Determine: How the 12 principles of economics work.

Question

Want to see more full solutions like this?

Answer 1

Question

Definition Definition Degree to which financial markets incorporate all available information into the prices of assets. In a more efficient market, the prices reflect the available information more than that in a weak efficient market. It is difficult for investors to outperform the market in a strong efficient market. This is because all the available information is already discounted in the asset's price. However, in a weak-form efficiency, the market does not reflect all information in the asset's price. As a result, it becomes easier to generate better returns in a weak form or an inefficient market.

Chapter 1, Problem 1BCQ

To determine

Determine:

How the 12 principles of economics work.

Expert Solution & Answer

Explanation of Solution

There are generally twelve principles of economics. The explanation given below relates those principles to the given case.

First: P Company fulfills the needs of consumers who are willing to make a choice between quality and convenience to acquire lower prices.

Second: The real cost of vacant airline seat or vacant hotel room is the income that they would have received from its use in the next best alternative.

Third: The amount paid for tickets depends on how much inconvenience and time is saved by buying it for higher prices. Similarly, the amount paid for advance ticket depends on the variation in price and cancellation policy.

Fourth: P Company is popular as people exploit the opportunities of getting hotels, flights, and many other benefits at lower cost.

Fifth: In Europe, gains from P Company network are more because it involves trade of goods and services provided to the people.

Sixth: O Company and E Company provided many incentives to the travelers to use their services. Hence, market of online services will move towards equilibrium.

Seventh: P Company used the resources like hotel rooms and airline seats in a very efficient manner. It is not wise to keep vacant seats and room, if someone wants them at going price.

Eighth: Vacant seats and room lead to inefficiency. So, P Company made its product popular and familiar through online services.

Ninth: A brief slump in the airline industry was managed by the government, as government intervention helped the industry by avoiding loss of jobs of many supporting staffs and company failure.

Tenth: Due to the attack of September 2001, people stopped spending on airline tickets. As a result, the salary of airline workers reduced.

Eleventh: The whole economy was suffering from depression after the attack of 2001 because the production was greater than the spending in the economy.

Twelfth: Congress provided aid of $15 billion to stabilize the airline industry and prevented major recession in the industry.

Economics Concept Introduction

Concept Introduction:

Twelve principles of economics are:

Resources are scarce, so people must make choices.
The true cost of anything is the next best alternative foregone, which is termed as opportunity cost.
Marginal decision and incentive are very important.
People respond to incentives by exploiting available opportunities to make themselves better off.
Trade benefits to everyone.
Market moves towards equilibrium.
Resources should be used efficiently to achieve social goals.
Market leads to efficiency.
When the market fails, government intervenes to maintain equilibrium.
Spending of one person becomes income of another.
Sometimes, spending varies with the economy’s productive capacity.
Government policies can change spending.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

Mark's Pizza Enter George's Pizza Stay Out Advertise $50, -$2 $175, $0 Do Not Advertise $150, $15 $100, $0 In their quest to maximize combined total profits, Mark and George's Pizzas find themselves at a critical juncture. As they carefully evaluate the potential outcomes and weigh their strategic options, the future of Moncton's pizza industry hangs in the balance. Let's imagine both players are analyzing the payoff matrix seeking the optimal combination of actions that will yield the highest collective profit. What actions maximize their combined total profits? a. Mark's Pizza to "Advertise" and George's Pizza to "Stay Out". b. Mark's Pizza to "Do Not Advertise" and George's Pizza to "Stay Out" C. Mark's Pizza to Do Not Advertise" and George's Pizza to "Enter" d. Mark's Pizza to "Advertise" and George's Pizza to "Enter"

With your team I would like you to complete the following questions after please post your replies and we will discuss in class Choose a financial instrument or market (such as stocks, bonds, insurance, cash, gold, bitcoin). Explain how investments work for the individual investor mainly yourself. With the current market upheaval and uncertainty what would you and your team consider the best options for investment. Consider the idea of short term investing vs long term investing, laddering, safe haven, liquidity, and risk) Consider Roth IRA vs traditional IRA, ETF's, CD's, Mutual Funds. Always consider taxes and inflation your return should always be greater then inflation and taxes.

