ECO 212 Final Exam Lehman IWU

ans to previous question my good sir

(P4 - P1) * Q1

Average total cost (ATC) equals (fixed costs + variable costs) / quantity produced (fixed costs + variable costs) / change in quantity produced change in total costs / quantity produced change in total costs / change in quantity produced

(fixed costs + variable costs) / quantity produced

Suppose that Mr. Jevons' income is greater than that of Mr. Menger, and that both incomes are subject to diminishing marginal utility. According to Utilitarian logic, taking a dollar from Mr. Jevons and giving it to Mr. Menger will increase the total utility to society if Mr. Menger's utility rises by less than Mr. Jevons' falls, and disincentives to work are deemed greater than the utility gains of greater equality Mr. Jevons' utility falls by more than Mr. Menger's rises, and the negative distortion effects more than offset the utility gains from greater equality Mr. Jevons' utility falls by less than Mr. Menger's rises, and the utility gains from greater equality outweigh the disincentives to work Mr. Jevons' utility rises by less than Mr. Menger's falls, and the utility gains from greater equality outweigh the disincentives to work

Mr. Jevons' utility falls by less than Mr. Menger's rises, and the utility gains from greater equality outweigh the disincentives to work

Use the graphs below to answer the following questions. Which of the graphs shown above would be consistent with a monopolistically competitive firm that is making economic losses? Panel c Panel a Panel b Panel d

Panel a

Use the panel of figures below to answer the following questions. (previous diagram 👀) Which of the panels shown reflects a long run equilibrium in a monopolistically competitive market? Panel d Panel a Panel c Panel b

Panel a

the loss in total welfare resulting from the levying of the tax is represented by the area

Ps-Pb-B-C-E

the tax caused a reduction in producer surplus represented by the area

Ps-Pm-C-E

👆you know da drill

Q = 120

Bill's Bones is an archaeology company and retail outlet that "mines" and sells common fossils directly to the public. The structure of his firm's costs are as follows. At what level of output would marginal cost (MC) equal average total cost (ATC)? Q = 100 Q = 175 Q = 150 Q = 120

Q = 150

answer to previous

Q = 150

ans to prev

Q = 400

ansssss me

Q1 * P4

flip me boi

The graphs below depict the effect on incumbent firms of entry and exit in a monopolistically competitive market. If firms in a monopolistically competitive market are earning economic profits, which of the graphs shown would reflect the change in demand for incumbent firms as the market adjusts to its new equilibrium? Panel d Panel b Panel a Panel c

flipppp

Which of the average total cost curves shown in the graphs below would be consistent with a natural monopolist? Panel d Panel a Panel c Panel b

When price is below average total cost, a firm in a competitive market will always exit the industry, even in the short run continue to operate as long as average revenue exceeds marginal cost shut down and incur the loss of both variable and fixed costs continue to operate as long as average revenue exceeds average variable cost

continue to operate as long as average revenue exceeds average variable cost

A monopolistically competitive firm differs from a perfectly competitive firm because a monopolistically competitive firm is characterized by profit maximization faces a horizontal demand curve at the market clearing price due to product homogeneity faces a downward sloping demand curve for its product due to product differentiation has no barriers to entry

faces a downward sloping demand curve for its product due to product differentiation

Factor (input) markets are different from product (output) markets in an important way; factor demand is likely to be upward sloping factor demand is a derived demand the factor supply function is likely to be downward sloping factor markets are fraught with disequilibrium

factor demand is a derived demand

A prisoners' dilemma game demonstrates how _______________ is often rational even though ________________________. a desire to cooperate, cooperation would make everyone worse off failure to cooperate, cooperation would make everyone worse off failure to cooperate, cooperation would make everyone better off all of the above can be demonstrated with a prisoner's dilemma game

failure to cooperate, cooperation would make everyone better off

Land, buildings, and production equipment are typically considered ________ of production in the short run. fixed costs variable costs implicit costs none of the above

fixed costs

economists generally support

free international trade

a toll collected from each car traveling during rush hour on a congested road is effective correction to the Tragedy of the Commons for all of the following except

fuel-efficient cars

Games which are repeated and played more than once lead to outcomes dominated purely by self-interest generally make collusive arrangements easier to enforce due to reputation building always enhance social well-being encourage more cheating on cartel production quotas in the successive multiple rounds

generally make collusive arrangements easier to enforce due to reputation building

efficiency means that

getting the most

hikers frequently claim that livestock grazing in Wilderness Recreation Areas reduces the satisfaction of their recreational hiking experience. and explanation would be that

grazing

suppose that there is a binding price ceiling imposed on the market for peaches. At the ceiling price,

greater

in which of the following examples are property rights not well established

groups

All else equal, if workers are in an industry that is experiencing rapid improvements (or advances) in technology which is a substitute for labor, they can expect to see a reduction in demand for final products see a reduction in the need for physical capital experience wage increases as their productivity is enhanced from technology advances have their wages decline

have their wages decline

Use the following information to answer the questions below. Gertrude Kelp owns a commercial fishing fleet off the coast of Alaska. As part of her business she hires someone to captain the boats in her fleet, and workers that are considered part of the crew. In the market for fresh pacific salmon, Gertrude is one of thousands of fisher-persons. While Gertrude usually catches a significant number of fish each year, her contribution to the entire harvest of salmon is negligible relative to the size of the market. According to Neoclassical economic theory, it is assumed that Gertrude's demand for crew workers and her supply of fresh Pacific salmon results from her intrinsic desire to create employment by hiring crew members altruistic motives to provide fresh salmon to fish consumers her primary goal of maximizing profit for her firm all of the above

her primary goal of maximizing profit for her firm

Equilibrium quantity in markets characterized by oligopoly is usually________________ than in monopoly markets and _______________ than in perfectly competitive markets. lower, higher higher, higher lower, lower higher, lower

higher, lower

The slope of the demand curve faced by a monopolist ________ the slope of the market demand curve. can be less than or equal to is greater than is less than is equal to

is equal to

in a market that is affected by a negative production externality, the optimum level of output is _____ the free market level of output and the optimum price is ____the free market price.

less than, greater than

taxes cause scarce resources to be allocated differently than those resources would be allocated by free markets. taxes provide incentives for consumers to consume _____, and incentives for producers to produce _____than in free markets

less;less

Ceteris paribus, workers that have invested in human capital are likely to have a lower value of marginal product and lower wages likely to have a higher value of marginal product and higher wages universally less productive in "dull" jobs not likely to have changed or improved the value of their marginal product

likely to have a higher value of marginal product and higher wages

Economists normally assume that the goal of a firm is to maximize profit sell as much of their product as possible minimize cost sell their product at the highest price possible

maximize profit

A perfectly price discriminating monopolist is able to maximize profit and produce a level of output consistent with optimal social well-being produce a level of output consistent with optimal social well-being, but not maximize profit exercise illegal preferences over the gender of its employees maximize profit, but not produce a level of output consistent with optimal social well-being

maximize profit and produce a level of output consistent with optimal social well-being

