Econ Final

Total surplus in a market is equal to a. amount received by sellers - costs of sellers. b. consumer surplus + producer surplus. c. value to buyers - amount paid by buyers. d. willingness to pay - price.

B

A decrease in the price of high-powered staple guns will a. increase the quantity of high-powered staple guns demanded. b. increase demand for high-powered staple guns. c. decrease the quantity of high-powered staple guns demanded. d. decrease demand for high-powered staple guns.

A

A good is excludable if a. people can be prevented from using it. b. people cannot be prevented from using it. c. one person's use of the good diminishes or eliminates another person's ability to use it. d. the government can regulate its availability.

A

Consider the market for umbrellas. Which of the following will occur if the price of umbrellas rises? a. Consumer surplus in the market will decreases. b. Producer surplus in the market will decrease. c. Consumer surplus will be unchanged. d. Some new buyers will enter the market.

A

I can receive all of the benefits of a public good even if I do not pay for it. This is an example of a. The free rider problem b. Adverse selection c. The tragedy of the commons d. The drop in the bucket problem

A

In the long run, when increasing output increases a firm's average total costs, the firm faces a. diseconomies of scale. b. constant returns to scale. c. economies of scale.

A

With a negative externality, a. the total cost to society (or social cost) is greater than the private cost. b. the private benefit is greater than the total benefit to society (or social benefit). c. the total benefit to society (or social benefit) is greater than the private benefit. d. the private cost is greater than the total cost to society (or social cost).

A

In the circular-flow diagram

A firms buy the factors of production from household

A monopolist produces a. less than the socially efficient quantity of output and at a lower price than in a competitive market. b. less than the socially efficient quantity of output and at a higher price than in a competitive market. c. the socially efficient quantity of output and at a higher price than in a competitive market. d. more than the socially efficient quantity of output and at a higher price than in a competitive market.

B

Public goods are _____ and common resources are _______. a. Excludable and nonrival in consumption; not excludable and nonrival in consumption b. Not excludable and nonrival in consumption; not excludable and rival in consumption c. Not excludable and rival in consumption; excludable and nonrival in consumption d. Not excludable and rival in consumption; not excludable and nonrival in consumption

B

When a positive externality is internalized, what will happen to the market price and quantity? a. The equilibrium price will decrease and the equilibrium quantity will increase. b. The equilibrium price will increase and the equilibrium quantity will increase. c. The equilibrium price will decrease and the equilibrium quantity will decrease. d. The equilibrium price will increase and the equilibrium quantity will decrease.

B

Which of the following is an example of a market-based policy? a. Setting a maximum mercury emission limit for each electric utility. b. Levying a tax on sulfur dioxide emissions. c. Requiring all cars to have catalytic converters. d. Establishing a minimum drinking age of 21.

B

Which of the following is an example of a normative, as opposed to postive, statement? a. College graduates, on average, make $2,000 more per year than individuals without a college degree. b. More money should be spent on primary education in North Carolina. c. It is currently raining outside. d. Improving air quality reduces days missed from school due to asthma.

B

Consider the market for Ramen noodles, which are an inferior good. A general decrease in incomes will a. decrease demand for Ramen noodles. b. increase the quantity of Ramen noodles demanded c. increase demand for Ramen noodles. d. decrease the quantity of Ramen noodles demanded.

C

For which of the following goods is the income elasticity of demand likely negative? a. sapphire pendant necklaces b. water c. Ramen noodles d. fresh fruit

C

If the price elasticity of supply is 0.25, what price increase would lead to a 10% increase in quantity supplied? a. 20% price increase. b. 2.5% price increase. c. 40% price increase. d. 0.25%% price increase.

C

Suppose that demand for cars is elastic at the current price. If a car company decides to lower it's price, a. this would decrease total revenue for the car company. b. this would not change total revenue at all for the car company. c. this would increase total revenue for the car company.

C

The Tragedy of the Commons for sheep grazing on common land can be eliminated by the government doing each of the following except a. taxing sheep flocks. b. assigning land property rights. c. subsidizing sheep flocks. d. auctioning off sheep-grazing permits.

C

As the demand curve gets steeper (more vertical), a. demand becomes more price elastic and the price elasticity of demand approaches negative infinity. b. demand becomes more price elastic and the price elasticity of demand approaches zero. c. demand becomes more price inelastic and the price elasticity of demand approaches negative infinity. d. demand becomes more price inelastic and the price elasticity of demand approaches zero.

D

Consider a production possibilities frontier (PPF) where the two goods are swords and ankle bracelets. The PPF is bowed outward when a. the more resources the economy uses to produce swords, the fewer resources it has available to produce ankle bracelets. b. the opportunity cost of increasing the production of swords is constant. c. an economy is self-sufficient does not trade with other economies. d. the opportunity cost of increasing the production of swords changes based on how many swords are being produced.

D

Which of the following is not a characteristic of a perfectly competitive market? a. There are many sellers in the market. b. All sellers produce identical goods. c. Firms have free entry and exit in the market in the long run. d. Firms have market power

D

What does it mean to say an allocation of resources is Pareto Efficient?

It must be impossible to make at least one person better off by reallocating resources without making someone else worse off.