Econ Post Test Micro

Which of the following statements about comparative advantage is true

Australia has a comparative advantage in the production of food while Korea has a comparative advantage in the production of electronics

Economic growth is depicted by

a shift in the production possibilities frontier outward

The efficient scale of production is the quantity of output that minimizes

a. average total cost

A decrease in the demand for fish

a. decreases the value of the marginal product of fisherman, reduces their wage and reduces employment in the fishing industry

An increase (rightward shift) in the demand for a good will tend to cause

a. increase in the equilibrium price and quantity

all of the following shift the supply of watches to the right except

a. increase in the price of watches

The long run market supply curve

a. is always more elastic than the short run market supply curve

Which of the following statements is true about a market economy?

a. market participants act as if guided by an "invisible hand" to produce outcomes that promote general economic well being

Compared to a perfectly competitive market, a monopoly market will usually generate

b higher prices and lower output

The purpose of antitrust laws is to

b increase competition in an industry by preventing mergers and breaking up large firms

Suppose there is an increase in both the supply and demand for personal computers. Furthermore, suppose the supply of personal computers increases more than the demand for personal computers. In the market for personal computers, we should expect the...

b. Equilibrium quantity to rise and the equilibrium price to fall

Economics is the study of how?

b. Society manages its scarce resources

An increase in the supply of labor

b. decreases the value of the marginal prodcut of labor and decreases the wage

Tradable pollution permits

b. set the quantity of pollution

The marginal product of labor as production moves from employing one worker to employing 2 workers is

c. 17

Which of the following situations describes the greatest market power?

c. Microsoft impact on the price of desktop operating system

Which of the following statements about price discrimination is not true

c. Perfect price discrimination generates a dead weight loss

According to the Coase theorem, private parties can solve the problem of externalities if

c. There are no transaction costs

The production process described above exhibits

c. dimishing marginal prodct of labor

The competitive firm maximizes profit when it produces output up to the point where

c. marginal cost qualsmarginal revenue

If income and prices were both to double the budget line would

c. stay the same

An externality is

c. the uncompensated impact of one persons actions on the well being of a bystander

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, then this firm should hire

c. three workers

according to the principle of comparative advantage

countries should specialize in the production of goods for which they have a lower opportunity cost of production than their trading partners

If leisure is a normal good an increase in the wage

d. Will increase the amount of labor supplied if the substitution effect outweighs the income effect

WHich of the following is true about the consumer optimum consumption bundle. At the optimum

d. all of the above are True (a,b,c,)

In the long run, some firms will exit the market if the price of the good offered for sale is less than

d. average total cost

bob and tom live in a university dorm. bob values playing loud music at $100. tom values peace and quiet at $150. which of the following statements is true about an efficient solution to this externality problem is bob has the right to play loud music and there are no transaction costs?

d. it is efficient for Bob to stop playing loud music regardless of who has the property right to the level of sound

To internalize a negative externally an appropriate public policy response would

d. tax the good

Points on the production possibilities frontier are

efficient