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Economic
Q:
The change in total revenues resulting from a change in output of one unit isA) average revenue. B) marginal revenue.C) quantity revenue. D) price revenue.
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 variable cost to produce 2 units of output?A) $30 B) $60 C) $55 D) $20
Q:
Which of the following would be a fixed input for an amusement park?A) Ticket takers B) Unpopped popcornC) Concession workers D) The roller coaster
Q:
Normal rate of return is A) accounting profit. B) an explicit cost.C) economic profit.D) the amount that must be paid to obtain investment in a business.
Q:
The budget constraint shows theA) combinations of goods that generate the same amount of total satisfaction.B) possible combinations of goods that can be purchased with a specified income.C) changes in consumption of goods that a consumer makes when his income increases.D) amount of a good the consumer will buy at various prices.
Q:
Diminishing marginal utility means that as more of a good is consumed, A) the rate at which total utility increases starts to diminish.B) the rate at which total utility increases stays the same.C) the rate at which total utility increases starts to increase.D) there is no impact on the rate of change of total utility.
Q:
Suppose the price of X increases by 20 percent while the quantity demanded of Y does not change. We would conclude thatA) the two goods are substitutes, but the cross elasticity of demand is not large.B) the two goods are complements, but the cross elasticity of demand is not large.C) the two goods are perfect substitutes. D) the two goods are not related.
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 $9 to $9.50?A) 0.35 B) 0.55 C) 2.57D) 2.85
Q:
All the costs associated with making, reaching, and enforcing agreements are calledA) private costs. B) internal costs. C) transaction costs. D) social costs.
Q:
The impact of technological change in the health care area has been to
A) reduce the quality of health care while raising the costs.
B) reduce the cost of health care.
C) increase the quality of health care while decreasing the costs.
D) increase both the quality of health care and the costs of health care.
Q:
Use the above table. If the marginal revenue product is $20, how many workers will the profit maximizing monopsonist hire?A) 1 B) 2 C) 3 D) 4
Q:
A business enterprise in which employees must belong to the union before they can be hired isA) a closed shop. B) a union shop.C) a jurisdictional dispute. D) an industrial union.
Q:
The price elasticity of demand for a variable input will be greaterA) the fewer substitutes there are for the final product.B) the easier it is for a particular input to be substituted for by other inputs. C) the lower the price elasticity of supply of all other inputs.D) the smaller the proportion of total costs accounted for by a particular variable input.
Q:
Which antitrust law is sometimes called the ʺChain Store Actʺ?A) Sherman Act B) Clayton ActC) Robinson-Patman Act D) Federal Trade Act
Q:
In which market structure does a firm have the LEAST influence over the market price?A) Monopoly B) Monopolistic competitionC) Oligopoly D) Perfect competition
Q:
If industry sales are $2,000, and the top four firms have sales of $170, $140, $100, and $80, respectively, what will be the four-firm concentration ratio?A) 49 percent B) 24.5 percent C) 490 percent D) 200/49
Q:
In the above figure, the monopolistically competitive firmʹs profit -maximizing output isA) 1,000 units. B) 300 units. C) 900 units. D) 700 units.
Q:
A monopolistA) is a price searcher. B) is a price taker.C) faces an upward sloping demand curve. D) faces a vertical demand curve.
Q:
In long-run equilibrium, the perfectly competitive firm will
A) go out of business.
B) produce to the point at which marginal cost is at its minimum.
C) produce to the point at which marginal cost equals average total cost.
D) produce on the upward sloping portion of its ATC curve.
Q:
Marginal revenue equalsA) total revenue divided by output.B) price times quantity, divided by average revenue.C) total revenue divided by average revenue.D) the change in total revenue from selling one more unit.
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 variable cost to produce 3 units of output?A) $30 B) $60 C) $10 D) $20
Q:
Which of the following would be a fixed input to an automobile firm?A) Steel B) A factory in DetroitC) Car batteries D) Engineers
Q:
Accounting profits are found by total revenues minusA) explicit costs. B) explicit and implicit costs. C) implicit costs. D) all opportunity costs.