Short Description Fiscal Policy Graph Details Shown is a Fiscal Policy diagram with the variable Real GDP (billions of dollars) on the x-axis and the variable Price Level on the y-axis. The x-axis is scaled from 0 to 800 billion dollars with an increment of 40 billion dollars, and the y-axis is scaled from 30 to 150 units with an increment of 5 units. Object Details On the graph we have:Four Line Objects:An upward sloping Aggregate Supply, AS line with two endpoints:Point 1 at (160, 70)Point 2 at (720, 140)A downward sloping Aggregate Demand, AD1 line with two endpoints:Point 1 at (80, 110)Point 2 at (640, 40)A vertical Long-run Aggregate Supply, LRAS with two endpoints:Point 1 at (400, 145)Point 2 at (400, 30)A downward sloping Aggregate Demand, AD line with two endpoints:Point 1 at (720, 60)Point 2 at (160, 130)Two Reference Points:Lines AS, AD, and LRAS intersect at (400, 100)Lines AS and AD1 intersect at (280, 85) a. How much does aggregate demand need to change to restore the…

Answer 2

Question

Definition Definition Degree to which financial markets incorporate all available information into the prices of assets. In a more efficient market, the prices reflect the available information more than that in a weak efficient market. It is difficult for investors to outperform the market in a strong efficient market. This is because all the available information is already discounted in the asset's price. However, in a weak-form efficiency, the market does not reflect all information in the asset's price. As a result, it becomes easier to generate better returns in a weak form or an inefficient market.

Chapter 1, Problem 1BCQ

To determine

Determine:

How the 12 principles of economics work.

Expert Solution & Answer

Explanation of Solution

There are generally twelve principles of economics. The explanation given below relates those principles to the given case.

First: P Company fulfills the needs of consumers who are willing to make a choice between quality and convenience to acquire lower prices.

Second: The real cost of vacant airline seat or vacant hotel room is the income that they would have received from its use in the next best alternative.

Third: The amount paid for tickets depends on how much inconvenience and time is saved by buying it for higher prices. Similarly, the amount paid for advance ticket depends on the variation in price and cancellation policy.

Fourth: P Company is popular as people exploit the opportunities of getting hotels, flights, and many other benefits at lower cost.

Fifth: In Europe, gains from P Company network are more because it involves trade of goods and services provided to the people.

Sixth: O Company and E Company provided many incentives to the travelers to use their services. Hence, market of online services will move towards equilibrium.

Seventh: P Company used the resources like hotel rooms and airline seats in a very efficient manner. It is not wise to keep vacant seats and room, if someone wants them at going price.

Eighth: Vacant seats and room lead to inefficiency. So, P Company made its product popular and familiar through online services.

Ninth: A brief slump in the airline industry was managed by the government, as government intervention helped the industry by avoiding loss of jobs of many supporting staffs and company failure.

Tenth: Due to the attack of September 2001, people stopped spending on airline tickets. As a result, the salary of airline workers reduced.

Eleventh: The whole economy was suffering from depression after the attack of 2001 because the production was greater than the spending in the economy.

Twelfth: Congress provided aid of $15 billion to stabilize the airline industry and prevented major recession in the industry.

Economics Concept Introduction

Concept Introduction:

Twelve principles of economics are:

Resources are scarce, so people must make choices.
The true cost of anything is the next best alternative foregone, which is termed as opportunity cost.
Marginal decision and incentive are very important.
People respond to incentives by exploiting available opportunities to make themselves better off.
Trade benefits to everyone.
Market moves towards equilibrium.
Resources should be used efficiently to achieve social goals.
Market leads to efficiency.
When the market fails, government intervenes to maintain equilibrium.
Spending of one person becomes income of another.
Sometimes, spending varies with the economy’s productive capacity.
Government policies can change spending.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Definition Definition Degree to which financial markets incorporate all available information into the prices of assets. In a more efficient market, the prices reflect the available information more than that in a weak efficient market. It is difficult for investors to outperform the market in a strong efficient market. This is because all the available information is already discounted in the asset's price. However, in a weak-form efficiency, the market does not reflect all information in the asset's price. As a result, it becomes easier to generate better returns in a weak form or an inefficient market.

