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Economic
Q:
FirmAnnual SalesFirmAnnual SalesA$1000G$800B900H1200C120I1050D75J90E50K75F40L600According to the above table, the eight -firm concentration ratio of this industry isA) 94.5 percent. B) 96.0 percent. C) 92.5 percent. D) 82.5 percent.
Q:
The demand curve for a monopolistically competitive firm isA) the same as the industry demand curve.B) more elastic than the demand curve of the perfectly competitive firm.C) less elastic than the demand curve of the perfectly competitive firm. D) horizontal.
Q:
A pure monopolist is selling 7 units at a price of $12. If the marginal revenue of the 8th unit is $4, then the price of the 8th unit isA) $10. B) $11. C) greater than $12. D) $4.
Q:
When a perfectly competitive firm is in long-run equilibrium, economic profits
A) are positive.
B) are zero.
C) are negative.
D) may be positive, zero or negative depending upon costs.
Q:
Refer to the above figure. Line C in Panel B does not representA) the equilibrium price. B) average revenue.C) total revenue. D) marginal revenue.
Q:
Which of the following statements regarding the relationship between average and marginal costs is INCORRECT?A) There is always a definite relationship between average and marginal cost. B) When marginal costs are less than average costs, the latter must fall.C) When marginal costs are greater than average costs, the latter must rise.D) There is no way for average variable costs to fall when marginal costs are falling.
Q:
The time period during at least one input cannot be changed is theA) production time. B) calendar year. C) long run. D) short run.
Q:
When economic profits are positive, accounting profitsA) must be positive. B) will be negative.C) will equal zero. D) could be positive, negative or zero.
Q:
The quantity of good A is measured along the vertical axis, and the quantity of good B is measures along the horizontal axis. If the price of Good A fallsA) the vertical intercept of the budget line moves along the vertical axis away from the origin. B) the vertical intercept of the budget line moves along the vertical axis toward the origin.C) the horizontal intercept (along Good B) of the budget line will increase.D) none of the above
Q:
Slices of PizzaTotal UtilityMarginal Utility00-120 250 3 204 105 0In the above table, marginal utility begins to diminish after consumption of theA) second slice of pizza. B) third slice of pizza.C) fourth slice of pizza. D) fifth slice of pizza.
Q:
The cross-price elasticity of demand of products ʺMʺ and ʺNʺ is zero. This implies that ʺMʺ and ʺNʺ areA) substitute products.B) complementary products.C) independent products.D) unique goods, as the price elasticity of demand for one of them is zero.
Q:
PricePer Unit Quantity DemandedPer Week$10.00259.50309.00358.50408.00457.50507.00556.50606.00655.50705.0075Refer to the above table. Demand is unit elastic between the prices ofA) $5.00 & $10.00. B) $6.00 & $7.00. C) $6.00 & $6.50. D) $7.00 & $7.50
Q:
When no property rights exist,A) no one has an economic incentive to care for common property, and an externality may well occur.B) there will be no production.C) externalities will be internalized by voluntary arrangements among a small group of parties.D) society will produce beyond the production possibilities frontier, but the allocation of resources is not apt to be optimal.
Q:
The top 5 percent of health care users in the United States account forA) 30 percent of all health costs. B) over 50 percent of all health costs.C) over 75 percent of all health costs. D) almost 90 percent of all health costs.
Q:
What is a monopsony and how does a monopsonistic firm determine the wage rate to pay its employees?
Q:
A union shop is aA) strike by a union in sympathy with another unionʹs strike or cause.B) dispute involving two or more unions over which should have control of a particular jurisdiction.C) business enterprise in which employees must belong to the union before they can be hired and must remain in the union after they are hired.D) business which may hire nonunion members conditional on their joining the union by some specified date after employment begins.
Q:
We would expect that a rise in labor supply will have a proportionately larger effect on the market wage rate whenA) the demand for labor is unitary elastic.B) the demand for labor is inelastic. C) the supply for labor is elastic D) the demand for labor is elastic.
Q:
Which of the following is exempt from antitrust laws?A) Professional basketball B) Suppliers of military equipmentC) Telephone companies D) Automobile companies
Q:
The market structure of oligopoly is whenA) there are a small number of interdependent firms that constitute the entire market. B) there is a single producer of a product.C) there are many producers of a differentiated product. D) there are many producers of a homogeneous product.