In standard economic theory, the goal of an oligopolist is assumed to be increase market share maximize profits maximize revenue maximize efficiency

maximize profits

Oligopolies would like to act like ________, but self-interest drives them closer to ________. competitive firms, monopolies monopolies, duopolies monopolies, competition none of the above

monopolies, competition

There are two types of markets in which firms face some competition yet are still able to have some control over the prices of their products. The names given these market structures are duopoly and imperfect competition imperfect competition and monopolistic competition monopolistic competition and oligopoly/duopoly oligopoly and duopoly only

monopolistic competition and oligopoly/duopoly

Under normal circumstances, hotels in New York City frequently experience an average vacancy rate of about 20% (i.e., on an average night, 80% of their rooms are full). This excess capacity is indicative of a (an) ________________ industry perfectly competition monopoly oligopoly monopolistically competitive

monopolistically competitive

if not internalized, a negative production externality will cause a market to

more desirable

In monopolistically competitive markets, economic losses ____________, and __________________ shifts the demand curve of incumbent firms to the ___________________. signal some incumbent firms to exit, exit, right signal some incumbent firms to exit, exit, left signal new firms to enter, entry, right signal new firms to enter, entry, left

signal some incumbent firms to exit, exit, right

A firm that hires workers in a perfectly competitive labor market faces a(n) ___________________ supply curve for labor _________________________. perfectly elastic, at the wage established in the overall labor market perfectly inelastic, at the wage established in the overall labor market upward sloping, over the range of increasing marginal product downward sloping, over the range of decreasing marginal product

perfectly elastic, at the wage established in the overall labor market

A plumber that specializes in cleaning plugged sewer lines is typically paid a higher wage than a plumber that works on installing water systems in newly constructed residential housing. This is likely to be partially explained by the fact that plumbing jobs that work with sewer and filth are likely to have an element of personal satisfaction plumbers that work with clogged sewer lines must necessarily require more years of specialized training than other plumbers plumbers that work with sewer are more likely to work a standard shift plumbers that work with clogged sewer lines are in shorter supply because sewer work is perceived as a "dirty job" compared to installing plumbing in newly constructed residential housing

plumbers that work with clogged sewer lines are in shorter supply because sewer work is perceived as a "dirty job" compared to installing plumbing in newly constructed residential housing

fad or populist economics often tempts politicians because

politicians in

in economics, discussions about efficiency are discussions that are

positive

the relationship between price and quantity supplied is

positive

normative statements are

prescriptive

the "invisible hand" directs economics activity through

price

When a monopolist is able to sell its product at different prices to different consumers, it is engaging in price differentiation distribution pricing quality-adjusted pricing price discrimination

price discrimination

In theory, a monopolistically competitive market could be considered inefficient since price exceeds marginal cost leading to a deadweight loss marginal cost exceeds price leading to a deadweight loss mark-up pricing does not occur in any other market structure excess capacity is a short-run problem

price exceeds marginal cost leading to a deadweight loss

For a monopolistically competitive firm in long-run equilibrium ___________________ like in a monopoly market, and ________________________ like in a competitive market. price exceeds marginal cost, price equals average total cost? price equals average total cost, price exceeds marginal cost marginal revenue equals marginal cost, average revenue exceeds average total cost average revenue exceed average total cost, marginal revenue exceeds average revenue

price exceeds marginal cost, price equals average total cost?

what is the law of demand?

price falls, service rises

When a perfectly competitive firm makes a decision to shut down in the short run, it is most likely that price is below the average variable cost fixed costs exceed variable costs average fixed costs are rising marginal cost is above average variable cost

price is below the average variable cost

in any market, total revenue is

price multiplied by quantity

if sellers respond substantially to changes in the price, then

price sensitive

Use the following information to answer the questions below. Gertrude Kelp owns a commercial fishing fleet off the coast of Alaska. As part of her business she hires someone to captain the boats in her fleet, and workers that are considered part of the crew. In the market for fresh pacific salmon, Gertrude is one of thousands of fisher-persons. While Gertrude usually catches a significant number of fish each year, her contribution to the entire harvest of salmon is negligible relative to the size of the market. Because Gertrude is one of thousands of fisher-employers in the Alaskan fishing industry, she is a _________________ in the labor crew market, and she has only to decide ________________. price taker, how many crew members to hire at the going market wage price setter, the wage to pay the crew she hires price taker, the wage to pay the crew she hires price setter, how many crew members to hire at the going market wage

price taker, how many crew members to hire at the going market wage

free markets ration goods with

prices

if not internalized, a positive production externality will cause a market to

produce less

the benefit received by the sellers of a good in a market is measured by

producer surplus

Economists typically assume that monopolists behave as cost maximizers profit maximizers price maximizers market-share maximizers

profit maximizers

The __________________ is a natural antidote that suppresses employer taste-based or irrational (non-meritocratic) discrimination in market economies. threat of judicial review union movement political and regulatory process profit motive altruist motive

profit motive

taxing high incomes at a higher rate than low incomes is most likely to alter incentives and do which of the following?

promote equity and hinder efficiency

markets do not ensure that the air we breathe is clean because

property rights

countries most often impose restrictions on free foreign trade to

protect domestic producers

Use the graph below to answer the following questions. (da previous diagram 👀) Increasing returns to scale occur when output is at Increasing returns to scale are observed over the entire output range Q = 480 Q = 320 Q = 120

q = 120

you know da move

q = 320

a.ns to previous

q1

on hot summer days, electricity-generating capacity is sometimes stretched to the limit. at these times, electric companies may ask people to voluntarily cut back on their use of electricity. an economist would argue that

raised rates

All else equal, if workers in competitive labor markets are able to augment their stock of human capital, they can expect to decrease the value of their marginal product of labor receive higher wages that reflect an increase in the value of their marginal product of labor increase the value of their marginal product of labor but will not likely receive higher wages increase the final product price

receive higher wages that reflect an increase in the value of their marginal product of labor

people who provide you with goods and services in a market economy

self interest

if a tax is imposed on a market with elastic demand and inelastic supply

sellers

if susan works an additional hour to help pay her expenses,

she gives up an hour

internalizing a negative production externality will cause the supply curve faced by an industry to

shift to the left

in panel (b), the price ceiling

shortage

If rational profit-maximizing firms (like rational people) think at the margin, then marginal adjustments to production will increase market share of the firm will increase homogeneity in the market should always increase profit (or decrease loss) should always lower cost

should always increase profit (or decrease loss)

When price is below average variable cost, a firm in a competitive market will continue to operate as long as average revenue exceeds average variable cost shut down and incur the loss of fixed costs continue to operate as long as average revenue exceeds marginal cost shut down and incur the loss of both variable and fixed costs

shut down and incur the loss of both variable and fixed costs

In monopolistically competitive markets, economic profits ____________, and __________________ shifts the demand curve of incumbent firms to the ___________________. signal some incumbent firms to exit, exit, right signal some incumbent firms to exit, exit, left signal new firms to enter, entry, right signal new firms to enter, entry, left

signal new firms to enter, entry, left

if the price of a substitute to good x increases then

the demand for good x will increase

what will happen in the rice market if buyers are expecting higher prices in the near future?

the demand for rice will intensify now

a tax levied on the supplier of a product shifts the supply curve _____. a tax levied on the buyers of a product shifts the demand curve ______.

upward downward

A worker's contribution to a firm's revenue is measured directly by the worker's value of marginal product of labor (VMPL) or marginal revenue product of labor (MRPL) marginal product of labor multiplied by his/her wage marginal product of labor minus his/her wage contribution to total absolute output

value of marginal product of labor (VMPL) or marginal revenue product of labor (MRPL)

