Micro Final
refer to the above data for a nondiscriminating monopolist. at its profit-maximizing output, this firm's total costs will be: a) $300 b) $294 c) $198 d) $126
b) $294
suppose that Joe sells pork in a purely competitive market. the market price of pork is $3 per pound. Joe's marginal revenue from selling the twelfth pound would be: a) $36 b) $3 c) 12lbs. d) 1 lbs.
b) $3
according to US Census Bureau data, approximately how many illegal immigrants are estimated to be living continuously in the US: a) 5 million b) 11 million c) 23 million d) 30 million
b) 11 million
refer to the data. the value for w is: a) 15 b) 20 c) 25 d) 30
b) 20
refer to the given data. what is the marginal product of the sixth worker: a) 2 units b) 3 units c) 4 units d) 5 units
b) 3 units
refer to the given data. in maximizing its profit, this firm will employ: a) 2 units of labor b) 3 units of labor c) 4 units of labor d) 5 units of labor
b) 3 units of labor
refer to the given information. the marginal product of the second worker is: a) 24 b) 8 c) 5 d) 1
b) 8
refer to the data. the average product (AP) when two units of labor are hired is: a) 8 b) 9 c) 10 d) 18
b) 9
which of the following is a measure of the degree of industry concentration: a) Dow Jones Industrial Index b) Herfindahl Index c) Employment Cost Index d) S&P-500 Index
b) Herfindahl Index
refer to the given data. at the profit-maximizing level of employment, this firm's total revenue will be: a) $16 b) $32 c) $24 d) $30
d) $30
assume labor is the only variable input and that an additional input of labor increases total output from 72 to 78 units. if the product sells for $7 per unit in a purely competitive market, the MRP of this additional worker is: a) $6 b) $12 c) $36 d) $42
d) $42
the US devotes about ____ percent of its gross domestic product to health care: a) 5 b) 8 c) 15 d) 18
d) 18
A market: a) reflects upswing demand and downscoping supply curves b) entails the exchange of goods, but not services c) is an institution that brings together buyers and sellers d) always requires face-to-face contact between buyers and sellers
Is an institution that brings together buyers and sellers
refer to the given data information: the marginal revenue product of the second worker is: a) $24 b) $8 c) $15 d) $9
a) $24
refer to the above data. at its profit-maximizing output, this firm's total revenue will be: a) $450 b) $198 c) $180 d) $380
a) $450
refer to the data. the value for x is: a) 15 b) 5 c) 55 d) 10
a) 15
health care expenditures coming directly out of consumers' pockets, primarily in the form of deductibles and copayments, account for what percent of US health care spending: a) 17 percent b) 33 percent c) 50 percent d) 83 percent
a) 17 percent
in the long run: a) all costs are variable costs b) all costs are fixed costs c) variable costs equal fixed costs d) fixed costs are greater than variable costs
a) all costs are variable costs
for all practical purposes, the supply of land is: a) almost perfectly inelastic b) negatively sloped c) relatively elastic d) perfectly elastic
a) almost perfectly inelastic
marginal revenue product measures the: a) amount by which the extra production of one more worker increases a firms total revenue b) decline in product price that a firm must accept to sell the extra output of one more worker c) increase in total resource cost resulting from the hire of one extra d) increase in total revenue resulting from the production of one more unit of a product
a) amount by which the extra production of one more worker increases a firms total revenue
a profit-maximizing firm should shut down in the short run if the average revenue it receives is less than: a) average variable cost b) average total cost c) average fixed cost d) marginal cost
a) average variable cost
if the nominal wage rises by 4 percent, and the price level rises by 4 percent, the real wage will: a) be unaffected b) rise by 3 percent c) fall by 3 percent d) rise by 11 percent
a) be unaffected
The demand for a product is inelastic with respect to price if: a) consumers are largely unresponsive to a per unit price change b) the elasticity coefficient is greater than 1 c) a drop in price is accompanied by a decrease in the quantity demanded d) a drop in price is accompanied by an increase in the quantity demanded
a) consumers are largely unresponsive to a per unit price change
in the health care market: a) demand has increase relative to supply b) supply has increased relative to demand c) neither demand nor supply has changed significantly in the past two decades d) the concepts of demand and supply are irrelevant
a) demand has increase relative to supply
which of the following is most likely to be an implicit cost for company x: a) forgone rent from the building owned and used by company x b) rental payments on IBM equipment c) payments for raw materials purchased from company y d) transportation cost paid to a nearby trucking firm
a) forgone rent from the building owned and used by company x
employer-provided private health insurance in the US has resulted in: a) incentives that encourage the overuse of health care b) incentives that discourage the use of health care, and overall poorer health c) lower costs of health care as providers better achieve economies of scale d) comprehensive coverage of the US population, with few lacking access to adequate health care
a) incentives that encourage the overuse of health care
refer to the data. the marginal product of the fourth worker: a) is 5 b) is 7 c) is 7 1/2 canon be calculated from the information given
a) is 5
employer-provided private health insurance: a) is unique to the US and not typically found in other countries b) is the most common form of health care provision in industrialized countries c) substantially reduces the cost of health care provision relative to national health insurance schemes d) provides a small percentage of health care spending in the US
a) is unique to the US and not typically found in other countries