Chapter 1, Problem 1BCQ

To determine

Determine:

How the 12 principles of economics work.

Expert Solution & Answer

Explanation of Solution

There are generally twelve principles of economics. The explanation given below relates those principles to the given case.

First: P Company fulfills the needs of consumers who are willing to make a choice between quality and convenience to acquire lower prices.

Second: The real cost of vacant airline seat or vacant hotel room is the income that they would have received from its use in the next best alternative.

Third: The amount paid for tickets depends on how much inconvenience and time is saved by buying it for higher prices. Similarly, the amount paid for advance ticket depends on the variation in price and cancellation policy.

Fourth: P Company is popular as people exploit the opportunities of getting hotels, flights, and many other benefits at lower cost.

Fifth: In Europe, gains from P Company network are more because it involves trade of goods and services provided to the people.

Sixth: O Company and E Company provided many incentives to the travelers to use their services. Hence, market of online services will move towards equilibrium.

Seventh: P Company used the resources like hotel rooms and airline seats in a very efficient manner. It is not wise to keep vacant seats and room, if someone wants them at going price.

Eighth: Vacant seats and room lead to inefficiency. So, P Company made its product popular and familiar through online services.

Ninth: A brief slump in the airline industry was managed by the government, as government intervention helped the industry by avoiding loss of jobs of many supporting staffs and company failure.

Tenth: Due to the attack of September 2001, people stopped spending on airline tickets. As a result, the salary of airline workers reduced.

Eleventh: The whole economy was suffering from depression after the attack of 2001 because the production was greater than the spending in the economy.

Twelfth: Congress provided aid of $15 billion to stabilize the airline industry and prevented major recession in the industry.

Economics Concept Introduction

Concept Introduction:

Twelve principles of economics are:

Resources are scarce, so people must make choices.
The true cost of anything is the next best alternative foregone, which is termed as opportunity cost.
Marginal decision and incentive are very important.
People respond to incentives by exploiting available opportunities to make themselves better off.
Trade benefits to everyone.
Market moves towards equilibrium.
Resources should be used efficiently to achieve social goals.
Market leads to efficiency.
When the market fails, government intervenes to maintain equilibrium.
Spending of one person becomes income of another.
Sometimes, spending varies with the economy’s productive capacity.
Government policies can change spending.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Definition Definition Degree to which financial markets incorporate all available information into the prices of assets. In a more efficient market, the prices reflect the available information more than that in a weak efficient market. It is difficult for investors to outperform the market in a strong efficient market. This is because all the available information is already discounted in the asset's price. However, in a weak-form efficiency, the market does not reflect all information in the asset's price. As a result, it becomes easier to generate better returns in a weak form or an inefficient market.

Chapter 1, Problem 1BCQ

To determine

Determine:

How the 12 principles of economics work.

Expert Solution & Answer

Explanation of Solution

There are generally twelve principles of economics. The explanation given below relates those principles to the given case.

First: P Company fulfills the needs of consumers who are willing to make a choice between quality and convenience to acquire lower prices.

Second: The real cost of vacant airline seat or vacant hotel room is the income that they would have received from its use in the next best alternative.

Third: The amount paid for tickets depends on how much inconvenience and time is saved by buying it for higher prices. Similarly, the amount paid for advance ticket depends on the variation in price and cancellation policy.

Fourth: P Company is popular as people exploit the opportunities of getting hotels, flights, and many other benefits at lower cost.

Fifth: In Europe, gains from P Company network are more because it involves trade of goods and services provided to the people.

Sixth: O Company and E Company provided many incentives to the travelers to use their services. Hence, market of online services will move towards equilibrium.

Seventh: P Company used the resources like hotel rooms and airline seats in a very efficient manner. It is not wise to keep vacant seats and room, if someone wants them at going price.

Eighth: Vacant seats and room lead to inefficiency. So, P Company made its product popular and familiar through online services.

Ninth: A brief slump in the airline industry was managed by the government, as government intervention helped the industry by avoiding loss of jobs of many supporting staffs and company failure.

Tenth: Due to the attack of September 2001, people stopped spending on airline tickets. As a result, the salary of airline workers reduced.