Over a sufficiently long period of time, all costs are fixed sunk variable none of the above

variable

air pollution creates a negative externality. as such,

welfare

In the parable of the leaky bucket, a fundamental problem with government redistribution programs is identified where equity and efficiency are in conflict. In the parable, the leaky bucket represents well intentioned programs which distort market incentives and reduce social welfare the economic satisfaction delivered to the poor through transfer payments an egalitarian policy without market distortions the economic losses caused to the rich due to the progressive taxes needed to fund the transfer payments to the poor

well intentioned programs which distort market incentives and reduce social welfare

in economics, the cost of something is

what you giv

the opportunity cost of an item is

what you give

If price is greater than marginal cost for a profit maximizing firm in a perfectly competitive market, that firm may reduce its output will increase its output will reduce its output none of the above

will increase its output

consumer surplus is

willing to pay

under rent control landlords cease to be responsive to tenants' concerns about the quantity of the housing because

with housing

The basic neoclassical theory of the labor market predicts that workers are compensated according to their contribution to the social value of society workers earn a wage equal to the value they contribute to the marketplace, or the value of their marginal product wages are determined entirely by market supply wages are determined entirely by firms that demand labor services

workers earn a wage equal to the value they contribute to the marketplace, or the value of their marginal product

when a tax is levied on a good

worse off

When the supply of a particular type of worker is limited relative to demand, we would predict that the market wages of these workers would be relatively low, other things equal would be determined outside the domain of the neoclassical theory of supply and demand would be determined solely by factors that affect demand would be relatively high, other things equal

would be relatively high, other things equal

a worker in India can earn $1 per day making cotton cloth on a hand loom. A worker in the US can earn $100 per day making cotton cloth with a mechanical loom. What accounts for the difference in wages?

labor

other things equal, when the price of a good falls, the quantity supplied of the good also falls. this is

law of supply

economists use models in order to

learn

the equilibrium wages of teenagers tend to be

least skilled

a perfectly vertical supply curve signifies that

no effect

Billy and Andy sell lemonade on the corner for $.10 per glass. Their producer surplus is $.06 per glass. Their willingness to supply is

$0.04

Use the following information to answer the questions below. A firm's labor demand curve is represented in the figure below. Assume this firm is a family-farm enterprise and as such is not subject to minimum wage laws. The firm hires 4 workers and the marginal product of the last worker hired is 12. At what price is the firm selling its output? $2.00 $0.50 $0.75 $6.00

$0.50

If a perfectly competitive firm receives $500 in total revenue and has a marginal revenue of $10, what is the average revenue, and how many units were sold? $5 and 100 $10 and 50 $10 and 100 Cannot be determined from the information given.

$10 and 50

If a monopolist sells 100 units at $8 per unit and realizes an average cost of $6 per unit, what is the monopolist's profit? $200 $800 $600 None of the above

$200

Kerstin buys a new pure-bred dog for $150. She receives consumer surplus of $100 on her purchase. Her willingness to pay is

$250

Roland produces nails at a cost of $200 per ton. if he sells the nails for $500 per ton, his producer surplus is

$300 per ton

Josh is lost in the Nevada desert. He determines that he would be willing to pay $50 for a quart of cold Gatorade. He happens upon a lone grocery store/gas station, buys a quart of cold Gatorade, and realizes a consumer surplus of $45. What did he pay for the Gatorade?

$5

Caitlin would be willing to pay $50 to see Le Miserables, but buys a ticket for only $30. Caitlin values the performance at _______ and her consumer is _________.

$50, $20

If a perfectly competitive firm produces 10 widgets and has a marginal revenue (MR) of $5.00, what are the firm's total revenue (TR) and the market price of widgets? $50.00 and $5.00 $5.00 and $5.00 $5.00 and $0.50 Cannot be determined from the information given

$50.00 and $5.00

What is the deadweight loss due to monopoly pricing under the following conditions: The price charged for goods produced is $16. The intersection of the marginal revenue and marginal cost curves occurs where output is 10 units and price is $8. The socially efficient level of production is 12 units. $48 $16 $24 $8 None of the above

$8

Economists have proposed the following hypotheses to explain the rising wage gap between skilled and unskilled workers: (i) increasing international trade, especially with developing countries like China (ii) skill-biased technological advances, especially those involving microprocessor technology, robotics, automation, and artificial intelligence (iii) increasing role of unions and collective bargaining in setting skilled wage rates in private-sector labor markets (iii) only (i) and (iii) only (ii) and (iii) only (i) and (ii) only all of the above

(i) and (ii) only

Question 73 0 / 1 point Monopolistic competition is characterized by which of the following attributes: (i) Many sellers (ii) Product Differentiation (iii) Barriers to entry (iv) Natural monopolies (i) and (iii) only (ii) and (iv) only (i) and (ii) only all of the above

(i) and (ii) only

The principle that rational people think at the margin (i) is important to understanding how firms decide how many workers to hire (ii) is of little use to firms who are trying to maximize profit (iii) provides the behavioral foundation for analyzing how firms make optimal decisions (ii) and (iii) only (i) and (iii) only (i) and (ii) only all of the above

(i) and (ii) only

When a government enacts policies that redistribute income through involuntary transfer payments, it (i) distorts the incentives of both the payer and the recipient of the transfers (ii) makes the allocation of resources more efficient (iii) ensures an equitable distribution of income (i), (ii) and (iii) (i) and (ii) only (i) only (iii) only

(i) only

Possible economic trade-offs from government attempts to involuntarily redistribute income include (i) productivity incentives are distorted and suppressed (ii) people are likely to alter their market behavior (iii) markets become less efficient at allocating resources to their highest and best valued uses (i) and (ii) only (ii) and (iii) only (i) and (iii) only (i), (ii) and (iii) there are no tradeoffs to government income redistribution

(i), (ii) and (iii)

Barriers to entry may arise if: (i) A key resource is owned by a single firm (ii) The government awards a firm the exclusive right to produce a product, such as a patent or special license (iii) Average total costs are always declining (iv) A firm faces perfectly elastic demand (i) only (i) or (ii) only (i), (ii), or (iii) all of the above

(i), (ii), or (iii)

A perfectly competitive market is characterized by which of the following attributes: (i) many buyers and many sellers (ii) barriers to entry (iii) goods offered for sale are largely the same (iv) price takers (i), (iii) and (iv) (i), (ii), and (iv) (i) only all of the above

(i), (iii) and (iv)

producer surplus in Country A will be equal to the area measured by

1-2-10

suppose than an increase in the price of carrots from $1.20 to $1.40 per pound raises the amount of carrots that carrot farmers produce from 1.2 million pounds to 1.6 million pounds. Using the midpoint method, which of the following is the price elasticity of supply

1.86

the opportunity cost of 1 meal for George is

1/2 book

the opportunity cost of 1 book for Martha is

1/8 meal

on the production possibilities graph shown below, the opportunity cost to the economy of getting the 10 additional gutters by moving from point A to point B is

10 buns

if the price elasticity of demand for a good is 1.22, then using the standard (not midpoint) method of computing elasticity, a 10 percent increase in price would be expected to result in a

12.2

Use the following graph to answer the questions below. The graph below depicts demand for workers to harvest the vineyards of the E & O Pietro Winery. Assume that the E & O Pietro Winery is a price taker in factor markets. E & O Pietro Winery is a perfectly competitive profit maximizing enterprise. When wages are $12 an hour, E & O Pietro Winery hires 14 workers to harvest grapes. If picked wine grapes are selling for $0.10 per pound, how many pounds of grapes can the 14th worker pick in an hour? 12 pounds 100 pounds 120 pounds there is not sufficient information about the price of wine to answer this question

120 pounds

Over what output range would marginal cost (MC) be above average variable cost (AVC) but below average total cost (ATC)? 120 to 150 120 to 175 100 to 120 it is impossible to tell from the information provided

120 to 150

Adrian's Premium Boxing Service subcontracts with a chocolate manufacturer to box premium chocolates for their mail order catalog business. Adrian rents a small room in an office building downtown. The relationship between output and the number of employees Adrian hires is outlined below. Number of Workers Output (boxes of premium chocolates produced per week) Marginal Product of Labor (MPL) 0 0 1 330 2 630 3 150 4 890 5 950 60 6 10 What is the marginal product of the fourth worker? 150 boxes 140 boxes 890 boxes cannot determine from the information given

140 boxes

the opportunity cost of 1 book for George is

2 meals

compared with no trade, free trade results in ____in consumer surplus equal to the area ____.

