ECON224 Final Review

C

(Figure: Externalities and Deadweight Loss I) Use Figure: Externalities and Deadweight Loss I. The figure shows the marginal private benefit, marginal social benefit, and marginal private cost for a good. The socially optimal price of the good is _____, and the socially optimal quantity is_____ units.Figure: Externalities and Deadweight Loss I a. $30; 40 b. $30; 30 c. $25; 40 d. $25; 30

D

(Figure: Minimum Wage and Job Loss I) Use Figure: Minimum Wage and Job Loss I. If the government sets a minimum wage of $14 per hour, then how many workers are currently employed?Minimum Wage and Job Loss I a. 2,000 b. 1,500 c. 1,000 d. 500

C

(Figure: Minimum Wage and Job Loss II) Use Figure: Minimum Wage and Job Loss II. At the competitive equilibrium, the quantity of labor demanded is _____, and the quantity of labor supplied is:Minimum Wage and Job Loss II a. 1,200; 1,000. b. 1,000; 1,200. c. 1,000; 1,000. d. 900; 900.

C

(Figure: Minimum Wage and Job Loss II) Use Figure: Minimum Wage and Job Loss II. If the government sets a minimum wage of $12 per hour, then the quantity of labor demanded is _____, and the quantity of labor supplied is:Minimum Wage and Job Loss II a. 1,000; 1,200. b. 1,000; 1,000. c. 900; 1,200. d. 1,200; 900.

B

(Figure: Monopoly Profit Maximization) Use Figure: Monopoly Profit Maximization. The figure shows the demand curve, marginal revenue curve, marginal cost curve, and average total cost curve that are faced by a monopolist. Suppose that the firm is operating at its profit-maximizing point. The profit per unit for the firm is_____, and the total profit is:Figure: Monopoly Profit Maximization a. $4; $560. b. $8; $400. c. $8; $700. d. $4; $280.

D

(Table: Costs for Alina's Apple Pies) Use the table Costs for Alina's Apple Pies. If Alina's Apple Pies operates in a perfectly competitive market and the market price for a pie is $18, how many pies should Alina's Apple Pies produce? a. 3,000 pies b. 10,000 pies c. 6,000 pies d. 5,000 pies

C

(Table: Marginal Revenue Product) Use Table: Marginal Revenue Product. The table lists the number of workers and the marginal revenue product per hour that is generated by each worker for a firm in a perfectly competitive market. If the hourly wage of workers is $12 per hour, then the firm will hire _____ workers. a. three b. six c. four d. five

B

(Table: Marginal Revenue Product) Use Table: Marginal Revenue Product. The table lists the number of workers and the marginal revenue product per hour that is generated by each worker for a firm in a perfectly competitive market. If the marginal product of the third worker is 6, then we can conclude that the price of the good is: ​ a. $5. b. $3. c. $4. d. $2.

C

A monopolist maximizes profit at the point where the _____ of production is equal to: a. marginal cost; price. b. average total cost; price. c. marginal cost; marginal revenue. d. marginal cost; total revenue.

B

A production function is a relationship that shows the: A. different between total revenues and total costs B. quantity of each input that a firm uses and quantity of output that the firm can produce as a result C. satisfaction that a consumer derived from each unit of consumption D. product of the quantity of a good and the different between the price of the good and the average total cost of the quantity produced

D

Evelyn's orchard currently produces 5.000 gallons of cider. the marginal 5,000th gallon was $3 and he average total cost of the 5000th gallon was $1.50. what can be concluded cased on this information? A. Evelyn's orchard marginal product of labor is increasing at 5,000 gallons B. if Evelyn's orchard produces one more gallon, marginal cost and average total cost will be closer to zero C. producing one more gallon will make the different between marginal cost and average total cost smaller D. the quantity where marginal costs equals average total cost is less that 5,000 gallons

B

Extensive medical research has conducted that using tobacco is harmful for your health. As a result, fewer Americans use tobacco today than they did 40 years ago. Economists would say that this change in ____ decreased the demand for tobacco, all else equal A. the price of a substitute product B. tastes C. the price of a complementary product D. incomes

B

(Figure: Costs for a Firm II). Use the figure Costs for a Firm II. What price and quantity combination are part of this firm's long-run supply curve?Figure: Costs for a Firm II a. price $5 and quantity 30 b. price $8 and quantity 40 c. price $2 and quantity 10 d. price $3 and quantity 20