which of the following is a barrier to entry: a) patents and licenses b) buyers' incomes c) close substitutes d) demising marginal returns
a) patents and licenses
the largest source of tax revenue for the US federal government is: a) personal income taxes b) property taxes c) corporate income taxes d) sales and excise taxes
a) personal income taxes
The supply curve shows the relationship between: a) price and quantity supplied b) production costs and the amount demanded c) total business revenues and quantity supplied d) means the same thing as demand
a) price and quantity supplied
The supply curve shows the relationship between: a) price and quantity supplied b) production costs and the amount demanded c) total business revenues and quantity supplied d) physical inputs of resources and the resulting units of output
a) price and quantity supplied
interest is the: a) price paid for the use of money b) opportunity cost of time c) expectation of a future return on investment d) reward for consuming rather than saving
a) price paid for the use of money
refer to the above table. if the market price for the firm's product is $80 the firm will: a) produce 4 units b) produce 5 units c) produce 6 units d) shut down
a) produce 4 units
the major purpose of medicare is to: a) provide health care services to people on Social Security b) provide health care services to those receiving public assistance c) contain rising health care costs d) make a basic health care package available to all Americans
a) provide health care services to people on Social Security
in which market model are the conditions of entry into the market easiest: a) pure competition b) pure monopoly c) monopolistic competition d) oligopoly
a) pure competition
the twin problems of the US health care industry are: a) readily rising costs and unequal access to health care b) declining quality of health care and the duplication of specialized equipment at hospitals c) defining per capita spending on health care and the moral hazard problem d) the decline in the number of family physicians and the failure to vaccinate children
a) readily rising costs and unequal access to health care
the highest quintile of households in the income distribution: a) receives about 51 percent of the total income b) is comprised of 10 percent of all households c) is comprised of 5 percent of all households d) receives about 43 percent of the total income
a) receives about 51 percent of the total income
the kinked demand model of oligopoly assumes that: a) rivals will ignore price increases but will match price cuts b) rivals will ignore price cuts but will match price increases c) the oligopolistic firms are colluding d) a firm faces a more elastic demand curve if it cuts its price, and less elastic if it raises price
a) rivals will ignore price increases but will match price cuts
if price is above the equilibrium level, competition among sellers to reduce the resulting: a) surplus will increase quantity demanded and decrease quantity supplied b) shortage will decrease quantity demanded and increase quantity suppled c) surplus will decrease quantity demanded and increase quantity supplied d) shortage will increase quantity demanded and decrease quantity supplied
a) surplus will increase quantity demanded and decrease quantity supplied
a competitive employer should hire additional labor as long as: a) the MRP exceeds the wage rate b) the wage rate is less than MP c) average product exceeds MP d) MC exceeds MR
a) the MRP exceeds the wage rate
human capital refers to: a) the accumulated knowledge and skills that allow a person to be productive b) machinery that requires extensive human interaction to be productive c) the accumulated financial assets of people d) all of these things
a) the accumulated knowledge and skills that allow a person to be productive
Xavier produces and sells tomatoes in a purely competitive market. this implies that Xavier's marginal revenue from an extra unit of tomatoes is always equal to the: a) unit price b) average cost c) variable cost d) unit profit
a) unit price
the largest single share of all income earned by Americans consists of: a) wages and salaries b) interest c) rents d) corporate profits
a) wages and salaries
an explicit cost is: a) omitted when accounting profits are calculated b) a money payment made for resources not owned by the firm itself c) an implicit cost to the resource owner who receives that payment d) always in excess of a resource's opportunity cost
b) a money payment made for resources not owned by the firm itself
which of the following persons is most likely to be insured for health care: a) a minimum-wage teenager working for a fast-food restaurant b) a skilled worker employed by a large multinational corporation c) an unemployed retail clerk d) a part-time groundskeeper for a small manufacturing plant
b) a skilled worker employed by a large multinational corporation
The main determinant of elasticity of supply is the: a) number of close substitutes for the product available to consumers b) amount of time the producer has to adjust inputs in response to a price change c) urgency of consumer wants for the product d) number of uses for the product
b) amount of time the producer has to adjust inputs in response to a price change
economic immigrants: a) are defined as any international migrants that have an impact on the economy b) are defined as international migrants motivated by economic gain c) only impact the economy if they enter the country legally d) include not only people, but also any capital that migrates from another country
b) are defined as international migrants motivated by economic gain
compensating differences in wages: a) compensate workers for differences in there human capital b) are wage differences that compensate for differences in the desirability of jobs c) describe the tendency for the wages of all occupations to adjust to the median level d) do not exist if jobs have different non monetary characteristics
b) are wage differences that compensate for differences in the desirability of jobs
