ECONOMICS FINAL STUDY GUIDE PART 1
According to the book, what percentage of adult women are in the workforce today?
60%
If these 2 companies decide not to cooperate and engage into a price war, the most likely outcome will be
6m, 6m
John Nash's life and his development of game theory which led him to earn the prestigious nobel prize in Economics is portrayed in the following movie.
A beautiful mind
Which of the following factors would lead to an increase in the supply of labor?
A country experiences an increase of immigrant labor
Which of the following is the best example of the law of supply?
A sandwich shop
Which of the following is THE BEST example of a good with an inelastic supply?
Apples
When firms are said to be price takers, it implies that if a firm raises its prices,
Buyers will go (buy) elsewhere
An agreement among members of an oligopoly to set prices and production level is called...?
Collison
A product that is considered the same regardless of who makes it or sell it
Commodity
Which of the following jobs is expected to double in the next few years?
Computer engineer
Which term does the Bureau of Labor Statistics use to describe people who once sought work but have given up looking for a job?
Discouraged workers
A producer's average cost drops as production rises
Economies of scale
A measure of the way a quantity supplied reacts to a change in price
Elasticity of supply
Which of the following is a reason for employer to hire more temporary workers instead of permanent workers?
Employers can cut costs because temporary workers typically receive fewer benefits.
How might employers benefit from workplace safety laws?
Employers can offer lower wages because more employees will want to work in a safer place
Patents are a form of monopoly that society allows because they
Encourage firms to research and develop new products that society benefits as a whole
A cartel is able to survive only if?
Every member keeps to the agreed output levels
A payment to the gov't on the production or sale of a good
Excise tax
The presence of women in the labor force is expected to decrease in the future.
FALSE. It is expected to increase
Offshoring refers to a situation where American companies can build factories and hire workers in countries where wages and costs are higher.
False-it is the total opposite.
Parents who stay at home to take care of children are considered unemployed.
False-they are considered not a part of the labor force
Which of the following jobs was held by most workers in the U.S. at the founding of the country?
Farm workers
To calculate profits, a firm subtracts total costs from total revenues. What makes up the firm's total cost?
Fixed and variable costs
Firms that shut down in the short run are unable t0 avoid their?
Fixed cost
Which statement about median weekly earnings from 1980 through 2012 is supported by the graph?
For any given year, men's median weekly earnings were greater than women's.
A single seller has the rights to sell goods in an exclusive market
Franchise
The ultimate source of the region's wealth is Washington's unparalleled human capital. The population is the best educated of any of the large metro's in the United States; about half the region's adults hold bachelor's degree, and nearly a quarter have graduate degrees. Which statement can be inferred from the excerpt?
Having college or graduate degrees has contributed to the wealth of many adults in Washington D.C.
Which of the following is a practice that U.S. companies might follow to lower costs?
Higher more part-time workers
What is the dominant strategy (the best strategy) for both airlines? Pay-offs are given in Sterling Pounds.
Higher prices
A major characteristic of monopolistic competition is that prices will be?
Higher than in perfect competition
When would 2 slides in a labor dispute bring in a mediator?
If a strike continues for a long time and neither side can reach an agreement
The main difference between perfect competition and monopolistic competition is that?
In monopolistic competition sellers can profit from the differences between their products and other products
Which of the following is a characteristic of a competitive market?
Inexhaustible supply
When the selling price of a good goes up, what is the relationship to the quantity supplies?
It becomes practical to produce more goods
Why can a labor strike, such as the one shown in the photo, be an effective tool for union workers trying to make a company accept its demands?
It can slow or stop production and, thus, profits, giving company owners an incentive to resolve the issue.
What generally happens to the equilibrium wage when demand for workers is low and supply is high?
It gets lower
How does the addition of the 5th worker affect the number of beanbags produced per hour?
It increases production by 5 bags
Suppose that, at a regular price of 50 for a package os six, the supply of LED lights bulbs was 10. After the price decreased to 40, the supply increase to 200. Which of the following best describes the elasticity of supply for the light bulbs?
It is elastic; the elasticity of supply equals 5
Why is the demand for labor called a derived demand?
It is set by the demand for another good or service.
If an advertising business buys new computers for its employees, how might its productivity of labor be affected?
It would increase
Why do you think a business owner would want to move jobs to a country where labor is not unionized and cheap?
It would increase profit
How would a new gov't subsidy for rice farmers affect the market for rice?
It would increase the supply by decreasing rice farmers' production costs.
A gov't's purpose in giving an antitrust exemption to sport leagues is to
Keep teams play orderly and stable
Why are US firms moving manufacturing jobs overseas?
Labor costs less overseas
The tendency of suppliers to offer more of a good at a higher price
Law of supply
Marginal revenue for a monopolist is
Less than price
What is one reason many firms hire temporary workers to do a particular job?
