ECON 201 PRACTICE FINAL
The price elasticity demand measures how much
quantity demanded respons to a change in price
The dominant strategy for Hector is to
refrain from cleaning, and the dominant strategy for Bart is to refrain for cleaning
The average total cost of producing 240 units is
$0.06
The average variable cost of producing 240 units of output is
$0.38
What is the marginal cost of producing 280 units of output?
$0.75
This graph represents the tobacco industry. Without any government intervention, the equilibrium price and quantity are
$1.60 and 42 units, respectively
This graph represents the tobacco industry. The socially optimal price and quantity are
$1.80 and 35 units, respectively
Which of the following price floors would be binding in this market?
$10
If the market price is $10, what is the firm's short-run economic profit?
$15
If the market for gasoline in Driveaway is perfectly competitive , then the equilibrium price of gasoline is
$2 and the equilibrium quantity is 300 gallons
IF the price of a CD is $12, then the consumer's income amounts to
$240
If the equilibrium price is $350, what is the producer surplus?
$30,000
If the market price is $10, what is the firm's total cost?
$35
If the market for gasoline in Driveaway is a monopoly, then the monopolist's maximum profit is
$450
If the market price is $10, what is the firms total revenue?
$50
The firm will earn zero economic profit if the market price is
$6
Which of the following price ceilings would be binding in this market?
$6
If the government imposes a price floor of $110 in this market, then consumer surplus will decrease by
$600
If the consumer's income is $140, then what is the price of a CD?
$7
If the equilibrium price is $200, what is the producer surplus?
$7,500
At the equilibrium price, consumer surplus is
$800
If the price elasticity of demand for a good is 1, then a 3 percent decrease in price results in a
3 percent increase in quantity demanded
What is the marginal product of the fourth worker?
40 units
The marginal revenue curve for a monopoly firm is depicted by curve
A
The demand curve for a monopoly firm is depicted by curve
B
A consumer who chooses to spend all of her income could be at which points on the figure?
B, C, or D only
The average total cost curve for a monopoly firm is depicted by curve
C
The marginal cost curve for a monopoly firm is depicted by curve
D
All of the points identified on the figure represent affordable consumption options with the exception of
E
If there are exactly two sellers of gasoline in Driveway and if they could collude, then which of the following outcomes is most likely?
Each seller will sell 75 gallons and charge a price of $5
When the price of an eBook is $10.00, the quantity demanded is 400 eBooks per day. When the price falls to $10.00, the quantity demanded increases to 700. Given this information and using the midpoint method, we know that the demand for eBooks is
Elastic
Profit will be maximized by charging a price equal to
P5
A profit-maximizing monopoly's total revenue is equal to
P5 x Q3
If the monopoly firm wants to maximize its profit, it should operate at a level of output equal to
Q3
Which of the following is an example of a normative statement?
Universal health care would be good for U.S. citizens
The opportunity cost of an item is
What you give up to get that item
If the government imposes a price ceiling of $6 on this market then there will be
a shortage of 30 units
If the government imposes a price floor of $10 on this market, then there will be
a surplus of 30 units
The circular-flow diagram
is an economic model, incorporates two types of decision makers: households and firms, represents the flows of inputs, outputs, and dollars
When describing the opportunity cost of two producers, economists use the term
comparative advantage
The movement from point A to point B is caused by a (n)
decrease in price
It is apparent from the figure that the
demand for the good conforms to the law of demand
In the long run a company that produces and sells laundry detergent incurs total costs of $2,500 when output is 1,250 units and $2,750 when output is 1,500 units. For this range of output, the laundry detergent company exhibits
economies of scale
The law of demand states that, other things equal, when the price of a good
falls, the quantity demanded of the good rises
By definition, exports are
goods produced domestically and sold abroad
The movement from point A to point B on the graph shows a(n)
increase in quantity demanded
Economists represent a consumer's preferences using
indifference curves
If an increase in income decreases the demand for a good, then the good is a(n)
inferior good
The cost of producing an additional unit of output is the firm's
marginal cost
This graph represents the tobacco industry. This industry creates
negative externalities