Q:
Suppose that the quantity of good y is measured along the vertical axis and that the quantity of good x is measured along the horizontal axis. If the price of good x is $5 and the price of good y is $10 when income is $200 per time period, the slope of the consumerʹs budget constraint will beA) -0.5. B) -2. C) -5. D) -10.
Q:
If your dinner guest said, ʺEvery bite, including the last bite, tasted as good as the first,ʺ then the marginal utility for himA) is decreasing. B) is increasing. C) is constant. D) is positive.
Q:
A measure of the responsiveness of the demand for one good to the percentage change in the price of another good isA) price elasticity of demand. B) price elasticity of supply. C) cross price elasticity of demand. D) income elasticity.
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 if a price falls from $7.50 to $7?A) 10 B) 1.38 C) 0.724 D) 0.1
Q:
Which of the following would be viewed as a common property problem?A) Your property is burglarized.B) Vandals damage your property.C) People pick all of the flowers in a public park. D) To be safe you must lock your door at night.
Q:
The percentage of national income spent on health care
A) has steadily decreased since 1965.
B) has steadily increased since 1965.
C) increased until the end of the 1970s and then decreased in the 1980s and 1990s.
D) decreased until the end of the 1970s and then increased in the 1980s and 1990s.
Q:
Use the above table. If the marginal revenue product is $10, how many workers will the profit maximizing monopsonist hire?A) 1 B) 2 C) 3 D) 4
Q:
The CIO was founded byA) Samuel Gompers. B) Jimmy Hoffa. C) John L. Lewis. D) George Meany.
Q:
When an input represents a larger proportion of a firmʹs total costs, thenA) demand for the input will tends to be less elastic.B) the input demand will not vary significantly with a change in input price. C) the usage of the input cannot be varied in the production function.D) demand for the input will tends to be more elastic.
Q:
Which antitrust act was passed to protect independent retailers from ʺunfair discriminationʺ by chain stores?A) Federal Trade Commission Act B) Robinson-Patman ActC) Sherman Act D) Wheeler-Lea Act
Q:
Other things being equal, which market structure is most likely to yield the greatest industry long-run economic profit?A) Monopolistic competition B) OligopolyC) Monopoly D) Perfect competition
Q:
The industry concentration ratio measures theA) value of the assets owned by the largest corporations in the market.B) percentage of industry sales accounted for by the top four or eight firms.C) difference between price and marginal cost for the largest firms in the industry.D) degree of product differentiation in the market.
Q:
Graphically, how does a monopolistically competitive firm determine its profit -maximizing price?A) It accepts the price set by the industry-wide forces of supply and demand.B) Graphically, it finds the place where MR = MC and charges the price directly to the left of that point.C) The firmʹs pricing structure is set by government regulators.D) The firm determines its profit-maximizing output and then charges the price associated with the point on its demand curve directly above that quantity.
Q:
Refer to the above figure. The firm is currently producing at Q1. The firm should A) reduce production. B) leave production as it is. C) increase production. D) shut down.
Q:
Firms in a perfectly competitive industry are producing goods efficiently in the long run if each is producing at the minimum point of theA) AVC curve. B) MC curve. C) LAC curve. D) AFC curve.
Q:
In the above figure, what happens to the firmʹs optimal level of output if the price it receives for its product decreases from P4 to P3?A) Output stays the same.B) Output decreases. C) Output increases.D) There is not enough information provided to know what happens to output.
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 variable cost to produce 4 units of output?A) $30 B) $60 C) $55 D) $20
Q:
A fixed resource is one thatA) is physically tied to a specific location.B) costs more than the average daily revenue of the firm. C) cannot be varied in the short run.D) can be disposed of only if the firm goes out of business.
