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Economic
Q:
The first step in enforcing any antitrust policy is toA) win the support of the public. B) win congressional approval.C) win the approval of the state senators from the state where the company is headquartered. D) define the market.
Q:
What is the main difference between economic regulation and social regulation?
Q:
What is oligopoly? How does oligopoly differ from the other kinds of market structure?
Q:
A monopolistic competitor will maximize its profits at the output level at whichA) TC = TR. B) MC = MR.C) the MC curve intersects the demand curve.D) MR = ATC.
Q:
Which of the following is NOT a necessary condition for price discrimination?A) Preventing resale of the product B) Downward sloping demand curveC) Separating markets for the good D) Having a constant marginal cost
Q:
Drug companies protect their monopolies over various drugs they develop by utilizingA) patent protection. B) low cost production.C) diseconomies of scale. D) zero economic profits in the long run.
Q:
In the above figure, the firm will shut down if quantity falls belowA) A. B) B. C) C. D) D.
Q:
In the above figure, for any output level less than Q 2, this firm experiencesA) economies of scale. B) diseconomies of scale.C) constant economies of scale. D) decreasing long run average costs.
Q:
A production function is a(n)A) cost relationship. B) economic relationship.C) accounting relationship. D) technological relationship.
Q:
Why are there so many more proprietorships than corporations, yet corporations account for so much more of the sales of business firms in the country?
Q:
For an individual who has special talent as an entertainer, a large proportion of his salary can be consideredA) a fixed cost. B) economic rent.C) a payment below opportunity cost. D) non-taxable income.
Q:
When Bonnie increases the consumption of Good A and decrease the consumption of Good B, her marginal utility ofA) A falls and the marginal utility of B will increase. B) both A and B will decrease.C) A increases and the marginal utility of B will fall. D) both A and B will increase.
Q:
Changes in technology over time will result inA) a more inelastic supply curve. B) a more elastic supply curve.C) a unitary elastic supply curve. D) no change in the elasticity of supply.
Q:
Refer to the above figure. Demand isA) perfectly elastic.B) unitary elastic.C) perfectly inelastic.D) undetermined without more information.
Q:
Which of the following is TRUE of the European Unionʹs Emissions Trading Scheme?A) Firms are taxed based on the their pollution levels.B) Firms are forced to shut down when they exceed their pollution limits.C) Governments subsidize firms to develop devices to reduce pollution. D) Firms can trade pollution permits to meet their pollution limits.
Q:
When social and private costs differ, economists state that
A) there will be economic profit in the society.
B) the society will produce inside the production possibilities frontier.
C) there is an externality.
D) there is not an efficiency problem but an equity problem.
Q:
Income-in-kind isA) money income.B) received in the form of goods and services. C) income in dollars.D) used to buy goods and services.
Q:
If a union succeeds in forcing employers in a perfectly competitive product market to increase wages above the equilibrium level, then the level of unemploymentA) will increase. B) will remain constant.C) will decrease. D) may increase or decrease.
Q:
Suppose the market for autoworkers is initially in equilibrium, but then the automakers purchase capital goods that are a substitute for workers. What happens in the market for autoworkers?A) The equilibrium wage rate will increase and the equilibrium quantity of labor will decrease.B) The equilibrium wage rate and the equilibrium quantity of labor will both increase.C) The equilibrium wage rate and the equilibrium quantity of labor will both decrease. D) The equilibrium wage rate will decrease and the equilibrium quantity of labor will increase.
Q:
The main goal of antitrust policy is toA) encourage firms to produce at the MR = demand level. B) regulate natural monopolies.C) prevent the monopolization of industries.D) prevent the nationalization of industries.
Q:
Financial markets are regulated byA) the Securities and Exchange Commission. B) the Stock and Bond Exchange Commission. C) the Security and Protection Commission.D) the Stock and Exchange Commission.
Q:
Suppose Nabisco merges with both a wheat firm and milling firm. This is an example of aA) vertical merger. B) horizontal merger. C) parallel merger. D) diagonal merger.
Q:
Which of the following is the long -run outcome for monopolistic competition?A) MR > MC. B) P > ATC > MC. C) P = ATC. D) P > ATC.