given the availably of the Medicaid program, why are so many poor people uninsured: a) because only a fixed percentage of the population can participate in Medicaid at any time b) because many poor people earn enough that they do not qualify for Medicaid c) because non income requirements screen many poor people from the program d) because only native-born Americans are eligible for the program
b) because many poor people earn enough that they do not qualify for Medicaid
the law of diminishing marginal utility states that: a) total utility is maximized when consumers obtain the same amount of utility per unit of each product consumed b) beyond some point, additional units of a product will yield less and less extra satisfaction to a consumer c) price must be lowered to induce firms to supply more of a product d) it will take larger and larger amounts of resources beyond some point to produce successive units of a product
b) beyond some point, additional units of a product will yield less and less extra satisfaction to a consumer
social security is financed: a) by state income tax revenues b) by payroll taxes on employees and employers c) by federal excise taxes d) out of general tax revenues
b) by payroll taxes on employees and employers
a perfectly inelastic demand schedule: a) rises upward and tot he right but has a constant slope b) can be represented by a line parallel to the vertical axis c) cannot be shown on a two-dimensional graph d) can be represented by a line parallel to the horizontal axis
b) can be represented by a line parallel to the vertical axis
Marginal cost is the: a) rate of change in total fixed cost that results from producing one more unit of output b) change in total cost that results from producing one more unit of output c) change in average variable cost that results from producing one more unit of output d) Change in average total cost that results from producing one more unit of output
b) change in total cost that results from producing one more unit of output
Marginal utility is the: a) sensitivity of consumer purchases of a good to changes int he price of that good b) change in total utility obtained by consuming one more unit of a good c) change in total utility obtained by consuming another unit of a good divided by the change in the price of that good d) total utility associated with the consumption of a certain number of units of a good divided bu the number of units consumed
b) change in total utility obtained by consuming one more unit of a good
the incentive to cheat within a cartel increases with an increase in the following factors, EXCEPT: a) the number of firms in the cartel b) economic performance and industry sales c) the number of potential entrants into the industry d) the cost-differences among firms
b) economic performance and industry sales
labor unions may attempt to raise wage rates by: a) increasing the supply of labor b) forcing employers, under the threat of a strike, to pay above-equilibrium wage rates c) decreasing the demand for labor d) increasing the price of complementary resources
b) forcing employers, under the threat of a strike, to pay above-equilibrium wage rates
under pure monopoly, a profit-maximizing firm will produce: a) in the inelastic range of its demand curve b) in the elastic range of its demand curve c) only where marginal costs are decreasing d) only where marginal revenue is increasing
b) in the elastic range of its demand curve
To economists, the main difference between the short run and the long run is that: a) the law of diminishing returns applies in the long run, but not in the short run b) in the long run all resources are variable, while in the short run at least one resource is fixed c) fixed costs are more important to decision making in the long run than they are in the short run d) in the short run all resources are fixed, while in the long run all resources are variable
b) in the long run all resources are variable, while in the short run at least one resource is fixed
effectively removing all illegal immigrants from US labor markets would: a) reduce wages in the US b) increase employment of domestic-born workers, but by a lesser amount than the number of jobs lost by illegal works c) increase employment of domestic-born workers at a rate of one-for-one with the jobs lost by illegal workers d) increase employment of domestic-born workers by an amount greater than the number of jobs lost by illegal workers
b) increase employment of domestic-born workers, but by a lesser amount than the number of jobs lost by illegal works
refer to the above data for a nondiscriminating monopolist. at its profit-maximizing output, this firm's total profit will be: a) $182 b) zero c) $156 d) $127
c) $156
if the demand for bacon is relatively elastic, a 10 percent decline in the price of bacon will: a) decrease the amount demanded by more than 10 percent b) increase the amount demanded by more than 10 percent c) decrease the amount demanded by less than 10 percent d) increase the amount demanded by less than 10 percent
b) increase the amount demanded by more than 10 percent
which of the following helps explain growing income inequality in the US in recent years: a) reduced immigration b) increased demand for highly skilled workers c) the falling labor force participation rate of women d) increased power of unions
b) increased demand for highly skilled workers
health care: a) is an inferior good b) is a normal good c) is highly elastic with respect to price d) has a price elasticity of demand of 1
b) is a normal good
the price elasticity of demand for health care is: a) perfectly inelastic b) is a normal good c) is highly elastic with respect to price d) has a price elasticity of demand of 1
b) is a normal good
the utility of a good or service: a) is synonymous with usefulness b) is the satisfaction or pleasure one gets from consuming it. c) is easy to quantify d) rarely varies from person to person
b) is the satisfaction or pleasure one gets from consuming it.
