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:
In the short run, the price at which a firmʹs total revenues equal its total costs isA) a point of positive profits. B) a no return price.C) the short-run shutdown point. D) the short-run break-even point.
Q:
Minimum efficient scale is defined asA) the lowest output level at which long-run average costs are at their minimum. B) the amount of labor that maximizes the marginal product of labor.C) the point at which marginal cost, average variable cost, and average fixed cost are all equal.D) the point at which economies of scale are at their maximum.
Q:
Quantity of WorkersTotal ProductAverage Physical ProductMarginal Physical Product00 13 27 312 416 518 618 In the above table, the marginal physical product of the 6th worker isA) 5. B) 4. C) 3. D) 0.
Q:
The interest rate used to bring future sums back to present value isA) always negative. B) zero when there is no inflation.C) the rate of discount. D) the prime rate.
Q:
Refer to the above figure. At demand curve D2, price equals and economic rent equalsA) OF; KHG B) OF; FHGO C) OE; EKGO D) OE; KHG
Q:
Quantity of Good X/WkMarginal UtilityQuantity of Good Y/WkMarginal Utility11200117002100021400380031100460048005400550061006200Refer to the above table. If the price of Good X is $2, the price of Good Y is $2, and the consumer has $14, the rational consumer will purchaseA) 3 units of Good X and 4 units of Good Y. B) 6 units of Good X and 6 units of Good Y. C) 6 units of Good X and 0 units of Good Y. D) 3 units of Good X and 3 units of Good Y.
Q:
Why is time such an important determinant in the elasticity of supply? Is time also important in determining price elasticity of demand? Explain.
Q:
Which of the following is NOT characteristic of a good with elastic demand?A) The absolute price elasticity of demand is less than 1.B) Total revenue decreases if price is increased.C) Buyers are relatively sensitive to price changes.D) The percentage change in quantity demanded is greater than the percentage change in price.
Q:
When social costs of an activity exceed private costsA) there is a tendency for resources to be under-utilized. B) this means that resources are being efficiently used.C) there is a tendency for resources to be over-utilized. D) None of the above is correct.
Q:
The age-earning cycle predicts that a typical person willA) be earning $50,000 in the year 2010.B) be earning the lowest income right before retirement.C) be earning the highest income right before retirement.D) be earning the highest income at about the age 45-50.
Q:
Refer to the above figure. If the union wants to maximize the total income of its members who work, it will set wages atA) W1. B) W2. C) W3. D) W4.
Q:
Suppose that U.S. firms outsource plane manufacturing jobs to China, it is expected thatA) the wage rate for workers manufacturing planes will decrease in the U.S. but increase in China.B) the wage rate for workers manufacturing planes will increase in the U.S. but decrease in China.C) the wage rate for workers manufacturing planes will increase in both the U.S. and China. D) the wage rate for workers manufacturing planes will decrease in both the U.S. and China.
Q:
When MFC = MRP, a firm in a competitive market willA) stop hiring. B) hire more workers.C) earn additional profits. D) layoff workers.
Q:
Refer to the above figure. If the government requires the natural monopolist to charge the efficient price, it will charge priceA) P5 and sell Q1 units. B) P2 and sell Q1 units. C) P3 and sell Q3 units. D) P1 and sell Q4 units.
Q:
Refer to the above figure. The figure gives the payoff matrix for two individuals who are being accused of robbing a bank together. What is dominant strategy for Bob?A) Confess. B) Donʹt confess.C) Flip a coin to decide what to do. D) There is no dominant strategy.
Q:
According to Chamberlin, the fact that in the long run average total cost exceeds its minimum value under monopolistic competition isA) the social cost of monopolistic competition.B) the most important reason for why monopolistic competition is not efficient. C) part of the cost of producing different products for consumers.D) actually beneficial because it makes adjustments easier when demand increases.
Q:
Price discrimination occurs when a firm sellsA) a given product at different prices at different points in time. B) a given product at different prices to different ethnic groups.C) a given product at different prices unrelated to differences in cost.D) a given product at different prices when it is produced in different colors.
Q:
Governments and legislatures can erect barriers to entry. Which of the following would NOT be one of them?A) LicensesB) TariffsC) Patents D) Laws that ensure property rights
Q:
In the short run, which of the following is FALSE about the shutdown point?A) Total revenue is equal to total fixed cost.B) Total revenue is equal to total variable cost.C) Product price is equal to the minimum average variable cost.D) Price multiplied by quantity must be equal to minimum average variable cost multiplied by quantity.
Q:
When a firm is at its minimum efficient scale of operation, it produces theA) maximum rate of output at which long-run average cost is minimized. B) minimum rate of output at which long-run average cost is minimized.C) maximum rate of output consistent with lowest long -run marginal cost.D) minimum rate of output consistent with lowest long -run marginal cost.
