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Economic
Q:
A firm has the following production relationship between labor and output, for a fixed capital stock.LaborOutput0015211318423526According to the above table, what is the average product of labor when five laborers are employed?A) 3 B) 5.2 C) 5.75 D) 6
Q:
You own $10,000 in personal property, $2,000 in Company X stocks, $1,000 in U.S. Savings Bonds and have $500 in your checking account. If Company X goes bankrupt, the most you could lose isA) $13,500. B) $11,500. C) $2,000. D) $500.
Q:
Economic rent is any paymentA) received by the owner of a resource in perfectly elastic supply.B) received by the owner of a resource with a supply curve that is not horizontal.C) in excess of the resourceʹs opportunity cost. D) below that of a normal profit or return.
Q:
The price of hamburgers is $2 and the price of movies is $4. The consumer has $16 of income. The consumer is purchasing 3 hamburgers and receiving 20 utils for the last hamburger. He is also purchasing 2 movies and receiving 40 utils for the last movie. This set of goodsA) is an optimum since the entire income is spent and the marginal utility per dollar spent is the same for the last unit of each good.B) is an optimum since the entire income is spent and total utility is maximized.C) is not an optimum because the marginal utility per dollar spent is greater for hamburgers than for movies.D) is not an optimum because the consumer has not spent all of his money.
Q:
When the Gizmo Company could sell a gizmo for $10, it produced 2,500 per month. More recently, the price of a gizmo has fallen to $9 and so Gizmo is only producing 2,000 units per month. What is the price elasticity of supply for gizmos?A) 0.47 B) -0.47 C) -2.11 D) 2.11
Q:
A demand relationship in which a given percentage change in price will result in a larger percentage change in quantity demanded isA) elastic. B) unit-elastic.C) inelastic. D) consistent with zero elasticity.
Q:
The 1997 Kyoto Protocol was signed by
A) only the United States and the European Union.
B) only nations in Asia.
C) more than three dozen nations.
D) all nations in the world.
Q:
To find the social cost of an action, add together
A) the external and accounting costs.
B) the private costs and the internal costs.
C) the external costs and the internal costs.
D) the internal costs and the private opportunity costs.
Q:
The richest 10 percent of U.S. houses hold more than two -thirds of all wealth. The problem with this statement is thatA) it does not consider an individualʹs current income.B) it does not consider private and public pension plans.C) it is based entirely on nonhuman wealth. D) it is based entirely on human wealth.
Q:
Collective bargainingA) has nothing to do with fringe benefits.B) is bargaining between unions and management. C) is illegal in many states.D) is practiced in non-union related disputes.
Q:
The supply of labor to an industry will decrease whenA) the price of leisure falls.B) the income effect dominates the substitution effect.C) the demand for labor falls in the industry.D) workers receive better employment opportunities in other industries.
Q:
The Supreme Court has defined the offense of monopolization toA) be when only one firm exists in an industry. B) occur when asymmetric information exists.C) include the possession of monopoly power and the willful maintenance of that power. D) be unfair acts in the practice of commerce.
Q:
All of the following are forms of social regulation EXCEPT
A) the Food and Drug Administration regulating the quality of drugs.
B) the Public Utility Commission regulating the price of telephone service.
C) the Environmental Protection Association regulating automobile emissions.
D) the Occupational Safety and Health Administration regulating workplace safety.
Q:
Oligopolistic industries are characterized by aA) few large firms and no barriers to entry.B) large number of firms and no barriers to entry.C) few large firms and substantial barriers to entry.D) large number of firms and substantial barriers to entry.
Q:
OutputPrice per Book ($)Marginal Cost08.00017.001.0026.002.0035.003.0044.004.00The above table depicts prices, quantities, and marginal costs faced by the campus bookstore. At the profit-maximizing level of output, what is the total cost earned by the store?A) $4 B) $9 C) $3 D) $16
Q:
Use the above figure. The profit this monopolist earns is closest toA) $3,000. B) $4,800. C) $1,600. D) $1,000.
Q:
Which of the following would NOT be a barrier to entry for a particular market?A) Ownership of a patent B) Low cost of obtaining initial capitalC) The presence of economies of scale D) Government regulation
Q:
In the above figure, what is the price the firm receives if the output is 8?A) $10 B) $2 C) $7 D) $8
Q:
ʺThe long-run average cost curve is derived from adding all short-run average cost curves together.ʺ Do you agree or disagree? Explain.
Q:
A firm has the following production relationship between labor and output, for a fixed capital stock.LaborOutput0015211318423526According to the above table, what is the marginal product of the 5th unit of labor?A) 3 B) 4 C) 5.2 D) 5
Q:
A disadvantage of the corporate form of business organization is
A) double taxation.
