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Economic
Q:
The marginal cost of pollution abatement is the
A) additional cost to clean up an additional unit of pollution.
B) additional benefit from cleaning up an additional unit of pollution.
C) total social costs of pollution clean-up divided by total social benefits.
D) total social costs of pollution clean-up divided by the total units of clean -up.
Q:
Attempts to alleviate poverty have included all of the following income -maintenance programs EXCEPTA) Social Security. B) temporary assistance to needy families. C) 401(k) plans. D) food stamps.
Q:
In the above figure, what is the wage rate for the perfectly competitive market?A) W1 B) W2 C) W3 D) W4
Q:
An industrial union isA) a union composed of public employees.B) a union composed of workers who are in a specific geographic area.C) a union composed of workers who are employed in a particular industry.D) a union composed of workers who engage in a particular trade or skill.
Q:
Whenever an input makes up a large percentage of a goodʹs final cost, an increase in that inputʹs price willA) affect total cost relatively more. B) not affect total revenues.C) affect only accounting profits. D) cause the firm to shutdown.
Q:
The primary antitrust statute in the United States is theA) NLRA of 1935. B) SEC Act of 1933.C) Sherman Antitrust Act of 1890.D) Federal Reserve Act of 1913.
Q:
Industry X comprises only very few large firms engaged in stiff competition with each other.Industry X can best be described asA) pure competition. B) monopolistic competition. C) pure monopoly. D) oligopoly.
Q:
How do economies of scale contribute to the development of an oligopoly?A) Economies of scale make it legally difficult for new firms to enter.B) Economies of scale make small -scale producers inefficient.C) Economies of scale are based on control of a key resource, without which other firms cannot enter an industry.D) Economies of scale are guaranteed when a patent is granted.
Q:
The above figure shows the situation of a monopolistic competitor in the short run. The maximum economic profits of the firm equalA) $50,000. B) $30,000. C) 15,000. D) zero.
Q:
If a monopolist produces to a point at which marginal revenue is more than marginal cost thenA) the firm should increase output.B) the firm should reduce output. C) the firm is maximizing profits.D) we do not know if the firm should increase or reduce without more information.
Q:
Which of the following is NOT correct for a perfectly competitive firm in long -run equilibrium?A) SAC = LAC B) MR = P = AR C) MC = MR > LAC D) LAC = P
Q:
Suppose that at the current level of output, price = $10, MC = $4, AVC = $7, and ATC = $11.Which of the following is true?A) The firm should decrease output. B) The firm should shut down.C) The firm should increase output.D) The firm should maintain the current level of output.
Q:
At an output at which MC is greater than ATCA) the ATC curve is downward sloping. B) the ATC curve is upward sloping.C) the AFC curve is upward sloping. D) the AVC curve is downward sloping.
Q:
Which of the following would NOT be a short-run decision for the firm?
A) Recall workers who were previously laid-off
B) Have labor work two hours overtime each day in order to expand output
C) Build another wing on the plant in order to add a new assembly line
D) Place an order with a supplier for additional raw materials
Q:
The concept of limited liabilityA) does not apply to a corporation.B) means that the owners of a corporation have liability limited to the value of the shares in the firm.C) means that owners of a firm are subject to double taxation.D) limits the amount of specialization that can occur in a firm.
Q:
The slope of the budget line isA) zero since prices of the goods and income are assumed to be constant.B) negative since to purchase more of one good means that some of the other good must be given up.C) negative because of the marginal rate of substitution. D) positive since prices and income are positive.
Q:
Which of the following is NOT consistent with the law of diminishing marginal utility?A) Newspaper vending machines are not as secure as soft drink machines.B) A student selects to eat at an all -you-can-eat restaurant rather than at a restaurant that charges for refills.C) A studentʹs enjoyment of opera increases the more she listens to it.D) A symphony has free throat lozenges in their lobby.
Q:
Robert must always have cream in his coffee. For Robert, the cross price elasticity of demand for coffee and cream isA) equal to 0. B) negative. C) positive.D) impossible to determine without more information.
Q:
The value of the absolute price elasticity of demand for good X is 4. The absolute price elasticity for good Y is 1. Which goodʹs quantity demanded is less responsive to a change in price?A) Good X. B) Good Y.C) They are equally responsive. D) Not enough information is given.
Q:
Quantity of Clean Air (%)Marginal Cost ($)Marginal Benefit ($)010,000100,0002525,00050,0005037,50037,5007575,00025,000100Infinite0In the above table, the optimal quantity of clean air isA) 25 percent. B) 50 percent. C) 75 percent. D) 100 percent.
