MICRO EXAM 3
a firm buys another firm unrelated to the original firm's business.
A conglomerate merger takes place when
well below the poverty line.
A family of four with one wage earner who earns the minimum hourly wage would be
marginal physical product and marginal revenue product are positive.
A firm will hire a unit of input only if its
the MRPs of all resources equal the prices of the resources.
A firm will operate up to the point where
its MRP schedule.
A firm's demand for labor is
a monopolistic competitor.
A low concentration ratio would most likely indicate that the industry resembles the behavior of
horizontal
A merger between Hertz Rent-a-Car and Budget Rent-a Car would be a _____ merger.
a vertical merger.
A merger of a firm and its supplier is called
its price is greater than its average total cost.
A monopolistic competitor will not make an economic profit unless
up the MRP curve and a decline in the number of workers hired.
A rise in the wage rate would lead to a movement
a firm integrates its production backward toward its source of supply or forward in its marketing chain.
A vertical merger takes place when
$2.50
About one-half of the world's population subsists on no more than _____ a day.
raise
An addition of a complementary resource would _____ the marginal revenue product of any given resource.
the income effect becomes stronger than the substitution effect.
As wage rates rise to extremely high levels
the growth in size of many American firms.
At least in the short run, each of these factors has increased competition EXCEPT
the factor's price.
Demand for a factor can shift for all of the following reasons EXCEPT for a change in
a model of cutthroat competition
Even with the big three textbook publishers (McGraw-Hill, Pearson, and Cengage) having a large market share, the textbook industry is still considered _____ because of the high level of competition that exists.
$250,000.
If Jason were offered a job as an accountant at $30,000 and a job as a running back for the Oakland Raiders at $300,000, and he would have been willing to accept the latter even if it paid as little as $50,000, he will receive economic rent of
the substitution effect outweighed the output effect.
If a large increase in the wage rate leads to a net increase in the use of capital by a firm, then
increase the level of output.
If a monopolistic competitor is producing a quantity of output such that marginal revenue is $40 and marginal cost is $32, then in order to maximize profits the firm should
1
If an industry had a Herfindahl-Hirschman Index of 10,000, how many firms are in the industry?
liberals favor the carrot and conservatives favor the stick.
If getting people off welfare could be described as a carrot-and-stick approach, it would be fair to say that
increase the wage rate and increase the number of workers hired.
If labor and capital are substitute resources in production, an increase in the price of capital will
1b. 25
If the firm is maximizing profits, this firm charges a price of
rise.
If the minimum wage were abolished, the employment of unskilled and inexperienced workers would
fall.
If the prices of cars doubled, the MRP schedule for autoworkers would
It remained the same.
In 2015, the base year, Khodi was earning $400 per week. His wages rose to $550 in 2016, the current year, when the CPI stood at 137.5. What statement can you make about what happened to his real wage over this period?
there may or may not be physical differences among the products. Correct
In order for product differentiation to take place
productivity must grow.
In order for real wages to grow
the mere possession of monopoly power is a violation of the antitrust laws.
In the ALCOA Case of 1945, the courts held that
above the minimum point of its ATC curve.
In the long run, the monopolistic competitor always charges a price that is
monopoly profits in the long run.
Monopolistic competition may lead to each of the following EXCEPT
will also rise, unless the consumer price index rises as fast as or faster than the money wage.
Most poorer people tend to find jobs in the primary labor market, according to the theory of the dual labor market.
high barriers to entry.
Oligopoly is characterized by
j the middle point
On the labor supply curve above, the income effect and the substitution effect exactly offset each other at point
upward from I to J First dot to second
On the labor supply curve above, the substitution effect takes place as we move
the relevant market is not for cola soft drinks but instead is for all soft drinks.
One company has 90 percent of the market for cola soft drinks. An antitrust action against this company is likely to be defended (by the company) on the grounds that
occurs when a seller charges two or more prices for the same good or service.
Price discrimination
charging different prices for identical goods that have identical production costs.
Price discrimination means
Productivity growth slowed down during this period. American factories were closing left and right as our relatively high-paying manufacturing jobs went to other countries. The decline in the percentage of better-paid, unionized workers in the U.S. ---all the above
Real wages have fallen in the U.S. since 1973 for which of the following reasons?
Clayton Act of 1914.
Specific business practices such as price discrimination are prohibited by the
a liberal
That an increasing number of jobs that do not pay enough to subsist on is _____ theory of poverty.
outlawed specific business practices that discouraged competition. Correct
The Clayton Act of 1914
Income
The Lorenz curve shows the distribution of
outlawed unfair business practices to exclude rivals from selling in markets.
The Sherman Act of 1890
dual labor market theory
The ________ supports the contention that there are non-competing groups in the labor market.
marginal physical product.
The additional output that one additional input of labor is responsible for is its
product differentiation.
