ALLIED ECN150 MODULE 5 HOMEWORK ASSIGNMENT

Welcome to the Module 5 Homework Assignment for ECN 150: Introduction to Microeconomics.This section prepares you to complete this assignment successfully. Please follow these instructions to complete and submit this assignment.You will create a document in either a .doc or .rtf format to record and save your work. If you have never created documents in an .rtf format, please visit the Academic Resource Center and click on Tutorials. You will then see a list of tutorials on the following page. Click on RTF Tutorial.Read the instructions carefully and review your work before you submit your assignment.Include a title page with this assignment. Your title page should follow standard APA formatting. Please view the .allied.edu/Pages/ViewPage.aspx?GroupID=189″>Title Page Example.When you are ready to submit the assignment, click the Start button at the bottom of the page to access the submission page and follow the instructions.Running head: [INSERT
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Student
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Allied
American University

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This
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PART
I

Directions:
Please answer each of the following questions in a paragraph for each. Explain your thoughts with theory and
examples where applicable.

1. What
are opportunity costs? How do explicit
and implicit costs relate to opportunity costs?

2. If the
average total cost curve is falling, what is necessarily true of the marginal
cost curve? If the average total cost
curve is rising, what is necessarily true of the marginal cost curve?

3. List
and describe the characteristics of a perfectly competitive market.

4. Why
would a firm in a perfectly competitive market always choose to set its price
equal to the current market price? If a
firm sets its price below the current market price, what effect would this have
on the market?

5. Explain
how a firm in a competitive market identifies the profit-maximizing level of
production. When should the firm raise
production, and when should the firm lower production?

6. If
identical firms that remain in a competitive market over the long run make zero
economic profit, why do these firms choose to remain in the market?

PART II

Please click .federalreserve.gov/monetarypolicy/bst.htm”>HERE and
read through the article on the Fed’s website on credit liquidity and balance
sheets.

Write a two page paper identifying:

1. the position of the federal open market committee.
2. the primary points articulated in the paper.
3. whether you believe Krugman would agree or disagree with the
positions noted in the paper.

Please review this module’s required videos for more information
on Krugman’s position.

PART III: Reflection Essay

As
you read about numerous topics this week including balance sheets and the Fed’s
policy, reflect on the past two years of your life in terms of
microeconomics. Is there information on
the Web site you would have found useful in personal decision making? If not, what would you have found
useful? Write a one page reflection
essay on this topic and cite at least one source.