average cost, and marginal cost.

Total cost is the cost for a production of a good. Average cost is total cost divided by quantity. Marginal cost is the change in cost when the quantity increases or decreases by more than one unit.

Correct.

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?

Loss in wealth would be 150 x $15 = $2250. There would be no loss in consumer surplus, because the consumers never spent the $15 dollars.

Nope. It's 50x$5 plus 10x$10 plus 5x$15. It's the surplus in value. (Minus 2).

7. Is there perfect competition between homeschooling and public schools? If not, explain the imperfections.

No, there is not perfect competition between homeschooling and public schools. There are not many buyers or sellers, only two. Private schools are rapidly going out of business in these tough economic times. They also do not have perfect mobility of resources. Homeschoolers are sometimes given a harder time by the state governments and it can sometimes be harder to get an official high school diploma.

Excellent!
58/60. Well done!--Andy Schlafly 23:44, 30 October 2009 (EDT)
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