Econ
What is the marginal cost of producing the 4th
$12
Human capital is determined by?
All of the above
Producer surplus is equivalent to?
profits
A market supply curve for labor is generally assumed to be?
upward sloping.
Economics has traditionally assumed that a consumer's problem is to maximize his or her ?
utility
A conscious decision to reduce one's level of consumption is known as?
voluntary simplicity
The difference between shallow and deep green consumerism depends on?
whether one reduces his overall level of consumption
The concept of efficiency wages means that?
workers can be motivated if they are paid slightly higher than market-level wages.
The slope of a consumer's indifference curve is?
−MUx/MUy
The slope of the budget line facing the consumer is?
−Px/Py
Suppose that the cost of producing the 600th cup of coffee to the local coffee shop is $1, and the price of coffee is $1.40 per cup. What is the producer surplus of selling the 600th cup of coffee?
$0.40
Suppose that John is willing to pay a maximum of 3 dollars per cup of regular coffee at a coffee shop on campus. What is John's consumer surplus from buying one cup of coffee if the actual price of coffee is 2 dollars per cup?
$1
In the graph above, if the price of hamburgers is $3, then the price of hot dogs is?
$1.50
In the graph above, Chandra must decide how to allocate his budget between hot dogs and hamburgers. If hamburgers cost $2 each, how much is Chandra's budget?
$10
How much more does it cost to produce 3 flashlights than to produce 2 flashlights?
$12
Suppose Tyra maximum willingness to pay for a pair of shoes is $60. The price of shoes is $45. What is her consumer surplus in this example?
$15
What was the government-defined poverty level in the U.S. for a family of four in 2013?
$23,550
If the graph above illustrates an increase in the price of hamburgers from $3 to $6, then the price of hot dogs must be?
$3
Suppose Luis, Madeleine, and Emma are the only consumers in the entire coffee market, and that their maximum willingness to pay for a cup of coffee is $2, $3, and $2 respectively. Assume that the price of coffee is $1 per cup and that they each buy one cup of coffee. What is the market consumer surplus?
$4
What is the total cost of producing 3 flashlights?
$57
If the shirt producer can sell shirts on a perfectly competitive product market for $4 each, how much additional revenue does it gain by hiring the 4th worker?
$80
How many haircuts can be produced if a total of four labor hours are used?
19
Refer to the figure above. Imagine that a price floor of $7.25 has been implemented. What would be market quantity under this scenario?
20
What value should take the place of (A)?
20
Suppose that annual tuition at your college is $10,000, room-and-board costs $12,000, and you are giving up the opportunity to work at McDonalds for $16,000. What is your accounting cost of attending college?
22,000
Imagine that Britt obtains a marginal utility of 150 after drinking the first glass of wine, a marginal utility of 90 after drinking the second glass of wine, and a marginal utility of 5 after drinking the third glass of wine. What is Britt's total utility when she drinks two glasses of wine?
240
If it costs $15 per hour to pay workers, what is the total labor cost involved in producing 8 haircuts?
30
In the above table, the number that should replace (A) is?
31
During the fifth hour, how many haircuts are produced?
4
During the fourth hour, how many haircuts are produced?
5
In the producer manufactures 3 flashlights, what is the average cost per unit, in dollars?
57/3
Refer to the figure above. Imagine that a price ceiling of $650 has been implemented in the above graph. What would be the resulting quantity under this scenario?
7
In the above table, the number that should replace (B) is?
8
In the graph above, Amy must decide how to allocate her budget between hot dogs and hamburgers. Which one of the following combinations is unaffordable to Amy?
8 hot dogs and 5 hamburgers
Annual advertising expenditures in the United States amount to about how much per person?
800
In the traditional neoclassical model of the labor market, wages are equal to?
A and B
Which one of the following statements is false?
A budget line informs us which combination of goods a consumer will purchase.
Which one of the following is the best example of a fixed input?
A factory owned by a firm
A price ceiling below the equilibrium price typically implies that?
A price ceiling below the equilibrium price typically implies that
The graph above shows a budget line. Which one of the following statements is false?
A rational consumer would choose to consume only the bundle represented by Point A
A productive enterprise owned by its own workers is known as?
A worker cooperative
Which one of the following statements is false?
Absolute deprivation is defined as a household living below the poverty line in the United States
Which of the following factors have an effect on labor productivity?
