Econ Exam 3

ch.14 As a monopolist, its firm demand curve is also the market demand curve. Why then can raising the price still lower the quantity demanded? Customers still have the option of not buying the product. Demand for the good is inelastic. Customers can buy a similar product from a competitor. The seller may offer similar differentiated products.

Customers still have the option of not buying the product.

ch.14 When existing companies exit your industry, how does it affect the market share and market power of existing sellers? Market share and power rise. Market share rises and market power falls. Market share and power fall. Market share falls and market power rises.

Market share and power rise.

Which statement is NOT true of market power? Maximization of market power causes firms to compete. Less competition yields larger profits for incumbent businesses. More market power yields larger profits for incumbent businesses. Market power makes society worse off.

Maximization of market power causes firms to compete.

ch.11 McDonald's has installed self-service ordering kiosks, how does that affect McDonald's demand for workers and why? McDonald's demand for workers will fall, as the ordering kiosks are a complement for cashiers. McDonald's demand for labor will remain unchanged. McDonald's demand for workers will rise, as they will need to hire workers to assist customers while they order from the kiosk. McDonald's demand for workers will fall, as the ordering kiosks are a substitute for cashiers.

McDonald's demand for workers will fall, as the ordering kiosks are a substitute for cashiers.

ch.11 When the owner of a sushi restaurant hires a second cook, customers increase their orders from 50 to 100 orders per week. He pays each cook $400 per week and charges $18 per order. If he adds one more cook, he might get 20 extra orders per week. Should he hire a third cook? Why? Yes, his marginal revenue product exceeds the wage by $40. No, he should hire only two cooks to get the maximum profit of $1000. Yes, he should hire another cook to maximize the profit, which is $960. No, he would lose $100, since the wage exceeds the marginal revenue product.

No, he should hire only two cooks to get the maximum profit of $1000.

ch.12 Which is NOT a way in which technological change contributes to inequality in some occupations? The most skilled individuals can capture a large share of the rewards, leaving little for those who are just slightly less skilled. The labor market becomes a winner-take-all market. Technology makes it easy for the best to reach millions of customers. Technology prevents the best from reaching millions of customers.

Technology prevents the best from reaching millions of customers.

ch.11 _____ will be a major factor influencing which occupation you choose. The market wage The unemployment benefit Your productivity The firm's labor demand

The market wage

ch.11 A century ago, it was common for children to work and many people worked until they died. Over time as wages have risen and the length of the typical workweek has declined, people consume a lot more leisure today. What does this evidence suggest? The supply curve is backward-bending. The supply curve is downward-sloping. The supply curve is upward-sloping. The supply curve is a vertical line at low wages.

The supply curve is downward-sloping.

ch.12 Which statement explains why pursuing a job in a "winner-take-all" market is risky? The very best performers capture a large share of the rewards, leaving little for those who are just slightly less skilled. It is easy to make it to the very top in these fields. It is difficult to reach potential customers. Wages are highly regulated and it is hard to advance.

The very best performers capture a large share of the rewards, leaving little for those who are just slightly less skilled.

ch.14 Which statement is NOT true about oligopolistic businesses? There is a small number of large sellers. The managers of oligopolistic businesses are locked in a strategic battle for market share. They have market power very similar to a monopolist's. They compete against few strategic competitors.

They have market power very similar to a monopolist's.

ch.11 As baby boomers age, more people seek in-home elder care for their aging parents. What happens to the labor market for home-health aids? Wage will decrease, and more jobs will be available. Wage will decrease, and fewer jobs will be available. Wage will increase, and more jobs will be available. Wage will increase, and fewer jobs will be available.

Wage will increase, and more jobs will be available.

ch.12 The unemployment rate for _____ workers is usually twice as low as their Black counterparts. Hispanic Asian Black White

White

ch.11 A salon's owner used to have one hair stylist and she hired one more. The customers increased from 40 to 75 customers per week. She is paying each stylist $500 per week and charges $30 per haircut. If she adds one more hair stylist, she might get 30 extra customers per week. Should she hire a third hair stylist? Why? No, the third hair stylist would add $900 to revenue but cost $1,500. Yes, the third hair stylist would add $3,150 to revenues but cost $1,500. Yes, the marginal revenue product of an extra worker exceeds the wage. No, the marginal revenue product of an extra worker is less than the wage.

Yes, the marginal revenue product of an extra worker exceeds the wage.

ch.14 Under perfect competition, what will happen to your competitors if your firm lowers its price by just a penny? Your competitors will have a small boost in sales. The sales rate of competitors will remain constant. Your competitors will have a large boost in sales. Your firm will have a large boost in sales, at the expense of a lower profit margin.

Your firm will have a large boost in sales, at the expense of a lower profit margin.

ch.12 Human capital is: - a difference in wages required to offset the undesirable or desirable aspects of a job. - the cost associated with producing an additional unit of a good. - an individual's accumulated productive skills. - the rate at which the quantity of labor supplied by all workers in the labor market is equal to the total quantity of labor demanded.

an individual's accumulated productive skills.

ch.14 When you have market power, raising your price will _____ the profit margin on each item you sell, _____ reducing the number of items you sell. lower; without lower; while boost; without boost; while

boost; while

ch.11 Which is NOT a factor that shifts the labor demand curve? better management techniques and productivity gains changes in the price of capital changes in the demand for your product changes in the supply of your product

changes in the supply of your product

ch.12 The minimum wage—when it is binding—pushes wages above the equilibrium wage and therefore results in a(n) _____ in the quantity of labor demanded and a(n) _____ in the quantity of labor supplied. increase; increase increase; decrease decrease; decrease decrease; increase

decrease; increase

ch.12 When the characteristics of a job are worse, a(n) _____ wage is required to entice workers into that occupation. - higher - lower - market - equivalent

higher

ch.11 New education funding designed to make college more affordable will shift the labor supply curve to the left because it: changes the market wage. decreases the opportunity cost of working. decreases the benefit of not working. increases the benefit of not working.

increases the benefit of not working.

ch.14 A market with many small businesses competing, but each selling differentiated products, is classified as: a monopoly. perfect competition. monopolistic competition. an oligopoly.

monopolistic competition.

ch.14 What does an anti-collusion law do? limit the extent to which monopolies exploit their market power prevent businesses from agreeing not to compete create a single business that can service the whole market at a lower cost than multiple businesses can prevent the formation of a monopoly

prevent businesses from agreeing not to compete

ch.11 The price of a haircut is determined by: the government regulation. the quantity supplied by salon owners. the quantity demanded by buyers. the intersection of the supply and demand curves.

the intersection of the supply and demand curves.

ch.12 If a corporation is worth roughly $50 billion and obtaining the best CEO will raise the value of your company by 0.016%, then this very small difference is worth an extra _____ to the valuation of the company. $80 billion $800 thousand $8 billion $8 million

$8 million