2-3-13-17

consumer surplus in Country A will be equal to the area measured by

2-6-17

in the absence of trade, if both George and Martha devote 1/2 of their time (20 hours) to production of each good, total consumption of books will be ________ and total consumption of meals will be _______

21, 4.5

XYZ corporation produced 300 units of output but sold only 275 of the units it produced. The average cost of production for each unit of output produced was $100. Each of the 275 units were sold for a price of $95. Total revenue for the XYZ corporation would be: $27,500 $30,000 $28,500 26,125

26,125

A firm's labor demand curve is represented in the figure below. Assume this firm is a family-farm enterprise and as such is not subject to minimum wage laws. When the market wage is $7 per hour, how many units of labor (per hour) will this firm employ? 3 2 4 6

3

Use the following information to answer the questions below. Adrian's Premium Boxing Service subcontracts with a chocolate manufacturer to box premium chocolates for their mail order catalog business. Adrian rents a small room in an office building downtown. The relationship between output and the number of employees Adrian hires is outlined below. Number of Workers Output (boxes of premium chocolates produced per week) Marginal Product of Labor (MPL) 0 0 1 330 2 630 3 150 4 890 5 950 60 6 10 What is the marginal product of the second worker? 300 boxes 315 boxes 630 boxes cannot determine from the information given

300 boxes

if both George and Martha specialize in the good in which they have a comparative advantage, total production of books will be _______ and total production of meals will be ___________

40, 4

in the production possibilities graph shown below, what is the opportunity cost to society of the movement from point C to point A?

500 bananas

Use the following graph to answer the questions below. The graph below depicts demand for workers to harvest the vineyards of the E & O Pietro Winery. Assume that the E & O Pietro Winery is a price taker in factor markets. E & O Pietro Winery is a perfectly competitive profit maximizing enterprise. The hourly wage rate for grape harvesters is $15 an hour, and picked wine grapes are selling for $0.20 per pound. What is the hourly marginal product of the last worker hired? 100 pounds 24 pounds 75 pounds there is not sufficient information about the production function to answer this question

75 pounds

the opportunity cost of 1 meal for Martha is

8 books

💧 you know the rules

8 years each

Use the table below to answer the following question: Quantity Price 1 $13 2 $13 3 $13 4 $13 5 $13 6 $13 7 $13 8 $13 9 $13 What level of output is associated with maximum revenue? 3 6 1 9

9

Use the following information to answer the questions below. Adrian's Premium Boxing Service subcontracts with a chocolate manufacturer to box premium chocolates for their mail order catalog business. Adrian rents a small room in an office building downtown. The relationship between output and the number of employees Adrian hires is outlined below. Number of Workers Output (boxes of premium chocolates produced per week) Marginal Product of Labor (MPL) 0 0 1 330 2 630 3 150 4 890 5 950 60 6 10 Total output from hiring 6 workers is 950 boxes per week 960 boxes per week 10 boxes per week cannot determine from the information given

960 boxes per week

on the production possibilities graph shown, which point represents the maximum possible production of CDs for this economy?

A

refer to the graph shown. what area represents consumer surplus when the price is P

A

..ans to prev

A + B + C + D + E

ans to 👆

A + B + C + D + E + F

On the production possibilities graph shown, which point or points are efficient?

A, B, D

when the market is in equilibrium, producer surplus is represented by the area

A-B-E

Which of the following industries is generally assumed to be most closely associated with a perfectly competitive market? Airline Companies Agriculture Retail Stores Telephone Companies

Agriculture

Firms in a perfectly competitive market are said to be price takers because firms have no incentive to charge less than the going market price each firm can sell as much as it wants at the going market price if a firm were to charge more than the going market price, it would sell none of its goods All of the above

All of the above

If you were to buy a product from a perfectly competitive firm, the price you would pay for the product would be equal to the average revenue of the firm equal to the marginal revenue of the firm close to the marginal cost of producing the product All of the above

All of the above

The efficient scale of a firm occurs when the firm is experiencing neither economies nor diseconomies of scale the firm is experiencing constant returns to scale average total cost is minimized marginal cost equals average total cost All of the above

All of the above

When marginal cost (MC) is less than average total cost (ATC), average total cost is greater than average variable cost average total cost must be decreasing the firm is experiencing economies of scale All of the above

All of the above

adam smith was the author of

An Inquiry

Which of the following scenarios best illustrates the concept of "derived demand" for the factors of production? An automobile firm's decision to supply more cars will lead to an increase in the demand for auto workers An auto firm's decision to supply more mini-vans results from a decrease in the demand for station wagons An increase in the price of gasoline will lead to an increase in the demand for small cars An increase in the real wages of autoworkers will lead to an increase in the demand for robots in automobile factories

An automobile firm's decision to supply more cars will lead to an increase in the demand for auto workers

Which of the following cost functions always has a negative slope? Average fixed cost (AFC) Average variable cost (AVC) Marginal cost (MC) Average total cost (ATC)

Average fixed cost (AFC)

on the production possibilities graph shown, which point represents the maximum possible production of pizzas for this economy?

B

The "beauty premium" can be explained by the realization that beauty always acts as an implicit signal of innate intelligence or "good breeding" the marginal productivity of labor in some occupations has a physical dimension that depends on appearance and appeal in some occupations, the physical attractiveness of a worker may increase the value of their marginal product all of the above B and C only

B and C only

with the market in equilibrium, consumer surplus is represented by the area

B-C-E

a tax on the buyers of popcorn will

D

taxes cause deadweight losses if

D

flippppp

Decreasing (diminishing) returns to scale occur when output is at Decreasing returns to scale are observed over the entire output range Q = 400 Q = 120 Q = 320

if the minimum wage is set above the equilibrium wage

E

on the production possibilities graph shown, which point or points are inefficient?

E

producer surplus is

E

what is the answer to prev

F

after the tax is levied, producer surplus is represented by the area

F-Ps-E

________ do not vary with the amount of output a firm produces. Total costs Variable costs Fixed costs None of the above

Fixed costs

flip

For the perfectly competitive firm depicted in the graph, average revenue is equal to $5.00 marginal revenue is equal to $3.50 accounting profits are zero economic profits are zero there is not enough information to determine MR, AR or profitability

________ is the study of how people behave in strategic situations. Game theory Welfare economics Statistics Econometrics

Game theory

do a flip

Given the following prisoners' dilemma table, if Bonnie and Clyde make the appropriate self-interested decision independent of the other, how much time would each end up spending in jail? 8 years each Bonnie goes free, Clyde gets 20 years Bonnie gets 20 years, Clyde goes free 1 year for each

🐬flip me

Given the following prisoners' dilemma table, if Bonnie and Clyde make the appropriate self-interested decision independent of the other, how much time would each end up spending in jail? Bonnie goes free, Clyde gets 20 years 1 year for each 8 years each Bonnie gets 20 years, Clyde goes free

Use the following information to answer the questions below. A firm's labor demand curve is represented in the figure below. Assume this firm is a family-farm enterprise and as such is not subject to minimum wage laws. When output price is $1.25 the firm hires 5 workers at $5 per hour. If the output price decreases to $0.75, what happens to the marginal product of the 5th worker? It falls to 0.94 It remains at 4 It rises to 6.67 There is not enough information to answer the question

It remains at 4

Founders of the philosophy of Utilitarianism include A. C. Pigou and John Maynard Keynes Jeremy Bentham and John Stuart Mill Augustin Cournot and Jean B. Say. A. Kondratieff and Thomas Malthus

Jeremy Bentham and John Stuart Mill

Liberalism is a label that is coined for the philosophy espoused by John Stuart Mill Robert Nozick John Rawls Jeremy Bentham

John Rawls

Use the table below to answer the following question: Quantity Price 1 $13 2 $13 3 $13 4 $13 5 $13 6 $13 7 $13 8 $13 9 $13 Over what range of output is marginal revenue (MR) declining? 3 to 7 7 to 9 1 to 6 None. Marginal revenue is constant over the whole range of output.

