ECO 202 Final

Refer to the diagram. To maximize profits or minimize losses, this firm should produce:

E units and charge price A

When the price of movie tickets in a certain town was reduced, the movie-theaters' revenues did not change. This suggests that the demand for movie tickets in that town has a price-elasticity coefficient of

1.0

Which of the above diagrams illustrate(s) the effect of an increase in automobile worker wages on the market for automobiles?

D Only

Refer to the diagram where curves (a) through (e) are for five different countries. Of the countries listed below, income is most unequally distributed in country

D.

Which of the following measurement issues makes interpretation of U.S. poverty rates difficult?

Poverty statistics measure consumption rather than income, and some families may receive income that is above the official poverty line.

Refer to the above diagram. A government-set price CEILING is best illustrated by

Price C

If the supply of a product decreases and the demand for that product simultaneously increases, then equilibrium:

Price must rise, but equilibrium quantity may rise, fall, or remain unchanged

If in the income elasticity of demand for lard is 2.00, this means that

lard is an inferior good

If the CEO of I'MaBigBank is playing prisoner's dilemma then, from his perspective, the gains to be had from cooperation are

larger than the rewards from pursuing self - interest

Refer to the above diagram. Consider the consumer market for coffee. A DECREASE in the price of coffee is depicted by a:

move from point y to point x

An individual whose income level is just above the poverty line would most likely be classified as being a member of the _____________ .

near poor

Government ______________ regulations specify that inventors will maintain exclusive legal rights to their respective inventions for ______________ .

patent; a limited time

Implicit costs are

payments for self employed resources

Marginal utility can be

positive, negative, or zero

In the short run, a purely competitive seller will shut down if:

price is less than average variable cost at all outputs.

In circumstances dealing with poverty, the term ______________ means taking income from those with higher incomes and providing income to those with lower incomes

redistribution

The demand schedules for such products as eggs, bread, and electricity tend to be:

relatively price inelastic

The more time consumers have to adjust to a change in price

the greater will be the price elasticity of demand

In the business world, a _______________ is recognized as a legally acceptable way for any business to keep knowledge of its particular methods of production from being known by competing firms.

trade secret

In economies, the pleasure, happiness, or satisfaction received from a product is called

utility

The Supplemental Nutrition Assistance Program (SNAP)

was previously known as the food-stamp program.

If a firm in a purely competitive industry is confronted with an equilibrium price of 5, its marginal revenue

will also be 5

Robert is a widower raising 5 year old twin boys. In 2013, after the plant where he had worked for 10 years shut down, he was able to obtain part-time work that paid him $13,000.00 a year. He receives the earned income tax credit. If Robert receives a raise, so that he will earn $16,350, the earned income credit will be

will not be reduced

Suppose you have money income of $15, all of which you spend on Coke and popcorn. In the diagram, the prices of Coke and popcorn respectively are

.50 and 1.00

Suppose that as the price of Y falls from $2.00 to $1.80 the quantity of Y demanded increases from 110 to 118. Then using the midpoint formula, the price elasticity of demand is:

1.37

Bruce is a single father with 1 child. He can work as a bagger at the local grocery store for $8 per hour up to 1,200 hours per year. He is eligible for welfare, and if he does not earn any income, he will receive $15,000 a year. If Bruce works, the government policy is to deduct 50 cents from his welfare stipend for every $1 that he earns in income. With this policy in place, if Bruce works 800 hours, his income will be

18,200 8.00 multiplied by 800= 6400 multiplied by .50 = 3,200 15,000-3,200= 11,800 + 6,400 = 18,200

Suppose the price elasticity of supply for crude oil is 2.5. How much would price have to rise to increase production by 30 percent?

20 percent

Refer to the data. What level of total utility is realized from the equilibrium combination of J and K, if the consumer has a money income of $28 and the prices of J and K are $8 and $4 respectively

276 units

The lowest quintile of households in the income distribution receives about

3.2 percent of the total income

Refer to the short-run data. The profit-maximizing output for this firm is:

320 units

Refer to the data. If product price is $75, the firm will produce

4 units

Refer to the above data. The value for Y is

45

The Sunshine Corporation finds that its costs are $40 when it produces no output. Its total variable costs (TVC) change with output as shown in the accompanying table. Use this information to answer the following question.Refer to the information. The average total cost of 3 units of output is

65+40=105/3=35

The following table lists the utility that Sarah receives from consuming bananas at 25 cents a banana. What is the marginal utility of consuming the 4th banana?

8 40-32

The first Pepsi yields Craig 18 units of utility and the second yields him an additional 12 units of utility. His total utility from three Pepsis is 38 units of utility. The marginal utility of the third Pepsi is:

8 units of utility

Which one of the following would not shift the demand curve for beef?

A reduction in the price of cattle feed

Which of the given distributions is closest to describing the United States

C.

What is the economic meaning of the expression that "there is no such thing as a free lunch"?

It means that there is an opportunity cost when resources are used to provide "free products"

In the circular economic flow diagram, households:

Make consumption expenditures and receive goods and services

Refer to the above data. Creamy Crisp's economic profit is:

add 22,000 +120,000+8,000 = 150,000

For most producing firms

average total cost decline as output is carried to a certain level and then begin to rise

Social Security is financed

by payroll taxes on employees and employers

The poverty rate for African Americans is

below that for whites

Which is the best example of a fixed cost of production to a firm?

depreciation of capital

Refer to the diagrams, which pertain to monopolistically competitive firms. Short-run equilibrium entailing economic loss is shown by

diagram c only because it asked for loss and the ATC line is above Demand which means a loss

The relationship between quantity supplied and price is _____ and the relationship between quantity demanded and price is _____.

direct, inverse

Which of the following is incorrect? Imperfectly competitive producers:

do not compete with one another

The supply curve of a pure monopolist:

does not exist because prices are not "given" to a monopolist

The branch of mathematics that analyzes situations in which players must make decisions and then receive payoffs most often used by economists is

game theory

The main difference between the short run and the long run is that:

in the short run some inputs are fixed

College students living off-campus frequently consume large amounts of ramen noodles and boxed macaroni and cheese. When they finish school and start their careers, their consumption of both goods frequently declines. This suggests that ramen noodles and boxed macaroni and cheese are:

inferior goods

Refer to the data. The profit-maximizing monopolist will realize a:

profit of 16 do price multiplied by quantity and subtract by total cost so 5.50(3)= 16.5 - 5.00 = 11.50

The formula for cross elasticity of demand is percentage change in

quantity demanded of X/percentage change in price of Y.

Refer to the diagram. The vertical distance between ATC and AVC reflects:

the average fixed cost at each level of output

When diseconomies of scale occur:

the long run average total cost curve rises

If incomes rise for both low-income and high-income workers, but rise less for the high-income workers

then poverty will rise and inequality will fall

One common way of measuring income inequality is to rank all households by income, from lowest to highest, and then

to divide all households into quintiles

The MR = MC rule applies:

to firms in all types of industries