B) limited access to capital.
C) that the corporation can only do business in the state where it was incorporated.
D) unlimited liability for shareholders.
Q:
Economic rent applies toA) land only and nothing else. B) real property only.C) all resources. D) any resource in fixed supply.
Q:
The price of hamburgers is $2 and the price of movies is $4. The consumer has $14 of income. The consumer is purchasing 3 hamburgers and receiving 20 utils for the last hamburger. He is also purchasing 2 movies and receiving 40 utils for the last movie. This set of goodsA) is an optimum since the entire income is spent and the marginal utility per dollar spent is the same for the last unit of each good.B) is an optimum since the entire income is spent and total utility is minimized.C) is not an optimum because the marginal utility per dollar spent is greater for hamburgers than for movies.D) is not an optimum because the consumer has not spent all of his money.
Q:
We expect the price elasticity of supply to beA) negative. B) positive.C) between -1 and +1.D) zero.
Q:
To say that demand is inelastic means thatA) people do not like the good very much.B) quantity demanded not very responsive to price changes.C) relatively small changes in price lead to relatively large changes in quantity demanded.D) relatively small changes in quantity demanded lead to relatively small changes in price.
Q:
Under the Emissions Trading Scheme, what would happen if governments reduce firmsʹ pollution caps?A) The market clearing price of pollution permits will increase. B) The market cleaning price of pollution permits will decrease.C) The marketing cleaning price of pollution permits will not change. D) The marketing clearing price of pollution permits will cease to exist.
Q:
Internal costs areA) costs borne solely by the individuals who incur them.B) costs borne by people in the same society as those who incur them. C) costs borne by people working in the firm that incurs them.D) all costs incurred in the marketplace.
Q:
The common measure of wealth used in calculating the distribution of wealth includesA) workersʹ claims on the Social Security system.B) workersʹ claims on private pension funds. C) financial assets.D) human capital.
Q:
The largest labor union in the United States is the
A) National Education Association.
B) International Brotherhood of Teamsters.
C) United Food and Commercial Workers International Union.
D) Service Employees International Union.
Q:
An increase in the supply of labor generatesA) increased unemployment. B) lower wages.C) an offsetting increase in the demand for labor. D) a decrease in the quantity demanded of labor.
Q:
The possession of monopoly power and the willful acquisition of that power isA) defined in the Sherman Antitrust Act as monopolization. B) defined by the Supreme Court as monopolization.C) not defined as monopolization until a statement about profits is included. D) not the definition of monopolization.
Q:
Since 1970, federal expenditures by regulatory agencies haveA) remained constant. B) decreased slightly. C) increased dramatically. D) increased slightly.
Q:
The outputs of an oligopolistic industryA) can be homogeneous or differentiated. B) must cost above $100 on the market.C) always have excise taxes imposed on them. D) have no substitutes on the market.
Q:
OutputPrice per Book ($)Marginal Cost08.00017.001.0026.002.0035.003.0044.004.00The above table depicts prices, quantities, and marginal costs faced by the campus bookstore. At the profit-maximizing level of output, what is the total revenue earned by the store?A) $12 B) $5 C) $15 D) $6
Q:
Use the above figure. Total cost at the profit-maximizing output is closet toA) $6,600. B) $9,600. C) $4,800. D) $8,000.
Q:
Which of the following is NOT a barrier to entry that would allow a monopolist to keep potential competitors out of its market?A) Significant economies of scale exist.B) The market price of the product is too high.C) The firm has a patent on the good or control over some resource required for the production of the good.D) The firm has government authorization to be a monopoly.
Q:
In the above figure, what is the profit at the profit -maximizing output level?A) $70 B) $2 C) $20D) $10
Q:
How is the long-run average cost curve found? What is its importance to the firm?
Q:
A firm has the following production relationship between labor and output, for a fixed capital stock.LaborOutput0015211318423526According to the above table, what is the average product of labor when three laborers are employed?A) 3 B) 4 C) 5 D) 6
Q:
An advantage of the corporate form of business organization isA) unlimited liability. B) easier access to capital.C) that profits are taxed only on one level. D) government supervision of its activities.
Q:
Economic rent is broadly defined asA) a payment received by a landowner.B) a payment for the use of any resource that has a fixed supply. C) the return to owners of farmland.D) the dividend return on a share of stock.