None. Marginal revenue is constant over the whole range of output.

Use the following information to answer the questions below. Adrian's Premium Boxing Service subcontracts with a chocolate manufacturer to box premium chocolates for their mail order catalog business. Adrian rents a small room in an office building downtown. The relationship between output and the number of employees Adrian hires is outlined below. Number of Workers Output (boxes of premium chocolates produced per week) Marginal Product of Labor (MPL) 0 0 1 330 2 630 3 150 4 890 5 950 60 6 10 Over what range of output does Adrian's Premium Boxing Service experience decreasing marginal product of labor? Adrian's never experiences decreasing marginal product of labor When less than 300 boxes are produced in a week Over the entire range of output When more than 780 boxes are produced in a week

Over the entire range of output

after the tax is levied, consumer surplus is represented by the area

Pb-A-B

the tax caused a reduction in consumer surplus represented by the area

Pm-Pb-B-C

________ occur(s) when companies merge in order to lower long-run average costs and achieve large economies of scale. Synergies Oligopolies Collusion Monopolies

Synergies

_______ suggests that under the right conditions the private market can be effective in dealing with externalities

The Coase Theorem

an overcrowded beach is an example of

Tragedy of the Commons

long lines at gas stations in the U.S. in the 1970s were primarily a result of

U.S. government

if Canada is better than the US at producing beer, but the US is better than Canada at producing hockey sticks,

US should export

so many graphs ;(

Use the figure below to answer the following question. A monopolist who is able to engage in perfect price discrimination will have profit equal to C + D + F A + B + C + D + E A + C B + D + E

flipppp meeeee

Use the figure below to answer the following questions. A profit maximizing monopolist will cause a deadweight loss equal to A + B + C + D + F F E A + B + F

flipame

Use the figure below to answer the following questions. A profit maximizing monopolist will choose to produce approximately _________ units of output. Q1 Q3 Q0 Q2

flipame pls

Use the figure below to answer the following questions. A profit maximizing monopolist will have economic profits roughly equal to (P5 - P2) * Q0 (P3 - P1) * Q2 (P5 - P0) * Q0 (P4 - P1) * Q1

👆 you know da vibe babyyy

Use the figure below to answer the following questions. A profit maximizing monopolist will have total revenue roughly equal to Q1 * P4 Q2 * P3 Q3 * P2 Q0 * P5

flikp me

Use the figure below to answer the following questions. If this monopolist decided to produce (and sell) Q2 units of output it would continue to make an economic profit, but would not be operating at a level consistent with profit maximization revenue would be less than if it sold Q0 units of output it would have losses of indeterminate size it could not stay in business in the long run

flippa de card

Use the figure below to answer the following questions. The socially efficient level of output will generate a total surplus equal to A + C + E A + B + C + D + E + F B + D + F all of the area beneath the demand curve

🐱‍🏍flip this card por favor

Use the graph below to answer the following questions. Constant returns to scale occur when output is at Q = 240 Q = 480 Constant returns to scale are observed over the entire output range Q = 320

eyo flip dis 👆

Use the graph below to answer the following questions. For the perfectly competitive firm depicted in the graph, economic profits are equal to $15.00� marginal revenue is equal to $5.00 marginal revenue is equal to $3.50 accounting profits are zero

you know what to do 🙁

Use the graphs below to answer the following questions. Which of the graphs shown above would be consistent with a monopolistically competitive firm that is making economic profits? Panel a Panel d Panel c Panel b

😵flip me

Use this information and the graphic shown to answer the following questions. Bill's Bones is an archaeology company and retail outlet that "mines" and sells common fossils directly to the public. The structure of his firm's costs are as follows. At what level of output would marginal cost (MC) equal average variable cost (AVC)? Q = 150 Q = 175 Q = 100 Q = 120

flip me

Use this information and the graphic shown to answer the following questions. Bill's Bones is an archaeology company and retail outlet that "mines" and sells common fossils directly to the public. The structure of his firm's costs are as follows. The most efficient or optimal scale of production for Bill's Bones occurs at Q = 100 Q = 150 Q = 175 Q = 120

which of the following quotations illustrates the Tragedy of the Commons

What is common

flip dis

Which of the graphs shown below best depicts the demand side of the market for a typical monopolist? Panel a Panel b Panel c Panel d

flipme my good sir

Which of the graphs shown below best describes the situation of a regulated natural monopolist with marginal-cost pricing regulation? Panel b Panel a Panel d Panel c

Suppose that professors at the University of Colorado-Denver are typically paid less than equally-talented and equally-accomplished professors at the University of Pittsburgh, even when wages are adjusted for cost of living differences. This real wage difference could be the result of supply, but not demand demand, but not supply conditions of regulated labor markets in the states of Colorado and Pennsylvania, respectively a compensating differential arising from differences in geography and environment between Denver and Pittsburgh

a compensating differential arising from differences in geography and environment between Denver and Pittsburgh

Which of the following factors would lead to an increase in the supply of labor? the price of a firm's final product increases a country tightens border restrictions to limit immigrant labor the market wage rate increases a country reduces border restrictions and experiences an increase of immigrant labor

a country reduces border restrictions and experiences an increase of immigrant labor

Because P > MC, monopoly pricing prevents some mutually beneficial trades from taking place. These unrealized mutually beneficial trades are ________ to society. a sunk cost not considered a cost a deadweight loss or excess burden of little concern

a deadweight loss or excess burden

Which of the following could decrease labor demand? an increase in the marginal productivity of workers a decrease in demand for the final product produced by labor a decrease in the labor supply an increase in migrant workers

a decrease in demand for the final product produced by labor

When factor demand is said to be a "derived demand," this means that factor demand is derived from a production function factor demand exists as a subset of factor supply equilibrium in the factor market is independent of factor supply a firm's demand for a resource (factor input) is derived from its decision to supply demanded goods in an output market

a firm's demand for a resource (factor input) is derived from its decision to supply demanded goods in an output market

a market is

a group of demanders

Dominant strategies in a two-person game often lead to one person gaining advantage at the expense of the other person the best possible outcome for both players a disequilibrium outcome a less preferred outcome for both players

a less preferred outcome for both players

assume that the demand for salt is relatively inelastic and that the demand for orange juice is relatively elastic. the elasticity of supply is exactly the same for both goods. imposing a tax on salt will cause ______total dead weight loss than imposing the same percentage tax on orange juice

a lesser

(previous diagram 👀) Panel b in the set of images shown above is consistent with a perfectly competitive firm that is incurring economic losses a monopolistically competitive firm in both a short-run and a long-run equilibrium a monopolistically competitive firm in a long-run equilibrium, but not a short-run equilibrium a monopolistically competitive firm in short-run equilibrium, but not a long-run equilibrium

a monopolistically competitive firm in short-run equilibrium, but not a long-run equilibrium

A firm in a market characterized by significant barriers to entry, products which have no close substitutes, and no competitors, is said to be a monopoly. an oligopoly. competitive. monopolistically competitive. none of the above.

a monopoly.

