Econ final

A firms demand curve for labor will shift because of

A change in the demand for a firms product

An externality is NOT:

A price change

Ever since giselles company developed its new product ten years ago, Giselle has managed its production with little turnover in workers. During that time, the company's average cost has fallen by 30%, due to the refinement of its production methods, thereby achieving great efficiency. Other rival companies have not achieved such lost costs. The advantage that Giselle's company now has over rivals stems from _____ achieved through _____

A unique cost advantage, learning by doing

You decide to star a house-painting business next summer. When you hire employees, you are involved in a _____ market, and when your employees paint the houses, you are involved in a _____ market

Factor; output

When wages _____ if the substitution effect dominates, the quantity of labor supplied will ____

Increase; increase

Apple produces accessories such as chargers, cases, and ear plugs that are specific to apples iPhone and that are incompatible with phones of other companies. What strategy is Apple using to create a barrier to entry

Increasing switching costs to ensure demand for its product

The less work people do, all other things equal, the

More leisure they have

Nonrival in consumption and non excludable

Public good

Wikipedia is a widely used, free online encloses, funded entirely by donations, rather than by selling advertising or user data. Wikipedia is a good:

Public good

If African airlines purchased all of its competitors to become a monopoly, all else equal, price will _____, and output will _____

Rise; fall

The _____ measures how people respond to a change in relative prices when the wage rises

Substitution effect

The Marginal revenue product is calculated as:

Thomas works 55 hours as a legal aid lawyer for the city of Chicago, and his wage is $35 per hour. If his wage increases to $70 per hour:

Suppose that the government decresss income tax rates, which had the effect of increasing wages. How will the decision affect the amount of labor supplied by parents, assuming that leisure is a normal good?

We don't know what will happen to die quantify of labor supplied, since we don't know whether the income effect of substitution effect will dominate

You apply for a job, using a 3-D printer to make coffee mugs, that pays $15 an hour. The mugs sell for $4 each. Part of the hiring process is to demonstrate how good you are at making the mugs. You make an average of five acceptable mugs per hour. Will you get the job?

Yes since your marginal revenue product is at least as large as your marginal cost

You own an orange juice stand in a competitive market, and so you are a price-taking firm. Which event would MOST likely increase your market power?

You acquire exclusive rights to harvest oranges from all domestic citrus orchards

Which statement BEST describes a negative externality?

Your neighbor has an ornamental pond that breeds mosquitoes.

In the long run each firm in an industry will

earn only enough to cover the opportunity costs of all resources used in production

The socially optimal outcome occurs where the _____ benefit equals the _____ cost.

marginal social; marginal social

Average cost is

total cost divided by quantity

The demand curve for a monopoly is

Above the marginal revenue curve

The demand curve for a monopoly is

The market demand curve

Being open to international trade helps a country foster competition for all the following reasons except that there will be

More bias toward domestic production

Mr Parker sells 10 bottles of wine per week at $50 per bottle. He can sell 11 bottles per week if he lowers the price to $45 per bottle. The output effect of the sale of an additional bottle would be _____. Where's the discount effect of the sale of an additional bottle would be _____.

$45: -$50

David's financial planner tells him that he made a profit of $31,300 running a ballroom dance studio in Sacramento. David's wife, an actuary, claims David lost $31,300 running his ballroom dance studio. This means his wife is claiming that he incurred _____ in _____ costs.

$62,600; implicit opportunity

Diminishing returns to an input occur when

At least one input is fixed

Which market type has the largest number of firms

Perfect competition

Georgia Pacific, one of the largest manufacturers and distributors of paper products, operates multiple papermills throughout the United States. The process of converting wood pulp into paper releases, air pollutants however, if new technology enabled, zero emission, paper production, the marginal:

Private cost would equal the marginal social cost

In contrast to perfect competition, a monopoly

Produces less at a higher price

Liana gives up a salary $80,000 per year at the Kellogg food manufacturing company to start her health food manufacturing company. She invests $50000 of her saving in her company, savings that had been earning her $4000 per year in interest. During Liana's first year in the health food business, total revenue is $300000, and her explicit financial cost are $225000. What is lianas accounting profit from her first year in business

$75000

Suppose a local Home Depot has explicit financial costs of $2 million per year and implicit opportunity costs of $44,000 per year. If the store earned an economic profit of $50,000 last year, its accounting profit was:

$94,000

A firm in an oligopoly knows that it's ____ affect its _____ and that the reactions of its rivals will affect it

Actions; rivals

In the labor market for computer programmers, the labor demand curve represents:

Employers looking to hire programmers

Economic profits encourage firms to ____ the industry, and losses encourage firms to _____ the industry