Q:
FirmAnnual SalesFirmAnnual SalesA$1000G$800B900H1200C120I1050D75J90E50K75F40L600According to the above table, if the fourth and fifth largest firms in the industry merge, the four-firm concentration ratio in the industry will beA) 82.5 percent. B) 35.8 percent. C) 69.0 percent. D) 84.1 percent.
Q:
Since the firm in the above figure is operating in a monopolistically competitive industry, in the long run we can expect to seeA) the typical firmʹs economic profits expand as production becomes more efficient. B) more firms entering the industry until economic profits are zero.C) the typical firm producing at the minimum point on its ATC curve. D) each firm expand its share of the total market.
Q:
Which of the following conditions hold true for both the perfectly competitive firm and the monopoly at the profit-maximizing output level?A) MR = P B) MC = ATC C) MC = P D) MR = MC
Q:
If a perfectly competitive industry is in long-run equilibrium, thenA) price equals average cost.B) price is greater than average cost and equal to marginal cost. C) all firms earn the same accounting profits.D) marginal cost is less than average cost.
Q:
For a perfect competitor, the marginal revenue curve will beA) horizontal. B) vertical.C) positively sloped. D) negatively sloped.
Q:
OutputFixed CostsVariable CostsTotal CostsAverage Total CostsAverage Marginal Variable Costs Costs0 $0$100 1 30 2 50 3 60 4 120 5 200 In the above table, what is the average total cost to produce 3 units of output?A) $33.33 B) $53.33 C) $55 D) $20
Q:
The short run is
A) a year or less.
B) up to three years.
C) the period of time in which the firm can vary its rate of output.
D) the period of time in which the firm cannot change its use of at least one input.
Q:
Economic profits are found by total revenues minusA) explicit costs. B) explicit and implicit costs.C) implicit costs. D) all opportunity costs.
Q:
Let the quantity of hamburgers be measured along the vertical axis and the quantity of movies be measured along the horizontal axis. If the price of a hamburger is $1.50 and the price of a movie is $6, then the slope of the budget line isA) -6. B) -4. C) -3. D) -0.25.
Q:
Slices of PizzaTotal UtilityMarginal Utility00-120 250 3 204 105 0In the above table, the total utility of 4 slices of pizza isA) 50. B) 70. C) 80. D) 20.
Q:
The cross price elasticity of demand between two goods is 50. We may conclude thatA) the two goods are very complementary and probably are sold together. B) the two goods are poor substitutes for each other.C) the demand for one of the goods is likely to be fairly elastic and the demand for the other good is likely to be fairly inelastic.D) the demand for each of the goods is likely to be very elastic.
Q:
PricePer Unit Quantity DemandedPer Week$10.00259.50309.00358.50408.00457.50507.00556.50606.00655.50705.0075Refer to the above table. Demand is least price elastic at a price ofA) $10.00. B) $7.50. C) $7.00. D) $5.00.
Q:
Common property ownership is most apt to lead toA) an efficient allocation of resources.B) production at a rate at which price is less than social cost. C) a decrease of externalities.D) an increase in pollution.
Q:
An individual with no deductible on his or her health insurance policy will tend to engage in a lifestyle that is less healthy than a person with a $2,000 insurance deductible. This is said to be a problem ofA) healthy selection. B) moral hazard.C) wellness training. D) blue-zoning.
Q:
If a minimum wage is established, a monopsonist facesA) an upward sloping supply of labor at all quantities of labor.B) a downward sloping supply of labor at all quantities of labor.C) a horizontal supply of labor at the minimum wage and the upward sloping portion of the labor supply curve above minimum wage.D) a horizontal supply of labor at the minimum wage and the downward sloping portion of the labor demand curve below minimum wage.
Q:
A business enterprise that allows the hiring of nonunion members conditional on their joining the union isA) a closed shop. B) a union shop.C) a jurisdictional dispute. D) an industrial union.
Q:
We would expect that a fall in labor supply will have a proportionately larger effect on the market wage rate whenA) capital goods exist that can replace many of the workers.B) the product produced in the industry has several close substitutes.C) the product produced in the industry makes up a large portion of most familiesʹ budgets. D) labor represents a relatively small portion of total costs.
Q:
Which of the following is exempt from antitrust laws?A) Professional football B) Petroleum companiesC) Airlines D) Hospitals
Q:
If we observe firms earning zero economic profits in the short run, we know thatA) the industry must be perfectly competitive.B) the industry must be either perfectly competitive or monopolistically competitive. C) there must not be any barriers to entry.D) any market structure is possible since firms under any market structure can earn zero profits at some time.