All of the Above
Which of the following statements about marginal analysis in production are true?
All of the above
Regarding welfare analysis, which of the following assertions is not correct?
All unregulated markets are efficient.
Which of the following policies could not be used to counter consumerism?
An employer-based health care system
Suppose the demand for automobiles increases. Which one of the following is least likely to occur in the short run?
An increase in the supply of automobile mechanics.
In the graph above, suppose the government mandates that the price of wheat rice can be no lower than $4 per bushel. What area(s) represent a transfer of welfare from consumers to producers as a result of this policy?
Area B
In the graph above, suppose the government mandates that the price of wheat rice can be no lower than $4 per bushel. What area(s) represent the producer surplus after the implementation of this policy?
Areas (B+F)
In the graph above, suppose the government mandates that the price of wheat rice can be no lower than $4 per bushel. What areas represent the deadweight loss as a result of this policy?
Areas (C+G)
In the graph above, suppose the government mandates that the price pf wheat rice can no lower than $4 per bushel. What area(s) represent the consumer surplus after the implementation of this policy?
Areas A
Which of the following statements about points A, B and C on the graph above is false?
At point C, the consumer is relatively unwilling to trade off units of good Y for units of good X.
Which of the following factors does not explain why some workers earn more than others?
Backward bending individual labor supply curves
Which of the following statements regarding the labor market in the United States is true?
Both c. and d.
Ranked in order from most preferred to least preferred, the consumer would prefer?
C to B, and B to D.
Referring to the above graph, which of the following statements is false?
Combinations B and D yield the same utility
What term is used by economists when an increase in output results in an increase in a firm's long-run average cost curve?
Diseconomies of scale
Which one of the following policies would not be expected to reduce levels of consumerism?
Expanding access to consumer credit
In the neoclassical model of a competitive labor market, labor is demanded by profit- maximizing firms. Which of the following is not a characteristic of the model?
Firms have some wage setting power
Economic costs are equal to?
Fixed costs plus variable costs plus depreciation plus opportunity costs
Suppose a production process exhibits increasing marginal costs throughout a production range. Which one of the graphs below most likely represents its production function?
Graph A
Which one of the graphs above illustrates the typical shape of a utility function with diminishing marginal utility?
Graph A
Suppose that the price of a cup of coffee is $1, the price of a slice of cheesecake is $2, and Cesar's income has increased from $8 to $10. This is illustrated by which one of the following graphs?
Graph B
Which one of the graphs below could represent a total product curve with constant returns to scale?
Graph B
Suppose that the price of coffee has increased from $1 to $2 per cup, the price per slice of cheesecake is $2, and Cesar's income is $8. Which of the following graphs does illustrates this?
Graph C
Which one of the graphs below represents a production function with both increasing and decreasing returns to scale?
Graph C
According to the text, what is the relationship between income and happiness?
Happiness tends to increase as income rises, but at a decreasing rate.
Which one of the following would not be a case of discrimination, as defined in the textbook?
Harry hires only men as administrative assistants because, among the people applying, only the males have the required keyboard skills
Which one of the following statements is false?
Individuals' labor supply curves are always upward sloping.
In the neoclassical model of a competitive labor market, what does a firm do when the marginal revenue product of labor (MRPL) is less than the marginal factor cost of labor (MFCL)?
It hires less labor.
In the neoclassical model of the perfectly competitive labor market, what does a firm do when the marginal revenue product of labor (MRPL) is greater than the marginal factor cost of labor (MFCL)?
It hires more labor
What is the definition of market failure?
Markets fail to maximize social welfare
Which of the following is not a motivation for voluntary simplicity?
More income
If the shirt producer can sell shirts on a perfectly competitive product market for $4 each and can hire workers on a perfectly competitive labor market at a wage of $15, what level of output should it produce?
More than 5 shirts
Suppose that Nailah's budget line shifts towards the origin as indicated in the graph above. Which one of the following is a possible explanation for this shift?
Nailah's income has decreased.
Which one of the following statements is false?
No wage discrimination between men and women remains once one accounts for differences in human capital, occupational segregation, and work experience.
Can we conclude from welfare analysis that unregulated markets are always efficient and that the only justification for government intervention is to further other social goals such as justice or ecological sustainability?
No, because there are situations in which unregulated markets are not efficient.