Enter; exit

The output in a market with market power is

Inefficient, since the marginal benefit to society of extra output exceeds the marginal cost

The market for orthodontic services in most communities is _____ because if offers a large number of similar but not identical options

Monopolistically competitive

If a monopolist produces a quantity that generates MC < MR then profit

Can be increased by increasing output

Which is not an example of a rule enacted to prevent negative externalities

County governments fund public elementary schools through tax revenue

External benefits are generated by garden supplies that are used to beautify gardens and yards in neighborhoods. In the equilibrium, the market will:

Pride garden supplies at less than the marginal social benefit

Which is not a government action that results in a barrier to entry in a product market

Prohibiting advertisers from making false claims

On hot summer days, parking lots at Disneyland are usually full by early morning, even though one must pay to park there. Parking at such lots is _____ in consumption and ______

Rival; excludable

A familiar example of a negative externality is loud music in a busy park on a weekend. In principle, it should be possible to solve this externality by permitting park visitors to negotiate rights to play music in particular locations or at specific times. The most likely reason these negotiations do not occur is that

The bargaining cost of identifying a and establishing communication between all affected parties would be high

Both omissions, taxes and tradable emissions permits

Are efficient methods of pollution reduction

As a rule, a profit maximizing dance studio owner employs labor up to the point at which the marginal revenue product of the ____ unit of labor is ____ the factors price wage

Last; equal to

How does output for a seller who has market power compare to output for a seller who does not have market power, assuming both follow the rational rule for sellers

Output is higher for the seller without market power than the one with market power

Which scenarios best illustrates an oligopolistic industry

The Coca Cola company and Pepsi sell most of the soft drinks consumed around the world

Which statement illustrates and environmental policy that uses cap and trade

Allowing drivers to buy and sell rights to emit specified levels of vehicle emissions

Sellers in a market will become less profitable when

New sellers enter the market

Minglewood Hall, a music venue in Memphis, Tennessee, often holds concerts that play late into the night. Minglewood provides an annual allotment of free concert tickets to residents who live in the houses directly behind the venue. Which solution to the externality problem does Minglewood have?

Side Payment

The mile end deli serves traditional delicatessen food in Brooklyn, New York. Which cost is most likely fixed at the deli?

The chairs customers sit on

After a year delivering pizzas, you get a raise, and you cut back on your hours. For you

The income effect is stronger than the substitution effect

The marginal social cost of a unit of pollution is:

The marginal private cost plus marginal external cost from one extra unit of polution

Kendrick, a recent high school graduate, is trying to decide between going to college or running his family's food catering business. Which would be an implicit opportunity cost of going to college

The profit he would earn running the catering business

Thomas works 55 hours as a legal aid lawyer, and his wage is $35 per hour. If his wage increases to $70 per hour

The substitution effect implies that he will work more

Alena manages a small theme park. She hired one more custodian at $450 per week, making her park cleaner and more attractive. As a result of this improvement, ticket sales rose by 40 tickets per week. Tickets sell for $12. Use the rational rule for employers to determine if hiring the extra custodian was a good move

Yes, it was a good move because it added more to revenue than to cost

During the summer, you work with a service that stocks vacation homes on a lake to save the owners time. After your boss cuts your hourly wage by 10%, you service more homes, working more hours. This means that:

You are on the downward sloping portion of your individual labor supply curve

Saudi Arabia has the second largest oil reserves and the lowest marginal cost of producing oil in the world. The saudis have started several oil processing wars to achieve various objectives, for example, in 2014/2015, when it sought to undermine the growing. US shake based oil industry. They did so again in 2020, when it was unhappy with Russia's continued supply of oil as global demand plummeted during the COVID-19 pandemic. By repeatedly starting price wars, Saudi Arabia is

Using its cost advantages to deter competitions from bringing oil to market

Which of these will not happen when the wages of pharmacists fall

The supply curve for pharmacist will shift to the left

Candice's stand up paddle board company will earn profits producing and selling at any output level where the company's

Demand curve is about its average cost curve

The Tennessee valley authority is the sixth largest power supplier in the United States, supplying hydroelectric energy to power companies in several southeastern states. In many rural towns, the TVA provides the only source of electricity. The market structure for electricity in these towns is

Monopoly

In the United States, the top brands of kitchen appliances include Samsung and LG, which are South Korean companies, and General Electric and whirlpool, which are American companies l. Without international trade, General Electric and whirlpool would have _____ market power, and American consumers would face _____ prices

More; higher

Since the advent of the digital age, the demand for in person telephone operators has fallen dramatically. Which factor would account for this development

An increase in the number of automated answering services

Marginal revenue is the output effect minus the _____ effect for a given quantity

Discount