true false econ final
If the demand for a monopolist's output is inelastic at its current level of production, the monopolist can increase its profit by producing more.
False
A subsidy of $1 per unit for sellers of a good will have the same economic effect on buyers and sellers of the good as a tax of $1 per unit on buyers of the good.
false
Consider a market consisting of a number of potential buyers with a range of buyer values and potential sellers with a range of seller values. If there are no external costs or external benefits and an outcome occurs in which the seller cost of each seller that fails to sell is greater than the buyer value of every buyer that fails to buy, the outcome is efficient.
false
For the outcome of trade to be efficient, buyers with the highest buyer value must buy from sellers with the lowest seller cost.
false
If a consumer has a certain budget to purchase quantities of two goods, he will maximize his utility by allocating that budget to equalize the marginal utilities of the two goods.
false
If a firm is hiring the number of workers that maximizes its profits, it will also be maximizing profit per worker.
false
If a monopolist charges one price to all customers and if the cost of producing one more unit is lower than the price at which the monopolist is currently selling its output, then the monopolist will increase its profits by selling one more unit.
false
If a monopolist is able to charge different prices for the same commodity in two different sub-markets, the sub-market with the higher price has the most elastic demand.
false
If a monopolist is able to practice third-degree price discrimination and it charges a higher price in one market than in another, the demand in the market with the higher price is more elastic than the demand in the market with the lower price.
false
If a monopolist is charging different prices for the same good in two different sub-markets, the marginal cost of supplying the goods must be different in the two sub-markets.
false
If a monopolist is facing a downward-sloping demand curve for its output and it has chosen a level of output that maximizes its profit, the price of a unit of its output equals the marginal cost of producing it.
false
If a monopolist practicing third-degree price discrimination charges a higher price in market A than in market B and the marginal cost of providing the good is the same in both markets, demand in market A is more price elastic than demand in market B.
false
If a series of trades has made each buyer and seller better off and there are no further trades that would make both buyer and seller better off, the outcome of these trades must be efficient.
false
If a series of trades is arranged between buyers and sellers so every trade has a positive profit for both the buyer and the seller, the outcome of these trades is efficient.
false
If all buyers in an experimental market are able to buy a unit of the good, the market efficiency of the experimental outcome is 100%.
false
If person A is more productive (more output per period) than person B in producing a good, person A has a comparative advantage over person B in producing that good.
false
If some buyers don't buy a bushel of apples in a round of the Farmers Apple Market (Experiment 1), market efficiency in that round is less than 100%.
false
If the average value product of labor (total revenue from output divided by the number of workers) exceeds the wage a worker receives, a firm can increase its profit by hiring an additional worker.
false
If the demand curve for a good is downward sloping and the supply curve for a good is perfectly elastic at all quantities, a tax on sellers of the good will have no deadweight loss.
false
If the demand curve for a good is elastic, a shift inward in the supply curve (less supplied at every price) will increase the total revenue of suppliers of the good.
false
If the demand curve is a downward-sloping, straight line, then the price elasticity of demand is constant all along the demand curve.
false
If the emissions of a pollutant are regulated by marketable pollution permits, a decrease in the marginal cost of reducing pollution will increase the price of a permit.
false
If the production of a good causes a negative externality, but there is a positive per unit tax on the good, the competitive equilibrium with the tax will always be the socially optimal (highest social profit) outcome.
false
If the purchase of a good by any one community resident provides external benefits to other residents, the total profits of all residents will be increased by providing a subsidy to those residents who purchase the good, financed by an excise tax on a different good.
false
If the supply curve for a good is perfectly elastic and the demand curve for the good is downward sloping, the loss to consumers from a tax on the good will equal the revenue raised by the tax.
false
If the value of the average product of labor (the revenue a firm receives from its output divided by the number of workers it employs) exceeds the wage the firm pays a worker, the firm can always make more profit by hiring an additional worker.