A

(Figure: Costs for a Firm). Use the figure Costs for a Firm. Which prices in this graph make this firm willing to produce in the short run and in the long run?Figure: Costs for a Firm a. $60 in the short run and $70 in the long run b. $50 in the short run and $60 in the long run c. $50 in the short run and $80 in the long run d. $80 in the short run and $60 in the long run

A

When the price of ice cream cones is $2 per cone, Celine buys three cones in a month. Which of the following describes an upward movement along Celine's monthly demand for ice cream cones? A. when the price of ice cream cones is $3, she will but two cones per month B. "" $2, buy four cones per month C. ""$1, buy one cone per month D. ""$2, buy two cones per month

A

Which of the following is NOT a possibility if demanded increases and supply decreases? A. price decreases B. price increases C. quantity decreases D. quantity increases

B

Which of the following is NOT a reason that firms in a perfectly competitive market are price takers? a. Each firm's good is a perfect substitute for another firm's good. b. Each firm can sell more of its good at a lower price than at the market price. c. There are many firms that a buyer can choose from. d. Each buyer has perfect information about all alternatives.

A

Which of the following is a curve that illustrates the relationship between the price of a good and the quantity that people are willing to buy at each price? A. the demand curve B. diminishing marginal benefit C. utility D. the supply curve

C

Which of the following statements about oligopolies is FALSE? a. Duopoly is an example of an oligopoly market. b. Firms face a downward-sloping demand curve. c. Firms in the market do not have any market power. d. The business strategy of one firm can affect the business of other firms.

D

Which of the following statements is FALSE for a monopoly firm? a. Its marginal revenue is less than the price. b. Its marginal revenue can be negative. c. It can sell additional units of output by lowering the price. d. It faces a horizontal demand curve.

B

Which of the following would decrease the supply of leather boots? A. a decrease in the price of sewing machines used sew boots together B. an increase in the price of leather C. better technology in boot production methods D. a decrease in the price of leather boots

B

Which one of the following is NOT a characteristic of monopolistically competitive markets? a. Firms can easily enter or exit the market. b. Each firm in the market faces a horizontal demand curve. c. Many firms are competing in the market. d. The products that are sold by the different firms are not identical.

A

Which one of the following is NOT a characteristic of monopolistically competitive markets? a. Firms sell identical products. b. Each firm faces a downward-sloping demand curve. c. Firms can easily enter or exit the market. d. Many firms compete in the market.

C

Workers and buns produced. How many buns are produces when seven workers are hired? A. 5 B. 205 C. 220 D. 40

C

Workers and buns produced. what is the marginal product of the eighth worker? A. 215 B. 205 C. -5 D. 5

C

Figure: Negative Externality and Deadweight Loss I) Use Figure: Negative Externality and Deadweight Loss I. The figure shows the marginal benefit, marginal private cost, and marginal social cost that are associated with producing a good. Based on the graph, producing the good involves a marginal external cost of:Figure: Negative Externality and Deadweight Loss I a. $2. b. $4. c. $5. d. $3.

D

Firms that have market power face a _____ demand curve. a. horizontal b. vertical c. u-shaped d. downward-sloping

A

Goods that are both rival and excludable are known as _____ goods. a. private b. luxury c. public d. common

C

Rebecca's marginal utility and total utility for magazines. how many magazines give Rebecca the most total happiness? A. one magazine B. six magazines C. five magazines D. three magazines

B

Spangles are sold in a perfectly competitive market, and the market price of a spangle is $10. A firm in this market can produce 100 spangles at a cost of $4 each. What does this firm's demand curve look like? a. a horizontal line at $6 b. a horizontal line at $10 c. a vertical line at $14 d. a horizontal line at $4

D

Suppose that bicycles and bicycle helmets are complementary good. All else equal, if the price of bicycles increases, there will be: A. downward movement along the bicycle demand curve B. a decrease in the demand curve for bicycles C. an upward movement along the helmet demand curve D. a decrease in the demand curve for helmets

B

Suppose that the marginal social benefit curve of a good lies above the marginal private benefit curve. In this case, the purchase of the good involves a _____ externality, and the good will be purchased in an amount that is _____ than the socially optimal. a. negative; more b. positive; less c. positive; more d. negative; less

D

Suppose that the profit-maximizing price for a monopolist is $10 and the profit-maximizing quantity is 50 units. Further, the average total cost of producing 50 units is $8. The total profit for the monopolist in this scenario is: a. $300. b. $400. c. $200. d. $100.