in a monopsonistic labor market, the employer will maximize profits by employing workers up to that point at which: a) the difference between the wage rate and marginal resource (labor) cost is at a maximum b) marginal revenue product equals marginal resource (labor) cost c) the wage rate equals marginal revenue product d) the wage rate equals marginal resource (labor) cost
b) marginal revenue product equals marginal resource (labor) cost
the unemployed are disproportionately represented among the uninsured because: a) one must be working to qualify for Medicaid b) most workers obtain health insurance through their employers c) most are young and in excellent health, so they choose not to purchase health insurance d) a large percentage of the unemployed are heads of single-parent families
b) most workers obtain health insurance through their employers
in pure competition, if the market price of the product is initially higher than the minimum average cost of the first, then: a) some first will exit the industry and the industry supply will decrease b) other firms will enter the industry and the industry supply will increase c) some firms will exit the industry and the industry supply will increase d) other firms will enter the industry and the industry supply will decrease
b) other firms will enter the industry and the industry supply will increase
one major barrier to entry under pure monopoly arises from: a) the availability of close substitutes for a product b) ownership of essential resources c) the price taking ability of the firm d) diseconomies of scale
b) ownership of essential resources
The basic formula for the price elasticity of demand coefficient is: a) absolute decline in quantity demanded/absolute increase in price b) percentage change in quantity demanded/percentage change in price c) absolute decline in price/absolute increase in quantity demanded d) percentage change in price/percentage change in quantity demanded
b) percentage change in quantity demanded/percentage change in price
defensive medicine refers to the idea that: a) it is more cost-efficient to prevent illnesses than to cure them b) physicians may require unnecessary testing as a means of protecting themselves against malpractice suits c) doctors know much more about diagnosing and treating illnesses than do health care consumers d) physicians do not advertise their services or fees
b) physicians may require unnecessary testing as a means of protecting themselves against malpractice suits
when a purely competitive industry is in long-run equilibrium, which statement is true: a) average total cost is less than marginal cost b) price and average total cost are equal c) marginal cost is at its maximum level d) marginal revenue is greater than price
b) price and average total cost are equal
which characteristic would best be associated with pure competition: a) few sellers b) price takers c) nonprime competition d) product differentiation
b) price takers
the major objective of Medicaid is to: a) provide health care services to the aged b) provide health care services to those receiving public assistance c) contain rising health care costs d) make a basic health care package available to all Americans
b) provide health care services to those receiving public assistance
insurance companies use deductibles and copayments to: a) increase access to health care b) reduce health care costs by discouraging overuse of the health care system c) prevent small copies from self-insuring their workers d) keep government out of the health care insurance industry
b) reduce health care costs by discouraging overuse of the health care system
critics of minimum-wage legislation argue that it: a) keeps inefficient producers in business b) reduces employment c) undermines incentives to work d) is deflationary
b) reduces employment
federal tax policy: a) treats employer health insurance premiums as taxable income b) subsidizes health insurance and thereby increases the demand for health care c) subsidizes health insurance and thereby decreases the demand for health care d) corrects the overallocation of resources to the health care industry that would otherwise exist
b) subsidizes health insurance and thereby increases the demand for health care
minority workers are underrepresented and have less access to certain high-paying occupations. this illustrates: a) human-capital discrimination b) the crowding model c) the taste-for-discrimination model d) statistical discrimination
b) the crowding model
the price elasticity of demand measures: a) buyer responsiveness to price changes b) the extent to which a demand curve shifts as income change c) the slope of the demand curve d) how far business executives can stretch their fixed costs
b) the extent to which a demand curve shifts as income change