Q:
All of the following aim to reduce income inequality EXCEPTA) Social Security payments. B) earned income tax credits. C) regressive taxes. D) food stamp programs.
Q:
In the above figure, what is the wage rate the monopsonist will pay?A) W1 B) W2 C) W3 D) W4
Q:
Prior to World War I, the U.S. governmentʹs attitude towards labor unions was one ofA) indifference.B) support. C) hostility.D) support, except when it came to unions of public employees.
Q:
In the long run, input demand becomes moreA) elastic. B) inelastic. C) unit-elastic. D) cost efficient.
Q:
The first antitrust law in the United States was theA) FTC Act. B) Clayton Act.C) Sherman Act. D) Robinson-Patman Act.
Q:
A given industry, Z, is such that the 1 -firm, 2-firm, 4-firm and 8-firm concentration ratios are the same. Based on this, we can conclude that Industry Z isA) pure competition. B) monopolistic competition. C) oligopoly. D) pure monopoly.
Q:
A horizontal merger involvesA) the joining of two firms at different stages of the production process.B) the separation of management from ownership. C) the joining of two firms selling similar products.D) the exchange of debt for stock.
Q:
In the above figure, the profit-maximizing monopolistically competitive firm will A) make a profit of $24,000. B) make a profit of $30,000. C) make a profit of $0. D) incur a loss of $20,000.
Q:
If a monopolist produces to a point at which marginal revenue is less than marginal cost thenA) the firm should increase output. B) the firm should reduce output. C) the firm is maximizing profits.D) we do not know if the firm should increase or reduce without more information.
Q:
In the long run, the price for a perfectly competitive firmA) will be determined by the firmʹs supply and demand curves. B) will allow for positive economic profits.C) will equal marginal cost where marginal cost is at a minimum. D) will equal the minimum average total cost.
Q:
Which of the following conditions is TRUE for a profit -maximizing firm in a perfectly competitive industry?A) MR = TC B) ATC = AFC C) MR = MC D) MC = AVC
Q:
MC = AVC and MC = ATC at points at whichA) the AVC and ATC curves are at their respective maximums.B) the AVC and ATC curves are at their respective minimums.C) the distance between the ATC and AVC curves is at its minimum. D) the distance between the ATC and AVC curves is at its maximum.
Q:
The focus of firm decisions in the short run is primarily onA) variable inputs. B) capital investment. C) plant size. D) economies of scale.
Q:
The characteristic of limited liability enables corporations toA) avoid taxes on some of their profits. B) exist even when owners die. C) raise large amounts of financial capital. D) start up and dissolve easily.
Q:
If an individualʹs utility from consuming two goods increases, then there must beA) a downward rotation of the individualʹs indifference curve. B) an inward rotation of the individualʹs indifference curve.C) an outward shift of the individualʹs indifference curve. D) in inward shift of the individualʹs indifference curve.
Q:
As an individual consumes more of a particular commodity, the total level of utility derived from that consumption willA) increase at an increasing rate. B) increase at a decreasing rate. C) increase at a constant rate. D) remain constant.
Q:
When two goods are unrelated,
A) the demands for both goods will be inelastic.
B) cross price elasticity of demand will be 0.
C) cross price elasticity of demand will be negative.
D) cross price elasticity of demand will be positive.
Q:
The value of the absolute price elasticity of demand for good X is 4. The absolute price elasticity for good Y is 1. Which goodʹs quantity demanded is more responsive to a change in price?A) Good X. B) Good Y.C) They are equally responsive. D) Not enough information is given.
Q:
Quantity of Clean Air (%)Marginal Cost ($)Marginal Benefit ($)010,000100,0002525,00050,0005037,50037,5007575,00025,000100Infinite0The above table shows marginal costs and marginal benefits of clean air in a particular industrial area. In the table, when the quantity of clean air is at 75 percent,A) the quantity of polluted air is 75 percent.B) the marginal benefit of clean air exceeds the marginal cost.C) the marginal benefit of clean air is less than the marginal cost. D) the quantity of clean air is optimal.
Q:
The incidence of absolute poverty is reduced by A) annual recalculations of the poverty line. B) government welfare programs.C) economic growth.D) the size of the budget deficit.
Q:
A firm that is a monopsonist in the labor market and a monopolist in the product market will hire labor to the point at whichA) MFC = MRPm.B) a perfectly elastic labor supply = MRP.C) a perfectly inelastic labor supply = perfectly inelastic labor demand. D) where supply of labor = demand for labor.