Q:
The problem with the separation of ownership from control is that
A) the owner in a proprietorship may not always act in the profit -maximizing fashion because he or she may not have the experience or expertise that professional managers have.
B) the managing partner of a firm may not always behave in the way that other managers would if they were the managing partners.
C) the managers of the firm can make decisions that reduce the wealth of the owners while not reducing their own wealth.
D) the owners of firms may not always know the best way to run a firm, yet they are the ones who elect the managers of the firm.
Q:
The slope of the budget constraint line is theA) income of consumers divided by the price of each good.B) ratio of this yearʹs income to last yearʹs income. C) rate of exchange between the two goods.D) ratio of different levels of income.
Q:
The reason that all -you-can-eat restaurants can make a profit is due toA) the law of demand.B) the law of increasing relative costs.C) the law of diminishing marginal utility.D) the law of diminishing marginal returns.
Q:
PxQxPyQyPzQz$10100$2050$25200109018602522510701590252751250151002529015251512025320Refer to the above table. The price of Y decreases from $18 to $15. What is the cross price elasticity of demand between Y and X?A) -0.73 B) -1.0 C) +1.38 D) +1.83
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 if a price falls from $7 to $6.50?A) 0.85 B) 1.08 C) 1.17 D) 0.92
Q:
When negative externalities exist, a voluntary agreement can be negotiated. Which of the following statements is true?A) Voluntary agreements usually do not work since the owner has no incentive to negotiate. B) Transactions costs must be low relative to the expected benefits of reaching an agreement. C) Voluntary agreements are difficult to negotiate because they usually involve government intervention.D) Voluntary agreements always leave the owner worse off.
Q:
An important contributor to rising U.S. health care costs in recent years isA) less interest on the part of Americans to stay physically fit. B) the increasing proportion of the population that smokes.C) an easing of standards at medical schools that has permitted unqualified people to become physicians.D) the aging of the population.
Q:
Use the above table. The MFC of the 4th worker isA) $5. B) $6.25. C) $25. D) $40.
Q:
The Wagner Act
A) permitted unions to engage in collective bargaining.
B) permitted states to pass right-to-work laws.
C) restricted activities of heads of unions that were not beneficial to union members.
D) mandates compulsory arbitration in some key industries.
Q:
When an input represents a small proportion of a firmʹs total costs, thenA) demand for the input will tend to be less elastic.B) the input demand will vary significantly with a change in input price. C) the usage of the input cannot be varied in the production function.D) output demand will be highly elastic.
Q:
The regulatory agency most concerned with false advertising is the
A) Antitrust Division of the Justice Department.
B) National Labor Relations Board. C) Federal Deposit Insurance Corp. D) Federal Trade Commission.
Q:
Other things being equal, which market structure would produce the least output and the highest average product price?A) Monopoly B) OligopolyC) Monopolistic competition D) Perfect competition
Q:
Suppose that an industry consists of 100 firms, and the top 4 firms have annual sales of $1 million, $1.5 million, $2 million, and $2.5 million, respectively. If the entire industry has annual sales of $8.5 million, the four-firm concentration ratio is approximatelyA) 82 percent. B) 50 percent. C) 94 percent. D) 70 percent.
Q:
Which of the following statements about a monopolistically competitive firm is FALSE?A) It tries to differentiate its product from that of competitors.B) It may earn short-run economic profits.C) It produces the quantity at which MC =MR. D) It sets price like a perfectly competitive firm.
Q:
Refer to the above figure. The firm is currently producing at Q2. The firm shouldA) reduce production. B) leave production as it is. C) increase production. D) shut down.
Q:
For a firm in a perfectly competitive industry, A) short-run economic profits must be zero.B) short-run and long-run economic profits must be zero.C) short-run economic profits may be positive, but long-run economic profits must be zero.D) both short-run and long-run economic profits may be negative.
Q:
In the above figure, what happens to the firmʹs optimal level of output if the price it receives for its product increases from P2 to P3?A) Output stays the same. B) Output decreases.C) Output increases.D) There is not enough information provided to know what happens to output.
