Accounting
Anthropology
Archaeology
Art History
Banking
Biology & Life Science
Business
Business Communication
Business Development
Business Ethics
Business Law
Chemistry
Communication
Computer Science
Counseling
Criminal Law
Curriculum & Instruction
Design
Earth Science
Economic
Education
Engineering
Finance
History & Theory
Humanities
Human Resource
International Business
Investments & Securities
Journalism
Law
Management
Marketing
Medicine
Medicine & Health Science
Nursing
Philosophy
Physic
Psychology
Real Estate
Science
Social Science
Sociology
Special Education
Speech
Visual Arts
Economic
Q:
Sometimes unions can raise wages above what productivity increases would permit. When this happens, we can be sure thatA) the employment of union workers is increasing. B) some union workers end up losing their jobs.C) there is a redistribution of income from union workers to nonunion workers. D) featherbedding will occur.
Q:
In the above table, what is the marginal revenue product of the 2nd worker?A) $99 B) $70 C) $110 D) $9
Q:
The marginal revenue product givesA) the change in total product for an additional unit of a variable input.B) the amount that other inputs must increase by when labor increase by one unit. C) the additions to total cost when an additional unit of a variable input is hired.D) the additional revenue obtained when an additional unit of a variable input is hired.
Q:
Using a graph, show the price-output combination of a natural monopoly without regulation and the price-output combination if the government requires the monopoly to earn a normal rate of return. What are economic profits in each situation?
Q:
According to game theorists, a cartel of several firms is an example of a(n)A) zero-sum game. B) uncooperative game.C) cooperative game. D) noncooperative game.
Q:
If a customer buys an airline ticket based only on the price of the ticket, then the airline ticket is a(n)A) experience good. B) credence good. C) logo good. D) search good.
Q:
In a perfectly competitive market, if all firms face identical, constant marginal marginal cost curves, then consumer surplus isA) the area beneath the market demand curve and above the market clearing price. B) the area above the market demand curve and above the market clearing price.C) the total area beneath the market demand curve. D) definitely zero.
Q:
If a monopolist lowers its price,A) it lowers the barriers to entry.B) the quantity demanded increases.C) the quantity demanded remains the same. D) the quantity demanded decreases.
Q:
In a perfectly competitive market, a firmʹs short -run supply curve isA) its total cost curve.B) its marginal cost curve equal to or above the point of intersection with its average variable cost curve.C) its average variable cost curve below the point of intersection with its total cost curve.D) its total cost curve between the shutdown point and the break -even point.
Q:
All of the following are characteristics of a perfectly competitive market EXCEPT A) homogeneous products.B) large number of buyers and sellers.C) buyers and seller have equal access to information.D) high barriers to entry and exit.
Q:
Suppose that when the level of output for the firm increases from 100 to 110 units, its variable costs increase from $500 to $700. What is the firmʹs marginal cost?A) $5 B) $7 C) $20 D) $200
Q:
The rate of interest that you pay on a home loan depends upon all of the following EXCEPT A) the supply of houses in the real estate market.B) the length of the loan. C) your credit rating.D) handling charges or loan fees.
Q:
One advantage of a partnership isA) lower costs. B) they are easy to form. C) all the profits go to the older partner. D) they are double taxed.
Q:
When the price of DVDs falls relative to movie and restaurant prices, and consumers buy more of the DVDs, economists call thisA) indifference. B) satisfaction. C) marginalization. D) substitution.
Q:
A representative unit by which utility is measured isA) a util. B) utility.C) marginal utility. D) ordinal utility.
Q:
Which of the following is FALSE regarding inelastic demand?A) Price elasticity of demand is less than 1 (Ep < 1). B) If a firm raises price, total revenues will go up.C) Price elasticity of demand is greater than 1 (Ep > 1).D) If a firm lowers price, total revenues will fall.
Q:
A good which has social costs that exceed private costs has a priceA) equal to marginal social cost. B) that is too low.C) that is too high.D) that is inefficient because price exceeds marginal social cost.
Q:
On average the productivity of an individual usually peaks when the individual is aboutA) 20. B) 30. C) 50. D) 60.
Q:
If we were to compare the hourly earnings of union and nonunion workers in recent years, we would find thatA) unions have not succeeded in raising the hourly incomes of their members above nonunion members.B) unions have succeeded in raising the hourly incomes of their members above nonunion members.C) state government unionized employees have earned less in hourly wages than nonunion government employee.D) union members have increased their hourly incomes, but are still below the hourly incomes of nonunion members.