Q:
Quantity of WorkersTotal ProductAverage Physical ProductMarginal Physical Product00 13 27 312 416 518 618 In the above table, the average physical product of the 6th worker isA) 5. B) 4. C) 3. D) 0.
Q:
The rate of discount is best described as the rate ofA) return on physical capital after the cost of capital has been removed.B) return on financial assets after an inflation adjustment has been made. C) interest used to derive the present values of future sums.D) return on financial capital that has not been adjusted for inflation.
Q:
Refer to the above figure. Suppose demand is D2 and then increases to D3. The change in economic rent isA) zero. B) area CIHF. C) area CIGO. D) area BJC.
Q:
Quantity of Good X/WkMarginal UtilityQuantity of Good Y/WkMarginal Utility11200117002100021400380031100460048005400550061006200Refer to the above table. If the price of Good X is $2, the price of Good Y is $1, and the consumer has $9, the rational consumer will purchaseA) 6 units of Good X and 0 units of Good Y.B) 6 units of Good X and 3 units of Good Y. C) 2 units of Good X and 5 units of Good Y. D) 5 units of Good X and 6 units of Good Y.
Q:
Why is the price elasticity of supply greater if there is more time for adjustment to an increase in the price of an item?
Q:
If a seller lowers the price of a product when demand is price inelastic, the seller can expect revenues toA) rise. B) fall.C) stay the same.D) either rise or fall, but it is impossible to determine which.
Q:
The social costs of an activity are greater than the private costs of the activity whenA) a person does not pay all costs associated with a particular resource -using activity. B) the internal costs of the resource-using activity are less than the external costs of the activity.C) the internal costs of the resource-using activity are positive. D) the external costs of the resource -using activity are zero.
Q:
The age-earning cycle shows declining income as a person approaches retirement age becauseA) worker productivity is increasing rapidly.B) worker and hours worked diminish.C) companies choose to promote these workers faster.D) companies add-in Social Security payments as a supplement.
Q:
If the goal of the union is to maximize member income, thenA) a wage rate will be set in the inelastic portion of the demand curve.B) a wage rate will be set at the point at which the elasticity of demand equals 1 and marginal revenue is positive.C) a wage rate will be set at the point at which marginal revenue equal zero. D) the supply of labor must be inelastic.
Q:
Which of the following is an example of outsourcing?A) A U.S. firm moves a manufacturing plant from the U.S. to Thailand where the firm can hire cheaper labor.B) A German firm hires an accountant in the U.S. to manage its payrolls.C) All the above are examples of outsourcing.D) None of the above is an example of outsourcing.
Q:
A firm will not hire additional workers once
A) it earns accounting profits.
B) the additional cost of a worker equals the additional revenue from the worker.
C) total product is rising.
D) the company reaches its breakeven output level.
Q:
Refer to the above figure. An unregulated natural monopolist would chooseA) output rate of Q1 and price P2. B) output rate Q1 and price P5.C) output rate Q3 and price P3. D) output rate Q4 and price P1.
Q:
Refer to the above figure. The figure gives the payoff matrix for two individuals who are being accused of robbing a bank together. If Bob does not confess, what is the best strategy for Harry?A) Confess. B) Donʹt confess.C) Flip a coin to decide what to do. D) There is no best strategy.
Q:
It has been argued that a monopolistically competitive industry involves ʺwasteʺ because
A) there is too much product differentiation making shelves too crowded.
B) they end up producing to the right of the minimum of the average total cost curve and the price is below the marginal cost.
C) the firms do not equate marginal cost to marginal revenue to find the profit maximizing price and output.
D) the firms do not produce at the minimum of the average total cost curve and price is above marginal cost.
Q:
Which of the following is NOT a condition for price discrimination to exist?
A) downward sloping demand curve faced by the firm
B) identification of buyers with differing elasticities
C) unpatented product or the service
D) ability to prevent the resale of the product or service
Q:
A natural monopoly
A) requires government licensing initially.
B) is derived from deposits of natural resources.
C) usually arises when there are large economies of scale.
D) involves multiple firms selling differentiated products.
Q:
A firm will shut down in the short run whenA) price is below average total costs at all possible rates of output.B) price is below average variable costs at all possible rates of output.C) price is below marginal cost at all possible rates of output. D) it is making a loss.
Q:
A single-plant firm trying to select the rate of output consistent with an overall plant size that yields the minimum efficient scale will choose a rate of output for whichA) the short-run marginal cost curve crosses the short-run average total cost curve at that rate of output.B) the long-run marginal cost curve crosses the long-run average fixed cost curve at that rate of output.C) long-run average total cost is lowest at that rate of output. D) total fixed cots are minimized at that rate of output.
