Microeconomics Final
Refer to the above table. If the product price is $290, the per-unit economic profit at the profit-maximizing output is...
$119
According to US Census Bureau data, approximately how many illegal immigrants are estimated to be living continuously in the US?
11 million
Refer to the data. The value for X is...
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?
17 percent
The US devotes about _______ percent of its gross domestic product to health care.
18
Refer to the data. If the consumer's Monet 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...
2 units of J and 3 units of K
Refer to the data. The value for W is...
20
The basic tax rate on taxable corporate income is...
20%
In the quintile distribution of income, the term "quintile" represents...
20% of the income receivers
Refer to the given data. How many units of output are produced when 2 workers are employed?
24
Refer to the data. What level of total utility is realized from the equilibrium combination of J and K, if the consumers a money income of $52 and the prices of J and K are $8 and $4 respectively...
276 units
If the wage rate increases...
a purely competitive producer and an imperfectly competitive producer will both hire less labor
Compensating differences in wages...
are wage differences that compensate for differences in the desirability of jobs
The incentive to heat within a cartel increases with an increase in the following factors, except...
economic performance and industry sales
"Beaten Paths" from one country to another...
encourage migration by providing employment contacts and job information
Average fixed cost...
equals marginal cost when average total cost is at its minimum
If the nominal wage rises by 4 percent, and the price level rises by 7%, the real wage will...
fall by 3%
Which of the following groups has the highest poverty rate?
female head of households
In an oligopolistic market there are...
few sellers
The monopolistic competition model assumes that...
firms will engage in nonprice competition
Labor unions may attempt to raise wage rates by...
forcing employers, under the threat of a strike, to pay above-equilibrium wage rates
Which of the following helps explain growing income inequality in the United States in recent years?
increased demand fro highly skilled workers
The real wage will rise if the nominal wage...
increases more rapidly than the general price level
Inclusive unionism is practiced mostly by...
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...
inelastic
Refer to the data. The marginal product of the fourth worker...
is 5
Health care...
is a normal good
The highest quintile of households in the income distribution...
receives about 51 percent of the total income
Insurance companies use deductibles and copayments to...
reduce health care costs by discouraging overuse of the health care system
Critics of minimum-wage legislation argue that it...
reduces employment
A tax that takes a larger proportion of income from low-income groups than from high income groups is a...
regressive tax
The price elasticity of demand for health care is...
relatively inelastic
The price of medical care in the US has...
risen faster than the overall price level
The kinked demand model of oligopoly assumes that...
rivals will ignore price increases but will match price cuts
Minority workers are underrepresented and have less access to certain high paying occupations. This illustrates...
the crowding model
The elasticity of demand for a product is likely to be greater...
the greater the amount of time over which buyers adjust to a price change
Marginal resource cost is...
the increase in total resource cost associated with the hire of one more unit of the resource
The change in a firm's total revenue that results from hiring an additional worker is measured by...
the marginal revenue product
One defining characteristic of pure monopoly is that...
the monopolist produces a product with no close substitutes
If the existence of health insurance increases one's incentive to use the health care system more intensively, this is an illustration of...
the moral hazard problem
By an "increase in demand," economists mean that...
the quantity demanded at each price in a set of prices is greater
At the point where the demand and supply curves for a product intersect...
the quantity that consumers want to purchase and the amount producers choose to sell are the same
Refer to the data. Diminishing returns begin to occur with the hiring of the ______ unit of labor.
third
Refer to the data. When two workers are employed...
total product is 18
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...
unit price
The largest single share of all income earned by Americans consists of...
wages and salaries
The incidence of a tax pertains to...
who actually bears the burden of a tax
Economies and diseconomies of scale explain...
why the firm's long-run average total cost curve is U-shaped
Compensating wage differentials...
will attract US workers to undesirable jobs if the differential over less unpleasant work is sufficiently high
Where total utility is at a maximum, marginal utility is...
zero
An explicit cost is...
a money payment made for resources not owned by the firm itself
One feature of pure monopoly is that the firm is...
a price maker
Economic cost can best be defined as...
a payment that must be made to obtain and retain the services of a resource
Refer to the above data for a non-discrimating monopolist. At its profit-maximizing output this firm's total profit will be...
$156
Refer to the given info. The marginal revenue product of the second worker is...
$24
Refer to the above data for a non-discriminating monopolist. At its profit-maximizing output, this firm's total costs will be...
$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...
$3
Refer to the above data for a non-discriminating monopolist. At its profit-maximizing output, this firm's price will exceed it marginal cost by_______ and its aver total cost by ______...
