ECO Final Pt. 4

Which of the following is directly illegal under the Sherman Act? A) price fixing B) interlocking directorates C) tying contracts D) price discrimination

A) price fixing

Interest is the: A) price paid for the use of money. B) expectation of a future return on investment. C) opportunity cost of time. D) reward for consuming rather than saving.

A) price paid for the use of money.

If Kelly deposits $10,000 into an account that pays 8 percent interest, compounded annually, and she makes no further deposits or withdrawals, how much will Kelly have in her account at the end of 5 years? A) $14,693 B) $14,000 C) $14,482 D) $15,000

A) $14,693

Marginal revenue product measures the: A) amount by which the extra production of one more worker increases a firm's total revenue. B) increase in total resource cost resulting from the hire of one extra unit of a resource. C) decline in product price that a firm must accept to sell the extra output of one more worker. D) increase in total revenue resulting from the production of one more unit of a product.

A) amount by which the extra production of one more worker increases a firm's total revenue.

Restructuring of a major industry resulted from the: A) IBM case. B) AT&T case. C) U.S. Steel case. D) DuPont cellophane case.

B) AT&T case.

A competitive employer should hire additional labor as long as: A) MC exceeds MR. B) the MRP exceeds the wage rate. C) the wage rate is less than MP. D) average product exceeds MP.

B) the MRP exceeds the wage rate.

If the nominal wage rises by 4 percent, and the price level rises by 7 percent, the real wage will: A) be unaffected. B) rise by 3 percent. C) fall by 3 percent. D) rise by 11 percent.

C) fall by 3 percent.

The antitrust laws are based on the: A) creative destruction view of competition. B) view that nonprice competition should be strictly regulated by government. C) idea that competition leads to greater economic efficiency than does monopoly. D) view that all negative externalities should be eliminated by government action.

C) idea that competition leads to greater economic efficiency than does monopoly.

The Sherman Act was designed to: A) prohibit misleading and antisocial advertising. B) exempt commercial banks from the antitrust laws. C) make monopoly and acts that restrain trade illegal. D) make interlocking directorates legal.

C) make monopoly and acts that restrain trade illegal.

Responsibility for enforcing the antitrust laws rests: A) solely with the Department of Justice. B) with the Interstate Commerce Commission. C) with both the Department of Justice and the Federal Trade Commission. D) solely with the Federal Trade Commission.

C) with both the Department of Justice and the Federal Trade Commission.

Which of the following statements best illustrates the concept of derived demand? A) A decline in the price of margarine will reduce the demand for butter. B) As income goes up the demand for farm products will increase by a smaller relative amount. C) When the price of gasoline goes up, the demand for motor oil will decline. D) A decline in the demand for shoes will cause the demand for leather to decline.

D) A decline in the demand for shoes will cause the demand for leather to decline.

Increases in the productivity of labor result partly from: A) increases in the quantity of labor. B) reductions in wage rates. C) the law of diminishing returns. D) improvements in technology.

D) improvements in technology.

Marginal revenue product (MRP) of labor refers to the: A) increase in total revenue resulting from the sale of an additional unit of output. B) amount by which a firm's total resource cost increases when it employs one more unit of labor. C) price at which additional units of labor can be employed in a monopsonistic labor market. D) increase in total revenue resulting from the hire of one more unit of labor.

D) increase in total revenue resulting from the hire of one more unit of labor.

Resource pricing is important because: A) resource prices are a major determinant of money incomes. B) resource prices allocate scarce resources among alternative uses. C) resource prices, along with resource productivity, are important to firms in minimizing their costs. D) of all of these reasons.

D) of all of these reasons.

The total supply of land is: A) perfectly elastic. B) greater in the short run than in the long run. C) upsloping D) perfectly inelastic.

D) perfectly inelastic.

A profit-maximizing firm will: A) expand employment if marginal revenue product equals marginal resource cost. B) expand employment if marginal revenue product is less than marginal resource cost. C) reduce employment if marginal revenue product equals marginal resource cost. D) reduce employment if marginal revenue product is less than marginal resource cost.

D) reduce employment if marginal revenue product is less than marginal resource cost.

A craft union attempts to increase wage rates by: A) equating the MRP and the MRC curves. B) shifting the MRP curve to the right. C) shifting the labor supply curve to the right. D) shifting the labor supply curve to the left.

D) shifting the labor supply curve to the left.

Marginal resource cost is: A) the increase in total resource cost associated with the production of one more unit of output. B) total resource cost divided by the number of inputs employed. C) the change in total revenue associated with the employment of one more unit of the resource. D) the increase in total resource cost associated with the hire of one more unit of the resource.

D) the increase in total resource cost associated with the hire of one more unit of the resource.

Economic or pure rent is: A) a payment made for the use of housing, factory buildings, or capital goods. B) a payment for resources used in the production of "free goods." C) a payment for the use of those resources whose supply is perfectly elastic. D) the price paid for the use of land and other non-reproducible resources

D) the price paid for the use of land and other non-reproducible resources

"Present value" refers to the: A) current value of money held in a bank account. B) amount to which some current amount of money will grow over time. C) interest rate specified when a loan contract is signed. D) value today of some amount of money to be received in the future.

D) value today of some amount of money to be received in the future.