Eleventh: The whole economy was suffering from depression after the attack of 2001 because the production was greater than the spending in the economy.

Twelfth: Congress provided aid of $15 billion to stabilize the airline industry and prevented major recession in the industry.

Economics Concept Introduction

Concept Introduction:

Twelve principles of economics are:

Resources are scarce, so people must make choices.
The true cost of anything is the next best alternative foregone, which is termed as opportunity cost.
Marginal decision and incentive are very important.
People respond to incentives by exploiting available opportunities to make themselves better off.
Trade benefits to everyone.
Market moves towards equilibrium.
Resources should be used efficiently to achieve social goals.
Market leads to efficiency.
When the market fails, government intervenes to maintain equilibrium.
Spending of one person becomes income of another.
Sometimes, spending varies with the economy’s productive capacity.
Government policies can change spending.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 1, Problem 1BCQ

To determine

Determine:

How the 12 principles of economics work.

Expert Solution & Answer

Explanation of Solution

There are generally twelve principles of economics. The explanation given below relates those principles to the given case.

First: P Company fulfills the needs of consumers who are willing to make a choice between quality and convenience to acquire lower prices.

Second: The real cost of vacant airline seat or vacant hotel room is the income that they would have received from its use in the next best alternative.

Third: The amount paid for tickets depends on how much inconvenience and time is saved by buying it for higher prices. Similarly, the amount paid for advance ticket depends on the variation in price and cancellation policy.

Fourth: P Company is popular as people exploit the opportunities of getting hotels, flights, and many other benefits at lower cost.

Fifth: In Europe, gains from P Company network are more because it involves trade of goods and services provided to the people.

Sixth: O Company and E Company provided many incentives to the travelers to use their services. Hence, market of online services will move towards equilibrium.

Seventh: P Company used the resources like hotel rooms and airline seats in a very efficient manner. It is not wise to keep vacant seats and room, if someone wants them at going price.

Eighth: Vacant seats and room lead to inefficiency. So, P Company made its product popular and familiar through online services.

Ninth: A brief slump in the airline industry was managed by the government, as government intervention helped the industry by avoiding loss of jobs of many supporting staffs and company failure.

Tenth: Due to the attack of September 2001, people stopped spending on airline tickets. As a result, the salary of airline workers reduced.

Eleventh: The whole economy was suffering from depression after the attack of 2001 because the production was greater than the spending in the economy.

Twelfth: Congress provided aid of $15 billion to stabilize the airline industry and prevented major recession in the industry.

Economics Concept Introduction

Concept Introduction:

Twelve principles of economics are:

Resources are scarce, so people must make choices.
The true cost of anything is the next best alternative foregone, which is termed as opportunity cost.
Marginal decision and incentive are very important.
People respond to incentives by exploiting available opportunities to make themselves better off.
Trade benefits to everyone.
Market moves towards equilibrium.
Resources should be used efficiently to achieve social goals.
Market leads to efficiency.
When the market fails, government intervenes to maintain equilibrium.
Spending of one person becomes income of another.
Sometimes, spending varies with the economy’s productive capacity.
Government policies can change spending.

Answer 6

Chapter 1, Problem 1BCQ

To determine

Determine:

How the 12 principles of economics work.

Expert Solution & Answer

Explanation of Solution

There are generally twelve principles of economics. The explanation given below relates those principles to the given case.

First: P Company fulfills the needs of consumers who are willing to make a choice between quality and convenience to acquire lower prices.

Second: The real cost of vacant airline seat or vacant hotel room is the income that they would have received from its use in the next best alternative.

Third: The amount paid for tickets depends on how much inconvenience and time is saved by buying it for higher prices. Similarly, the amount paid for advance ticket depends on the variation in price and cancellation policy.

Fourth: P Company is popular as people exploit the opportunities of getting hotels, flights, and many other benefits at lower cost.

Fifth: In Europe, gains from P Company network are more because it involves trade of goods and services provided to the people.

Sixth: O Company and E Company provided many incentives to the travelers to use their services. Hence, market of online services will move towards equilibrium.

Seventh: P Company used the resources like hotel rooms and airline seats in a very efficient manner. It is not wise to keep vacant seats and room, if someone wants them at going price.