false
In a competitive equilibrium for a good, the total consumer surplus of all buyers exceeds the total expenditures on the good made by all buyers.
false
In a competitive equilibrium like the Farmers Apple Market in experiment 1, if some buyers with high buyer values purchase a bushel of apples and some buyers with low buyer values also purchase a bushel of apples, the buyers with high buyer values will pay a higher price than the buyers with low buyer values.
false
In a constant cost industry, an increase in demand will have a larger effect on price in the long run than in the short run.
false
Outlawing price discrimination by monopolists - that is forcing monopolists to offer goods at the same price to everyone -- will improve social welfare by increasing total surplus (social profits).
false
Social welfare (profit) will increase if a price discriminating monopolist is forced to charge a single price to all customers
false
Social welfare (profits) will increase if a monopolist practicing price discrimination is required to charge the same price to every customer.
false
Suppose Bill has a budget for food that he spends entirely on Tacos and Hamburgers. Then, if he maximizes his utility, he allocates his budget so that his marginal utilities for Tacos and Hamburgers are equal
false
Suppose a monopolist charges one price to all customers and is currently selling a positive quantity to customers. If the cost of producing one more unit is lower than the price at which the monopolist is currently selling its output, then the monopolist will increase its profits by selling one more unit.
false
Suppose that the supply curve for a good is perfectly elastic, that a sales tax of $40 per unit is collected from buyers of this good, and that the competitive equilibrium price sellers receive is $60. If the sales tax is removed, the competitive equilibrium price sellers receive will fall by $40.
false
The Law of Demand states that an increase in the incomes of consumers increases their demand for a good.
false
The free rider problem is more severe for a small group of people than for a large group of people.
false
The law of demand implies that an increase in a household's income will increase its demand for a good.
false
To maximize its profits, a firm should hire the number of workers that maximizes the marginal value product of labor.
false
A worker's reservation wage is the opportunity cost of his or her time
true
Al and Bill each have 20 hours per week to make brooms and dustpans. It takes Al 2 hours to make a broom and 3 hours to make a dustpan. It takes Bill 6 hours to make a broom and 4 hours to make a dustpan. Suppose the market for brooms is competitive and has an overall supply function of 10p-50 and demand function of 100-5p. Then a price of $7 for dustpans will cause Al and Bill to each specialize in their comparative advantage.
true
An increase in the income of consumers will reduce the demand for an inferior good.
true
If a consumer has a certain budget to purchase quantities of two goods and the prices of the two goods are equal, he will maximize his utility by allocating that budget to equalize the marginal utilities of the two goods.
true
If a consumer has chosen amount of two goods, x and y, to maximize his or her utility subject to a budget constraint and the marginal utility of good x is higher than the marginal utility of good y, the price of good x must also be higher than the price of good y.
true
If a consumer is maximizing utility subject to a budget constraint and the price of good 2 is higher than the price of good 1, the marginal utility of good 2 is higher than the marginal utility of good 1 at the consumption bundle that maximizes utility
true
If a decrease in the amount of a good supplied decreases the total revenue of suppliers, demand for the good is elastic.
true
If a firm's marginal value product of hiring an additional worker exceeds the wage the firm must pay a worker, the firm can increase profit by hiring an additional worker.
true
If a household has chosen amounts of two commodities to maximize its utility subject to its budget constraint and the marginal utilities of those two goods are equal, their prices must also be equal.
true
If a monopolist can increase its sales by 10 percent by reducing its price by less than 10 percent, its marginal revenue is positive.
true
If a monopolist is selling some positive amount of output and the demand for its product is downward sloping, its marginal revenue is less than the price it is currently charging
true
If a monopolist must charge the same price to everyone and its marginal cost is positive, demand will be elastic at the price it charges.
true
If a pollutant is regulated by tradable emissions permits, polluters will reduce their emissions to the point at which further reductions have the same marginal cost for all polluters.
true
If a public good has been provided to one consumer, the marginal cost of providing it to another consumer is zero.
