Describe the major sources of income and expenditures for households
1. (Evolution of the Household) Determine whether each of the following would increase or decrease the opportunity costs for mother who choose not to work outside the home. Explain your answers.
a. Higher levels of education for women
b. Higher unemployment rates for women
c. Higher average pay levels for women
d. Lower demand for labor in industries that traditionally employ large numbers of women
2. (Household Production) Many households supplement their food budget by cultivating small vegetable gardens. Explain how each of the following might influence this kind of household production:
a. Both husband and wife are professionals who earn high salaries.
b. The household is located in a city rather than in a rural area.
c. The household is located in a region where there is a high sales tax on food purchases.
d. The household is located in a region that has a high property tax rate. .
3. (Household Production) What factors does a householder consider when deciding whether to produce a good or service at home versus buy it in the marketplace?
4. (Objectives of the Economic Decision Makers) In economic analysis, what are the assumed objectives of households, firms, and the government?
Outline the evolution of production over the centuries from the household to the modem corporation
5. (Corporations) How did the institution of the firm get a boost from the advent of the Industrial Revolution? What type of business organization existed before this?
6. (Sole Proprietorships) What are the disadvantages of the sole proprietorship form of business?
7. (Cooperatives) How do cooperatives differ from typical businesses?
8. (Evolution of the Firm) Explain how production after the Industrial Revolution differed from production under the cottage industry system.
Summarize the seven roles of government in an economy
9. (Government) Complete each of the following sentences:
a. When the private operation of a market leads to overproduction or underproduction of some good, this is known as a(n)
b. Goods that are nonrival and nonexcludable are known as
c. are cash or in-kind benefits given to individuals as outright grants from the government.
d. A(n) confers an external benefit on third parties that are not directly involved in the market transaction.
e. refers to the government's pursuit of full employment and price stability through variations in taxes and govern¬ment spending.
10. (Tax Rates) Suppose taxes are related to income as follows:
|
Income
|
Taxes
|
|
$1,000
|
$200
|
|
$2,000
|
$350
|
|
$3,000
|
$450
|
a. What percentage of income is paid in taxes at each level?
b. Is the tax rate progressive, proportional, or regressive?
c. What is the marginal tax rate on the first $1,000 of income? The second $1,000? The third $1,000?
11. (Substitutes and Complements) For each of the following pair of goods, determine whether the goods are substitutes, complements, or unrelated:
a. Peanut butter and jelly
b. Private and public transportation
c. Coke and Pepsi
d. Alarm clocks and automobiles
e. Golf clubs and golf balls
Identify five things which could shift a demand curve to the right or left
12. (Demand Shifters) List five things that are held constant along a market demand curve, and identify the change in each that would shift that demand curve to the right-that is, that would increase demand.
(Supply) Why is a firm willing and able to increase the quantity supplied as the product price increases?
13. (Equilibrium) Assume the market for corn is depicted as in the table that appears below.
a. Complete the table below.
b. What market pressure occurs when quantity demanded exceeds quantity supplied? Explain.
c. What market pressure occurs when quantity supplied exceeds quantity demanded? Explain.
d. What is the equilibrium price?
e. What could change the equilibrium price?
f. At each price in the first column of the table below, how much is sold?