The basis for monopolistic competition is
both the poor and the government
The conservative theory of poverty blames _____ for welfare dependency.
horizontal
The conventional merger is the _____ merger.
the larger its share of the market and the more differentiated the product.
The demand curve facing an oligopoly will be less elastic
final; derived
The demand for goods and services is called _____ demand, while the demand for resources is called _____ demand.
its marginal revenue product schedule.
The demand for labor is
the late 19th century.
The era of the trust was
in the long run breaking even. (1a)
The graph shows a monopolistic competitor
the more likely that existing firms will enjoy large profits in the long run.
The greater the barriers to entry into an industry are
Industry J has a higher concentration ratio than industry K.
The largest firm in Industry J has a 90 percent market share, while the remaining ten firms each has a one percent share. The largest firm in industry K has a 80 percent market share, while the other two firms each has a 10 percent share. Which of the following statements is true?
oligopoly.
The market structure in which the behavior of any given firm depends on the behavior of the other firms in the industry is
floor; decrease
The minimum wage is a price _____, which tends to _____ the employment of unskilled workers.
calculated as three times the cost of a minimally acceptable diet for a family.
The official poverty income threshold in the U.S. is
MRP of labor / wage rate = MRP of land / rent.
The optimum resource mix for a firm would occur when
5 percent.
The percentage share of income of the bottom quintile on curve X is about
$65; 9 (2c)
The price charged by this profit-maximizing firm is about _____ and its output is about _____.
nearly
The rich receive _____ all property income.
opposite direction all of the time.
The substitution effect and the output effect work in the
a higher wage is necessary to attract more people into that occupation from other occupations.
The supply curve of labor for any particular occupation is upward sloping because
the percent of households and the percent of income.
The two axes on the Lorenz curve graph of income distribution are
many conservatives.
The view that many welfare mothers have baby after baby to keep their welfare checks rising is a view held by
the late 1990s.
There has been an unmistakable steady trend toward bigness in business since
1,200; 700
Today a college graduate earns about $__________ a week while a high school graduate earns about $__________.
Industry Y with a concentration ratio of 95. (2a)
Using concentration ratios, which is the more concentrated industry?
Enron
Which company bilked its stockholders and allowed their employees' pension funds to be wiped out?
Children under age 18
Which group has the highest poverty rate from among these groups?
Supplies a small share of the market and sells a product that is slightly different from its competitors
Which of the following combinations of characteristics best describes a monopolistically competitive firm?
Food stamps
Which of the following is an example of an "in-kind" benefit?
Crime and drugs are central to the ghetto culture. Ghetto residents are more likely to be street crime victims than middle-class people. A basic way to reduce crime would be to alleviate poverty. ---all true
Which of the following statements is FALSE?
In general, the deregulation of the airlines and interstate trucking industries led to higher costs and higher prices.
Which of the following statements is FALSE?
Most poor women who get pregnant do so to get on welfare
Which of the following statements is FALSE?
Most poorer people tend to find jobs in the primary labor market, according to the theory of the dual labor market.
Which of the following statements is FALSE?
The primary labor market includes jobs in the skilled crafts, management, and the professions. The dual labor market consists of the primary market and the secondary market. The dual labor market theory doesn't account for the huge middle level of occupations—nursing, teaching, social work, and non-college-graduate positions in insurance, banking, and retailing. ---all true
Which of the following statements is FALSE?
The substitution effect means that as your wage rises, leisure time becomes more expensive. The income effect means that as your wage rises, you can afford more leisure time. ---both true
Which of the following statements is FALSE?
Oligopolies are illegal in most states.
Which of the following statements is false?
A change in final demand brings about a change in derived demand.
Which of the following statements is true?
L1 Income is more evenly distributed along curve Y than curve X. (the y curve is closer to the straight curve)
Which of the following statements is true?
Much of black poverty is caused by black male joblessness.
Which of the following statements is true?
The cartel and the cutthroat competitor are on opposite ends of the competitive spectrum.
Which of the following statements is true?
There are at least a dozen different theories of poverty.
Which of the following statements is true?
There is no one single cause of homelessness.
Which of the following statements is true?
Training, education, and intelligence play a very large role in determining the distribution of income.
Which of the following statements is true?
Price discrimination is usually against poor people who can't afford to shop around.
Which statement is FALSE?
Product differentiation takes place in the minds of the buyers
Which statement is true?
they have more complementary factors to work with.
Workers in one country are more productive than workers in another country because
the supply of labor.
_) The above graph is
Cutthroat competition
_____ is legal and not frowned upon in the U.S.
A college diploma
________ is a necessary condition for a person to move from the secondary to the primary labor market but is no longer a sufficient condition.
a cutthroat oligopolist. (2b)
the graph shows a cut throat oligopolist