Micro Econ 131

For the Colorado beef industry to be classified as perfectly competitive, ranchers in Colorado must have ________ on prices and beef must be a _________ product.

No noticeable effect; standardized

Suppose a taxpayer has an income of a $70,000 any taxable income of $60,000 and pays $9000 in taxes. If the taxpayers says she is taxed at a 15% tax rate, she is referring to the

Nominal tax rate

If the demand for personal computers (PC) shift to the right as consumers incomes rise, PCs are

Normal goods

Suppose Cesar I locate his entire budget to the purchase of soft drinks and chips. The marginal utility Of the last bottle of soft drinks Bridges is 12 utils, and each bottle cause $1.50. The marginal utility of the last bag of chips purchase is eight utils , and each bag cost one dollar. In order to maximize his utility, Caesar should:

Not change anything because he has made the choice that gives him the most total utility

Which of the following is most likely a fixed cost?

Property taxes

The entry of firms into a market, ceteris pariibus,

Reduces the economic profit of each firm already in the market.

If the equilibrium price in a perfectly competitive market for milk is $4.99 per gallon, then an individual firm in this market can

Sell an additional gallon of milk at $4.99

Shift first & direction: The government reduces environment restrictions on offshore oil drilling along the Pacific coast.

Shift Supply; right

Shift first & direction: Evidence shows full face snorkel mask have an increased incidence of accidental drowning.

Shift demand; left

Shift first & direction: People become more healthwise and prefer a power bars over donuts

Shift demand; left

Shift first & direction: A hurricane destroyed several hotels in the major resort destination

Shift supply; left

Shift first & direction: Much of Florida citrus crop is destroyed by a hurricane

Shift supply; left

And example of a social insurance program is

Social Security payments for the disabled

The result of a Gov. intervention in the market, in the case of market failure, is that:

Society may be worse off.

When the price of FedEx shipping increases, the demand for UPS shipping service increases, Ceteris paribus. FedEx and UPS are therefore:

Substitutes

Retain earnings are

The amount of corporate profit not paid out in dividends

Dividends are

The amount of corporate profits paid out for each share of stocks

Which of the following statements exemplifies the law of diminishing marginal utility?

The more I go to school, the more I want to do something else.

When firms are independent,

The profit of one firm depends on how its rival respond to its strategic decisions.

If an oligopolist is going to change its price or output, it's initial concern is

The response of its competitors

Price discrimination is best defined as

The selling of an identical good at different prices to different consumers by a single seller.

If the percentage of income paid in taxes increases as incomes rises, then the tax system is

progressive

The concentration ratio measures the

proportion of total output produced by the four largest producers in a specific market

A monopoly can be temporary because of:

technological change

The present discounted value of $2000 to be received one year from now, if the interest rate is 2.5 percent, is closet to:

$1951

Lashandra is the owner/operator of an interior design firm. Last year she earned $400,000 in total revenue. Her explicit costs were $200,000 (assume that this amount represents the total opportunity cost of these resources). During the year she received offers to work for other design firms. One offer would have paid her $120,000 per year and the other would have paid her $130,000 per year. Lashondra's economic profit is equal to

$70,000

Which of the following is not a determinant of market power?

Age of the industry

Capital gains are

An Increased in the market value of an asset

If income rises by 10% and the quantity sold by a particular vehicle falls by 12%, then the particular type of vehicle is

An inferior good

In a market economy, the people who receive the goods and services produced in those who:

Are willing and able to pay the market price

An example of monopolistic competition is the ____________ market.

Automobile

Which of the following is an example of a financial intermediary

Banks

The percentage of the US population living in poverty in 2014 was

Between 12 and 16%

When a corporation issues a bond, it is

Borrowing funds from the initial buyer of the bond

If the price of Coke rises by 5% and the sale of Pepsi go up by 10%, we can conclude that

Both goods are substitute goods because the cross price elasticity is +2

Which of the following describes how resources are typically allocated in the US economy?

By markets

Inequalities in income caused by market forces:

Can provide incentives and rewards for achievements

Sellers can game profits from price discrimination because

Charging different prices based on willingness to pay can increase revenues without increasing costs

A consequence of the economic problem of scarcity is that:

Choices have to be made about how resources are used

The price of a stock will decrease, ceteris paribus, for all of the following reasons except

Consumer confidence increases

Zoe's bakery that P<ATC and P> AVC. Zoe should:

Continue to operate even though she is taking an economic loss.

Toby operates a small deli downtown. The deli industry is monopolistically competitive. If some delis leave the industry, Toby's __________ curve will shift to the ____________.

Demand; right

For the monopolistically competitive wild-caught seafood market, the demand curve for any individual firm is __________, and there are ________ producers of seafood.

Downward sloping; many

Suppose Mary is willing to pay up to $1000 for a used stand up paddleboard, but she finds one she finds on Craigslist she really likes for $1200. her _______ is __________.

Economic surplus ; $0

Taxes paid divided by total income is the

Effective tax rate

Because tourist demand for airline flights is relatively __________, small ________ in ticket price will result in relatively ________ in additional tourist.

Elastic; reductions; large increases.

Sam's surf shop has total costs of $2000 when it's not producing and surfboards. This mean that

Fixed costs are $2000

Which of the following is a factor of production for the Little biscuit bread company?

Flour

According to the law of supply, a supply curve:

Has a positive slope

If they state legislature wishes to raise revenue by increasing certain sale taxes, it would increase sales taxes on goods that:

Have elastic demand

Destiny owns a small flower shop in the industry is perfectly competitive. She is considering whether or not to hire an additional worker. The wage rate for the worker is $400 per week; the marginal product the additional work it would be 40 units per week; and the price of the units produced is $12 per unit. What should destiny do?

Hired the additional worker

Monopolistically competitive industries are characterized by all of the following except

Homogeneous products

Food stamps, Medicaid, and housing subsidize are all examples of

In kind transfers

Kip will work fewer hours if his salary increases . For Kip, the________ effect must outweigh the _________ effect.

Income; substitution

Microeconomics focuses on the performance of:

Individual consumers, firms and markets

Bonds may be issued by all of the following except

Individuals

Marginal Cost

Is the change in total cost cost when hiring one more factor of production.

Profit

Is the difference between total revenue and total cost.

A monopolistic competitive industry is characterized by ___________ concentration ratios and _________ entry barriers.

Low; low

A leftward shift in a demand curve and a leftward shift in a supply curve both result in a:

Lower equilibrium

Sam owns a taco restaurant, and he conducted a customer survey that indicates that the price elasticity of demand for his restaurant is 4.2. You would advise Sam to:

Lower his price to increase revenue, "Taco Tuesday"

In which of the following types of markets does a single firm have the most market power?

Monopoly

The taxation principle that says people with higher incomes should pay more in taxes than those with lower incomes is called

Vertical equity

Which of the following industries is likely to have the highest concentration ratio?

Video game systems

In monopolistic competition:

firms advertise to increase demand for their product.

Because of monopoly, consumers experience ___________ than with perfect competition.

higher prices