Q:
When grocery stores issue special discount membership cards for shoppers effectively offering different prices based on quantities consumed, this is an example ofA) price discrimination. B) price differentiation. C) product differentiation. D) patent protection.
Q:
According to the text, government licensing frequently enables monopoly in A) agriculture. B) electricity production. C) mining. D) retail sales.
Q:
In the above figure, the firm will shut down if price falls belowA) F. B) I. C) H. D) E.
Q:
Economies of scale occur when there areA) decreases in long-run average costs resulting from increases in output. B) no changes in long-run average costs when output increases.C) increases in long-run average costs when output increases. D) decreases in output resulting from decreases in input.
Q:
The relationship between inputs and outputs is known asA) business. B) manufacturing.C) a production function. D) marginal product.
Q:
Discuss the advantages and disadvantages of proprietorships.
Q:
According to Ricardoʹs explanation of land rent, what happens when the demand for land increases?A) The supply curve shifts to the right just enough to keep the price per acre constant. B) Revenues to owners of land increase but economic rent declines.C) The amount of economic rent stays constant, constrained by a perfectly inelastic supply curve.D) Both revenues to owners of land and economic rent increase.
Q:
John is currently spending all of his income. For the last unit of Good A consumed John gets 20 utils and for the last unit of Good B consumed he gets 10 utils. The price of Good A is $10. The price of Good B is $5. If John wants to maximize his utility he shouldA) continue to purchase the same amount of Good A and Good B.B) increase the consumption of Good A and decrease the consumption of Good B. C) decrease the consumption of Good A and increase the consumption of Good B. D) decrease the consumption of Good A and decrease the consumption of Good B.
Q:
In the long run, the supply curveA) is more elastic than it is in the short run.B) is less elastic than it is in the short run.C) exhibits no systematic sequence of changes in elasticity.D) exhibits no change in elasticity at all.
Q:
The absolute price elasticity of demand for a vertical demand curveA) is infinite. B) is 1.0.C) is 0.D) depends on where one is on the demand curve.
Q:
The EU Emission Trading Scheme created a market forA) permits to emit greenhouse gases.B) cigarettes. C) marijuana.D) devices that lower the global temperature.
Q:
When the social costs exceed the private costs, economists state that there isA) a positive externality. B) an underproduction of output.C) a negative externality. D) social appreciation of resources.
Q:
If a nationʹs Lorenz curve lies on the 45 degree line of income equality, thenA) more of the nationʹs income is received by the lowest 20 percent of families than by the highest 20 percent.B) income is unequally distributed.C) more of the nationʹs income is received by the highest 20 percent of families than by the lowest percent.D) the income received by each 20 percent of families is 20 percent of the total income.
Q:
The most powerful tool unions have at their disposal when bargaining with management isA) the Taft-Hartley Act. B) the ability to strike.C) the secondary boycott. D) the power of pure competition.
Q:
An increase in demand for DVD machines occurs. Which of the following statements is true for individual firms that produce DVD machines?A) The price of DVD machines will decrease leading to an increase in the demand for labor by the firm.B) The price of DVD machines will increase leading to an increase in the demand for labor by the firm.C) The price of DVD machines will increase leading to a decrease in demand by customers leading to a decrease in the demand for labor by the firm.D) A change in demand at the industry level does not influence an individual firmʹs demand curve for labor.
Q:
Courts have generally adopted the notion that a firm has monopoly power if its relevant market share is or more.A) 20 percent B) 40 percent C) 70 percent D) 50 percent
Q:
The Federal Register
A) itemizes state and local government spending.
B) is used to track immigration.
C) publishes all the new federal regulatory rules.
D) has decreased in size.
Q:
All of the following can create an oligopolistic structure EXCEPTA) low barriers to entry. B) economies of scale.C) government licensing rules. D) mergers.
Q:
Which of the following short -run outcomes for monopolistic competition is not possible?A) P = MR = MC. B) P > MC > ATC.C) P = ATC. D) P > ATC.
Q:
A monopolist engages in price discriminationA) by charging a higher price to consumers whose demand is more inelastic. B) by charging a lower price when marginal cost is higher.C) by charging a lower price to consumers whose demand is more inelastic. D) by charging the same price to all consumers.