Q:
In the above table, what is the marginal revenue product of the 1st worker?A) $92 B) $70 C) $40 D) $8
Q:
The additional revenue obtained by a firm when it hires an additional worker, holding other inputs constant, isA) the marginal physical product of labor. B) the marginal revenue product of labor. C) the marginal cost of labor.D) equal to total revenue divided by the number of workers.
Q:
Why do government regulators not enforce marginal cost pricing for natural monopolies? What are the common regulatory solutions?
Q:
A group of firms that try to work together to earn monopoly profits is called a(n) A) patent. B) public enterprise.C) cartel. D) natural monopoly.
Q:
Steve can tell if his car has been fixed or notit works, or it doesnʹtbut he cannot tell how it was fixed. The car repair is a(n)A) experience good. B) credence good. C) logo good. D) search good.
Q:
What is the social cost of a monopoly? Explain.
Q:
If a monopolist raises its price,A) it raises the barriers to entry.B) the quantity demanded increases.C) the quantity demanded remains the same. D) the quantity demanded decreases.
Q:
The rising portion of a perfectly competitive firmʹs marginal cost curve, above the intersection with AVC, is itsA) demand curve. B) economic profit. C) supply curve. D) accounting profit.
Q:
Which of the following is NOT a characteristic of perfect competition?A) Firms are ʺprice takers.ʺB) All firms sell identical products.C) There are substantial barriers to entry into the industry. D) There are many buyers and sellers.
Q:
Suppose that a firm is currently producing 500 units of output. At this level of output, TVC = $1,000 and TFC = $2,500. What is the firms ATC?A) $2 B) $5 C) $7 D) $10
Q:
If the bank advertises 6 percent annual interest rate on a one -year certificate of deposit and you anticipate the rate of inflation to rise to 3 percent during the year, then the real rate of interest on the certificate of deposit isA) 9 percent. B) 6 percent. C) 3 percent. D) 2 percent.
Q:
In a partnership, legal responsibility for all debts isA) shared by the partners. B) passed to the shareholders.C) paid by the principle owner. D) handled by the bondholders.
Q:
Your annual review is given to you at your place of employment, and you get a raise of 3 percent for the next year. On the subway home though, you read an article stating the price of homes in the area you are looking to buy will increase by 6 percent during the coming year. You determine from the article that if you buy in your favorite neighborhoodA) your purchasing power declines. B) consumer optimum is reached.C) your real income actually increases. D) quantity demanded will increase.
Q:
Juan and Sophia have decided to stop studying economics and get a bite to eat. Juan wants to go for a pizza and Sophia wants a hamburger. They decide to go for pizza. What can we conclude from this?A) Juan always gets more utility from pizza than Sophia does.B) Sophia gets less utility from pizza than she could from a hamburger. C) Sophia will get negative utility from the pizza.D) Utility analysis does not work here since Sophia did not eat a hamburger.
Q:
A movie theatre raises ticket prices from $8 to $10 in order to raise revenues. The theatreʹs management is assuming the absolute value of the price elasticity of demand for tickets is A) less than 1. B) greater than 1. C) equal to 1. D) infinity.
Q:
The marginal cost curve of a firm measuresA) external costs. B) pollution costs.C) private costs. D) social costs.
Q:
All of the following lead to a difference in income EXCEPTA) sales tax. B) discrimination.C) the age-earnings cycle. D) marginal productivity.
Q:
If we were to compare the annual earnings of union and nonunion workers in recent years, we would find thatA) unions have not succeeded in raising the annual incomes of their members. B) unions have succeeded in raising the annual incomes of their members.C) the data is incomplete to tell whether unions have been successful in raising the annual income of their members.D) union members have annual incomes substantially below nonunion members.
Q:
In the above table, what is the marginal revenue product of the 4th worker?A) $92 B) $70 C) $40 D) $8
Q:
If a firm hires 312 workers it produces 4,522 computers. If it hires 313 workers it produces 4,786 computers. If computers sell at a constant price of $1 and labor is hired at a constant wage rate of $65 per workerA) the firm should hire and retain the additional worker.B) the marginal factor cost of labor is $65.C) the marginal revenue product of the added worker is $264.D) all of the aboveE) the additional employee brings into the firm a NET revenue of $112.
Q:
What is the problem with marginal cost pricing in the natural monopoly situation? How do regulatory agencies in the United States usually handle the problem?
Q:
Explain how the prisonersʹ dilemma can be used to examine pricing strategies in an oligopoly.