Lower hiring and training costs
A sports equipment company increases its production of volleyballs. It cots the co. 4.00 to make 10 volleyballs and 4.10 to make 11 volleyballs. This 10 cent difference is an example of
Marginal cost
The cost of producing one one unit of a good
Marginal cost
The change in output from hiring one additional unit of labor
Marginal product of labor
The additional income from selling one more unit of a good
Marginal revenue
A chart that lists how much of a good all suppliers will offer at different prices
Market supply schedule
A single seller in a market
Monopoly
The De Beers Co. was once the classical example of a
Monopoly
Why has union membership fallen in manufacturing industries?
More white collar workers are employed in manufacturing
If 2 shops sell the same merchandise but 1 offers a higher lever of service, the service distinction is a term of....?
Non-pricing competition
What government agency's regulations MOST LIKELY require this worker to wear protective gear?
Occupational Safety and Health Administration (OSHA)
Game theory is not necessary for understanding competitive markets, but is quite useful in understanding the behavior of?
Oligopolies
The simplest way of a monopoly to arise is for a single firm is to?
Own a key resource
Refer to the Graph. At the profit maximizing level of output, a monopoly's price is equal to
P3
A company has exclusive rights to sell a new good or service for a specific time period
Patent
A market with many well-informed buyers and sellers, identical products, and free entry and exit
Perfect competition
Consumers are divided into groups and each is charged differently
Price discrimination
If price is greater than average total cost at the profit-maximizing quantity of output in the short run, a perfectly competitive firm will:
Produce at a profit
Refer to Graph 14-1. When marginal revenue is = to MC3, the profit maximizing firm will produce what level of output?
Q3
Based on this graph, after adding the 8th worker, what is the beanbag co.'s owner MOST LIKELY going to do?
Reduce the workforce
Which of the following is a fixed cost for a store?
Rent
Read each question and choose the best answer. Over the past 2 decades, the U.S. economy has shifted from a manufacturing economy toward a(n) ________ economy.
Service-producing
OPEC is able to raise the price of its products by?
Setting production levels for each of its members
Which of the following receives gov't subsidies that are in place to protect the population rather than for economic reasons?
Small farmers in France
Why does a perfectly competitive market require many participants as both buyers and sellers?
So that no individual can control price
Expenses a new business must pay before the first product reaches the customer
Start-up cost
What do sellers do if they expect the price of goods they have for sale to increase dramatically in the near future?
Store the goods until the price rises
Which of the following is an example of gov't influence on supply?
Subsidies
A gov't payment that supports business or market
Subsidy
Labor markets are governed by the force (s) of?
Supply and demand
The US economy has experience an overall shift from a manufacturing economy to a service economy.
TRUE
Which of the following is an explanation for the decline in union membership?
The passing of right-to-worker laws
Genetic drugs enter the pharmaceutical drug market once
The patent on the name brand drug expires
Milk is considered a commodity because it is which of the following?
The same product regardless of who sells it
Suppose data show an increase in offshoring by U.S. companies. Which of the following describes a possible effect on the unemployment rate?
The unemployment rate would increase, because jobs formerly taken by U.S. employees are now located in other countries.
Which of the following is an example of lower production costs brought about by the use of technology?
The use of e-mail to replace slower surface mail
What factor has the greatest influence on elasticity and inelasticity of supply?
Time
Which of the following could be a reason a worker joins a labor union?
To improve working conditions
Computer and hand-held devices such as cell phone and tablets have changed the way business, including farming is done in the U.S.
True
The Bureau of Labor Statistics reports the unemployment rate each month.
True
The term "outsourcing" refers to companies contracting other companies to do a specific job that would otherwise be done by a company's own workers
True
A perfectly competitive firm will continue producing in the short run as long as it can cover its:
Variable cost
How have the earning of US workers changed over the last 20 years?
Wages of college graduates only have gone up
Which of the following BEST defines the learning effect theory?
With increased education comes an increased efficiency of production, resulting in higher wages.
In the 1800s, why was there a greater need for labor unions than there is now?
Workers worked long hours
A natural monopoly is
An industry that runs best when one firm produces all the output
The marginal revenue curve for a monopoly firm is depicted by cure?
B
Factors that make it difficult for new firms to enter a market
Barriers to entry
The difference between total revenue and total cost is:
Economic profit
According to this table, what number if beanbags per hour would be the BEST level of production from a firm's point of view?
10 beanbags per hour
Which term describes a perceived barrier that may prevent qualified women from promotions to top-level jobs?
"The glass ceiling"
If a perfectly competitive firm sells 300 units of output at a market price of $1 per unit, its marginal revenue is:
$1
Suppose a firm's hourly fixed costs of production = $40 per hour, its variable costs =$125 per hour, and its total revenue is $275. What is the firm's profit per hour? How did you get your answer?
$110; fixed costs + variable costs subtracted from total revenue
