MicroEconomic Post Test
Which of the following is true about the consumer's optimum consumption bindle? At the optimum,
(indifference curve is tangent to the budget constraint, the slopes of both curves equal, prices equal marginal rate substitution) All of the above are true
The marginal product of labor as production does from employing 1 worker to 2 workers is
17
The competition firm maximizes profit when it produces output up to the point where
Marginal cost equals marginal revenue
Economic growth is depicted by
A shift in the production possibilities frontier outward
An increase (rightward shift) in the demand for a good will tend to cause
An increase in the equilibrium price and quantity
All of the following shift the supply of watches to the right except
An increase in the price of watches
Which of the following statements about comparative advantage is true?
Australia has a competitive advantage in the production of food while Korea has a comparative advantage in the production of electronics
In the long run, some firms will exit the market if the price of the food offered for sales less than
Average total cost
The efficient scale of production is the quantity of output that minimizes
Average total cost
According to the principles of comparative adventure
Countries should specialize in the production of goods for which they have a lower opportunity cost of production
A decrease in the demand for fish
Decrease the value of marginal product of fishermen, reduces their wages, and reduces employment in the industry
An increase in the supply of labor
Decreases the value of the marginal product of labor and decrease the wage
The production process described above exhibits
Diminishing marginal product of labor
Points on the production possibilities frontier are
Efficient
Suppose there is an increase in both supply and demand for personal computers. Furthermore, suppose the supply of personal computers increases more than demand for personal computers. In the market for personal computers, we would expect the
Equilibrium quantity to rise and the equilibrium price to fall
Compared to a perfectly competitive mark, a monopoly will usually generate
Higher prices and lower outputs
The purpose of antitrust laws is to
Increase competitive in a industry by preventing mergers and breaking up large firms
The long-run market supply curve
Is always more elastic than the short-run market supply
Bob and tom live in a university dorm. Bob loves playing loud music at a value of 100. Tom values peace and quiet at a value of 150. Which one of the following statements is true
It is efficient for bob to stop playing loud music regardless of who has the property right to the level of sound
Which of the following statements is true about a market economy
Market participants act as if guided by and "invisible hand" to produce outcomes that promote general economic well-being
Which of the following situations describes the greatest market power
Microsofts impact on price of desktop operating system
Tradable pollution permits
Set the quantity of pollution
Economies is the study of how
Society manages its scarce resources
If income and prices were both to double, the budget line would
Stay the same
To internalize a negative externality, an appropriate public policy reposes would be to
Tax the good
An externally is
The uncompensated impact one person's actions on the well-being of a bystander
According to the Coase theorem, private parties can solve the problem of externalities if
There are no transaction costs
If this profit-maximizing firm sells its output in a competitive market for $3 per unit and hires labor in a competitive market for 8 per hour than this firm should hire. (Value of the MPL) (15,12,9,6,3)
Three workers
If leisure is a normal good, and increase in the wage
Will increase the amount of labor supply if the substitution effect outweighs the income effect
Which of the following statements about price discrimination is true?
perfect price discrimination generates a dead weight loss