B

The cross-price elasticity of demand is a measure of how responsive the: A. quantity demanded of a good is to a change in its own price B. price of one good affects the quantity demanded of another C. quantity demanded of a good is to a change in consumers' income D. sellers of a good are to change in its price

A

The equilibrium price in the market for lobster tails is $45 per pound. If a price of $50 is imposed on this market, this would be: A. an effective price floor B. an effective price ceiling C. a queueing cost D. an equilibrium price

B

When a firm in a perfectly competitive market is producing the optimal quantity, what is true? a. P > MR and MR = MC b. P = MR = MC c. P < MC and MR < MC d. P < MR and MR = MC

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B

A change in the supply curve II. what changes has occurred in this graph? A. an increase in quantity supplies B. a decrease in supply C. an increase in supply D. a decrease in quantity supplies

A

A collection of buyers and sellers of the same good and service is called: A. a market B. a model C. an economy D. ceteris paribus

C

A firm pays $500,000 per year on costs that it cannot alter in the short run. This year, it expects to produce 100 units, and it will pay $400,000 on the inputs to produce those 100 units. What is this firm's average variable cost? a. $5,000 b. $1,000 c. $4,000 d. $9,000

D

A market in which there are many buyers and sellers, every firm sells the same standardized product, buyers and sellers have full information about the product and its price, and it is easy for firms to enter and exit the market is known as _____ market. a. a monopoly b. a duopoly c. an oligopoly d. a perfectly competitive

C

A tariff has been places on sisal, a plant that is used to produce sisal rugs. Wool rugs are a substitute in consumption for sisal rugs. If the price of wool rugs increases and the effect of this is greater on the demand for sisal rugs than the impact of the tariff on supply, what happens to the equilibrium price and quantity of sisal rugs? A. price decrease, and quantity decreases B. price decreases and quantity increases C. price increases and quantity increases D. price increases, and quantity decreases

B

Ali has a firm that provides accounting services for 300 households. if he hires an executive assistant to assist the accountants bu he doesn't hire any more accountants, he can serve 320 households. what is the marginal product of the executive assistant? A. we cannot tell without knowing what each household is charged B. 20 household C. 320 household D. 620 households

B

Alisa buys a 3D printer for the cowering space that she operates. which category of the four factors of production does this printer fall under? A. land B. capital C. entrepreneurship D. labor

D

All else equal, an increase in the overall price level of goods and services in the economy will lead to _____ in the quantity of labor hired and _____ in the wage rate. a. an increase; a decrease b. a decrease; an increase c. a decrease; a decrease d. an increase; an increase

B

All else equal, if a technological improvement increases the marginal product of workers, then the marginal revenue product of workers will _____, and the firms will hire _____ workers. a. decrease; fewer b. increase; more c. increase; fewer d. decrease; more

D

Alpha, Inc. knows that its lowest average variable cost is $400 and its lowest average total cost is $1,000. What price would make Alpha, Inc. willing to produce in the short run but not in the long run? a. $300 b. $1,400 c. $1,001 d. $420

B

An economist who wants to measure a consumer's sensitivity to price changes would: A. use a market model B. calculate the consumers price elasticity of demand C. calculate the consumers income elasticity of demand D. use a production possibilities frontier

D

What model is used by economists to illustrate efficient combination of the production of two goods with an economy? A. maps B. cost curves C. the market model D. the product possibilities frontier (ppf)

B

Because public goods are both nonrival and nonexcludable, it is possible for people to use these goods without having to pay for them. Enjoying the benefits of a good without paying for it is known as: a. moral hazard. b. free-riding. c. the tragedy of the commons. d. a positive externality.

C

Burgin broilers produced one more chicken, and as a result its long-run average total cost increased. what must be true? A. bb is experiencing economies of scale when it increases output B. bb is experiencing increasing fixed costs C. bb is experiencing diseconomies of scale when its increases output D. bb is losing money

D

How do the price and quantity change for an inferior good if income increases? A. price increases, and quantity increase B. price decreases, and quantity increases C. price increases, and quantity decreases D. price decreases, and quantity decreases

A

How is profit calculated? A. profit=total revenue - total cost B. profit = average revenues - total costs C. profit = total revenue -average costs D. profit = average revenue - average cost

D

If Ana's income elasticity of demand for rice is -2, what happens to the quantity of rice she buys if her income decreases by 20 percent? A. she buys 20 percent more rice B. she buys 20 percent less rice C. she buys 40 percent less rice D. she buys 40 percent more rice