Q:
A natural monopoly usually arises when
A) there are diseconomies of scale in an industry.
B) the government allows unrestricted access to a market.
C) there are large economies of scale relative to the industryʹs demand.
D) companies band together to form a larger company.
Q:
The short-run break-even price
A) is the price at which the firmʹs current liabilities are paid off.
B) is the price at which a firmʹs total revenues equal total costs.
C) occurs at the output at which the firm yields a below normal rate of return.
D) occurs at the output at which the firm yields a positive economic profit.
Q:
In the above figure, the long -run cost curve between points E and F illustratesA) diseconomies of scale. B) diminishing marginal product.C) constant returns to scale. D) economies of scale.
Q:
Which of the following statements is not true about the production function?A) It gives the maximum output that can be obtained for a given level of inputs.B) A new production function does not have to be developed when there is technical progress since technology is included in the function.C) The production function depends upon the level of technology available to the firm.D) It specifies the cost of inputs necessary to produce a certain level of outputs.
Q:
What is a normal rate of return?
Q:
The concept of economic rent is associated with the economistA) Adam Smith. B) Karl Marx. C) David Ricardo. D) Henry George.
Q:
John is currently spending all of his income. For the last unit of Good A consumed John gets 20 utils and for the last unit of Good B consumed he gets 10 utils. The price of Good A is $2. The price of Good B is $5. If John wants to maximize his utility he shouldA) continue to purchase the same amount of Good A and Good B.B) increase the consumption of Good A and decrease the consumption of Good B. C) decrease the consumption of Good A and increase the consumption of Good B. D) decrease the consumption of Good A and decrease the consumption of Good B.
Q:
When the price of cable modems decreased from $100 to $85, the number of cable modems produced fell from 1,000 per week to 850 per week. Using this information, we know the supply of cable modems isA) elastic. B) inelastic.C) unit elastic. D) perfectly inelastic.
Q:
If demand is unit elastic, thenA) a ten percent increase in price leads to a one percent decrease in quantity demanded. B) the percentage change in quantity demanded equals the percentage change in price.C) a two percent increase in price leads to a two percent decrease in quantity demanded. D) an increase in price of any amount leads to quantity demanded falling to zero.
Q:
Participating nations in the 1997 Kyoto Protocol agreed to reduce overall greenhouse gases emission through 2020 toA) as much as 20 percent below the levels in the 1990s. B) as much as 5 percent below the levels in the 1990s. C) as much as 50 percent below the levels in the 1990s. D) as much as 50 percent below the levels in the 1960s.
Q:
A social cost that is not fully paid by the individual using an automobile isA) traffic congestion. B) gasoline and oil.C) insurance. D) depreciation of the vehicle.
Q:
Which of the following statements regarding the Lorenz curve is FALSE?A) A Lorenz curve is a geometric representation of the distribution of income.B) A Lorenz curve that is perfectly straight represents complete income equality.C) The less bowed is a Lorenz curve, the less equally income is distributed.D) The more bowed is a Lorenz curve, the more unequally income is distributed.
Q:
Which of the following would increase the demand for union labor?
A) Increasing worker productivity
B) Increasing the demand for union made goods
C) Decreasing the demand for non-union-manufactured goods
D) All of the above
Q:
Which of the following will not lead to a change in the demand for labor?
A) A change in demand for the final good.
B) A change in the supply of labor.
C) A change in the price of a substitute input.
D) A change in labor productivity.
Q:
The United States as a whole would be inappropriate as the relevant geographic market when an antitrust case involvedA) ABC and NBC. B) two auto producers.C) two steel producers. D) two concrete producers.
Q:
Social regulation is focused on all of the following EXCEPT
A) the impact of production on the environment and society.
B) better working conditions, and safer and better products.
C) a better quality of life through a less polluted environment.
D) ensuring costs are minimized and benefits are maximized.
Q:
Using the concentration ratio to measure the degree of competitionA) may understate the degree of competition because it ignores imported goods. B) may overstate the degree of competition because it ignores imported goods.C) may overstate the degree of competition because inter-industry competition is ignored. D) may understate the degree of competition because market share changes annually.
Q:
In the long run, a monopolistically competitive firm
A) earns positive economic profits.
B) earns zero economic profits.