refer to the given data. at the profit-maximizing level of employment, this firm's total labor cost will be: a) $16 b) $30 c) $24 d) $32
c) $24
refer to the given data. at what price does each shoe shine sell: a) $1 b) $2 c) $3 d) $2.50
c) $3
the elasticity of demand for a product is likely to be greater: a) if the product is a necessity, rather than a luxury good b) the greater the amount of time over which buyers adjust to a price change c) the smaller the proportion of one's income spent on the product d) the smaller the number of substitute products available
b) the greater the amount of time over which buyers adjust to a price change
marginal resource cost is: a) the increase in total resource cost associated with the production of one more unit of output b) the increase in total resource cost associated with he hire of one more unit of the resource c) total resource cost divided by the number of inputs employed d) the change in total revenue associated with the employment of one more unit of the resource
b) the increase in total resource cost associated with the hire of one more unit of the resource
if the existence of health insurance increases one's incentive to use the health care system more intensively, this is an illustration of: a) the adverse selection problem b) the moral hazard problem c) the benefits-received principle d) the Case theorem
b) the moral hazard problem
by an "increase in demand" economists mean that: a) product price has fallen so consumers move down to a new point on the demand curve b) the quantity demanded at each price in a set of prices is greater c) the quantity demanded at each price in a set of prices is smaller d) a leftward shift of the demand curve has occurred
b) the quantity demanded at each price in a set of prices is greater
refer to the data. when two workers are employed: a) total product is 20 b) total product is 18 c) average product is 10 d) total product canon be determined from the information given
b) total product is 18
economies and diseconomies of scale explain: a) the profit-maximizing level production b) why the firm's long-run average total cost curve is u-shaped c) why the firm's short-run marginal cost curve cuts the short-run average variable cost curve at its minimum point d) the distinction between fixed and variable costs
b) why the firm's long-run average total cost curve is u-shaped
refer to the above table. if the product price is $290, the per-unit economic profit at the profit-maximizing output is: a) $0 b) $76 c) $119 d) $152
c) $119
refer to the above data for a nondiscrimination monopolist. at its profit-maximizing output, this firm's price will exceed its marginal cost by _____ and its average total cost by ___ a) $20;$27 b) $10;$11 c) $34;$26 d) $30;$20.50
c) $34;$26
in the quintal distribution of income, the term "quintile" represents: a) 5 percent of the income receivers b) 10 percent of the income receivers c) 20 percent of the income receivers d) 25 percent of the income receivers
c) 20 percent of the income receivers
refer to the given data. how many units of output are produced when 2 workers are employed: a) 4 b) 16 c) 24 d) 10
c) 24
refer to the data. what level of total utility is realized from the equilibrium combination of J and K, if the consumer has a money income of $52 and the prices of J and K are $8 and $4 respectively: a) 156 utils b) 124 utils c) 276 utils d) 36 utils
c) 276 utils
refer to the given information. how many workers should the farmer hire: a) 1 b) 2 c) 3 d) 4
c) 3
refer to the given information. what is the farmer's profit-maximizing output: a) 20 b) 32 c) 37 d) 40
c) 37
refer to the data. if the consumer has money income of $52 and the prices of J and K are $8 and $4 respectively, the consumer will maximize her utility by purchasing: a) 2 units of J and 7 units of K b) 5 units of J and 5 units of K c) 4 units of J and 5 units of K d) 6 units of J and 3 units of K
c) 4 units of J and 5 units of K
refer to the above table. if the market price for the firm's product is $180, the competitive firm will produce: a) 5 units and earn economic profits of $100 b) 6 units and earn economic profits of $120 c) 7 units and earn economic profits $238 d) 8 units and earn economic profits of $278
c) 7 units and earn economic profits $238
the first Pepsi yields Craig 18 units of utility and the second yields him an additional 12 units of utility. his total utility form three Pepsi is 38 units of utility. marginal utility of the third Pepsi is: a) 26 of utility b) 6 units of utility c) 8 units of utility d) 38 units of utility
c) 8 units of utility
If two goods are complements: a) they are consumed independently b) an increase in the price of one will increase the demand for the other c) a decrease in the price of one will increase the demand for the other d) they are necessarily inferior goods.