C

If Mackenzie owns the equipment that she uses to bake pies, then her: A. opportunity cost of the equipment is zero B. opportunity cost of the equipment is zero C. opportunity cost of the equipment is what she could earn renting the equipment to someone else D. opportunity cost of the equipment is what she could earn if she replaced all of workers with equipment

D

If a person wants to find the marginal utility that is gained from consuming four tacos instead of three tacos, the correct way to calculate it would be to measure the: A. total utility from consuming three tacos B. total utility fro consuming four tacos C. average of the utility from consuming three tacos and four tacos D. difference between the utility from consuming four tacos and the utility from consuming three tacos

D

If the purchase of a good involves a positive externality, then the equilibrium quantity that is purchased in a free market is _____ than socially optimal, and the equilibrium price is _____ than socially optimal. a. more; less b. less; more c. more; more d. less; less

A

In imperfectly competitive markets, buyers and sellers have _____ relevant information about the products and prices available. a. limited b. some c. no d. all

C

In which of the following situations would demand NOT elastic? A. a good is a luxury B. people have a lot of time to shop around C. the time frame is very short D. consumers have many other options

A

Individual demand schedule for pairs of socks, if the price of a pair socks rises from $6 to $7, by how much did Nile's consumer surplus change? A. Nile's consumer surplus decreased by $1 B. decreases by $2 C. increased by $1 D. did not change

C

Jackson's total utility for cupcakes. how many cupcakes will Jackson choose to consume if cupcakes are free? A. 75 cupcakes B. one C. five D. six

D

Jaeyoung believes that the price of coffee will increase soon. All else equal, how will this affect his demand for coffee today? A. his demand today isn't affected B. his demand for coffee today decreases C. his quantity demanded for coffee increases D. his demand for coffee today increases

D

Last year Reed's financial services received revenues of $500,000. labor costs were $150,000 and equipment and building rental was $100,000. the owner reed could be making $200,000 as a software engineer if he didn't operate the financial services firm. what is reed's economic profit? A. $250,000 B. $350,000 C. -$200,000 D. $50,000

A

Netta considers apples and oranges complements. All else equal, what will happen to Netta's demand for organs when the price of apples increases? A. the demand for oranges will shift to the left B. the demand for oranges will not be affected C. the quantity demanded of oranges will increase D. the demand for oranges will shift to the right

B

People who buy good Z are typically in a hurry when they buy it. Good Z has ______ demand, and if the seller increases the price of Good Z, its total revenue will: A. unit elastic; not change B. inelastic, increase C. elastic, increase D. inelastic, decrease

B

Podrick enjoys consuming sandwiched (S) and juice boxed (J). Suppose that Podrick has $20 in his budget, the price of a sandwich is $4, and the price of a juice box is $2. Which of the following combinations uses more than his $20 budget? A. 0 S and 5 J B. 10 S and 0 J C. 2 S and 2 J D. 2 S and 6 J

D

Podrick enjoys consuming sandwiches (S) and juice boxes (J). suppose that pod rick has $20 in his budget, the price of a sandwich is $4, and the price of a juice box is $2. which of the following combinations uses exactly his $20 budget? A. 0 S and 5 J B. 10 S and 0 J C. 2 S and 2 J D. 2 S and 6 J

D

Price elasticities of demand for four goods I. how are these goods ranked from most responsive to a price change to least responsive to a price change? A. ice cream, boba tea, funnel cakes, curly fries B. curly fries, boba tea, ice cream, funnel cakes C. funnel cakes, curly fries, boba tea, ice cream D. funnel cakes, ice cream, boba tea, curly fries

D

The government of Maxistan has imposed a price ceiling in the market for shows and has been able to prevent black markets from forming. What is true about the market for shoes in Maxistan? A. price floor will be created B. price will return to the equilibrium price C. no shortage will exist D. shoe buyers pay more in the form of queuing costs

C

The price of meatballs increases and as a result, the demand curve for salad shifts to the right. Based on information we can conclude that salad and meatballs A. inferior goods B. complements in consumption C. substitutes in consumption D. normal goods

B

The production possibilities frontier II. which points on the ppf are efficient. A. R and T only B. R, T, and V C. R, T, S, U, and V D. V onlu

A

The reason that firms cannot charge more than the market price for a product in perfectly competitive markets is that: a. one firm's product is a perfect substitute for another firm's product. b. there are a limited number of sellers to choose from in perfectly competitive markets. c. firms have imperfect information about the pricing by other firms. d. firms sell goods that are all slightly differentiated from each other.