The fact that women are more likely to interrupt their careers (and thus limit their accumulation of human capital) to raise children reflects evidence that society under-values the role of women in the market place a potential market-based reason why average wages for men tend to exceed those for women, ceteris paribus evidence that markets are inefficient in allocating labor resources and thus require government intervention to tip the scales to favor women further evidence that labor markets discriminate irrationally against women

a potential market-based reason why average wages for men tend to exceed those for women, ceteris paribus

Firms that have large advertising budgets, such as those firms that advertise during the Super Bowl, are likely to be providing consumers with a good example of wasted resources a potential signal about product quality a glimpse of ostentatious capitalism information about product price

a potential signal about product quality

the minimum wage is an example of

a price floor

If we were to consider a university as a business, the computers in the classrooms and computer labs would be classified as _________________. technology flows a flow of services from capital a stock of capital mechanization

a stock of capital

Use the graph below to answer the following questions. If this perfectly competitive labor market experienced an increase in labor demand, the new equilibrium would occur at a wage above $9, and employment below 100 a wage above $9, and employment above 100 a wage below $9, and employment above 100 a wage below $9, and employment below 100

a wage above $9, and employment above 100

Use the graph below to answer the following questions. If this perfectly competitive labor market experienced an increase in labor supply, the new equilibrium would occur at a wage below $9, and employment above 100 a wage below $9, and employment below 100 a wage above $9, and employment below 100 a wage above $9, and employment above 100

a wage below $9, and employment above 100

The term "compensating differential" in labor markets refers to the fact that workers that do similar work should be paid the exact same wage a wage difference between jobs that is distinguishable on the basis of monetary characteristics a wage difference that arises from the non-monetary characteristics of different types of jobs compensation to workers who are victims of employer discrimination

a wage difference that arises from the non-monetary characteristics of different types of jobs

economists tend to see ticket scalping as

a way of increasing

Interest paid on a bank loan is an explicit cost always lower than money you borrow from yourself an implicit cost always higher than money you borrow from yourself

an explicit cost

In a monopolistically competitive industry, price is likely to be _________________ marginal cost since each firm is a _________________. always a fraction of, price setter or price maker below, price setter or price maker equal to, price taker above, price setter or price maker

above, price setter or price maker

Diminishing marginal product of labor occurs when adding another unit of labor increases output, but not by as large a margin as the previously employed labor adding another unit of labor decreases output adding another unit of labor increases output, but by more than the margin of previously employed labor none of the above

adding another unit of labor increases output, but not by as large a margin as the previously employed labor

which of the following is not an advantage of road tolls as a way to reduce traffic

administrative

ceteris paribus is a latin phrase that literally means

all else equal

If regulators were to require that monopolistically competitive firms set price equal to marginal cost in the long run, then all monopolistically competitive firms would experience economic losses firms would also operate at maximum efficient scale the most efficient firms are not likely to be affected new firms would be likely to enter the market

all monopolistically competitive firms would experience economic losses

whenever we talk of demand curves or movements along the demand curve,

all non-price

Advertising that identifies the location and hours of operation of retail outlets enhances the ability of markets to allocate scarce resources more efficiently enhances the competitive structure of markets gives consumers more information on which to make better choices all of the above

all of the above

Bill owns three acres of beautiful wooded land. when Bill decides to move away to be closer to his grandchildren he donates the three acres of land to the state with the understanding that the land will be used as a state park that anyone may use without paying any fees. this state park

all of the above

Differences in wages across countries is most likely attributable to differences in how technologically advanced the country is the amount of physical capital available to workers worker productivity all of the above

all of the above

For a firm in a perfectly competitive market, __________________ equals the price of the good. marginal revenue (MR) average revenue (AR) demand price all of the above

all of the above

From the perspective of labor market demand, human capital investment is reflected in a firm's willingness to pay more for more productive workers in an increase in the marginal product of labor in an increase in labor demand all of the above

all of the above

In a perfectly competitive market, the long-run process of entry and exit ends only when price equals average total cost and marginal cost marginal revenue equals marginal cost optimum efficiencies of scale are reached all of the above

all of the above

In theory, price discrimination decreases deadweight loss decreases consumer surplus increases the monopolist's profits all of the above

all of the above

Proponents of legislation that limit the time a family can receive welfare benefits are likely to argue that time limits are desirable or necessary because welfare programs can create incentives that entrench the habit of government dependency long periods of time relying on welfare income tends to erode work skills, making people less employable (and more dependent) in the future they tend to reduce government budget outlays for poverty programs and reduce fiscal deficits which can be a drag on economic growth all of the above

all of the above

Proponents of welfare reform claim that programs for the poor which do not establish a time limit on recipient benefits harm children by forcing mothers to work outside of the home encouraging child abuse by absent fathers encouraging a generational psychological dependency on government programs all of the above

all of the above

The basic purpose of the theory of factor markets is to explain how the quantity of factor resources exchanged in markets is determined how prices are determined for factors of production how income is distributed among owners or suppliers of the factors of production all of the above

all of the above

The goal of a(n) ________ is to maximize profit. oligopoly monopoly monopolistically competitive firm perfectly competitive firm all of the above

all of the above

The philosophy of Libertarianism invokes the supremacy of voluntary processes over outcomes supremacy of individual rights over collective rights supremacy of free choice over coercion all of the above none of the above

all of the above

When regulating a natural monopoly, one of the problems with setting price equal to average total cost is that there is no incentive for the monopolist to lower its costs there is an incentive for the monopolist to overstate its costs total social welfare is not optimized because P > MC consumer surplus is not maximized all of the above

all of the above

When will a perfectly competitive firm be making zero economic profit? When price equals minimum average total cost When price equals the level of average total cost at the efficient scale After the long-run process of entry and exit all of the above

all of the above

Which of the following could increase labor demand? an increase in the marginal productivity of workers an increase in final product price an increase in demand for the final product produced by labor all of the above

all of the above

Which of the following is a reason that barriers to entry exist? The government gives a single firm the exclusive right to produce some good, or government product regulations hinder competitive entry by rivals. A key resource is owned by a single firm The relatively high fixed costs of production make a single producer more efficient than a large number of producers all of the above

all of the above

Which of the following would be considered key determinants of labor productivity? (i) Physical capital available to workers (ii) Human capital obtained by workers through education and training (iii) Technological advancements and knowledge (i) and (iii) only (i) and (ii) only (ii) and (iii) only all of the above

all of the above

adam smith

all of the above

buyers generally buy more of a good when

all of the above

in a market economy,

all of the above

in a market system, prices

all of the above

in general, opponents of the minimum wage

all of the above

in most free markets

all of the above

price acts as

all of the above

rationing mechanisms that develop under price ceilings

all of the above

technological advancement

all of the above

the demand for a good tends to be more price sensitive or price elastic

all of the above

trade can benefit society as a whole because it allows

all of the above

when the absence of property rights causes a market failure, the government can potentially solve the problem

all of the above

which of the following falls within the study of economics?

all of the above

Economies of scale can occur when marginal cost is less than average total cost average variable cost is less than average total cost a firm has large fixed costs all of the above are possible

all of the above are possible

If a professional baseball player makes more money than a private preschool teacher, we can conclude that an additional professional baseball player generates more revenue in the market than an additional private preschool teacher labor markets are therefore inefficient and inequitable professional baseball players are valued more highly by society than preschool teachers society's values are simply all screwed up

an additional professional baseball player generates more revenue in the market than an additional private preschool teacher

a binding price floor causes

an excess supply

Foregone interest from investing your own personal savings into a business is an example of an explicit cost a foregone tax liability an accounting cost an implicit cost

an implicit cost

the figure below shows the supply and the demand for wheat in Country A. it also shows the world price for wheat. assume that there are no restrictions to free trade and the Country A cannot influence the world wheat price. use the figure to answer the following questions. Country A will be

an importer of wheat

a supply curve slopes upward because

an increase

if a good is a "normal good" then an increase in income will result in

an increase

suppose that scientists find evidence that proves a correlation between eating chocolate pudding and hair growth. it appears that the consumption of chocolate pudding increases hair growth in men who are balding. All else equal, we would expect to see

an increase

Economists that study labor markets have documented a rising trend in U.S. and world labor markets for employers to pay all costs of education and training a decrease in the earnings gap between low skill and high skill workers since the 1970s an increase in the earnings gap between low skill and high skill workers since the 1970s a general decline in the average real wages of college graduates over the last two decades

an increase in the earnings gap between low skill and high skill workers since the 1970s