Suppose Amon's maximum willingness to pay for a pair of jeans is $35. The price of the jeans is $45. What is his consumer surplus in this example?
None
About what proportion of the world's population suffers from absolute deprivation?
One-third
In the graph above, there are economies of scale at?
Point A
In the graph above, there are diseconomies of scale at?
Point B
Which of the following statements about points A, B and C on the graph above is false?
Point B will clearly be the utility-maximizing choice for the consumer.
In the graph above, the minimum efficient scale is given by?
Point D
Which of the following phenomena did not contribute to the rise of a consumer society?
Population growth
Which of the following is most likely to be a fixed cost of a manufacturing company?
Property insurance premiums.
Which one of the following jobs is most likely to have an elastic labor supply curve?
Sales clerk
Which of the following statements is false in the welfare analysis model presented in Chapter 5?
Social welfare analysis focuses on the fairness of the distribution of benefits in a market.
Which one of the following statements if false?
Social welfare is the same thing as social well-being
Which one of the following is an example of "deep" green consumerism?
Someone decides she doesn't really need a car to meet her transportation needs.
At a total cost of $3,100, a company can produce 4 scooters. It has fixed costs of $1,000. If it produces 5 scooters, the costs of production total $3,800. Which of the following statements is true?
The average (or per unit) cost of producing 5 scooters is $760 per scooter.
How will an increase in the price of one item change a consumer's budget line?
The budget line will rotate toward the origin.
How will an increase in a consumer's income change her budget line?
The budget line will shift outward.
Considering point A to be the initial point, and B the point after a change, which of the following statements is true?
The consumer's marginal utility from consuming good X is lower after the change
Which one of the following costs would be an external cost to a pulp mill?
The costs of treating diseases caused by the mill's pollution
If a firm hires workers in a perfectly competitive labor market, the marginal factor cost of labor is equal to ?
The going wages
Referring to the graph above, which one of the following statements is false?
The graph illustrates a possible labor supply curve for an entire market.
Why might an individual's labor supply curve be backward bending?
The individual has a target income.
Which one of the following did not contribute to the expansion of consumer society?
The low pay and long work hours at the start of the Industrial Revolution
a total cost of $3,100, a company can produce 4 scooters. It has fixed costs of $1,000. If it produces 5 scooters, the costs of production total $3,800. Which of the following statements is true?
The marginal cost of producing the fifth scooter is $700.
Which one of the following was not discussed in the text as a main contributor to variations in labor productivity?
The opportunity cost workers face for paid labor
Which one of the following statements is false?
The standard model of consumer behavior accurately explains why people make particular consumer decisions.
Which one of the following is an economic, but not an accounting, cost?
The wages a business owner could have received from a full-time job elsewhere
Which of the following is not one of the factors that can shift a labor demand curve?
The workers' wage
Which of the following is not a reason for why some employers pay their workers more than the market-clearing wage?
To clear the labor market
At a total cost of $3,100, a company can produce 4 scooters. It has fixed costs of $1,000. If it produces 5 scooters, the costs of production total $3,800. Which of the following statements is true?
Variable costs of producing 4 scooters total $2,100.
Suppose that the government mandates a minimum wage, as shown in the graph above. What area represents the decrease in the surplus received by employers due to the minimum wage?
W + Y
Suppose that the government mandates a minimum wage, as shown in the above graph. What area represents the increase in the surplus received by workers due to the minimum wage?
W-Z
Which is not an opportunity cost of paid employment?
Wages
In the neoclassical model of a competitive labor market, labor is supplied by utility- maximizing households. Which of the following is not an assumption of the model?
Working produces utility.
In the graph above, what area represents the producer surplus received by workers in the unregulated labor market?
X+Z
Suppose that the government mandates a minimum wage, as shown in the graph above. What area represents the decrease in the total surplus received by workers and employers due to the minimum wage?
Y+Z
In the graph above, suppose the government mandates that the price of wheat rice can be no lower than $4 per bushel. Areas (C+G) in this scenario would be referred to as?
a deadweight loss
In the graph above, suppose the government of developing country mandates that the price of rice can be no higher than $4 per bag. Areas (B+D) in this scenario would be referred to as?
a deadweight loss
Considering point A to be the initial point, and B the point after a change, the above graph illustrates?
a decrease in the price of good X.