Q:
FirmAnnual SalesFirmAnnual SalesA$1000G$800B900H1200C120I1050D75J90E50K75F40L600According to the above table, the four-firm concentration ratio of this industry isA) 69.2 percent. B) 35.1 percent. C) 66.7 percent. D) 67.5 percent.
Q:
In the above figure, this profit-maximizing monopolistic competitive firm will realize an economic profit ofA) -$1,400. B) $2,100. C) $1,400. D) $700.
Q:
A monopolist determines the profit-maximizing outputA) at the point at which TR = TC. B) at the point at which MR = MC.C) at any point it wants because it is the only producer of the product.D) at the point at which TR is maximum.
Q:
For a perfectly competitive firm at its long -run equilibrium, A) P = MR = MC = AC.B) P = MR > MC.C) accounting profit must be zero.D) there are no opportunity costs to be concerned with.
Q:
Which of the following is not true for a perfectly competitive firm?A) P = MR B) AR = MR C) MR = TR D) P = AR
Q:
OutputFixed CostsVariable CostsTotal CostsAverage Total CostsAverage Marginal Variable Costs Costs0 $0$100 1 30 2 50 3 60 4 120 5 200 In the above table, what is the average total cost to produce 5 units of output?A) $80 B) $55 C) $40 D) $60
Q:
In economics, how long is the long run?
A) More than 12 months
B) 24 months or longer
C) 5 years or more
D) Whatever time it takes a firm to vary all inputs
Q:
The opportunity cost of capital is
A) an explicit cost.
B) a part of economic profits.
C) usually unknown and must be estimated by looking at the price of capital goods.
D) the normal rate of return.
Q:
The consumption possibilities curve is theA) supply curve. B) demand curve.C) budget constraint. D) indifference curve.
Q:
Slices of PizzaTotal UtilityMarginal Utility00-120 250 3 204 105 0In the above table, the marginal utility of the second slice of pizza isA) 20. B) 30. C) 50. D) 10.
Q:
The price of X falls by ten percent, and the quantity demanded of X increases by ten percent. Meanwhile, the quantity demanded of Y increases by ten percent too. We would conclude thatA) demand for X is elastic, and X and Y are substitutes.B) demand for X is elastic, and X and Y are complements.C) demand for X is unit-elastic, and X and Y are complements. D) demand for X is inelastic, and X and Y are unrelated.
Q:
PricePer Unit Quantity DemandedPer Week$10.00259.50309.00358.50408.00457.50507.00556.50606.00655.50705.0075Refer to the above table. What is the absolute price elasticity of demand when price changes from $5.50 to $5.00?A) 0.72 B) 0.79 C) 1.38 D) 5.0
Q:
Economic theory suggests that if natural resources can be held as private property, then
A) conservation will be nonexistent.
B) owners will have an incentive not to abuse them.
C) natural resources will be sold off for immediate use.
D) people will simply hold them and refuse to make them available.
Q:
Among the reasons that health care expenditures have grown so rapidly in the United States over the last two decades are all of the following EXCEPTA) an emphasis on wellness programs and preventive medicine. B) the aging of the U.S. population.C) expensive new medical technologies.D) third-party financing.
Q:
Use the above table. The data shows that the firmA) is hiring in a perfectly competitive labor market.B) is selling its output in a perfectly competitive market.C) is a monopsonist.D) is selling its output in an imperfectly competitive market.
Q:
A closed shop is aA) strike by a union in sympathy with another unionʹs strike or cause.B) dispute involving two or more unions over which should have control of a particular jurisdiction.C) business enterprise in which employees must belong to the union before they can be hired and must remain in the union after they are hired.D) legal environment in which businesses may hire nonunion members conditional on their joining the union by some specified date after employment begins.
Q:
Suppose there are four industries. Labor costs are 80 percent of total costs in industry A, 60 percent in B, 45 percent in C, and 10 percent in D. In which of these industries will a 10 percent increase in the price of labor reduce quantity demanded of labor by the largest proportion?A) A B) B C) C D) D
Q:
Which of the following is NOT exempt from antitrust laws?A) Professional baseball B) Labor unionsC) Airlines D) Public transit systems
Q:
Firms face downward sloping demand curves in
A) monopolies only.
B) monopolies and oligopolies only.
C) monopolies and oligopolies that collude only.
D) all market structures except perfect competition.
Q:
A concentration ratio givesA) the average size of the firms in an industry.B) the total sales of four or eight of the mid-sized firms in the industry.C) the percentage of all sales contributed by the four or eight largest firms in the industry.D) the sales of the four largest firms in the industry divided by the sales of the eight largest firms in the industry.
