micro practice final exam 1

using the same graph above, assuming country X is producing efficiently, calculate their opportunity cost to increase production of consumer goods from 20 unit to 30 units

30 capital goods

the graph above illustrates the production possibilities for country X. assume country X is currently producing 30 capital goods and 40 consumer goods. which of the following combinations could country X produce that would most likely accelerate economic growth?

90 capital goods, 20 consumer goods

which of the following would make it possible for a country to consume beyond its individual production possibilities curve?

importing products from other countries that have a relatively low opportunity cost

in a perfectly competitive labor market, imposing a binding minimum wage will bring about what changes on the demand and supply graph

increase in wage, decrease in quantity of workers hired

if consuming one unit of a good yields 50 utils and consuming two units of the good yields 70 utils, which of the following must be true?

the marginal utility of the second unit is 20

when consumption of a good generates a positive externality and gov. take action to fix the problem created by this externality, what problem is the gov. most likely attempting to fix?

the product is under-produced, given the social costs and benefits

Which of the following is the best example of a pure public good?

A fire station that provides protection to the surrounding community

Using the graph above, if this perfectly competitive firm maintains marginal revenue of $50 per unit, which of the following accurately describes the firm's profit/loss and output in the short run?

Loss; output of less than 550

assume the government establishes a new binding minimum wage. for a typical firm, which of the following will happen the marginal revenue resource cost (MRC) and the marginal revenue product (MRP) of the last worker hired

MRC MRP increase increase

The graph above illustrates the costs and revenues for an unregulated monopoly producing in the short run. What price and quantity combination will this firm choose to profit maximize or loss minimize?

P = 60; Q = 40

according to the graph above, what price will this perfectly competitive firm charge in the long run?

P2 ATC = MC

Which of the following is a fundamental aspect of the free market economics system?

The protection of private property rights.

in the competitive market for jelly beans (a normal good), all of the following are true EXCEPT

a decrease in the price of jelly beans would shift demand right correct: A decrease in consumer income would shift demand level an increase in variable costs of producing jelly beans would shift supply left a decrease in the price of a substitute would shift demand right an increase in population would shift demand right

a firm experiencing dis economies of scale will have

a long run average total cost that increases as output increases

which of the following best describes a perfectly competitive market

a market structure where individual firms have no control over the price `

which of the following best describes the marginal revenue curve as a single-price monopolist increases its output n the short run?

decreasing and below the monopolists demand curve

assume that pizza and stromboli are substitues. which of the following best describes the effect on the pizza market if the price of stromboli decreases?

demand for pizza will shift level

a perfectly competitive firm hires three workers in a perfectly competitive labor market. the daily marginal products of the three workers are listed below # of workers marginal product 1 200 2 150 3 50 which of the following is most likely true?

each worker will receive the same wage, equal to the marginal revenue product of the last worker

economic profit can be calculated as accounting profit plus

implicit costs

Johnny is currently spending his entire weekly snack budget on 5 bags of candy and 4 juice boxes. at his current level of consumption, Johnnys marginal utility for candy is 5 utils and his marginal utility for juice boxes is 10 utils. in order to maximize his total utility, johnny should

maintain his current level of consumption if the price of candy is $1 and the price of juice box is $2

a firm hires two inputs, labor and capital, in a perfectly competitive resource market. the firm sells its product in a perfectly competitive market for $10 per unit. the marginal cost to hire each unit of capital is $150 per day, and the marginal product of labor is 10. assuming the firm hires the least-cost combination of labor and capital, the firms marginal product of capital and the daily wage per worker must be equal to which of the following?

marginal product of capital must be 15 and the daily wage for labor must be $100

in the short run, diminishing marginal returns begin when

marginal product of labor begins to fall

Governments often allow some natural monopolies to exist without competition becaue

natural monopolies experience economies of scale at the allocatively efficient output

on a downward sloping straight line demand curve, which of the following is always true?

price elasticity decreases as quantity increases

which of the following is not true of a monopolistically competitve firm in long run equilibium

price equals average total cost and marginal cost

if a perfectly competitive firm produces an output level where price is greater than both marginal cost and average variable cost, in order to maximize profit in the short run, the firm should

produce more

monopolistic-ally competitive firms are usually less efficient than perfectly competitive firms because monopolist-ally competitive firms

produce where price is greater than marginal cost

the difference between the price at which a producer would be willing to sell a candy bar and the actual market price that she receives from the sale is best known as

producer surplus

the quantity of acrylic paint supplied decreased from 500 tons per week to 400 tons per week when the price of acrylic paint decreased from $20 per ton to $10 per ton. the price elasticity of supply for acrylic paint over this price is

relatively elastic

an effective price ceiling in the market for tea will most likely result in a/an

shortage of tea

which of the following factors of production would best be described as human capital

skills and training that help workers to complete their role in producing a finished product