In the short run?
a firm does not have sufficient time to change the level of use some of its inputs.
Economies of scale refer to?
a firm's long-run average costs decreasing as the quantity of production increases.
Which of the following is the best example of a short-run adjustment?
a local bakery hires a new cook.
Another name for a demand curve is?
a marginal benefit curve
The term economists use to describe a small change is?
a marginal change
In the graph above, suppose the government of a developing country mandates that the price of rice can be no higher than $4 per bag. This is an example of?
a price ceiling
Which one of the following statements is true?
a price ceiling will always decrease producer surplus
A minimum wage is an example of what type of policy?
a price floor
Which one of the following statements is true?
a price floor will always decrease consumer surplus
The relationship between a firm's level of output and level of inputs is given by ?
a production function.
A budget line is most analogous to?
a production possibilities frontier
If the supply of labor is relatively wage inelastic, then an increase in wages will lead to?
a relatively small increase in the quantity of labor supplied.
If the demand for labor is relatively wage elastic, an increase in labor supply will lead to?
a small decline in wages.
Diminishing marginal utility means that?
additional units of consumption produce less additional utility than previous units.
Economics defines the "long run" as a time period where?
all inputs are variable.
If Michael's budget line changes from the dashed line to the solid line in the above graph, this could be caused by?
an increase in the price of books
In the graph above, the shift in the budget line could represent?
an increase in the price of hamburgers.
In the graph above, the new (black) budget line illustrates the choices for consumer with an income equal to?
an unknown quantity
A market failure occurs when?
an unregulated market produces a socially inefficient outcome.
In the graph above, suppose the government of a developing country mandates that the price of rice can be no higher than $4 per bag. Consumer surplus after the policy is implemented would be equal to?
areas (A+C)
In the graph above, suppose the government of developing country mandates that the prices of rice can be no higher than $4 per bag. The reduction in social welfare as a result of this policy (relative to the unregulated market equilibrium) is equal to?
areas (B+D)
Worker cooperatives ?
arose as an alternative labor framework during the Industrial Revolution.
Consumer surplus is the area?
below the demand curve but above price
Suppose the solid line in the graph above illustrates Michaela's budget line. We can conclude that?
both A and D
In the graph above, the shift in the budget line could represent?
both a. and d
Suppose that cooks that work the late-night hours at a restaurant get paid slightly more than cooks who work during the day shift. This is an example of ?
compensating wage differentials.
"Keeping up with the Joneses" refers to?
consumers' attempts to maintain the same material lifestyle of their reference group.
Consumer sovereignty means that ?
consumers' needs and wants determine the shape of all economic activities.
In the graph above, point C illustrates the range of?
decreasing marginal return
Moving from three to five hours of labor input, this production process is characterized by?
diminishing marginal returns
Suppose that if you plant one bag of seeds in your small garden 10 sunflowers come up. If you plant two bags of seeds, 18 sunflower come up. And if you plant 3 bags of seeds, 24 sunflowers come up. This illustrates the concept of?
diminishing marginal returns
T he short run marginal cost curve in the traditional microeconomic model eventually rises because of?
diminishing marginal returns
Leopoldo loved his first slice of cake, he enjoyed his second slice of cake, and he felt a bit sick after his third slice of cake. This illustrates the concept of?
diminishing marginal utility
he U shape of the long-run average (total) cost curve is primarily due to?
economies and diseconomies of scale
Automobile factories and universities tend to be large because of?
economies of scale.
Social production costs equals to economic costs plus?
externality costs
Even when firms minimize the accounting and opportunity cost of production, private production decisions will not maximize social well-being if?
firms externalize some costs
Accounting costs are equal to?
fixed costs plus variable costs plus depreciation
What is the main policy inference of market failure?
government regulation may be warranted to increase social welfare
Median weekly wage in the United States since 1980?
has remained basically flat.
Monopsonistic or oligopsonistic employers will tend to?
hire fewer workers than firms that compete in labor markets and pay the workers less than their MRPL.
An indifference curve illustrates?
how a consumer might trade off different levels of consumption of each of two goods, while staying at the same utility level.
Referring to the graph above, an increase in the demand for nurses will ?
increase wages and increase employment.
The increased labor force participation rate in industrialized countries is due mainly to ?
increased labor force participation by women.