The term "factor markets" is used to describe markets of fixed inputs only labor only any and all inputs into the production process all factors that contribute to the profitability of firms

any and all inputs into the production process

a perfectly elastic demand curve implies that

any rise

in free markets, landlords try to keep their building clean and safe because

appealing

The process of buying a good in one market at a low price and selling it in another market at a higher price, such as in ticket-scalping or in stock market speculation, is called ________. profit discrimination arbitrage product discrimination marginal cost pricing

arbitrage

david richardo

argued

When large-scale firms have tacit agreements among themselves on the quantity to produce and the price at which to sell their output, they are organized on a competitive scale as a Nash arrangement as competitive oligopolists as a cartel

as a cartel

As the quantity produced increases, average fixed cost decreases total fixed cost increases total variable cost decreases None of the above

average fixed cost decreases

ans to prev/

average revenue is equal to $5.00

The cost to produce the typical unit of output is the firm's variable cost average total cost fixed cost marginal cost

average total cost

Economies of scale occur when average variable cost increases as output increases average total cost declines as output increases average fixed cost increases as output increases average fixed cost declines as output increases

average total cost declines as output increases

Diseconomies of scale occur when average total cost increases as output increases average fixed cost declines as output increases average total cost declines as output increases average fixed cost increases as output increases

average total cost increases as output increases

When average total cost (ATC) is less than marginal cost (MC), average fixed cost is greater than marginal cost the firm is experiencing economies of scale average total cost must be increasing all of the above

average total cost must be increasing

A "natural monopoly" occurs when the monopolist product is sold in its natural state (such as water or diamonds) average total cost of production decreases continuously as more output is produced over the relevant range of product demand firms are characterized by falling marginal cost curves a monopoly firm requires the use of free natural resources (such as water or air) to produce its product

average total cost of production decreases continuously as more output is produced over the relevant range of product demand

The next set of questions is designed to get you to think carefully and critically about how competitive markets (freedom of entry and exit) can cope with and may actually reduce taste-based discrimination in employment without government intervention. As you consider the bald and hairy barbers in this example, apply the scenario to possible employment discrimination against women and racial/ethnic minorities. Example: Assume that the competitive market for barbers is differentiated into two groups due to taste-based (irrational) discrimination by barbershop employers: those barbers that are bald (or going bald) and those that have a full head of hair. Bald barbers are initially the group discriminated against in the market. Assume that the barbers in this market are identical in every other way and are equally skilled in their trade. The labor market for barbers is represented by the two figures below: If wages for "bald" and "hairy" barbers. respectively, are initially as indicated in the above graphs, then barbershops that eventually hire only "hairy" barbers will all go out of business barbershops hiring "hairy" barbers will have a cost advantage, leading to an increase in the demand for "hairy" barbers and a further widening of the wage difference between the two types of barbers, all else equal barbershops hiring "bald" barbers will enter the market, increasing the demand for "bald" barbers and bringing "bald" and "hairy" barbers' wages closer together, all else equal all incumbent barbershops will necessarily end-up with some "bald" and some "hairy" barbers in the long run, all else equal

barbershops hiring "bald" barbers will enter the market, increasing the demand for "bald" barbers and bringing "bald" and "hairy" barbers' wages closer together, all else equal

The next set of questions is designed to get you to think carefully and critically about how competitive markets (freedom of entry and exit) can cope with and may actually reduce taste-based discrimination in employment without government intervention. As you consider the bald and hairy barbers in this example, apply the scenario to possible employment discrimination against women and racial/ethnic minorities. Example: Assume that the competitive market for barbers is differentiated into two groups due to taste-based (irrational) discrimination by barbershop employers: those barbers that are bald (or going bald) and those that have a full head of hair. Bald barbers are initially the group discriminated against in the market. Assume that the barbers in this market are identical in every other way and are equally skilled in their trade. The labor market for barbers is represented by the two figures below: Ceteris paribus, if the market for a haircut is competitive, barbershops that hire bald barbers will initially be more profitable barbershops that hire barbers with hair will initially be more profitable barbershops will all earn a normal economic profit in the short run the difference in wages between bald and hairy barbers is able to be maintained indefinitely since a haircut is not a homogeneous good

barbershops that hire bald barbers will initially be more profitable

The fundamental source of monopoly market power arises from perfectly inelastic demand perfectly elastic demand availability of "free" natural resources, such as water or air barriers to entry

barriers to entry

Martha has a comparative advantage in ___________ and George has an comparative advantage in ____________

books, meals

Martha should specialize in _________ and George should specialize in ________

books, meals

in a free market, what determines how much of a good will be sold and the price at which it is good?

both

When many sellers are involved in selling their products in a market, the market structure could be which of the following: (i) perfect competition (ii) monopolistic competition (iii) monopoly (iv) oligopoly (ii) only (i), (ii) and (iv) only (i) only both (i) and (ii) all of the above

both (i) and (ii)

The supply curve for an individual firm in a perfectly competitive market is determined by forces external to the firm. is reflected in its marginal cost curve above average variable cost in the short run is reflected in its marginal cost curve above average total cost in the long run. is likely to slope downward. both b and c are correct

both b and c are correct

in panel (c), at the actual rental price there will be

both b and d

Price discrimination requires the firm to differentiate between different units of their product engage in arbitrage among buyers of their product separate customers according to their willingness to pay prevent arbitrage among buyers of their product both c and d

both c and d

Martha has absolute advantage in _________ and George has absolute advantage in __________

both goods

Typically, the marginal cost curve ________ as output increases. briefly increases then decreases always decreases always increases briefly decreases then increases None of the above

briefly decreases then increases

In the short term, all of the following are variable costs of production except building rent electricity raw materials overtime pay

building rent

Use the following information to answer the questions below. Gertrude Kelp owns a commercial fishing fleet off the coast of Alaska. As part of her business she hires someone to captain the boats in her fleet, and workers that are considered part of the crew. In the market for fresh pacific salmon, Gertrude is one of thousands of fisher-persons. While Gertrude usually catches a significant number of fish each year, her contribution to the entire harvest of salmon is negligible relative to the size of the market. When Gertrude hires workers for her boat crews, she would be considered a _____________ in the factor market for labor services. buyer-demander discriminator seller-supplier fringe competitor

buyer-demander

if a tax is imposed on a market with inelastic demand and elastic supply

buyers

the term tax incidence refers to

buyers and sellers

what is true about the burden of a tax imposed on sellers of popcorn

buyers and sellers

in general, in economics elasticity is

buyers and sellers respond

economists use the concept of price elasticity of demand to

buyers the price of the good

the price elasticity of supply measures

changes in the price of the good

in the long run, the quantity supplied

can respond

Since natural monopolies have a declining average cost curve, regulating natural monopolies by setting price equal to marginal cost would maximize producer surplus result in a less than optimal total surplus cause the monopolist to operate at a loss all of the above

cause the monopolist to operate at a loss

Individual members of a cartel almost always have an incentive to ________ to increase their own profits further. lower production limit membership collude by lowering output and increasing price cheat by increasing output and reducing price

cheat by increasing output and reducing price

Individual members of a cartel have a strong incentive to ________________ the cartel agreement (by increasing output) because pursuit of _______________ will maximize individual firm profits and potentially increase the individual firm's market share. cheat on, collective interest cheat on, self-interest adhere to, self-interest adhere to, collective interest

cheat on, self-interest

consider the following problems: overcrowded public highways, overfishing in the ocean, polluted air, and the near-extinction of some wild animals. what do these problems have in common

clear property rights

The claim that "coal miners are generally paid more on average than workers with similar (low) levels of education" is likely to reflect that all coal mines use union labor coal exports must be rising coal mining jobs are potentially more dangerous/hazardous than other jobs with comparable education requirements coal mining is a declining industry

coal mining jobs are potentially more dangerous/hazardous than other jobs with comparable education requirements