c) a decrease in the price of one will increase the demand for the other
economic cost can best be defined as: a) any contractual obligation that results in a flow of money expenditures from an enterprise to resource suppliers b) any contractual obligation to labor or material suppliers c) a payment that must be made to obtain and retain the services of a resource d) all cost exclusive of payment s to fixed factors or production
c) a payment that must be made to obtain and retain the services of a resource
if the wage rate increases: a) a purely competitive producer will hire less labor, but an imperfectly competitive producer will not b) an imperfectly competitive producer will hire left labor, but a purely competitive producer will not c) a purely competitive producer and an imperfectly competitive producer will both hire less labor d) an imperfectly competitive producer may find it profitable to hire either more or less labor
c) a purely competitive producer and an imperfectly competitive producer will both hire less labor
collusion refers to a situation where rival firms decide to: a) compete aggressively against each other b) cheat on each other c) agree with each other to set prices and output d) combine their operations and merge with each other
c) agree with each other to set prices and output
other things equal, an increase in the equilibrium interest rate will: a) increase R&D spending b) rise when the supply of loanable funds increases c) decrease purchases of capitol goods and reduce R&D spending d) increase bank lending
c) decrease purchases of capitol goods and reduce R&D spending
most remittances flow toward: a) European nations b) advanced industrial nations c) developing nations d) north america
c) developing nations
noncompeting groups of workers are the result of: a) differences in the age-earning profiles of workers b) differences in the "job tastes" of workers c) differences in the innate and acquired abilities of workers d) geographic immobility
c) differences in the innate and acquired abilities of workers
which set of characteristics below best describes the basic features or monopolistic competition: a) easy entry, many firms, and standardized products b) barriers to entry, firms and differentiated products c) easy entry, many firms, and differentiated products d) easy entry, few firms and standardized products
c) easy entry, many firms, and differentiated products
"beaten paths" from one country to another: a) discourage migration to that country because of a perception that all of the good jobs have already been taken b) discourage migration by increasing the cost of moving c) encourage migration by providing employment contacts and job information d) are more prevalent the greater the distance between the two countries
c) encourage migration by providing employment contacts and job information
in an oligopolistic market there are: a) many buyers b) few buyers c) few sellers d) many sellers
c) few sellers
the monopolistic competition model assumes that: a) allocative efficiency will be achieved b) productive efficiency will be achieved c) firms will engage in nonprime competition d) firms will realize economic profits in the long run
c) firms will engage in nonprime competition
let us suppose harry's, a local supplier of chili and pizza, has the following revenue and cost structure: total revenue. $3000 per week total variable cost $2000 per week total fixed costs $2000 per week a) harry's should stay open in the long run b) harry's should shut down in the short run c) harry's should stay open in the short run d) harry's should shut down in the short run but reopen in the long run
c) harry's should stay open in the short run
the long run trend of real wages: a) cannot be determined from available data on nominal wages and the price level b) has been downward because the price level has risen faster than normal wages c) has been upward d) has been downward because labor's share of the domestic income has fallen
c) has been upward
"remittances" occur when: a) two countries send immigrants to each other in approximately equal numbers b) physical capital flows into a country that has lost labor due to migration c) immigrants send financial payments back to family in their country of origin d) migrants return to their home country
c) immigrants send financial payments back to family in their country of origin
when the price of a product increases, a consumer is able to buy less of it with a given money income. This describes the: a) cost effect b) inflationary effect c) income effect d) substitution effect
c) income effect
the movement of individuals and households from one income quintile to another over time is called: a) income averaging b) wealth turnover c) income mobility d) the ratchet effect
c) income mobility
an increase in the price of product A will: a) reduce the demand for resources used int he production of A b) increase the demand for complementary product C c) increase the demand for substitute product B d) reduce the demand for substitute product B
c) increase the demand for substitute product B
An increase in the price of product A will: a) reduce the demand for resources used in the production of A. b) increase the demand for complementary product C. c) increase the demand for substitution product B. d) reduce the demand for substitute product B.
