1. What is a black market, and under what economic condition is it most likely to thrive?

1.
What
is a black market, and under what economic condition is it most likely to
thrive?2.
When
nations desire a healthy macroeconomy, they typically focus on several
goals:. Three are:3.
The
two main tools of macroeconomic policy include monetary policy and fiscal
policy. Briefly describe the main
components of each.4.
The
formal study of economics began when Adam Smith (1723-1790) published his
famous book The Wealth of Nations in 1776.
In the first chapter of The Wealth of Nations, Smith introduces the idea
of the division of labor. Define
“division of labor” and illustrate with an example.5.
Define
Productive Efficiency and Allocative Efficiency.6.
Explain
the Law of Diminishing Returns and illustrate with a relevant example.7. When most people want to know the cost of an
item or a service, they look for a price tag. When economists want to determine
cost, they go one step further. They use the idea of opportunity cost. Explain the concept of opportunity cost and
illustrate with an example.8.
Define
the term “sunk costs” and illustrate with an example.9.
Various
factors cause a demand curve to shift. List four different factors.10.
Define
consumer surplus and producer surplus.11.
Define
social surplus and deadweight loss.12.
Around
the world, many countries have passed laws to keep farm prices higher than they
otherwise would be. Why does this widespread practice continue?1.
Several
types of economic events can cause a shift in labor demand, so that a higher or
lower quantity of labor is hired at every salary or wage. List three of these
events.2.
Explain
the nature of individual and business decisions which drive the demand and
supply of financial capital. Specifically, what kinds of factors will shift
demand and supply of financial capital?3.
Markets
tend toward equilibrium and, as a result, will tend to eliminate shortages and
surpluses. Why?4.
Suppose
that a 20% increase in the price of gasoline causes a 5% decrease in the
consumption of gasoline and a 30% drop in the sales of SUVs. What can you say
about elasticities?5.
Define
cross-price elasticity of demand and discuss within the context of
complementary goods and substitute goods.6.
Define
zero elasticity and describe the resultant demand curve.7. What does the
budget constraint framework suggest when price changes? Include a brief explanation of what the
results of price changes will depend on.8. Briefly discuss the
choices typical to households with respect to intertemporal budget constraint.9. Briefly discuss how
a higher rate of return or a higher interest rate affects the choices typical
to households with respect to intertemporal budget constraint.10. Briefly explain how
the total revenue for a profit-seeking firm is determined.11. Briefly explain what
is meant by the term “fixed costs” and provide three examples of
same. What determines a firm’s level of
fixed costs?
12. Briefly explain
what is meant by the term “variable costs” and provide three examples
of same.