true
If a series of trades in the Farmers Apple Market (Experiment 1) results in an efficient outcome, the buyer value of every buyer who did not purchase a bushel of apples must be less than or equal to the buyer value of every buyer who did purchase a bushel of apples.
true
If the demand curve for a good is a downward sloping linear function (same negative slope for all prices), the absolute value of the price elasticity of demand for that good will be higher for high prices than for low prices.
true
If the demand curve for a good is downward sloping, the supply curve for the good is upward sloping and the good has no externalities, the loss in buyers' and sellers' profits from a per unit tax on the good will be greater than the revenue the government receives from the tax.
true
If the demand curve for a good is inelastic at a particular quantity, the marginal revenue of the good is negative at that quantity.
true
If the demand curve for labor is elastic, a minimum wage that is set higher than the equilibrium wage will decrease the total wage income employed workers receive from their employers.
true
If the demand for a good is elastic, an outward shift in the supply of the good (more supplied at every price) will increase the total amount buyers spend on the good.
true
If the demand for a monopolist's output is inelastic at a particular quantity, the monopolist's marginal revenue will be negative at that quantity
true
If the demand for a monopolist's output is perfectly elastic, the monopolist's marginal revenue equals the price it charges for its output.
true
If the government imposes a tax on carbon dioxide emissions and polluters react by minimizing the total cost of their emissions (tax plus cost of reducing emissions), the marginal cost of reducing carbon dioxide emissions from any site will be greater than or equal to the tax on a unit of emissions
true
If the marginal value product of an additional worker exceeds the wage the worker would receive, a firm can increase its profit by hiring an additional worker.
true
If the price a profit-maximizing firm receives for its output is less than the minimum of its average variable cost, the firm should not produce any output.
true
If the price buyers pay for a good is $50 when a $10 per unit tax is levied on sellers of the good, the price sellers receive for the good will be $40 when the tax is levied on buyers of the good instead of sellers.
true
If the supply curve for a good is perfectly elastic, a per-unit tax levied on sellers of the good will not make sellers worse off.
true
If the supply curve for a good is perfectly inelastic, an excise tax on the good will have no deadweight loss
true
If the supply curve for a good is upward sloping and the demand curve for the good is elastic, a per-unit tax on the good paid by sellers will decrease the total amount buyers spend on the good.
true
If the supply of a good is perfectly elastic and the demand for the good is inelastic, a per unit tax on sellers of the good will increase the total amount consumers spend on the good.
true
If, in the long run, new firms can easily enter an industry and existing firms can leave it, the long-run supply curve for the industry will be more elastic than its short-run supply curve.
true
In a long run equilibrium in an industry, no firm in the industry has negative economic profit.
true
In a long-run equilibrium in an industry where all firms have identical u-shaped average cost curves, a per unit tax levied on the sellers of the industry's output will be shifted entirely to the buyers of that output.
true
In the short run, a profit-maximizing firm will produce as long as price exceeds the average variable cost of production.
true
Monopolists try to avoid producing quantities at which demand is inelastic because marginal revenue is negative at such quantities.
true
Suppose a firm's cost of producing an additional unit of its output is equal to the price of the output, and producing this additional unit also lowers the average cost of production. Then, if there are no fixed costs of production, the supplier will produce nothing in the short run.
true
Suppose the demand curve for a good slopes down, and the supply curve for that good slopes up. If the supply curve shifts and the demand curve does not shift, the equilibrium price and quantity will move in opposite directions.
true
Suppose the market for Widgets consists of a number of firms, each with the same u- shaped average cost of production. A per-unit tax on producers of Widgets will be, in a long run equilibrium, paid entirely by buyers of Widgets.
true
The facts that (1) the price of a good is lower in November than in July and that (2) more of the good is sold in November than July is best explained by a shift in the supply curve of the good between November and July.
true
The marginal social cost of a good or activity is equal to the marginal cost of production plus its marginal external cost.
true