Q:
Harry needs to hire a lawyer but does not know how to find a good one. The lawyer is a(n) A) experience good. B) credence good.C) logo good. D) search good.
Q:
ʺThe social cost of a monopoly comes from the fact that it charges a price higher than what consumers are willing to pay.ʺ Do you agree or disagree? Why?
Q:
Which of the following statements is TRUE about the relationship between a firmʹs demand curve under perfect competition and monopoly?A) Under perfect competition, the demand curve is perfectly elastic; under monopoly, the demand curve has elastic, unit -elastic and inelastic portions.B) Under monopoly, the demand curve is perfectly elastic; under perfect competition, the demand curve has elastic, unit -elastic and inelastic portions.C) The demand curves for a monopoly and perfect competition are always inelastic.D) We can define a demand curve under perfect competition but not under monopoly.
Q:
The perfectly competitive sellerʹs short-run supply curve is
A) its entire marginal cost curve.
B) its marginal revenue curve.
C) the part of its marginal cost curve above the average variable cost curve.
D) the part of its marginal cost curve above the average total cost curve.
Q:
Which of the following is NOT a characteristic of perfect competition?A) differentiated products B) large number of buyers and sellersC) price taking by each firm D) easy entry and exit into the market
Q:
Suppose that a firm is currently producing 1,000 units of output. At this level of output, AVC is $1 per unit, and TFC is $500. What is the firmʹs TC?A) $1,500 B) $1,000 C) $501 D) $499
Q:
How much money would you have to put into a savings account today to be worth $500 three years from now at a market rate of interest equal to 8 percent?A) $397 B) $351 C) $420 D) $459
Q:
One disadvantage of a partnership isA) limited liability. B) lower monitoring costs.C) difficulty raising funds. D) it permits greater specialization.
Q:
If your money income stays the same but the price of one good that you are buying goes up, your effective purchasing powerA) rises. B) does not change. C) cannot be determined. D) falls.
Q:
At a ball game we can observe people eating hot dogs, chips, and burgers. If all are priced the same and we observe Michelle eating a hot dog and David eating a hamburger, we can conclude thatA) Robert will be eating chips.B) Michelle likes hot dogs better than David does and David likes hamburgers better than Michelle does.C) Michelle derives the same amount of utility from eating a hot dog as David derives from eating a hamburger.D) at this time Michelle derives more utility from eating a hot dog than from eating either a hamburger or chips, while David derives more utility from eating a hamburger than from eating either a hot dog or chips.
Q:
If the price of a good increases and the total revenue also increases, the good has a(n) A) elastic demand. B) inelastic demand.C) unit elastic demand. D) perfectly elastic demand.
Q:
Refer to the above figure. S1 is the supply curve that includes only private costs. S2 is the supply curve that includes social costs. From this figure we know that
A) an external benefit exists.
B) private costs are less than social costs.
C) private costs equal social costs.
D) private costs are greater than social costs.
Q:
Going to college to get more knowledge and skills is considered to be an increase inA) physical capital. B) consumption.C) human capital. D) net exports.
Q:
An example of featherbedding isA) the union practice that requires younger workers to be laid off first in a recession.B) a requirement that all construction workers working on government -funded construction projects must be paid union wages.C) employer-paid dental insurance negotiated by the union.D) a requirement on railroads to keep a fireman on board after the introduction of diesel engines.
Q:
In an imperfectly competitive labor market, the firm is faced with a(n) MPP curve and a(n) MR curve.A) downward sloping; upward sloping B) downward sloping; downward slopingC) upward sloping; downward sloping D) downward sloping; horizontal
Q:
If a firm hires 312 workers it will produce 4,522 units of output. If it hires 313 workers it will produce 4,786 units of output. The marginal physical product of labor equalsA) 4,786 B) 313 C) 264 D) 1
Q:
One type of economic regulation often used in the United States by various public utility commissions allows prices to reflect only the actual cost of production and no monopoly profits. This type of economic regulation is known asA) rate-of-return regulation. B) cost-of-service regulation.C) price per constant-quality-unit regulation. D) creative response regulation.
Q:
Firms faced with prisonersʹ dilemma can always make more profits by engaging in opportunistic behavior. Why is this type of behavior NOT commonly found even in oligopolistic markets?
Q:
John has just tried on the most comfortable pair of pants that he has ever known. The pants are a(n)A) experience good. B) credence good.C) logo good. D) information good.
Q:
Why is a monopoly inefficient?
