chapter 11, 12, 13 quizzes

An oligopolistic market a. has a small number of rival firms, and each is large relative to the size of the market. b. is characterized by firms that merely take the price that is determined by the forces of supply and demand in the market. c. has low entry barriers facing firms that may be interested in entering the market. d. has a large number of firms that are small relative to the size of the market.

a

If the demand for workers with doctorate degrees in economics increases, we would expect a. the wages of economists to increase in the short run and the number of economists employed to increase in the long run. b. the supply of economists to increase in the short run and their wages to rise in the long run. c. a rapid increase in the supply of economists, causing wages to remain constant. d. the wages of economists to decrease in the short run and the number of economists employed to increase in the long run.

a

Suppose the United Auto Workers' Union succeeded in obtaining a 10 percent increase in the wages of its workers and that the wage increase caused automobile prices to rise. Employment in the auto industry would be most likely to decline significantly if a. the demand for American-made automobiles was highly elastic. b. the supply of foreign-produced automobiles was highly inelastic. c. American consumers considered foreign automobiles a poor substitute for American automobiles. d. the demand for American automobiles was relatively constant and highly inelastic.

a

The demand curve for a human resource will be more elastic the a. more and better substitutes are available for it. b. more difficult it is to substitute other resources for it. c. more inelastic the demand for the product the resource is used to produce. d. shorter the time period under consideration.

a

The fact that some people will work hard to earn a lot of money while others will be content with much less income indicates that a. worker preferences are an important source of earning differentials. b. economics ranks one set of worker preferences as more desirable than another. c. some people can be paid less for doing hard work while others have to be paid a premium for doing a similar task. d. skill levels of laborers are a minor consideration in wage rate determination.

a

What concept implies that a firm's marginal revenue product curve for labor will slope downward in the short run? a. diminishing marginal returns b. the law of supply c. the law of decreasing cost d. the price equalization principle

a

When economists talk about a barrier to entry, they are referring to a. a factor that makes it difficult for potential competitors to enter a market. b. the opportunity cost of equity capital that is incurred by a firm producing at minimum total cost. c. the downward-sloping portion of the long-run average total cost curve. d. the declining output experienced as additional units of a variable input are used with a given amount of a fixed input.

a

When firms use resources in an attempt to secure and maintain grants of market protection from the government, it is called a. rent-seeking. b. collusion. c. franchising. d. resource investment.

a

A monopolist has less to gain from cost-saving measures in the production process when a. the monopoly is unregulated. b. regulators use average cost pricing to set the monopolist's price. c. the demand for the product of the monopolist is inelastic. d. changes in the regulated price occur only after considerable delay.

b

An increase in the demand for a product will cause a. both the demand for and prices of the resources used to produce the product to decline. b. both the demand for and prices of the resources used to produce the product to increase. c. the demand for the resources used to produce the product to increase and their prices to decline. d. the demand for the resources used to produce the product to decline and their prices to increase.

b

Automated production methods are only attractive when they a. are undertaken in heavily unionized sectors of the economy. b. reduce per-unit costs. c. replace workers. d. decrease labor productivity.

b

In a market economy, which of the following is most important if one is going to achieve high earnings? a. hard work b. provision of goods and/or services that others value highly c. having a graduate degree in a field like history or sociology d. membership in a labor union

b

Oligopolistic agreements on price tend to be unstable because a. although the monopoly price is the best price for all firms, oligopolists are unaware of this and thus charge prices that are lower than the price that could be charged by a monopolists, therefore, decreasing social welfare. b. although the monopoly price maximizes the joint profits of the firms, a secret price cut by any individual firm will increase the profits of that firm; hence, collusive agreements tend to break down. c. the demand for the products of oligopolistic industries is inherently unstable relative to the demand for the products of non-oligopolistic industries because demand for products in oligopolistic industries are dependent on changes in consumer tastes and preferences. d. firms in oligopolistic industries have more concern for consumers than do firms in competitive industries.

b

The notion that the demand for inputs depends on the demand for outputs is termed a. inverse demand. b. derived demand. c. proportional demand. d. complementary demand.