c) increase the demand for substitution product B
the real wage will rise if the nominal wage: a) falls more rapidly than the general price level b) increases at the same rate as labor productivity c) increases more rapidly than the general price level d) falls at the same rate as the general price level
c) increases more rapidly than the general price level
inclusive unionism is practiced mostly by: a) professional and semiprofessional employees b) small unions comprised of skilled workers, such as the bricklayers c) industrial unions d) craft unions
c) industrial unions
If the university chamber music society decides to raise ticket prices to provide more funds to finance concerts, the society is assuming that the demand for tickets is: a) parallel tot he horizontal axis b) shifting to the left c) inelastic d) elastic
c) inelastic
other things equal, interest rates are: a) higher on large loans than on small loans b) higher on loans with tax-exempt interest payments c) lower on less risky loans than on riskier loans d) lower on short-term loans than on long-term loans
c) lower on less risky loans than on riskier loans
monopolistic competition means: a) a market situation where competition is based entirely on product differentiation and advertising b) a large number of firms producing a standardized or homogeneous product c) many firms producing differentiated products d) a few firms producing a standardized or homogenous product
c) many firms producing differentiated products
pure monopolist may obtain economic profits in the long run because: a) a market situation where competition is based entirely on product differentiation and advertising b) a large number of firms producing a standardized or homogeneous product c) many firms producing differentiated products d) a few firms producing a standardized or homogeneous product
c) many firms producing differentiated products
In which two market models would advertising be used most often: a) pure competition and monopolistic competition b) pure competition and pure monopoly c) monopolistic competition and oligopoly d) pure monopoly and oligopoly
c) monopolistic competition and oligopoly
which of the following is true under conditions of pure competition: a) there are differentiated products b) the market demand curve is perfectly elastic c) no single firm can influence the market Bruce by changing its output d) each individual firm has the ability to set its own price
c) no single firm can influence the market price by changing its output
the Lorenz curve: a) plots graphically the poverty rate over time b) is located closer to the diagonal today than it was in 1975 c) plots graphically the distribution of income d) is located farther from the diagonal when income is defined to include the value of non cash transfers
c) plots graphically the distribution of income
Marginal utility can be: a) positive, but not negative b) positive or negative, but not zero c) positive, negative, or zero d) decreasing, but not negative
c) positive, negative, or zero
The demand curve shows the relationship between: a) money income and quantity demanded b) price and production costs c) price and quantity demanded d) consumer tastes and quantity demanded
c) price and quantity demanded
The term "quantity demanded": a) refers to the entire series of prices and quantities that comprise the demand schedule b) refers to a situation in which the income and substitution effects do not apply c) refers to the amount of a product that will be purchased at some specific price d) means the same thing as demand
c) refers to the amount of a price that will be purchased at some specific price
an improvement in production technology will: a) increase equilibrium price b) shift the supply curve tot he left c) shift the supply curve to the right d) shift the demand curve to the left
c) shift the supply curve to the right
marginal product is: a) the output of the least skilled worker b) a worker's output multiplied by the price at which each unit can be sold c) the amount an additional worker adds to the firm's total output d) the amount any given work contributes tot he firm's total revenue
c) the amount an additional worker adds to the firm's total output
the change in a firms total revenue that results from hiring an additional worker is measured by: a) the marginal product b) the marginal revenue c) the marginal revenue product d) the average revenue product
c) the marginal revenue product
one defining characteristic of pure monopoly is that: a) the monopolist is a price taker b) the monopolist uses advertising c) the monopolist produces a product with no close substitutes d) there is relatively easy entry into the industry, but exit is difficult
c) the monopolist produces a product with no close substitutes
refer to the data. diminishing returns begin to occur with the hiring of the ___________ unit of labor a) first b) second c) third d) seventh
c) third
where total utility is at a maximum, marginal utility is: a) negative b) positive and increasing c) zero d) positive but decreasing
c) zero
refer tot he data. if the consumer's money income were cut from $52 to $28, and the prices of J and K remain at $8 and $4 respectively, she would maximize her satisfaction by purchasing: a) 3 units of J and 3 units of K b) 1 unit of J and 3 units of K c) 4 units of J and 1 unit of K d) 2 units of J and 3 units of K
d) 2 units of J and 3 units of K
refer to the data. the value for y is: a) 25 b) 30 c) 40 d) 45
d) 45
refer to the given data. if the wage rate is $11, how many workers will Manfred hire to maximize profits: a) 1 b) 2 c) 3 d) 5
d) 5
refer to the above data for a non-discriminating monopolist. this firm will maximize its profit by producing: a) 3 units b) 4 units c) 5 units d) 6 units
d) 6 units
one feature of pure monopoly is that the firm is: a) a producer of products with close substitutes b) one of several producers of a product c) a price taker d) a price maker
d) a price maker
the real rate of interest is the interest rate: a) charged on long-term government bonds b) associated with a riskless loan c) that large commercial banks charge their best customers d) after adjustment has been made for inflations
d) after adjustment has been made for inflations
which of the following is a demand-increasing factor in the health care market: a) rising incomes b) the aging of the population c) asymmetric information d) all of these
d) all of these
in the standard model of pure competition, a profit-maximizing firm will shut down in the short run if price is below: a) marginal cost b) average cost c) average fixed cost d) average variable cost
d) average variable cost
