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Economics Homework Ten Answers - Student Ten (view source)
Revision as of 15:14, November 19, 2009
, 15:14, November 19, 2009no edit summary
'''2. Explain why marginal revenue must be zero when total revenue is maximized.'''
'''2. Explain why marginal revenue must be zero when total revenue is maximized.'''
If the total revinue is maxemized
If the total revenue is maximized you can't make any more revenue.
'''3. What is your favorite question on the midterm exam that you answered incorrectly, and why is it your favorite?'''
'''4. Give an example of a positive externality, and an example of a negative externality. The example does not have to be limited to a business.'''
'''4. Give an example of a positive externality, and an example of a negative externality. The example does not have to be limited to a business.'''
An example of a transaction that can either positive or negative externalities is smoking. If a person buys cigarettes and smokes them in a public place a non-smoking person may experience a negative externality in having to breathe the polluted air. On the other hand if a poor person who can't afford cigarettes parks himself next to the smoker, he reaps the benefit of a free smoke.
'''5. Explain why private firms in the free market are unlikely to try to provide public goods.'''
'''5. Explain why private firms in the free market are unlikely to try to provide public goods.'''
Because they are not getting any benefit, since it's a public good. A firm is not going to do something if it can't get any profit.
'''6. Review question: the cross-elasticity of A with respect to B is positive, and C with respect to D is negative. What is the relationship (complement or substitute?) of goods A and B with each other, and C and D with each other? Explain.'''
'''6. Review question: the cross-elasticity of A with respect to B is positive, and C with respect to D is negative. What is the relationship (complement or substitute?) of goods A and B with each other, and C and D with each other? Explain.'''
A and B are complements because they are positive. C and D are substitutes because they are negative.
'''7. List the four factors of production and give a very brief explanation of each.'''
'''7. List the four factors of production and give a very brief explanation of each.'''
Land, money, workers and entrepreneurship.