C

The stalks left over from the harvesting of corn are used to produces ethanol. The demand for ethanol has increased. What happens to the price and quantity of ethanol if the price of corn also decreases but the shift in supply is not as large as the shift in demand? A. price decreases, and quantity increases B. price decreases, and quantity decreases C. price increases, and quantity increases D. price increases, and quantity decreases

C

The total cost curve: A. at first decreases and then increases B. is always below the fixed cost curve C. has a height of the variable cost plus the fixed cost D. is the difference between marginal cost and profit

C

There are NO fixed inputs inL A. production functions B. profit functions C. the long run D. the short run

B

Total revenue is the: A. same profit B. total amount of money that a firm receives from selling a good C. total amount of money that a firm receives from selling a good minus what it costs to produce that good D. same as the price of a good

B

What best describes the short run? A. a period less than six months B. a period of time that at least one input cannot be changes C. a period less than one year D. a period of time that all inputs can be changed

C

What costs involve an actual payment of money? A. marginal costs B. opportunity costs C. explicit costs D. implicit costs

D

What does the word "marginal" means in the phrase "diminishing marginal utility" A. constant B. average C. all D. one more

B

What happens if an effective price floor is placed on the market for steel? A. the price of steel will be lower than the equilibrium price B. there will be a surplus of steel C. there will be a shortage of steel D. the quality of steel produced will decrease

A

What is a key difference between a perfectly competitive market and a monopolistically competitive market? a. Perfectly competitive markets have identical products, but monopolistically competitive markets have slightly differentiated products. b. Perfectly competitive markets have imperfect information, but monopolistically competitive markets have perfect information. c. Perfectly competitive markets have many buyers and sellers, but monopolistically competitive markets have only a few sellers. d. Perfectly competitive markets have difficult entry and exit, but monopolistically competitive markets have easy entry and exit.

B

individual demand schedules for pairs of socks. what is the increase in the market demand if the price of a pair of socks falls from $7 to $6 A. seven B. two C. five D. one

A

producer surplus in the market for marzipan IV. what will happen to produced surplus in this market if the price of marzipan increased by $2 per pound? A. it increases by $5 B. increases by $6 C. increases by $9 D. increases by $2

C

the cost of inputs that cannot be changed in the short run is the _____ cost A. marginal B. average total C. fixed D. variable

C

the marginal cost curve: A. is the sum of the total cost curve and the marginal cost curve B. intersects the average total cost curve at the highest point of the average total cost curve C. intersects the average total cost curve at the lowest point on the average total cost curve D. is the sum of the marginal cost curve and the fixed cost curve

A

the marker for sandwiches. what happens is a price ceiling of $9 is placed on this market? A. the price ceiling would not affect this market B. there would be a surplus of five sandwiches C. total of 11 sandwiches will be sold D. there would be a shortage of five sandwiches

B

the market for sandwiches II. what does the shaded area in this graph represent? A. consumer surplus B. deadweight loss C. surplus D. producer surplus

D

the price elasticity of demand for Paola's equipment. Paola sells equipment for makerspaces and the price elasticity of demand for the goods that she sells is given in the table below. which good does not have an elastic demand? A. 3-D printer B. marker cart C. magic pen D. filament

A

the sign of the cross-price elasticity of demand: A. indicates whether two goods are complements or substitutes B. indicates where a good is normal or inferior C. is always positive D. is always negative, but the sign is customarily dropped for convenience

B

the supply schedule for beaded necklaces. what is the lowest price that would create a market supply of six necklaces (abby, Oliver, Elizabeth) A. $5 B. $20 C. $15 D. $10

D

when a market has reached the equilibrium quantity, the: A. lowest price that consumers are willing to pay is equal to the highest price that sellers are willing to accept B. price received by consumer is higher than the price paid by sellers C. price paid by consumers is lower than the price received by sellers D. highest price that consumers are willing to pay is equal to the lowest price sellers are willing to accept

B

when total utility _____ at a decreasing rate, marginal utility A. increases, increases B. increases, decreases C. decreases, stays the same D. decreases, increases

D

why does a decrease in demand cause a decrease in a good's equilibrium price? A. at the old price, the quantity demanded is greater than the quantity supplied, which leads firms to charge a lower price B. a decrease in demand causes a price floor to be placed on a market C. there is a short at the old price, which leads firms to charge a lower price D. there is a surplus at the old price, which leads firms to charge a lower price

B

workers and buns produced. at what quantity of workers if the marginal product the greatest? A. one worker B. two workers C. three workers D. seven workers