Q:
The price of a hamburger is $1 and the price of a movie is $4 and the consumer has $10. A consumer has purchased 2 hamburgers and 2 movies, receiving 25 units of utility for the second hamburger and 100 units of utility for the second movie. The set of goodsA) is an optimum since the entire income is spent and the marginal utility per dollar spent is the same for the last unit of each good.B) is an optimum since the entire income is spent and total utility is minimized.C) is not an optimum because the marginal utility per dollar spent is greater for hamburgers than for movies.D) is not an optimum because the consumer has not spent all of his money.
Q:
The price elasticity of supplyA) is the slope of the supply curve.B) is the percentage change in quantity supplied divided by the percentage change in price. C) is always negative.D) does not vary between the long and the short run.
Q:
PricePer UnitQuantity DemandedPer Week$10.00259.50309.00358.50408.00457.50507.00556.50606.00655.50705.0075Refer to the above table. At a price below $5, the absolute price elasticity of demand isA) 1.0. B) below 1.C) between 0.8 and 1.0. D) greater than 1.
Q:
In theory, the Emissions Trading Scheme wouldA) cause firms to generate more pollution than their allowed limits. B) cause firms to generate less pollution than their allowed limits. C) raise the production costs of all firms.D) lower the production costs of all firms.
Q:
All of the following are private costs of operating an automobile EXCEPT A) gasoline for the car.B) depreciation of the vehicle. C) car insurance.D) harm to the environment from emissions.
Q:
All of the following would show a more equal distribution than the distribution of money income EXCEPTA) total income. B) after-tax income. C) wealth. D) lifetime earnings.
Q:
Since the 1960s, the share of the labor force that is unionized in the United States hasA) increased except for the government sector.B) increased. C) declined.D) declined except in the private sector.
Q:
Which of the following would NOT shift an industryʹs supply of labor curve?A) The wage rate in the particular industry falls.B) Wage rates in industries using similar labor rise.C) Working conditions within the industry become less desirable.D) Wage rates in other industries fall.
Q:
One of the elements of monopolization isA) having a superior product or having a superior business acumen..B) the possession of monopoly power in the relevant market. C) when only one firm exists in an industry.D) having a significant pricing power due to an accident in the relevant market.
Q:
Which of the statements best describes the difference between economic regulation and social regulation?
A) There are no significant differences between economic and social regulation, social regulation is a more modern way of regulating an economy.
B) Economic regulation focuses on output and price; social regulation focuses on improving the quality of life.
C) Social regulation focuses on output and price; economic regulation focuses on quality of life issues.
D) Social regulation targets industries like transportation, while economic regulation targets utilities.
Q:
The number of firms in an oligopolistic industryA) must be less than 10.B) must be less than 20.C) must be small enough that firms are interdependent.D) must be large enough for firms to be independent.
Q:
Use the above figure. The economic profit for this firm isA) zero. B) the distance between T and E.C) the distance between E and x-axis. D) the distance between T and x-axis.
Q:
Use the above figure. Total revenue at the profit-maximizing output isA) $4,800. B) $9,600. C) $5,600. D) $8,000.
Q:
To be able to engage in profit-maximizing price searching, a monopoly firm must be able toA) prevent the entry of other firms into the market for its product.B) induce the entry of other firms into the market for its product.C) avoid earning negative economic profits in the short run. D) always earn zero economic profits.
Q:
In the above figure, what is the profit-maximizing output and price?A) 8, $7 B) 10, $8 C) 12, $10 D) 10, $10
Q:
Explain how the long -run average cost curve is constructed graphically.
Q:
A firm has the following production relationship between labor and output, for a fixed capital stock.LaborOutput0015211318423526According to the above table, what is the marginal product of the 4th unit of labor?A) 3 B) 5 C) 6 D) 7
Q:
Most businesses in the United States are , and the type of business organization that accounts for the LEAST amount of total revenues is .A) proprietorships; partnerships B) corporations; proprietorshipsC) proprietorships; proprietorships D) corporations; partnerships
Q:
Economic rent is a concept that can be appliedA) only to land, as that is the only resource that is in limited supply.B) only to land and natural talent.C) to any factor of production that is fixed in supply.D) to any resource or factor of production that has a supply curve with a positive (upward) slope.
Q:
The price of a hamburger is $1 and the price of a movie is $6 and the consumer has $14. A consumer has purchased 2 hamburgers and 2 movies, receiving 20 units of utility for the second hamburger and 100 units of utility for the second movie. The set of goodsA) is an optimum since the entire income is spent and the marginal utility per dollar spent is the same for the last unit of each good.B) is an optimum since the entire income is spent and total utility is maximized.C) is not an optimum because the marginal utility per dollar spent is greater for hamburgers than for movies and the consumer is not spending all of his income.D) is not an optimum because the marginal utility for each good is not equal.