Q:
Samuel Gompers served as the first leader of theA) Knights of Labor. B) American Federation of Labor. C) Congress of Industrial Organizations. D) United Steel Workers.
Q:
If labor is 80 percent of total costs in industry A and 20 percent in industry B, then other things equal, we would expect the elasticity of demand for labor to beA) greater in industry A than in industry B. B) greater in industry B than in industry A. C) the same in both industries.D) uncertain since no general relationship exists between cost shares and elasticities.
Q:
A major shortcoming of the Sherman Act was thatA) when it was passed, there were no violations, so the Supreme Court ruled it unnecessary.B) it failed to explicitly state which specific activities were illegal. C) violators of the Act were forced out of business.D) it was not enforced by the courts.
Q:
Strategic dependence is found inA) monopoly markets. B) oligopolistic markets.C) monopolistic competitive markets. D) perfect competitive markets.
Q:
If the United Statesʹ largest bakery buys an agricultural firm that specializes in growing wheat, we would have an example ofA) a horizontal merger. B) a vertical merger.C) a monopoly. D) excessive product differentiation.
Q:
In the above figure, total cost for this profit-maximizing monopolistically competitive firm isA) $91,000. B) $50,000. C) $70,000. D) $72,000.
Q:
If a monopolist produces to a point at which marginal revenue is greater than marginal cost thenA) profits are being maximized.B) profits will always be negative.C) the incremental cost of producing the last unit exceeds the incremental revenue.D) the incremental cost of producing the last unit is less than the incremental revenue.
Q:
In the long run, a perfect competitorA) earns positive profits but will not make losses. B) earns positive economic profits.C) earns zero economic profits.D) produces at its shutdown point.
Q:
When demand is perfectly elastic, marginal revenue isA) zero. B) equal to price. C) declining. D) increasing.
Q:
The distance between the TC and the TVC curveA) is constant. B) decreases as output increases.C) increases as output increases. D) is the MC curve.
Q:
Which of the following is a short-run decision for a firm?
A) Downsizing the firmʹs manufacturing plant
B) Expanding the firmʹs distribution network of long -haul freight trucks and smaller delivery trucks.
C) Firing workers
D) Investing in a new addition to the firmʹs manufacturing plant
Q:
Corporations are responsible for approximately what percentage of total business revenues?A) 19 percent B) 50 percent C) 72 percent D) 83 percent
Q:
Suppose that indifference curve I1 lies to the right of indifference curve I2. We can conclude thatA) some, but not all, points on indifference curve I1 will correspond to higher utility than points along indifference curve I2.B) some, but not all, points on indifference curve I1 will correspond to lower utility than points along indifference curve I2.C) all points along indifference curve I 1 will correspond to higher utility than points along indifference curve I2.D) all points along indifference curve I 1 will correspond to lower utility than points along indifference curve I2.
Q:
QuantityPer WeekTotal UtilityAmyRobertDavidMichelle0000015.01006006029.91901200130314.72701800220419.43402400310524.04003000425628.54503600575732.94904200900837.252048001275941.451054001770Refer to the above table. The one who likes the good the most isA) David.B) Michelle.C) Robert.D) uncertain since we cannot compare utility across people.
Q:
When two goods are complements,A) the demands for both goods will be elastic. B) cross price elasticity of demand will be 0.C) cross price elasticity of demand will be negative. D) cross price elasticity of demand will be positive.
Q:
Absolute price elasticities are calculated for four commodities, and the values are: 0.009; 1.0; 3.3; and 4.1. Which indicates the most price -responsive situation?A) 0.009 B) 1.0 C) 3.3 D) 4.1
Q:
Quantity of Clean Air (%)Marginal Cost ($)Marginal Benefit ($)010,000100,0002525,00050,0005037,50037,5007575,00025,000100Infinite0The above table shows marginal costs and marginal benefits of clean air in a particular industrial area. In the table, when the quantity of clean air is at 25 percent,A) the quantity of polluted air is 25 percent.B) the marginal benefit of clean air exceeds the marginal cost.C) the marginal benefit of clean air is less than the marginal cost.D) the quantity of clean air is optimal.
Q:
The federal government began officially measuring poverty in theA) 1860s. B) 1900s. C) 1930s. D) 1960s.
Q:
At any quantity, the marginal factor cost is alwaysA) parallel to the marginal revenue product.B) below the labor supply curve. C) above the labor supply curve. D) above the labor demand curve.
