【正文】 s totalcost curve. It slopes up because catching additional fish takes additional time. The curve is convex because there are diminishing returns to fishing time190。 (3) natural resources, which are inputs into production that are provided by nature。s ine must equal its expenditure, since every transaction has a buyer and a seller. Thus, expenditure by buyers must equal ine by sellers.24Q2 Describe the three problems that make the consumer price index an imperfect measure of the cost of living.The three problems in the consumer price index as a measure of the cost of living are: (1) substitution bias, which arises because people substitute toward goods that have bee relatively less expensive。s price equals the minimum of average total cost only in the long run. In the short run, price may be greater than average total cost, in which case the firm is making profits, or price may be less than average total cost, in which case the firm is making losses. But the situation is different in the long run. If firms are making profits, other firms will enter the industry, which will lower the price of the good. If firms are making losses, they will exit the industry, which will raise the price of the good. Entry or exit continues until firms are making neither profits nor losses. At that point, price equals average total cost.15Q3Why is monopolist’s marginal revenue less than the price of its goods? Can marginal revenue be negative? Explain. A monopolist39。 costs, producer surplus, and the supply curve are all closely related. The height of the supply curve represents the costs of the sellers. Producer surplus is the area below the price and above the supply curve, which equals the price minus each sellers39。t have a parative advantage in every good.Q4Will a nation tend to export or import goods to Question2.A nation will export goods for which it has a parative advantage because it has a smaller opportunity cost of producing those goods. As a result, citizens of all nations are able to consume quantities of goods that are outside their production possibilities frontiers.4Q5Propeye’s ine declines, and as a result, he buys more spinach. Is spinach an inferior or a normal goods? What happens to Popeye’s demand curve for spinach?Since Popeye buys more spinach when his ine falls, spinach is an inferior good for him. Since he buys more spinach, but the price of spinach is unchanged, his demand curve for spinach shifts out as a result of the decrease in his ine.Q8 Dose a change in producers’ technology lead to a movement along the supply curve? Does a change in price lead to a movement along the supply curve or a shift in the supply curve? A change in producers39。1Q4Why should policy makers think about incentives?Policymakers need to think about incentives so they can understand how people will respond to the policies they put in place. The text39。 technology leads to a shift in the supply curve. A change in price leads to a movement along the supply curve.Q9 Define the equilibrium of a market. Describe the forces that move a market towards its equilibrium.The equilibrium of a market is the point at which the quantity demanded is equal to quantity supplied. If the price is above the equilibrium price, sellers want to sell more than buyers want to buy, so there is a surplus. Sellers try to increase their sales by cutting prices. That continues until they reach the equilibrium price. If the price is below the equilibrium price, buyers want to buy more than sellers want to sell, so there is a shortage. Sellers can raise their price without losing customers. That continues until they reach the equilibrium price.Q11 Describe the role of prices in market economies.Prices play a vital role in market economies because they bring markets into equilibrium. If the price is different from its equilibrium level, quantity supplied and quantity demanded are not equal. The resulting surplus or shortage leads suppliers to adjust the price until equilibrium is restored. Prices thus serve as signals that guide economic decisions and allocate scarce resources.5Q2 List and explain the four determinants of the price elasticity of demand discussed in the chapter.The determinants of the price elasticity of demand include how available close substitutes are, whether the good is a necessity or a luxury, how broadly defined the market is, and the time horizon. Luxury goods have greater price elastic ties than necessities, goods with close substitutes have greater elastic ties, goods in more narrowly defined markets have greater elastic ties, and the elasticity of demand is higher the longer the time horizon.Q4 On a supplyanddemand diagram, show equilibrium price, equilibrium quantity, and the total revenue received by producers.Figure 1 presents a supplyanddemand diagram, showing equilibrium price, equilibrium quantity, and the total revenue received by producers. Total revenue equals the equilibrium price times the equilibrium quantity, which is the area of the rectangle shown in the figure.Figure 16Q2Which causes a shortage of a good—a price ceiling or a price floor? Which causes a surplus?A shortage of a good arises when there is a binding price ceiling. A surplus of a good arises when there is a binding price floor.Q6How does a tax on a good affect the price paid by buyers, and the quantity sold?A tax on a good raises the price buyers pay, lowers the price sellers receive, and reduces the quantity sold.Q7What determines how the burden of a tax is divided between buyers and sellers? Why? The burden of a tax