Microeconomics Online Spring 2019 John Yarber NEMCC
Refer to the diagram. A surplus of 160 units would be encountered if the price was:
$1.60.
Answer the question on the basis of the following information: Harry owns a barber shop and charges $6 per haircut. By hiring one barber at $10 per hour, the shop can provide 24 haircuts per eight-hour day. By hiring a second barber at the same wage rate, the shop can now provide a total of 42 haircuts per day. Refer to the given information. The MRP of the second barber is:
$108.
Refer to the diagram. The highest price that buyers will be willing and able to pay for 100 units of this product is:
$60.
Refer to the diagram. At the profit-maximizing output, total revenue will be:
0AHE.
What percentage of their spending do U.S. consumers allocate to food purchases?
13 percent.
The basic tax rate on taxable corporate income is:
35 percent
Answer the question on the basis of the following cost data: Refer to the data. The marginal cost curve would intersect the average variable cost curve at about:
4 units of output.
Which of the following would likely reduce income inequality?
A reduction in the number of high school dropouts.
Which of the diagrams correctly portrays a nondiscriminating pure monopolist's demand (D) and marginal revenue (MR) curves?
B.
If a firm wanted to know how much it would save by producing one less unit of output, it would look to:
MC
In 2011, the greatest number of legal immigrants arriving in the United States came from:
Mexico and China.
Why do people tend to eat more at all-you-can-eat buffet restaurants than at restaurants where each item is purchased separately?
Once the all-you-can-eat meal is purchased, consumers view additional trips back to the buffet as having a price of zero.
In which of the following cases will total revenue increase?
Price rises and demand is inelastic.
Which of the following is a fundamental characteristic of the market system?
Property rights.
Which of the following is correct?
Real capital is a resource, but money is not.
Which of the following is not a basic characteristic of monopolistic competition?
Recognized mutual interdependence.
The U.S. federal government's largest unfunded liability is:
Social Security.
Which one of the following acts declared "[e]very contract, combination . . . or conspiracy, in restraint of trade or commerce among the several states . . . to be illegal"?
The Sherman Act.
Which of the following constitutes an implicit cost to the Johnston Manufacturing Company?
Use of savings to pay operating expenses instead of generating interest income.
(Consider This) From an economist's perspective, when is government too big?
When the marginal costs from additional government spending exceed marginal benefits.
A bumper crop of farm products causes:
a large decline in the price of farm products because the demand for farm products is price inelastic.
The term "other things equal" means that:
a number of relevant variables are assumed to be constant.
Refer to the diagram. A price of $60 in this market will result in:
a surplus of 100 units.
"Earmarks" refer to:
authorized expenditures benefiting a narrow, specifically designated group that are included in more comprehensive spending legislation.
The law of increasing opportunity costs is reflected in a production possibilities curve that is:
bowed out from the origin.
The price elasticity of demand coefficient measures:
buyer responsiveness to price changes.
A perfectly inelastic demand schedule:
can be represented by a line parallel to the vertical axis.
A perfectly elastic demand curve implies that the firm:
can sell as much output as it chooses at the existing price.
Health maintenance organizations (HMOs):
charge a fixed amount per member, hire many of their own physicians, and provide health services only to members.
Blu-ray players and Blu-ray discs are:
complementary goods
The dollar votes of consumers ultimately determine the composition of output and the allocation of resources in a market economy. This statement best describes the concept of:
consumer sovereignty.
The advent of DVDs has virtually demolished the market for videocassettes. This is an example of:
creative destruction.
The Sherman Act:
declared monopoly and restraints of trade to be illegal.
The marginal benefit to society of reducing pollution declines with increases in pollution abatement because of the law of:
diminishing marginal utility.
Total fixed cost (TFC):
does not change as total output increases or decreases.
Refer to the diagram for a purely competitive producer. If product price is P3:
economic profits will be zero.
"Beaten paths" from one country to another:
encourage migration by providing employment contacts and job information.
The benefits-received principle of taxation is most evident in:
excise taxes on gasoline.
To the economist, total cost includes:
explicit and implicit costs.
A person will be more likely to migrate the:
greater the wages in their prospective new country relative to wages in their home country.
Prashanth decides to buy a $75 ticket to a particular New York professional hockey game rather than a $50 ticket for a particular Broadway play. We can conclude that Prashanth:
has a higher "marginal utility-to-price ratio" for the hockey game than for the play.
The copper, aluminum, cement, and industrial alcohol industries are examples of:
homogeneous oligopoly.
A firm is likely to be a natural monopoly:
if economies of scale are experienced over the full range of output.
Answer the question on the basis of the following demand schedule: Refer to the data. The price elasticity of demand is unity:
in the $4-$3 price range only.
When the price of a product increases, a consumer is able to buy less of it with a given money income. This describes the:
income effect.