marginal revenue is the: a) change in product price associated with the sale of one more unit of output b) change in average revenue associated with the sale of one more unit of output c) difference between product price and average total cost d) change in total revenue associated with the sale of one more unit of output
d) change in total revenue associated with the sale of one more unit of output
average fixed cost: a) equals marginal cost when average total cost is at its minimum b) may be found for any output by adding average variable cost and average total cost c) graphs as a u-shaped curve d) declines continually as output increases
d) declines continually as output increases
total fixed cost: a) falls as the firm expands output from zero, but eventually rises b) falls continuously as total output expands c) varies directly with total output d) does not change as total output increases or decreases
d) does not change as total output increases or decreases
which of the following groups has the HIGHEST poverty rate: a) age 65 or over b) foreign-born (not citizens) c) hispanics d) female-headed households
d) female-headed households
each of the following contributes to income inequality EXCEPT: a) differences in ability and training b) differences in job tastes c) differences in wealth ownership d) government transfers
d) government transfers
each of the following has contributed to growing income inequality in the US since 1975 EXCEPT: a) the decline in unionism b) greater demand for highly skilled workers c) stronger international competition from imports d) government transfers
d) government transfers
which of the following is not a source of economies of scale: a) learning-by-doing b) labor specialization c) use of larger machines d) inelastic resource supply curves
d) inelastic resource supply curves
a monopolistically competitive firm is operating at a short-run level of output where price is $21, average total cost is $15, marginal cost is $13, and marginal revenue is $13. in the short run this firm should: a) reduce product price b) increase the level of output c) decrease the level of output d) make no change in the level of output
d) make no change in the level of output
many people believe that monopolies charge any price they want to without affecting sales. instead, the output level for a profit-maximizing monopoly is determined by: a) marginal cost=average revenue b) marginal revenue=average cost c) average total cost=average revenue d) marginal cost=marginal revenue
d) marginal cost=marginal revenue
a firm that is hiring labor in a purely competitive labor market and selling its product in a purely competitive product market will maximize its profit by hiring labor until: a) marginal revenue product is zero b) marginal revenue product exceeds marginal resource (labor) cost by the greatest amount c) marginal resource cost is zero d) marginal revenue product equals marginal resource (labor) cost
d) marginal revenue product equals marginal resource (labor) cost
a major reason that firms form a cartel is to: a) reduce the elasticity of demand for the product b) enlarge the market share for each producer c) minimize the costs of production d) maximize joint profits
d) maximize joint profits
a unique feature of an oligopolistic industry is: a) low barriers to entry b) standardized products c) diminishing marginal returns d) mutual interdependence
d) mutual interdependence
in which set of market models are there the most significant barriers to entry: a) monopolistic competition and pure competition b) monopolistic competition and pure monopoly c) oligopoly and monopolistic competition d) oligopoly and pure monopoly
d) oligopoly and pure monopoly
about ____ of recent annual labor force growth in the US is the result of immigration a) one-tenth b) one-fifth c) one-third d) one-half
d) one-half
some economists have criticized standard government figures on income inequality, arguing that these data: a) exclude households whose earnings arise in the public sector b) conceal the strong trend toward greater equality in household sizes c) conceal the growth of poverty due to a growing number of discouraged workers d) overstated the degree of income inequality by failing to include non cash transfers as income
d) overstated the degree of income inequality by failing to include non cash transfers as income
In which of the following instances will total revenue decline a) price rises and supply is elastic b) price falls and demand is elastic c) price rises and demand is inelastic d) price rises and demand is elastic
d) price rises and demand is elastic
illegal immigration positively contributes to the US standard of living by reducing: a) the fiscal burdens of state and local governments b) the average wages of domestic-born workers c) crime rates d) prices of good and services produced with illegal immigrant labor
d) prices of good and services produced with illegal immigrant labor
an industry comprised of a very large number of sellers producing a standardized product is known as: a) monopolist competition b) oligopoly c) pure monopoly d) pure competition
d) pure competition
the price of medical care in the US has: a) remained relatively unchanged in recent years b) risen slower than the overall price level c) risen at the same pace as the overall price level d) risen faster than the overall price level
d) risen faster than the overall price level
refer to the data marginal product becomes negative with the hiring of the ________ unit of labor a) third b) fourth c) sixth d) seventh
d) seventh
a leftward shift of a product supply curve might be caused by: a) an improvement in the relevant technique of production b) a decline in the prices of needed inputs c) an increase in consumer incomes d) some firms leaving an industry
d) some firms leaving an industry
Which of the following is NOT characteristic of the demand for a commodity that is elastic: a) the relative change is quantity demanded is greater than the relative change in price b) buyers are relatively sensitive to price changes c) total revenue declines if price is increased d) the elasticity coefficient is less than one
d) the elasticity coefficient is less than one
compensating wage differentials: a) refer to the wage premium given to domestic-born workers b) refer to the wage premium necessary to attract illegal immigrant workers c) discourage illegal immigrants from entering low-wage labor markets d) will attract US workers to undesirable jobs if the differential over less unpleasant work is sufficiently high
d) will attract US workers to undesirable jobs if the differential over less unpleasant work is sufficiently high