C) earns negative economic profits.
D) can have positive, zero, or negative profits.
Q:
A monopolist engages in price discriminationA) by charging a higher price to consumers whose demand is more elastic. B) by charging a higher price when marginal cost is lower.C) by charging a lower price to consumers whose demand is more elastic. D) by charging the same price to all consumers.
Q:
Economies of scale can
A) result in an increasing cost industry.
B) cause input prices to drop.
C) prevent the entry of new firms into a market.
D) reduce the rate of return which the firm may earn.
Q:
When a firm earns zero economic profits, A) it cannot continue to produce.B) it has not covered its opportunity costs. C) it has a positive accounting profit.D) it has average revenue that is less than average cost.
Q:
In the above figure, the long -run cost curve between points C and D illustratesA) diseconomies of scale. B) diminishing marginal product.C) constant returns to scale. D) economies of scale.
Q:
The production functionA) gives the maximum amount of output for a given level of inputs.B) gives the implicit costs for all inputs.C) gives the amount of time necessary to reach the long run.D) allows us to compute the difference between accounting and economic profits.
Q:
A normal rate of return on investment is equal toA) accounting profit minus economic profit.B) the opportunity cost of capital plus any other implicit costs. C) accounting profit plus economic profit.D) total revenue plus total accounting profit
Q:
A key assumption of Ricardoʹs economic rent concept was that
A) all land is equally productive.
B) land is too differentiated to be able to measure. C) only land in large cities matters.
D) land is always cheap and needs development.
Q:
John is currently spending all of his income. For the last unit of Good A consumed John gets 20 utils and for the last unit of Good B consumed he gets 10 utils. The price of Good A is $10. The price of Good B is $1. If John wants to maximize his utility he shouldA) continue to purchase the same amount of Good A and Good B.B) increase the consumption of Good A and decrease the consumption of Good B. C) decrease the consumption of Good A and increase the consumption of Good B. D) decrease the consumption of Good A and decrease the consumption of Good B.
Q:
If a 10 percent increase in price causes a 5 percent increase in quantity supplied, then supply isA) elastic. B) inelastic. C) unit elastic. D) infinite.
Q:
When demand is inelastic,A) quantity demanded is very responsive to a change in price.B) quantity demanded is not very responsive to a change in price.C) the proportional change in quantity demanded is equal to the proportional change in price.D) producers react quickly to price changes.
Q:
Which of the following was signed in the Kyoto Protocol?
A) The Framework Convention on Climate Change
B) The Zero Greenhouse Gas Agreement
C) The Treaty on Global Warming
D) The Emission Trading Scheme
Q:
Social costs are
A) private costs plus any external costs.
B) the costs of the externality only.
C) costs incurred when common property is used.
D) the costs associated with reaching and enforcing agreements.
Q:
All of the following are criticisms of the Lorenz curve analysis EXCEPT A) income-in-kind is not figured in.B) the inequality gap is not an issue that economists study.C) different sizes of households are ignored.D) it does not take into consideration lifetime earnings.
Q:
The impact of a strike is limited to the ability of the union toA) prevent replacement workers from continuing their work.B) lower its wage demands of non-union members. C) control the pension fund.D) none of the above.
Q:
A firm purchases more capital equipment. We would expect to observeA) a decrease in the supply curve of labor to this firm.B) an increase in the supply of labor for this firm. C) an increase in the demand for labor by this firm.D) an increase in the wage rate paid for labor by this firm.
Q:
Offering two or more products for sale as a set is known asA) bundling. B) versioning.C) monopolizing. D) product sharing.
Q:
An agency that regulates labor markets is theA) Equal Employment Opportunity Commission.B) Environmental Protection Agency. C) Federal Trade Commission.D) Consumer Product Safety Commission.
Q:
If the four-firm concentration ratio for an industry is 84 percent, thenA) each of the firms account for 21 percent of total sales.B) the four largest firms in the industry account for 16 percent of the total sales. C) the four largest firms in the industry account for 84 percent of the total sales. D) the remaining firms in the industry accounts for 84 percent of the total sales.
Q:
Which of the following is true of the price charged by a monopolistically competitive firm at the profit-maximizing level of output?A) P > MC B) P = MC C) P = MR D) P < AVC