Econ Final
Generally, the amount of public goods available in a society is _____ what is actually desired. a) greater than b) less than c) exactly d) either exactly or greater than
B
Suppose the marginal cost of hiring an additional unit of labor is $10 and the value of the marginal product from hiring this additional unit of labor is $12. To maximize profit, this firm should hire: a) more labor. b) less labor.
A
Using the table, what is the equilibrium level of employment for the firm if the wage rate falls to $80? a) 4 workers b) 3 workers c) 5 workers d) 6 workers
A
When an individual's labor supply curve is backward- bending (that is, downward-sloping), this implies that the individual's income effect is: a) stronger than the individual's substitution effect. b) weaker than the individual's substitution effect.
A
An increase in the price of good X while holding income and the price of good Y constant will: a) have a positive substitution effect, leading the consumer to increase consumption of good X because of the increase in the marginal utility per dollar spent on good X. b) have a negative substitution effect, leading the consumer to decrease consumption of good X because of the decrease in the marginal utility per dollar spent on good X. c) cause the consumer to substitute away from good Y toward good X. d) cause the consumer to purchase more units of good X because of the income effect.
B
Because Dennis always eats cereal while he drives, he is generating a _____ to others, resulting in a shift of the supply curve to the _____. a) external cost; right b) external cost; left c) external benefit; right d) external benefit; left
B
The marginal productivity theory of income distribution provides a moral justification for the prevailing income distribution. a) true b) false
B
Using the table, what is the equilibrium level of employment for the firm if the wage = $100? a) either 2 or 4 workers b) 3 workers c) 4 workers d) 6 workers
B
When Lin receives a flu vaccination, it reduces the chance of him receiving the flu as well as the chance that his sister will get sick. His flu vaccination creates a(n): a) external cost b) external benefit c) marginal social cost d) deadweight loss
B
Which of the following best represents a tragedy of the commons? a) A shopping mall with virtually no shoppers inside. b) A severe traffic jam on the freeway. c) A fire that burns an entire apartment complex. d) A ski resort closing due to lack of snow.
B
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B
An increase in the price of good X while holding income and the price of good Y constant will: a) increase the marginal utility provided by good X. b) increase the marginal utility per dollar spent on good Y. c) decrease the marginal utility per dollar spent on good X. d) reduce the individual's preference for good X.
C
Assume that the marginal utilities for the first three units of a good consumed are 200, 150, and 125, respectively. The total utility when two units are consumed is: a) 150. b) 200. c) 350. d) 475.
C
Suppose the production of widgets generates an unpleasant smell to households that are located nearby, but when the widgets are consumed people nearby the consumer also benefit. Is the total surplus generated by the free market outcome smaller than the socially optimal outcome? a) Yes b) No c) Not enough information
C
The equilibrium wage rate is $18. A perfectly competitive firm sells widgets for $8. Suppose the marginal product of the sixth unit of labor is three widgets and the marginal product of the ninth unit of labor is two widgets. This firm should hire: a) fewer than six units of labor. b) more than nine units of labor. c) more than six but fewer than nine units of labor. d) six units of labor. e) nine units of labor.
C
The private consumption of services that generate positive externalities, such as getting a college education, is usually _____ the socially optimal level of consumption. a) greater than b) equal to c) less than d) unrelated to
C
Which of the following is an example of a positive externality? a) buying a gift for your sister b) getting a deal at the local store c) making improvements to your house d) None of these choices are examples of a positive externality
C
Which of the following is not a common method by which government controls pollution? a) Issuing tradable permits to pollute. b) Implementing a tax on pollution emitted. c) Advertising the harmful effects of pollution to encourage firms to pollute less. d) Setting a strict limit on the amount of pollution each firm can generate.
C
Which of the following is the best example of a public good with exclusion? a) A fireworks display that can be seen miles away b) Fire protection services offered by the city c) Satellite radio service d) A public lake
C
Which of the following would be the best example of a free-rider? a) A roommate asking you for a ride to school but won't help out with gas. b) A panhandler who sneaks onto the subway without paying. c) A person without health insurance visiting an emergency room because they can't be turned away. d) A neighbor who plants vegetables in her garden and allows others to help themselves to the harvest.
C
Which of the following would be the best example of a public good? a) clean water at the public lake b) a community park c) snowplowing the streets d) public school
C
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C