Microeconomics Final

A monopolist can sell 200 units of output for $36 per unit. Alternatively, it can sell 201 units of output for $35.80 per unit. The marginal revenue of the 201st unit of output is

$-4.20

When an industry is a natural monopoly

a larger number of firms will lead to a higher average cost

There is general disagreement among economists about the role of advertising but there is widespread agreement about the role of brand names on market efficiency

False

Evaluating normative statements involves values as well as facts

True

If the income elasticity of demand for a good is negative, then the good must be an inferior good

True

Private goods and club goods have in common that they are excludable, but are different in that private goods are rival while club goods are not rival in consumption

True

Suppose a certain good provides and external benefit. IF the private cost of the last unit of the good that was produced is equal to the social value of that unit, then the sum of producer and consumer surplus is maximized

True

When economists are trying to explain the world, they are scientists, and when they are trying to help improve the world, they are policy advisers

True

Two types of private solutions to the problem of externalities are

charities and the Golden Rule

If the price of apples increases, the

demand for apple pickers will shift to the right

In a duopoly situation, the logic of self-interest results in a total output level that

exceeds the monopoly level of output, but falls short of the competitive level of output

Discrimination is an emotionally charged issue that is impossible to study objectively

false

Economists believe that the optimal level of pollution is zero

false

If the marginal productivity of the sixth worker hired is less than the marginal productivity of the fifth worker hired, then the addition of the sixth worker causes total total output to decline

false

Trade can make everyone better off except in the case where one person is better at doing everything

false

Whether an oligopoly consists of 3 firms or 10 firms, the level of output likely will be the same

false

Incomes of U.S. households in the 1970s and 1980s

grew slowly, due to slow growth of the output of goods and services per hour of U.S. workers' time during those decades

The quantity sold in a market will decrease if the government

increases a tax on the good sold in that market

two goods are complements when a decrease in the price of one good

increases the demand for the other good

Which of the following is an example of labor-market discrimination? You may assume that worker A and worker B have identical characteristics except the ones listed. A firm offers a higher salary to worker A than worker B because worker A

is a young blonde woman, whereas worker B is an older, gray-haired man

When a market is monopolistically competitive, they typical firm in the market can ear

losses in the short run and zero profit in the long run

the commercial jetliner industry consisting of Boeing and Airbus would best be described as a

oligopoly

A firm produces the welfare-maximizing level of output

only when the market is perfectly competitive

Value of the marginal product is defined as the additional

revenue earned from hiring one more factor of production

For a horizontal demand curve,

slope and price elasticity of demand are both equal to 0

As a result of a successful attempt by government to cut the economic pic into more equal slices

the pie gets smaller, and there will be less pie overall

Suppose there is currently a tax of $50 per ticket on airline tickets. Sellers of airline tickets are required to pay the tax to the government. If the tax is reduced from $50 per ticker to $30 per ticket, then

the supply curve will shift downward by $20, and the effective price received by sellers will increase by less than $20

In a long-run equilibrium, both perfectly competitive markets and monopolistically competitive markets have price equal to average total cost

true

in a competitive market for labor, the equilibrium wage always equals the value of the marginal product

true