Q:
The Knights of Labor wasA) a craft union that tried to restrict immigration into the United States.B) an organization of skilled labor that tried to increase technical training after the German model.C) an organization of both unskilled and skilled workers that pushed for an eight -hour workday and equal pay for men and women.D) an industrial union composed of military personnel that tried to improve military life.
Q:
The market demand for labor will beA) insensitive to the wage rate in the short run.B) downward sloping.C) the inverse of the market demand for output.D) perfectly inelastic.
Q:
The U.S. Justice Department prosecuted Microsoft under the terms of
A) the Sherman Act.
B) the Kefauver amendment.
C) the 1933 amendment to the Federal Trade Commission Act.
D) none of the above.
Q:
Game theory is used to explain the pricing behavior ofA) monopolies. B) perfect competition. C) monopolistic competition. D) oligopolies.
Q:
The joining of firms that are producing or selling a similar product isA) a conglomerate merger. B) a horizontal merger.C) a vertical merger. D) always an illegal merger.
Q:
In the above figure, total revenue for this profit-maximizing monopolistically competitive firm isA) $50,000. B) $91,000. C) $96,000. D) $100,000.
Q:
If a monopolist produces to a point at which marginal revenue is less than marginal cost thenA) profits are being maximized.B) profits will always be negative.C) the incremental cost of producing the last unit exceeds the incremental revenue.D) the incremental cost of producing the last unit is less than the incremental revenue.
Q:
In the above figure, the long -run equilibrium price and output areA) $10 and 10. B) $10 and 12. C) $7 and 8. D) $8 and 10.
Q:
For a firm in a perfectly competitive industry, which of the following is TRUE?A) MR = P B) MR < P C) AVC = ATC D) MR > P
Q:
Using the above table, the TVC, the TC, and the MC when output is 4 units areA) $67, $72, and $22, respectively. B) $16.75, $21.75, and $22, respectively. C) $16.75, $21.75, and $30, respectively. D) $67, $62, and $22, respectively.
Q:
Which of the following is TRUE about the long run?A) All resources are variable. B) All resources are fixed. C) At least one resource is fixed. D) None of the above.
Q:
A legal entity that may conduct business in its own name just as an individual does is a(n) A) corporation. B) entrepreneur.C) proprietorship. D) partnership.
Q:
Suppose that indifference curve I1 lies to the left of indifference curve I2. We can conclude thatA) some, but not all, points on indifference curve I1 will correspond to higher utility than points along indifference curve I2.B) some, but not all, points on indifference curve I1 will correspond to lower utility than points along indifference curve I2.C) all points along indifference curve I 1 will correspond to higher utility than points along indifference curve I2.D) all points along indifference curve I 1 will correspond to lower utility than points along indifference curve I2.
Q:
QuantityPer WeekTotal UtilityAmyRobertDavidMichelle0000015.01006006029.91901200130314.72701800220419.43402400310524.04003000425628.54503600575732.94904200900837.252048001275941.451054001770Refer to the above table. Michelleʹs utility schedule is characterized byA) diminishing marginal utility. B) increasing marginal utility.C) constant marginal utility. D) constant total utility.
Q:
When two goods are substitutes,
A) the demands for both goods will be inelastic.
B) cross price elasticity of demand will be 0.
C) cross price elasticity of demand will be negative.
D) cross price elasticity of demand will be positive.
Q:
A value of the absolute price elasticity of demand equal to 0.5 indicates that A) a 0.5% decrease in price leads to a 1% increase in quantity demanded. B) a 2% decrease in price leads to a 25% increase in quantity demanded. C) a 1% increase in price leads to a 5% decrease in quantity demanded.D) a 1% increase in price leads to a 0.5% decrease in quantity demanded.
Q:
The optimal quantity of pollution in the above figureA) is defined as the level where the marginal benefit is at a maximum.B) is where the optimal degree of air cleanliness is 100 percent.C) is the level of pollution at which the marginal benefit equals the marginal cost.D) cannot be determined.
Q:
The official definition of poverty isA) exactly the 12 percent of U.S. residents with the lowest incomes.B) exactly the 20 percent of U.S. residents with the lowest incomes. C) an absolute measure.D) a relative measure.
Q:
Quantity of LaborHourly Wage RateTotal Marginal Wage Bill Factor Cost0-- -1$10 212 314 416 518 620 In the above table, if the marginal revenue product is $16, how many workers will the profit maximizing monopsonist hire and what wage will they pay each worker?A) 5; $18 B) 5; $16 C) 4; $16D) 6; $30
Q:
Bargaining between the management of a company and the management of a union isA) a closed shop. B) a bilateral monopoly.C) a craft union. D) collective bargaining.