$34; $26.00
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 $6 per unit in a purely competitive market, the MRP of this additional worker is...
$36
Refer to the above data. At its profit-maximizing output, this firm's total revenue will be...
$450
Refer to the given data. At what price does each shoe shine sell?
3
Refer to the given data. What is the marginal product of the sixth worker?
3
The maximum federal marginal tax rate on taxable personal income is, as of 2013...
39.6%
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...
4 units of J and 5 units of K
Refer to the data. The value for Y is...
45
Refer to the given data. If the wage are is $11, how many workers will Manfred hire to maximize profits?
5
Refer to the above data for a non discriminating monopolist. This firm will maximize its profit by producing...
6 units
Refer to the above table. If the market price for the firm's product is $180, the competitive firm will produce...
7 units and earn economic profits of $238
Refer to the given information. The marginal product of the second worker is...
8
The first Pepsi yields Craig 18 units of utility and the second yields him an additional 12 units of utility. His total utility from three pepsis is 38 units of utility. The marginal utility of the third Pepsi is...
8 units of utility
Refer to the data. The average product (AP) when two units of labor are hired is...
9
Which of the following persons is most likely to be insured for health care?
A skilled worker employed by a large multinational corporation
Collusion refers to a situation where rival firms decide to...
Agree with each other to set prices and output
Which of the following is a demand increasing factor in the health care market?
All of these
A profit-maximizing firm should shut down in the short run if the average revenue it receives is less than...
Average variable cost
In the standard model of pure competition, a profit maximizing from will shut down in the short run if price is below...
Average variable cost
A leftward shift of a product supply curve might be caused by...
a decline in the prices of needed inputs.
If two goods are complements...
a decrease in the price of one will increase the demand for the other.
Total fixed cost (TFC)...
Does not change as total output increases or decreases.
Which set of characteristics below best describes the basic features of monopolistic competition?
Easy entry, many firms, and differentiated products.
Which of the following is most likely to be an implicit cost for Company X...
Forgone rent from the building owned and used by Company X
Let us suppose Harry's, a local supplier of chili and pizza, has the following revenue and cost structure: Total Revenue: $3,000 Per Week Total Variable Cost: $2,000 Per Week Total Fixed Costs: $2,000 Per Week
Harry's should shut down in the short run
Which of the following is a measure of the degree of industry concentration?
Herfindahl Index
To economists, the main differences between the short run and the long run is that...
In the long run all resources are variable, while in the short run at least one resource is fixed.
When the price of a product increases, a consumer is able to buy less of it with a given money income. This describes the...
Income effect
Which of the following is not a source of economies of scale?
Inelastic resource supply curves
A monopolistically competitive firm is operating at a short-run level of output where prices is $21, average total cost is $15, marginal cost is $13, and marginal revenue is $13. In the short run this firm should...
Make no change in the level of output
Monopolistic competition means...
Many firms producing differentiated products
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...
Marginal Cost = Marginal Revenue
A major reason that firms form a cartel is to...
Maximize joint profits
Which of the following is true under conditions of pure competition?
No single firm can influence the market price by changing its output
In which set of market models are there the most significant barriers to entry?
Oligopoly and pure monopoly
Which of the following is a barrier to entry?
Patents and licenses
When a purely competitive industry is in long-run equilibrium, which statement is true?
Price and average total cost are equal
The supply curve shows the relationship between...
Price and quantity supplied
Which characteristic would best be associated with pure competition?
Price taker
Refer to the above table. If the market price for the firm's product is $80, the firm will...
Produce 4 units
In which market model are the conditions of entry into the market easiest?
Pure competition
Which of the following is NOT characteristic of the demand for a commodity that is elastic?
The elasticity coefficient is less than one
The term "quantity demanded" means...
The same thing as demand
The real rate of interest is the interest rate..
after adjustment has been made for inflation
In the long run...
all costs are variable costs
For all practical purposes, the supply of land is...
almost perfectly inelastic
Marginal revenue product measures the...
amount by which the extra production of one more worker increases a firm's total revenue
The main determinant of elasticity of supply is the...
amount of time the producer has to adjust inputs in response to a price change
A market is...
an institution that brings together buyers and sellers
Economic immigrants...
are defined as international migrants motivated by economic gain
Given the availability of the medicaid program, why are so many poor people uninsured?
because many poor people earn enough that they do not qualify for medicaid
The law of diminishing marginal utility states that...
beyond some point, additional units of a product will yield less and less extra satisfaction to a consumer
The price elasticity of demand measures...