Q:
Quantity of WorkersTotal ProductAverage Physical ProductMarginal Physical Product00 13 27 312 416 518 618 In the above table, the marginal physical product of the 3rd worker isA) 5. B) 4. C) 3. D) 12.
Q:
Assuming a market interest rate of 6 percent per year, what is the present value of $5,000 payable at the end of three years?A) $4,717 B) $4,450 C) $4,198 D) $4,317
Q:
Refer to the above figure. Suppose demand is D2 and then increases to D3. Economic rent after the change isA) zero. B) area CIHF. C) area CIGO. D) area BJC.
Q:
Quantity of Hamburgers/WkTotal UtilityQuantity of Movies/WkTotal Utility14014002602700376385048649505915100069361025Refer to the above table. The price of a hamburger is $2, the price of a movie is $5, and the consumerʹs income is $29. What is the marginal utility per last dollar spent on movies equal to if the consumer is at an optimum?A) 50 B) 40 C) 20 D) 10
Q:
The price elasticity of supply is 0.6. This means thatA) a $10 increase in price would increase quantity supplied by 60.B) a 150 percent increase in price would increase quantity supplied by 90 percent.C) a 50 percent increase in quantity will occur when price increases by 30 percent. D) a 10 percent increase in quantity will occur when price increases by 6 percent.
Q:
If the price elasticity of demand for apples is greater than 1, an increase in apple prices willA) raise total revenue. B) lower total revenue.C) not affect total revenue.D) either raise or lower total revenue, but it is impossible to determine which.
Q:
Which of the following statements is true about the relationship among external, internal and social costs?A) External cost is the difference between social and internal costs. B) Internal cost is the sum of social and external costs.C) Social cost is the difference between internal and external costs. D) None of the above.
Q:
The age-earning cycle usually begins A) at relatively high income levels. B) at relatively low income levels.C) once a worker reaches 25 years of age.D) only when a worker is employed full time.
Q:
If the union wants to follow the strategy of maximizing memberʹs income, wages should be set
A) above the market clearing wage rate.
B) such that all that wanted to work could work.
C) at the market clearing wage rate.
D) at the point at which the price elasticity of demand equals 1.
Q:
Outsourcing is being practiced byA) U.S. firms that want to keep jobs at home in the United States.B) overseas firms hiring in the U.S. labor market and by U.S. firms hiring in foreign labor markets with lower wages. C) U.S. firms only.D) governments but private firms are not allowed to outsource work.
Q:
The firmʹs demand curve for labor is
A) the marginal revenue product curve for labor.
B) the demand curve for the good produced divided by the price of the good.
C) the marginal physical product curve for labor divided by the price of the good.
D) the marginal physical product curve for labor multiplied by the price of labor.
Q:
For a firm to be economically efficient from societyʹs point of view, it should produce to the point at whichA) marginal cost equals marginal revenue. B) marginal cost equals average total cost. C) marginal cost equals price. D) average total cost equals price.
Q:
Refer to the above figure. The figure gives the payoff matrix for two individuals who are being accused of robbing a bank together. If Bob confesses, what is the best strategy for Harry?A) Confess. B) Donʹt confess.C) Flip a coin to decide what to do. D) There is no best strategy.
Q:
Long-run equilibrium for a monopolistic competitor is characterized byA) a price exceeding marginal cost. B) marginal cost pricing.C) economic profits. D) too few firms in the industry.
Q:
When a firm practices price discrimination, for each separate set of consumers it will determine the rate of output at whichA) MR > MC. B) MR = P. C) MR = AVC. D) MR = MC.
Q:
When a firm experiences steadily declining long -run average total costs as it produces more output, it is known as a(n)A) oligopoly. B) rent seeker.C) natural monopoly. D) monopolistic competitor.
Q:
As long as price exceeds AVC, the firm is better offA) continuing production. B) closing.C) raising its price. D) cutting price.
Q:
In the above figure, point B is calledA) the maximum efficient scale. B) the minimum efficient scale. C) the planning horizon.D) the point of diminishing marginal product.
Q:
Quantity of WorkersTotal ProductAverage Physical ProductMarginal Physical Product00 13 27 312 416 518 618 In the above table, the average physical product of the 3rd worker isA) 5. B) 4. C) 3. D) 12.
Q:
Suppose that you borrow $10,000 for two years, and at the end of the second year, you must repay $11,664. The interest rate isA) 16.7 percent. B) 8.0 percent. C) 7.0 percent. D) 9.0 percent.
Q:
Refer to the above figure. If demand curve D1 is the relevant demand curve, rent isA) zero. B) OG. C) area FHGO. D) area KHG.