Eighth: Vacant seats and room lead to inefficiency. So, P Company made its product popular and familiar through online services.

Ninth: A brief slump in the airline industry was managed by the government, as government intervention helped the industry by avoiding loss of jobs of many supporting staffs and company failure.

Tenth: Due to the attack of September 2001, people stopped spending on airline tickets. As a result, the salary of airline workers reduced.

Eleventh: The whole economy was suffering from depression after the attack of 2001 because the production was greater than the spending in the economy.

Twelfth: Congress provided aid of $15 billion to stabilize the airline industry and prevented major recession in the industry.

Economics Concept Introduction

Concept Introduction:

Twelve principles of economics are:

Resources are scarce, so people must make choices.
The true cost of anything is the next best alternative foregone, which is termed as opportunity cost.
Marginal decision and incentive are very important.
People respond to incentives by exploiting available opportunities to make themselves better off.
Trade benefits to everyone.
Market moves towards equilibrium.
Resources should be used efficiently to achieve social goals.
Market leads to efficiency.
When the market fails, government intervenes to maintain equilibrium.
Spending of one person becomes income of another.
Sometimes, spending varies with the economy’s productive capacity.
Government policies can change spending.

Answer 7

Chapter 1, Problem 1BCQ

To determine

Determine:

How the 12 principles of economics work.

Answer 8

Expert Solution & Answer

Explanation of Solution

There are generally twelve principles of economics. The explanation given below relates those principles to the given case.

First: P Company fulfills the needs of consumers who are willing to make a choice between quality and convenience to acquire lower prices.

Second: The real cost of vacant airline seat or vacant hotel room is the income that they would have received from its use in the next best alternative.

Third: The amount paid for tickets depends on how much inconvenience and time is saved by buying it for higher prices. Similarly, the amount paid for advance ticket depends on the variation in price and cancellation policy.

Fourth: P Company is popular as people exploit the opportunities of getting hotels, flights, and many other benefits at lower cost.

Fifth: In Europe, gains from P Company network are more because it involves trade of goods and services provided to the people.

Sixth: O Company and E Company provided many incentives to the travelers to use their services. Hence, market of online services will move towards equilibrium.

Seventh: P Company used the resources like hotel rooms and airline seats in a very efficient manner. It is not wise to keep vacant seats and room, if someone wants them at going price.

Eighth: Vacant seats and room lead to inefficiency. So, P Company made its product popular and familiar through online services.

Ninth: A brief slump in the airline industry was managed by the government, as government intervention helped the industry by avoiding loss of jobs of many supporting staffs and company failure.

Tenth: Due to the attack of September 2001, people stopped spending on airline tickets. As a result, the salary of airline workers reduced.

Eleventh: The whole economy was suffering from depression after the attack of 2001 because the production was greater than the spending in the economy.

Twelfth: Congress provided aid of $15 billion to stabilize the airline industry and prevented major recession in the industry.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Economics Concept Introduction

Concept Introduction:

Twelve principles of economics are:

Resources are scarce, so people must make choices.
The true cost of anything is the next best alternative foregone, which is termed as opportunity cost.
Marginal decision and incentive are very important.
People respond to incentives by exploiting available opportunities to make themselves better off.
Trade benefits to everyone.
Market moves towards equilibrium.
Resources should be used efficiently to achieve social goals.
Market leads to efficiency.
When the market fails, government intervenes to maintain equilibrium.
Spending of one person becomes income of another.
Sometimes, spending varies with the economy’s productive capacity.
Government policies can change spending.

Answer 12

Ch. 1 - Prob. 1BCQ Ch. 1 - Prob. 1P Ch. 1 - Prob. 2P Ch. 1 - Prob. 3P Ch. 1 - Prob. 4P Ch. 1 - Prob. 5P Ch. 1 - Prob. 6P Ch. 1 - Prob. 7P Ch. 1 - Prob. 8P Ch. 1 - Prob. 9P

Determine: How the 12 principles of economics work.

Determine: How the 12 principles of economics work.

Explanation of Solution

Want to see more full solutions like this?

Chapter 1 Solutions

Determine:

How the 12 principles of economics work.