Q:
Color television prices rise by 10 percent, and in response the quantity of those TVs supplied increases by 6 percent. The supply elasticity for color television sets in that price range isA) 0.6. B) 1.66. C) 6.0. D) -1.66.
Q:
PricePer UnitQuantity DemandedPer Week$10.00259.50309.00358.50408.00457.50507.00556.50606.00655.50705.0075Refer to the above table. For which prices is demand unit -elastic?A) In a range of prices below $6.50B) In a range of prices above $6.50C) In a range of prices between $5 and $10D) In a range of prices between $6 and $6.50
Q:
In a market for emission permits, firms that emit below their allowed limitsA) will buy even more allowances through a trading system.B) are taxed by the government for the amount of emissions. C) receive a subsidy for the amount of emissions.D) will sell their excess allowances through a trading system.
Q:
Private costs are the same asA) implicit costs. B) external costs. C) public costs. D) internal costs.
Q:
When comparing the distribution of wealth to the distribution of income, it can be noted thatA) the distributions are about the same.B) the measurement of income is much less accurate than the measurement of wealth.C) the measurement of wealth is much less accurate than the measurement of income. D) wealth does not generate income.
Q:
A work stoppage by a union in solidarity with another unionʹs cause is known as aA) secondary boycott. B) sympathy strike. C) jurisdictional dispute. D) primary boycott.
Q:
In labor markets, the substitution effect occurs whenA) a substitute good also functions as a complement.B) the cost of production falls enough that the firm will produce a larger amount of output. C) a change in the price of a substitute input causes the demand for labor to change in the same direction.D) a change in the price of a substitute input reduces the cost of capital.
Q:
One of the elements of monopolization isA) having a monopoly.B) wanting to be a monopoly and wanting to earn monopoly profits. C) monopoly pricing.D) the willful acquisition of monopoly power.
Q:
While economic regulation applies to industries, social regulation applies tofirms.A) particular; individual B) particular; allC) all; individual D) utility; healthcare
Q:
The higher the concentration ratio is in an industry, the more likely it is thatA) the industry is perfectly competitive.B) the market share of the smallest four firms is larger. C) the market share of the largest four firms is smaller. D) the industry has an oligopoly.
Q:
Use the above figure. For this monopolistic competitor, which of the following is INCORRECT?A) The profit-maximizing rate of output is qe, and the profit -maximizing price is P.B) The demand curve shows a direct relationship between price and quantity demanded.C) The profit-maximizing rate of output is at E, where MR intersects MC.D) A downward sloping marginal revenue curve that is below the demand curve.
Q:
Use the above figure. The profit-maximizing output and price isA) 600 and $16, respectively. B) 600 and $10, respectively.C) 600 and $8, respectively. D) 800 and $10, respectively.
Q:
Which of the following is NOT a barrier to entry?A) Patents B) LicensesC) Economies of scale D) U.S. antitrust legislation
Q:
Refer to the above figure. In order to stay open in the short run, this firm mustA) earn a positive profit.B) receive a price equal to or greater than the minimum of its average variable cost.C) receive a price exactly equal to its average total cost. D) recover its fixed cost.
Q:
The planning curve is theA) long-run average cost curve. B) production function.C) short-run marginal cost curve. D) short-run average cost curve.
Q:
A firm has the following production relationship between labor and output, for a fixed capital stock.LaborOutput0015211318423526According to the above table, at what usage of labor does diminishing marginal product begin?A) 1 B) 2 C) 4 D) 5
Q:
Which form of business organization accounts for the largest proportion of sales in the United States?A) the corporationB) the partnershipC) the proprietorshipD) the subchapter S partner-based proprietorship.
Q:
Economic rent is defined asA) any payment that has a contract period.B) a payment to an owner of a factor that is in perfectly elastic supply.C) a payment to an owner of a factor greater than the opportunity cost of utilizing the factor. D) the opportunity cost or return to a productive factor such as capital.
Q:
The price of a hamburger is $1, and the price of a movie is $6. The consumer has purchased 2 hamburgers and 2 movies, and her marginal utility from the second hamburger is 20 and from the second movie is 120. The consumer has an income of $21. This combination of goodsA) maximizes utility and is an optimum because the marginal utility of the last dollar spent on each good is the same.B) maximizes utility because the marginal utility of the last dollar spent on each good is the same, but it is not an equilibrium because marginal utility is not zero.C) is not an optimum because the consumer has not spent all of her money.D) is not an optimum because the marginal utility of the last dollar spent on each good is not the same.