Consider a farmer who can increase the amount of wheat he grows per acre by using more fertilizer. If the farmer faces diminishing marginal returns to fertilizer, he must also face?
increasing marginal costs
Moving from zero to two hours of labor input, this production process is characterized by:?
increasing marginal returns
In The Wealth of Nations, Adam Smith argued that the interest of society are frequently promoted by?
individual self-interest
The main reason that people engage in unpaid work is that?
it produces valuable goods and services for them and their families.
Subjective well-being is a measure of people's?
life satisfaction
What is the main policy recommendation of laissez-faire economics?
limit government regulation
Which one of the following jobs is most likely to have an elastic labor supply curve?
lower wages and increase employment for dentists.
In the neoclassical labor model, the amount that it costs to hire an additional worker is called the _____ of labor.
marginal factor cost
In the neoclassical labor model, the amount that an additional worker hired adds to the revenues of the firm is called the _____ of labor?
marginal revenue product
The concept of occupational segregation means that?
men and women tend to be found in different types of jobs.
Suppose that a paper mill in a small rural town is the only employer in the area. This is an example of labor market?
monopsony
Since 1900, the U.S. labor participation rate has increased primarily because?
more women have entered the labor force.
A socially efficient outcome in a market?
occurs where the marginal benefits equal the marginal costs
Although everyone is free to participate in markets, some people's preferences are weighed more heavily than others. Markets operate according to the principle?
one dollar one vote
The difference between economic and accounting costs is the inclusion of?
opportunity costs.
As described in the text, in the traditional model of labor supply individuals allocate their time between?
paid work, unpaid work, and leisure.
Suppose that an ice cream parlor raises the price of an ice cream cone from $3 to $4, and that the parlor sells five fewer cones each day. Which of the following statements is false?
part of the area of consumer surplus becomes part of the area of producer surplus
Consider the figure above. Deadweight loss is zero when the?
price is $800
A firm's minimum efficient scale of production is defined as ?
producing at the point where the firm's long-run average cost curve starts to display constant returns to scale.
A price floor above the equilibrium price typically implies that?
quantity demanded is lower than quantity supplied, and a deadweight loss is created.
Suppose that Samantha purchases one pound of chicken, which is worth $5 to her, costs $4 to produce, and imposes $2 in environmental damages on people who live near the chicken farm. This purchase?
reduces social welfare by $1
The term that would be used to describe someone who suddenly feels poor when he enrolls in an Ivy League school is?
relative deprivation
The concept of dual labor markets means that?
some workers have good pay and working conditions while others have low pay and poor working conditions.
On the above graph, point A represents a combination of goods X and Y?
that is less preferred than combination C.
In the graph, the MFCL curve represents ?
the amount the firm has to pay to hire an additional worker
The "budget line" in the neoclassical model of labor supply represent?
the combinations of consumption and activities available to an individual, given the hours he or she has to "spend."
There is debate among economists about whether minimum wage hikes are good for workers. Based on welfare analysis, raising the minimum wage is most likely to increase workers' surplus if?
the demand for labor is very inelastic
External costs are ?
the difference between social costs and economic costs.
In the neoclassical model of the labor market, firms hire labor until ?
the marginal revenue product equals the marginal factor cost
In the graph, the MRPL curve represents?
the marginal revenue product of labor
A market demand curve does not illustrate?
the price and quantity of the good that maximize the net benefits to society
Which of the following statements is TRUE for a perfectly competitive firm whose labor costs and revenues are represented in this graph?
the production process is characterized by initially increasing, then diminishing, returns to labor inputs
Referring to the individual labor supply graph above, at a wage below W0?
the substitution effect dominates
The net social benefits of a market are equal to?
the sum of consumer and producer surplus
Producer surplus for any unit sold is equal to?
the vertical distance between the supply curve and price
Labor demand will tend to be relatively wage elastic if?
there are good substitute inputs available and the wage bill is a large proportion of total production costs.
Monopsony in the labor market context is defined as a situation in which?
there is only one employer but many potential workers.
A "reference group" refers to?
those other people to which individuals compare themselves.
Social welfare is defined as?
total benefits minus totals cost
In the graph above, the blue curves illustrates a?
total product curve
In the graph above, the new (black) budget line shows the price of hamburgers is?
twice the price of hot dogs
Given the above graph, the producer should hire labor?
up to point B