Q:
At its profit-maximizing output, the firm in the above figure incurs a total cost of production ofA) $7,000. B) $9,000. C) $6,300. D) $3,900.
Q:
The point of profit maximization for a monopolist is exemplified byA) TR = TC. B) MR = MC. C) ATCmin. D) MR > MC.
Q:
Which of the following is NOT a characteristic of a perfectly competitive long -run equilibrium?
A) Firms are earning zero profits.
B) Price equals marginal cost.
C) Price equals long-run minimum average cost.
D) Firms are producing on the downward sloping portions of their short -run average cost curves.
Q:
For a perfect competitor, marginal revenue equalsA) the slope of the demand curve. B) average revenue divided by price. C) price divided by average revenue. D) the market price.
Q:
OutputFixed CostsVariable CostsTotal CostsAverage Total CostsAverage Marginal Variable Costs Costs0 $0$100 1 30 2 50 3 60 4 120 5 200 In the above table, what is the average total cost to produce 4 units of output?A) $30 B) $60 C) $55 D) $20
Q:
Mr. Jamesʹ company produces candy bars. Which is NOT a variable input for this firm?A) Sugar B) Assembly line workersC) The big chocolate-stirring machines D) Packaging materials
Q:
The amount that must be paid to an individual to get them to invest in the industry isA) a normal rate of return. B) the explicit costs. C) reinvestment. D) financial capital.
Q:
All possible combinations of goods that can be purchased at fixed prices with a specific income isA) a marginal utility curve. B) a total utility curve. C) an indifference curve. D) a budget constraint.
Q:
Which of the following statements is true with respect to total utility and marginal utility?A) Marginal utility always rises as total utility increases. B) Marginal utility can decline as total utility rises.C) Total utility is not related to marginal utility.D) Total utility can decline while marginal utility rises.
Q:
The cross price elasticity between X and Y is -1.8. We can conclude thatA) goods X and Y are substitutes. B) goods X and Y are complements.C) goods X and Y are unrelated. D) perfect substitutes
Q:
PricePer Unit Quantity DemandedPer Week$10.00259.50309.00358.50408.00457.50507.00556.50606.00655.50705.0075Refer to the above table. What is the absolute price elasticity of demand when a price rises from $8 to $8.50?A) 5.15 B) 1.94 C) 0.515 D) 0.194
Q:
The exclusive rights of ownership that allow the use, transfer, and exchange of property are calledA) common property rights. B) private property rights. C) externalities. D) social benefits.
Q:
A problem with third-party financing of so much of health care is that
A) it reduces the quality of health care received by most people.
B) it discourages physicians from getting second opinions and running enough tests to be sure the right procedure is followed.
C) it causes the demand for medical services to increase, which causes health care costs to increase.
D) it discourages people from relying on the judgments of physicians in making decisions about health care.
Q:
Use the above table. If the marginal revenue product is $30, how many workers will the profit maximizing monopsonist hire and what wage will they pay each worker?A) 1; $10 B) 2; $15 C) 3; $20 D) 4; $25
Q:
The United Auto Worker (UAW) would best be classified asA) a craft union.B) an industrial union. C) a guild.D) closed shop union. E) none of the above
Q:
Aluminum cannot be produced without bauxite. Hence, the price elasticity of demand for bauxite by aluminum manufacturers will beA) perfectly elastic. B) elastic.C) inelastic. D) unitary elastic.
Q:
All of the following are exempt from antitrust laws EXCEPTA) labor unions. B) professional baseball.C) oil companies. D) public utilities.
Q:
Product differentiation always exists inA) perfect competition. B) monopolistic competition.C) oligopoly. D) monopoly.
Q:
As the definition of products narrows (i.e., becomes more specific), the concentration ratioA) is not valid.B) tends to decrease.C) tends to increase.D) does not change in any predictable manner.
Q:
In the above figure, when this monopolistically competitive firm produces its profit-maximizing output, it sets a per-unit price ofA) $13. B) $11. C) $10. D) $8.
Q:
A firm that can determine the price-output combination in order to maximize profit is known as aA) price searcher. B) price taker. C) demand searcher. D) cost taker.
Q:
Price equals the minimum of long-run average costA) in a long-run equilibrium.B) in a short-run equilibrium as well as in a long-run equilibrium. C) whenever average revenue equals marginal cost.D) along a horizontal long-run supply curve, but not along an upward sloping long-run supply curve.