Econ Exam

In a competitive market the price is 8$. A typical firm in the market has ATC=$6, AVC = $5 and MC = $8. How much economic profit is the firm earning in the short run

$1 per unit $2 per unit $3 per unut $0 per unit

In a competitive market the price is $8. A typical firm in the market has ATC = $6, AVC = $5 and MC = $8. How much economic profit is the firm earning in the short run

a. $1 per unit b. $2 per unit c. $3 per unit d. $0 per unit

Ziva is an organic lettuce farmer, but she also spends part of her day as a professional organization consultant. As a consultant, Ziva helps people organize their houses. Due to the popularity of her home organization services, farmer siva has more clients requesting her services than she has time to help if she maintains her farming business. Farmer siva charges $25 an hour for her home organization services. One spring day siva spends 10 hours in her fields planting $130 worth of seeds on her farm. She expects that the seeds she planted will yield $300 worth of lettuce. Refer to scenario. What is the total opportunity cost of the day that farmer siva spent in the field planting lettuce?

a. $300 b. $250 c. $380 d. $130

Brady industries has average variable cost of $1 and average cost of $3 when it produces 500 units of output. The firms total fixed cost has equal

a. $4 b. $1,000 c. $2,000 d. $2

allen tutors in his spare time for extra income. buyers of his service are willing to pay $40 per hour for as many hours Allen is willing to tutor. One a particular day, he is willing to tutor for the first hour for $10 the second hour for $18 the third hour for $28 and the fourth hour for $40. Assume Allen is rational in deciding how many hours to tutor. His producer surplus is

a. $40 b. $56 c. $65 d. $12

Let L represent the number of workers hired by a firm, and Q represent the firm's quantity of output. Assume two points on the firms production function are (L = 12 Q= 112) and (L = 13 and Q= 130). Then marginal product of the 13th worker is

a. 122 units of output b. 132 units of output c. 8 units of output d. 10 units of output

Dallas buys strawberries, and he would be willing to pay more than he now pays. Suppose that Dallas has a change in his taste such that he values strawberries more than before. If the market price is the same as before, then

a. Dallas would be wise to buy fewer strawberries b. dallas consumer surplus would decrease c. Dallas's consumer surplus would increase d. Dallas' consumer surplus would be unaffected

Suppose Jim and Tom can both produce two goods: baseball and hockey sticks. Which of the following is not possible?

a. Jim has an absolute advantage in the production of hockey sticks and a comparative advantage in the production of baseball bats. b. Jim has an absolute advantage in the production of baseball bats and in the production of hockey sticks. c. Jim has a comparative advantage in the production of baseball bats and in the production of hockey sticks. d. Jim has an absolute advantage in the production of baseball bats and a comparative advantage in the production of hockey sticks.

which of the following as a disadvantage of government production of a public good?

a. The government does not provide enough of any public good b. the private sector can provide all public goods at a lower cost c. there are no disadvantages of government provision of a public good d. the government lacks information about the value people place on the good

which of the following would not be considered a private good

a. an SUV b. a pair of shoes c. a pair of scissors d. cable tv service

If a tax is levied on the sellers of flour, then

a. buyers will bear the entire burden of the tax b. buyers and sellers will share the burden of tax c. the government will bear the entire burden of the tax d. sellers will bear the entire burden of the tax

what causes the tragedy of the commons

a. common resources are not rival in consumption and are not excludable b. social and private incentives are the same c. social and private incentives differ, and common resources are not excludable but are rival in consumption d. social and private incentives differ, and common resources are not rival in consumption are not excludable

the goal of requiring licenses for hunting and fishing is to

a. ensure that the people hunting and fishing are qualified b. monitor the compliance with federal gun laws c. promote hunting anf fishing d. reduce the use of common resource

when a good is rival in consumption

a. everyone will be excluded from obtaining the good b. people can be prevented from using the good c. one persons use of the good diminishes another persons ability to use it d. an unlimited number of people can use the good at the same time

When small changes in price lead to infinite changes in quantity demanded, demand is perfectly

a. inelastic, and the demand curve will be horizontal b. elastic, and the demand curve will be verticle c. elastic, and the demand curve will be horizontal d. inelastic, and the demand curve will be vertical

The line that relates the price of a good and the quantity demanded of that good is called the demand

a. schedule, and it usually slopes upward b. curve, and it usually sloped downward c. curve, and it usually slopes upward d. schedule, and it usually slpps downward

The term tax incidence refers to

a. the distribution of the tac burden between buyers and sellers b. widespread view that taxes (and death) are the only certainties in life c. whether the demand curve of the supply curve shifts when the tax is imposed d. whether buyers or sellers of a god are required to send tax payment to the government

you are in charge of the local city owned aquatic center. you need to increase the revenue generated by the aquatic center to meet expenses. the mayor advises you to increase the price of a day pass. the city manager recommends the reducing price of a day pass. you realize that...

a. the mayor thinks demand in inelastic and the city manager thinks demand is elastic b. both the mayor and the city manager think that demand is inelastic c. both the mayor and the city manager think that demand is elastic d. the mayor thinks demand is elastic and the city manager thinks that the demand is inelastic.

which of the following is not an advantage of corrective taxes

a. they enhance economic efficiency b. they subsidize the production of goods with positive externalities c. they move the allocation of resources closer to the social optimum d. they raise revenues for the government

suppose that the equilibrium price in the market for widgets is $5. If a law increased the minimum legal price for widgets to $6, producer surplus

a. would be unaffected b. might increase decrease c. would necessarily increase even if the higher price resulted in a surplus of widgets d. would necessarily decrease because the higher price would create a surplus of widgets