buyer responsiveness to price changes
Social security is financed...
by payroll taxes on employees and employers
A perfectly inelastic demand schedule...
can be represented by a line parallel to the vertical axis
Marginal cost is the...
change in total cost that results from producing one more unit of output
Marginal revenue is the...
change in total revenue associated with the sale of one more unit of output
Marginal utility is the...
change in total utility obtained by consuming one more unit of a good
the demand for a product is inelastic with respect to price if...
consumers are largely unresponsive to a per unit price change
Other things equal, an increase in the equilibrium interest rate will...
decrease purchases of capital goods and reduces R&D spending
In the health care market...
demand increased relative to supply
most remittances flow toward...
developing nations
Noncompeting groups of workers are the result of...
differences in the innate and acquired abilities of workers
Each of the following has contributed to growing income inequality in the United States since 1975 except...
government transfers
Other things equal, the optimal quantity of immigrants will be greater, the...
greater the degree of complementarity between immigrant and domestic born workers.
The long-run trend of real wages...
has been upward
Remittances occur when...
immigrants send financial payments back to family in their country of origin
Employer provided private health insurance in the US has resulted in...
incentives that encourage the overuse of health care
The movement of individuals and households from one income quintile to another over time is called...
income mobility
Effectively removing all illegal immigrants from US labor markets would...
increase employment of domestic born workers, buy by a lesser amount than the number of jobs lost by illegal workers
If the demand for bacon is relatively elastic, a 10 percent decline in the price of bacon will...
increase the amount demanded by more than 10 percent
An increase in the price of product A will...
increase the demand for substitute product B
The utility of a good or service...
is the satisfaction or pleasure one gets from consuming
Employer provided private health insurance...
is unique to the US and not typically found in other countries
Other things equal, interest rates are...
lower on less risky loans than on riskier loans
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...
marginal revenue product equals marginal resource (labor) cost
In a monopsonistic labor market, the employer will maximize profits by employing workers up to that point at which...
marginal revenue product equals marginal resource (labor) cost
In which two market models would advertising be used most often?
monopolistic competition and oligopoly
The unemployed are disproportionately represented among the uninsured because...
most workers obtain health insurance through their employers
A unique feature of an oligopolistic industry is...
mutual interdependence
Pure monopolists may obtain economic profits in the long run because...
of barriers to entry
About _______ of recent annual labor force growth in the United States is the result of immigration.
one half
Under pure monopoly, a profit-maximizing firm will produce...
only where marginal revenue is increasing
In pure competition, if the market price of the product is initially higher than the minimum average cost of the firms, then...
other firms will enter the industry and the industry supply will increase
Some economists have criticized standard government figures on income inequality arguing that these data...
overstate the degree of income inequality by failing to include non cash transfers as income
One major barrier to entry under pure monopoly arises from...
ownership of essential resources
The largest category of federal spending is for...
pensions and income security
The basic formula for the price elasticity of demand coefficient is...
percentage change in quantity demanded/percentage change in price
The largest source of tax revenue for the U.S. federal government is...
personal income taxes
Defensive medicine refers to the idea that...
physicians may require unnecessary testing as a means of protecting themselves against malpractice suits
The Lorenz curve...
plots graphically the distribution of income
Marginal utility can be...
positive, negative, or zero
The demand curve shows the relationship between...
price and the quantity demanded
Interest is the...
price paid for the use of money
In which of the following instances will total revenue decline?
price rises and demand is elastic
Illegal immigration positively contributes to the US standard of living by reducing...
prices of goods and services produced with illegal immigrant labor
The major purpose of Medicare is to...
provide health care services to people on social security
The major objective of Medicaid is to...
provide health care services to those receiving public assistance
An industry comprised of a very large number of sellers producing a standardized product is known as...
pure competition
the twin problems of the US health care industry are...
rapidly rising costs and unequal access to health care
Refer to the data. Marginal product becomes negative with the hiring of the ________ unit of labor.
seventh
An improvement in production technology will...
shift the supply curve to the right
Federal tax policy...
subsidizes health insurance and thereby increases the demand for health care
If price is above the equilibrium level, competition among sellers to reduce the resulting...
surplus will increase quantity demanded and decrease quantity supplied
A progressive tax is such that...
tax rates are higher the greater one's income
A competitive employer should hire additional labor as long as...
the MRP exceeds the wage rate
Human Capital refers to...
the accumulated knowledge and skills that allow a person to be productive
Marginal product is...
the amount an additional worker adds to the firm's total output