Illegal immigration tends to:
increase average wages and employment where illegal workers are complements to domestic-born workers.
The fact that most medical care purchases are financed through insurance:
increases the amount of health care consumed by reducing the price of additional units of care.
The amount of land covered by forests is:
increasing in places like the United States and Western Europe, while declining in countries in South and Central America.
As a general rule, oligopoly exists when the four-firm concentration ratio:
is 40 percent or more.
Income:
is a flow concept.
An industry having a four-firm concentration ratio of 85 percent:
is an oligopoly.
Refer to the diagram. Flow 2 represents:
land, labor, capital, and entrepreneurial ability.
A natural monopoly occurs when:
long-run average costs decline continuously through the range of demand.
Statistical discrimination refers to:
making individual hiring decisions on the basis of the characteristics of the group to which a person belongs, rather than on his or her personal characteristics and productivity.
A firm will find it profitable to hire workers up to the point at which their:
marginal resource cost is equal to their MRP.
Supply curves tend to be:
more elastic in the long run because there is time for firms to enter or leave the industry.
Wealth in the United States is:
more unequally distributed than is income.
A positive statement is one that is:
objective and is based on facts.
Tying agreements:
obligate a purchaser of product X to also buy product Y from the same seller.
Resource pricing is important because:
of all of these reasons.
An industry comprised of four firms, each with about 25 percent of the total market for a product, is an example of:
oligopoly.
The "rule of reason" indicated that:
only contracts and combinations that unreasonably restrain trade violate the antitrust laws.
Craft unions:
only organize workers who have a particular skill.
The largest category of federal spending is for:
pensions and income security.
A firm operating in a purely competitive resource market faces a resource supply curve that is:
perfectly elastic.
If discrimination based on gender and race was eliminated, we would expect the:
personal distribution of income to become more equal.
The largest source of tax revenue for the U.S. federal government is:
personal income taxes.
Discrimination:
places the economy at some point inside of its production possibilities curve.
The unlawful misdirection of governmental resources for personal gain is known as:
political corruption.
Market failure is said to occur whenever:
private markets do not allocate resources in the most economically desirable way.
In terms of the circular flow diagram, households make expenditures in the _____ market and receive income through the _____ market.
product; resource
Refer to the diagram for a nondiscriminating monopolist. Marginal revenue will be zero at output:
q2.
The twin problems of the U.S. health care industry are:
rapidly rising costs and unequal access to health care.
The highest quintile of households in the income distribution:
receives about 51 percent of the total income.
Production costs to an economist:
reflect opportunity costs.
Refer to the diagram. In the P1P2 price range, demand is:
relatively elastic.
The demand for agricultural products is:
relatively inelastic with respect to price.
Gigantic State University raises tuition for the purpose of increasing its revenue so that more faculty can be hired. GSU is assuming that the demand for education at GSU is:
relatively inelastic.
Long-run competitive equilibrium:
results in zero economic profits.
The price of medical care in the United States has:
risen faster than the overall price level.
A production possibilities curve illustrates:
scarcity.
Macroeconomics can best be described as the:
study of the large aggregates of the economy or the economy as a whole.
The real interest rate can be estimated by:
subtracting the rate of inflation from the nominal interest rate.
Any point inside the production possibilities curve indicates:
that more output could be produced with the available resources.
Allocative efficiency occurs only at that output where:
the combined amounts of consumer surplus and producer surplus are maximized.
The income and substitution effects account for:
the downward-sloping demand curve.
In the Alcoa case of 1945, the courts held that:
the mere possession of monopoly power is a violation of the antitrust laws.
The lowest point on a purely competitive firm's short-run supply curve corresponds to:
the minimum point on its AVC curve.
If the existence of health insurance increases one's incentive to use the health care system more intensively, this is an illustration of:
the moral hazard problem.
The economizing problem is:
the need to make choices because economic wants exceed economic means.
The primary motivation for economic immigration is:
the opportunity to increase earnings and standard of living.
When the price of a product rises, consumers with a given money income shift their purchases to other products whose prices are now relatively lower. This statement describes:
the substitution effect.
A negative externality or spillover cost occurs when:
the total cost of producing a good exceeds the costs borne by the producer.
Competition means that:
there are independently acting buyers and sellers in each market.
If an exclusive union is successful in restricting the supply of labor, the:
wage rate will rise.
The labor demand curve of a firm:
will shift to the left if the price of the product the labor is producing falls.
Insurance tends to drive up health care costs by encouraging greater use of health care resources. Why has this occurred in the United States but not in Canada or the United Kingdom?
Canada and the United Kingdom use nonprice rationing to contain costs.
Which of the following is a distinguishing feature of a command system?
Central planning.
Nonprice competition refers to:
advertising, product promotion, and changes in the real or perceived characteristics of a product.
In the long run:
all costs are variable costs.