b

When natural monopoly is present in an industry, the per-unit costs of production will be a. lowest when there are a large number of producers in the industry. b. lowest when a single firm generates the entire output of the industry. c. lower for small firms than for large firms. d. minimized at the output that maximizes the industry's profitability.

b

Which of the following is most likely to reduce the nominal market wage in a job category? a. The job requires employees to work the night shift from 11 p.m. to 7 a.m. b. The job is prestigious, and the work is quite interesting. c. The job is widely viewed as dangerous. d. The job requires employees to move from city to city quite often.

b

A monopolist will maximize profits by a. setting the price at the level that will maximize per-unit profit. b. producing the output where marginal revenue equals total cost and charging a price along the demand curve. c. selling at the price on the demand curve at the output rate where marginal revenue equals marginal cost. d. producing at the output rate where price equals marginal cost.

c

Assuming that firms maximize profits, how will the price and output policy of an unregulated monopolist compare with ideal market efficiency? a. The output of the monopolist will be too large and its price too high. b. The output of the monopolist will be too large and its price too low. c. The output of the monopolist will be too small and its price too high. d. The output of the monopolist will be too small and its price too low.

c

If all persons had identical preferences and productivity factors (ability, skill level, education, experience, etc.), the highest paying jobs would be the most a. prestigious. b. convenient. c. undesirable. d. easily learned.

c

If the demand for a consumer good decreases, the demand for resources required to make the good will a. increase. b. remain the same, but the quantity demanded will increase. c. decrease. d. increase or decrease depending on whether the demand for the product is elastic or inelastic.

c

Other things constant, which of the following job characteristics would be most likely to result in a higher pay rate for the job? a. The employer provides low cost child-care services on the premises. b. The job is widely viewed as prestigious. c. The job requires substantial amounts of stressful out-of-town travel. d. The job involves working in pleasant surroundings.

c

Refer to Table 12-1. If the security guards can be hired for $75 per day, how many guards should the shop hire? a. two b. three c. four d. five e. six

c

The price charged by oligopolists will a. equal the equilibrium price in a price-takers market if the oligopolists collude. b. equal the monopoly price if the oligopolists do not collude. c. generally fall between the monopoly and competitive market equilibrium prices. d. be the same whether the oligopolists cooperate with one another or not; only profit is affected.

c

When employment discrimination results from the personal prejudices of employers, economic theory suggests that a. it is costless for employers to discriminate against groups they do not like. b. the wages of employees who are discriminated against will actually rise. c. an employer who discriminates will experience higher costs. d. discrimination by an employer will reduce production costs since the employer can pay lower wages.

c

Which one of the following is the best description of a monopolist? a. a firm that produces a single product b. a firm that is the sole producer of a narrowly defined product class, such as yellow, grade-A butter produced in Jackson County, Wisconsin c. a firm that is the sole producer of a product for which there are no good substitutes in a market with high barriers to entry d. a firm that is large relative to its competitors

c

Economic theory suggests that the standard of living of American workers would rise if a. the minimum wage were doubled. b. automation were outlawed. c. workers were forced to retire earlier. d. technological improvements increased output per worker-hour.

d

If skilled labor is three times the cost of unskilled labor, a profit-maximizing firm will vary the quantity of each type of labor until the a. marginal product of each is the same. b. amount of unskilled labor used is three times the quantity of skilled labor used. c. amount of unskilled labor used is one-third the quantity of skilled labor used. d. marginal product of unskilled labor is one-third that of skilled labor.

d

The earnings of all employees in a competitive economy would be equal if a. all individuals were homogeneous. b. all jobs were equally attractive. c. workers were perfectly mobile among jobs. d. all of the above are true.

d

Wages in the United States are higher than those in India primarily because a. the weather is better in the United States. b. a larger proportion of the labor force is unionized in the United States. c. less capital per employee is required in the United States. d. the human and physical capital of American workers exceeds that of their Indian counterparts.

d

Which one of the following labor resources will likely have the most inelastic supply schedule in the short run? a. filling station attendants b. sales clerks c. construction laborers d. dentists

d