Q:
Refer to the above figure. Which of the following statements is true about the demand curves for an individual firm in a perfectly competitive industry and a monopoly?A) Panel A is the demand curve for a perfectly competitive firm and panel B is the demand curve for a monopoly.B) Panel C is the demand curve for a perfectly competitive firm and panel A is the demand curve for a monopoly.C) Panel C is the demand curve for a perfectly competitive firm and panel B is the demand curve for a monopoly.D) Panel B is the demand curve for a perfectly competitive firm and panel A is the demand curve for a monopoly.
Q:
A firm is currently producing an output at which price equals the minimum point on the average variable cost curve. If wage rates increase, the firm willA) increase its rate of output to make up for the higher variable costs. B) shut down since it would no longer be covering its variable costs. C) decrease its rate of output to offset the higher variable costs.D) not make any changes since its current rate of output is still minimizing its losses.
Q:
Which of the following is NOT a characteristic of perfect competition?
A) There are many buyers and sellers.
B) Each firm determines the market price of its product.
C) Products are homogeneous.
D) Buyers and sellers have equal access to information.
Q:
Which of the following is correct?A) TC = TFC + TVC B) TC = TFC - TVC C) TC = TFC * TVC D) TC = TFC / TVC
Q:
Assuming a market rate of interest equal to 7 percent and anticipated inflation is 2 percent, what is the real (adjusted for inflation) present value of $200 to be received one year from today?A) $190 B) $214 C) $187 D) $210
Q:
The most common form of business organization, as far as the number of such firms in business, is theA) proprietorship. B) partnership. C) corporation. D) S corporation.
Q:
For most goods, the real-income effect of a price change isA) small because the good accounts for a small part of the consumerʹs budget.B) small because the decision to buy a good depends only on the income of a consumer.C) large because the price of the good is in terms of the currency and the income of the personis also in terms of the currency.D) zero because the real-income effect only applies to durable goods.
Q:
The analysis of consumer decision making based on utility maximization is known asA) specialization analysis. B) consumption analysis. C) utility analysis. D) market analysis.
Q:
A university raises annual tuition by 10 percent. No other events have occurred, and the universityʹs revenues have increased. It must be true thatA) the associated change in quantity demanded was smaller than 10 percent. B) the associated change in quantity demanded was equal to 10 percent.C) the associated change in quantity demanded was greater than 10 percent. D) there was no associated change in quantity demanded.
Q:
Refer to the above figure. S1 is the supply curve that includes only private costs. S2 is the supply curve that includes social costs. The free market rate of output is and the corrected, socially optimal amount of output is .A) Q4; Q1 B) Q2; Q1 C) Q4; Q2 D) Q2; Q4
Q:
Determinants of the marginal productivity of labor include all of the following EXCEPTA) talent. B) education. C) experience. D) location.
Q:
Featherbedding is the term forA) any practice that forces employers to use more labor than they would otherwise.B) training programs initiated by unions to make their less-skilled members more productive.C) the practice of trying to recruit union members among public employees. D) attempts by management to eliminate a union.
Q:
If we assume competitive labor markets, the supply curve of labor when the firm is a monopoly isA) upward sloping. B) vertical.C) horizontal. D) downward sloping.
Q:
If a firm hires 215 workers it will produce 3,016 units of output. If it hires 216 workers it will produce 3,128 units of output. The marginal physical product of labor equalsA) 1 B) 112 C) 216 D) 3,128
Q:
The difference between cost -of-service regulation and rate-of-return regulation is thatA) the former sets prices based on actual costs, and the latter focuses on setting prices such that the firm earns a normal rate of return.B) the latter sets prices first, and then the firm must keep costs in line if it wants to earn a profit, and the former sets price high enough to cover costs.C) the former uses marginal cost pricing and the latter uses average cost pricing.D) the former uses average cost pricing and the latter uses marginal cost pricing.
Q:
Explain the basic operations of an economic game.
Q:
All of Jillʹs friends have been telling Jill that she must see a certain movie but she is not sure that she will like it. The movie is a(n)A) experience good. B) credence good. C) logo good. D) search good.
Q:
Economic inefficiency exists whenA) P = MR. B) P = MC. C) MR = MC. D) P > MC.
Q:
An important difference between perfect competition and monopoly isA) a monopoly is profitable and a perfect competitor is not.B) the monopoly faces a downward sloping demand curve and the perfect competitor faces a horizontal demand curve.C) the monopoly faces an inelastic demand curve and the perfect competitor faces an elastic demand curve.D) a monopoly is not regulated by the market, while a perfect competitor is regulated by the market.