Q:
Quantity of Hamburgers/WkTotal UtilityQuantity of Movies/WkTotal Utility14014002602700376385048649505915100069361025Refer to the above table. Suppose the price of a hamburger is $2, the price of a movie is $5, and the income of the consumer is $29. What will the consumerʹs total utility equal at an optimum?A) 70 B) 1025 C) 1060 D) 1118
Q:
A supply curve that is parallel to the quantity axis isA) perfectly elastic. B) perfectly inelastic. C) relatively inelastic. D) unitary elastic.
Q:
Suppose that the demand for pizza is inelastic. If a pizzeria decided to lower the price of pizza, total revenue wouldA) increase. B) decrease. C) stay the same. D) be maximized.
Q:
Which of the following statements is true about the relationship among external, internal and social costs?A) Social costs will always be higher than external costs.B) Social costs will always be higher than internal costs.C) Internal costs will always be higher than external costs. D) Internal costs will never equal external costs.
Q:
The age-earning cycle
A) is an earnings profile of an individual throughout his or her lifetime.
B) shows the earnings differences by age and by gender.
C) depicts differences in the relationship between age and earnings across countries.
D) shows the average incomes of people broken down by age categories.
Q:
Which of the following is not a wage or employment strategy that a union would follow?
A) Set a maximum wage rate such that a shortage of workers will result.
B) Set a wage rate such that all workers that want to find a job can find a job.
C) Set a wage rate that will maximize the income of its members.
D) Set a wage rate that will maximize the income of only some of its members.
Q:
The practice of outsourcing has been given a boost byA) advances in telecommunications and computer networking. B) support from organized labor.C) firms that are becoming more risk-averse. D) sharp increases in the cost of overseas labor.
Q:
The marginal revenue product representsA) the marginal physical product of labor divided by the price of the good produced.B) the workerʹs contribution to the firmʹs total revenues. C) the workerʹs contribution to the firmʹs output.D) the value of each additional unit of output.
Q:
The reason an unregulated natural monopolist will produce at an economically inefficient quantity isA) due to the fact that the monopolist will equate marginal cost with price to determine the output level.B) due to the fact that the monopolist will equate average total cost with price to determine the output level.C) that the price does not equal the true marginal cost of producing the good.D) that the monopolist will produce a quantity greater than the minimum of the average total cost curve.
Q:
A game in which the players explicitly coordinate their decisions to make themselves better off is aA) cooperative game. B) noncooperative game.C) zero-sum game. D) negative-sum game.
Q:
A monopolistic competitor in long-run equilibrium is like a perfect competitor in thatA) price equals marginal cost.B) price is greater than marginal cost. C) zero economic profits are made.D) both produce at the minimum points of their average total cost curves.
Q:
A firm will practice price discrimination when it believes that by doing so it will be able to increase totalA) sales. B) revenue. C) profits. D) production.
Q:
When a firm experiences declining long-run average total costs as it produces more output, there areA) increasing marginal returns to variable inputs. B) economies of scale.C) diseconomies of scale.D) constant returns to scale.
Q:
The shutdown rule for a firm in a perfectly competitive industry is that the firm should cease production ifA) P < MC. B) P < ATC. C) P < AVC. D) P < AFC.
Q:
Why might firms experience diseconomies of scale?
Q:
The average product of labor is equal toA) total product divided by quantity of labor.B) change in total product divided by quantity of labor. C) total product divided by change in quantity of labor.D) change in total product divided by change in quantity of labor.
Q:
Suppose that you borrow $10,000 for one year, and at the end of the year, you must repay $10,450. Also, during that year inflation was 2.5%. The real interest rate isA) 12.0 percent. B) 7.0 percent. C) 4.5 percent. D) 2.0 percent.
Q:
A portion of a workerʹs earnings is rent ifA) the worker was the last person hired at the going wage rate.B) the supply curve of labor is horizontal.C) the worker would accept a small wage cut without quitting or working for someone else.D) the worker has industry-specific skills.
Q:
Quantity of Hamburgers/WkTotal UtilityQuantity of Movies/WkTotal Utility14014002602700376385048649505915100069361025Refer to the above table. Suppose the price of a hamburger is $2, the price of a movie is $5, and the income of the consumer is $29. How many hamburgers and movies will this consumer buy to be at an optimum?A) 1 hamburger and 5 movies. B) 6 hamburgers and 3 movies.C) 4 hamburgers and 4 movies. D) 2 hamburgers and 5 movies.
Q:
A supply curve that is parallel to the price axis isA) perfectly elastic. B) perfectly inelastic. C) relatively inelastic. D) unitary elastic.
Q:
A firm could lower prices and still increase revenue ifA) demand is elastic. B) elasticity of demand is equal to unity.C) demand is inelastic. D) elasticity of demand is equal to zero.