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 marginal cost to produce the 2nd unit of output?A) $30 B) $60 C) $55 D) $20
Q:
The long run is defined as the time period in whichA) the firm can vary only one input.B) the firm can make positive economic profits.C) all factors of production can be altered. D) the firm can alter its rate of production.
Q:
It is likely that the owners have little to do with the day -to-day management of a firm in the case ofA) partnerships only. B) proprietorships only.C) corporations only. D) partnerships and corporations.
Q:
If the quantity of hamburgers is measured along the horizontal axis and the quantity of movies is measured along the vertical axis, and the price of a hamburger is $2.00 while the price of a movie is $12, then the slope of the budget line isA) -1/3. B) -3.5 C) -1/6. D) -6.
Q:
Bill ate four hot dogs at the baseball game. The first one tasted best, but he found that as he ate more hot dogs the amount of extra satisfaction he was receiving was beginning to fall. This would demonstrateA) the law of total utility maximization. B) the law of zero utility.C) the law of diminishing marginal utility. D) the law of diminishing costs.
Q:
PxQxPyQyPzQz$10100$2050$25200109018602522510701590252751250151002529015251512025320Refer to the above table. Suppose the price of X increases from $10 to $12. What is the cross price elasticity of demand between X and Y?A) -1.833 B) +0.545 C) +0.579 D) +1.833
Q:
The price elasticity of demand can be computed asA) change in total utility/change in quantity.B) change in price/change in quantity demanded.C) percentage change in quantity demanded/percentage change in price.D) change in quantity demanded/change in price.
Q:
Why do economists believe that it is socially optimal to have some amount of pollution?
Q:
According to the text, government spending accounts for about percent of all U.S. health care expenditures.A) 70 B) 10 C) 30 D) 40
Q:
Use the above table. The MFC of the 3rd worker isA) $5. B) $30. C) $20. D) $6.7.
Q:
The American Federation of State, County, Government and Municipal Employees is an example of a(n)A) guild. B) craft union.C) industrial union. D) public-sector union.
Q:
If the price elasticity of demand is less than 1, then then consumer demand isA) unrelated to the elasticity of demand. B) inelastic.C) elastic. D) unitary elastic.
Q:
The Federal Trade Commission was established in 1914 toA) regulate trade of public goods.B) promote competition in interstate commerce.C) investigate unfair competitive practices.D) prevent non-price competition.
Q:
Product differentiation exists in
A) oligopolies only.
B) monopolies only.
C) monopolistic competition only.
D) all market structures except perfect competition.
Q:
Suppose a ten firm industry has total sales of $35 million per year. The largest firm have sales of $10 million, the third largest firm has sales of $4 million, and the fourth largest firm has sales of $2 million. If the rest of the industry has annual sales of $12 million, the second largest firm has sales ofA) $8 million. B) $7 million.C) $4 million. D) none fo the above.
Q:
Which of the following is TRUE for a monopolistically competitive firm?A) MR = P B) MR > P C) MR < P D) MR = AFC
Q:
Refer to the above figure. Profits for this firm areA) negative. B) zero.C) positive.D) undetermined without more information.
Q:
In the long run, the perfectly competitive firmA) does not have a shut down price. B) earns only a normal profit.C) may produce even if it suffers a loss. D) earns an economic profit.
Q:
In a perfectly competitive industry, the firmʹs marginal revenue curve is A) downward sloping. B) upward sloping. C) vertical. D) horizontal.
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 marginal cost to produce the 4th unit of output?A) $30 B) $60 C) $55 D) $20
Q:
The time period during which a firmʹs capital is fixed but its labor is variable is calledA) the planning horizon. B) the short run.C) the long run. D) the very long run.
Q:
If the death of an owner causes the firm to dissolve, the firm must have beenA) a partnership only. B) a proprietorship only.C) a corporation only. D) either a proprietorship or a partnership.