An agreement among firms over production output and price is called _______. This group of firms that are acting in unison is called a ________. conspiracy, union conspiracy, cartel collusion, cartel collusion, union

collusion, cartel

the benefit received by buyers in a market is measured by

consumer surplus

If a monopolist is able to price discriminate consumer surplus is increased at a point closer to the socially efficient level of output consumer surplus and deadweight losses are transformed into producer surplus and monopoly profits at a point closer to the socially efficient level of output the price effect dominates the output effect on monopoly revenue at a point farther from the socially efficient level of output deadweight loss is increased at a point closer to the socially efficient level of output

consumer surplus and deadweight losses are transformed into producer surplus and monopoly profits at a point closer to the socially efficient level of output

In a two-person repeated game, a tit-for-tat strategy starts with ____________________ and then each player ______________________. non-cooperation, pursues their own self-interest cooperation, is unresponsive to the strategic moves of the other player cooperation, mimics the other player's last move non-cooperation, cooperates when the other player demonstrates a desire for the cooperative solution

cooperation, mimics the other player's last move

the commercial value of ivory is a threat to the elephant, but the commercial value of beef is guardian of the cow. this is because

cows are private goods

Private clubs that intentionally hire workers only from one specific gender may offer an example of government-induced discrimination customer-induced discrimination clubs that are therefore not profit maximizers a market-induced nondiscriminatory equilibrium

customer-induced discrimination

As some incumbent firms exit a monopolistically competitive market, economic losses of existing firms ____________ and product diversity in the market _________________. decline, increases rise, increases rise, decreases decline, decreases

decline, decreases

As new firms enter a monopolistically competitive market, economic profits of existing firms ____________ and product diversity in the market _________________. rise, increases rise, decreases decline, decreases decline, increases

decline, increases

suppose that you own a business that makes and sells jewelry boxes. a business consultant tells you that she has determined that you face an elastic demand for your jewelry boxes. if you want to increase your total revenue, assuming all other forces remain unchanged, you should

decrease

in the figure shown, as a result of the tariff, consumer surplus _____by______, producer surplus ____by______, government tariff revenue is _____, and deadweight loss is_________.

decrease CFGH

internalizing a negative production externality will cause an industry to ______ the quantity it supplies to the market and _______the price of the good produced

decrease, increase

All else equal, if wages rise, profit maximizing firms in competitive markets will __________________ employment and the marginal product of labor will _________. increase, rise increase, fall decrease, fall decrease, rise

decrease, rise

As a monopolist increases the quantity of output it sells, the price consumers are willing to pay for the good __________ . decreases due to the law of decreasing marginal benefit increases due to the law of increasing marginal benefit is unaffected Not enough information given

decreases due to the law of decreasing marginal benefit

Under conditions of monopoly, the socially efficient level of production occurs where the marginal cost curve intersects the ________ curve. demand average cost supply marginal revenue

demand

if the number of buyers in the market decreases,

demand decrease

economists compute the price elasticity of demand as

demand over price percentage

positive statements are

descriptive

economist Milton believes that macroeconomic policy cannot be used effectively to reduce fluctuations in the economy. Economist Paul disagrees. their disagreement can be best described as

disagreement about the validity

Evidence of differences in average wages of women compared to men are solely indicative of differences in productivity between genders does not alone provide conclusive evidence of sex discrimination in labor markets is seldom used as evidence of discriminatory bias provides conclusive evidence of broad patterns of widespread labor markets discrimination on the basis of sex

does not alone provide conclusive evidence of sex discrimination in labor markets

In game theory, a strategy is called a ________ if it is the best strategy for a player to follow regardless of the strategies pursued by other players. known probability dominant strategy perfect strategy None of the above

dominant strategy

when there is excess supply in a market,

downward pressure

The market demand curve for a single-price monopolist is typically downward sloping and equal to the market demand curve unitary elastic horizontal and below the market demand curve perfectly elastic at market price

downward sloping and equal to the market demand curve

Since a monopolistically competitive firms faces a ____________________ demand curve, it will always operate at ___________________. downward sloping, excess capacity perfectly inelastic, efficient scale downward sloping, efficient scale perfectly elastic, excess capacity

downward sloping, excess capacity

which of the following goods best meets the definition of scarcity?

drinkable water in a city

When advertising encourages customers to become more informed about all firms in the market, then the market power of individual firms is strengthened each firm is likely to have less market power and prices are likely to be lower firms are able to foster stronger brand loyalty demand curves for specific brands in the market are likely to become less elastic

each firm is likely to have less market power and prices are likely to be lower

Monopolistic competition differs from standard or typical oligopoly because in monopolistically competitive markets all firms can eventually earn economic profits in perpetuity each of the sellers offers a somewhat different product strategic interactions between firms is vitally important there are barriers to entry

each of the sellers offers a somewhat different product

in the production possibilities graph shown below, the movement of the frontier from A to B can best be described as

economic growth

When new firms enter a market in pursuit of economic profit, all firms will see their share of market production increase no firms in the industry will earn economic profit in the short run, all else equal. the market demand curve will rise. economic profit of existing firms in the market will begin to fall, all else equal.

economic profit of existing firms in the market will begin to fall, all else equal.

The entry and exit decisions of firms are signaled by high or low demand for a firm's product. high capital costs. economic profits and economic losses low capital costs.

economic profits and economic losses

policies such as rent control, minimum wage laws, tariffs and import quotas persist in spite of the fact that economists are nearly united in their opposition to these policies. Which of the following is the best explanation for this situation?

economists have not yet

when a supply curve is relatively flat, then

elastic

The wage difference between jobs that require higher education and those that don't encourages workers to bear the relatively high cost of acquiring higher education by providing an incentive in the form of higher wages is not likely to be related to productivity differences is a barrier to obtaining an education does not affect the supply of workers in the different labor markets

encourages workers to bear the relatively high cost of acquiring higher education by providing an incentive in the form of higher wages

For a competitive firm, marginal revenue ________ the price of its good, and for a monopolist, marginal revenue ________ the price of its good. is less than, equals is greater than, is less than equals, is greater than equals, is less than

equals, is less than

workers with high skills and much experience are not affected by the minimum wage because

equilibrium wages

For a firm that is perfectly competitive in both product (output) and factor (input) markets, the value of the marginal product of labor eventually declines because the marginal product of labor diminishes as the number of workers rises increases because the market supply curve for labor is upward sloping eventually declines because a perfectly competitive firm must lower product price in order to increase sales is constant at the prevailing market wage

eventually declines because the marginal product of labor diminishes as the number of workers rises

When freedom of entry is one of the attributes of a market structure, economic profits are sacrificed to excess capacity negative for all firms always positive eventually driven to zero

eventually driven to zero

Liberalism is grounded in a premise that behind a "veil of ignorance" everyone would agree to "just" rules in the social redistribution of income justice is a matter of political philosophy justice could never be agreed upon no one would be considered in an "original position"

everyone would agree to "just" rules in the social redistribution of income

Use the following graph to answer the questions below. The graph below depicts demand for workers to harvest the vineyards of the E & O Pietro Winery. Assume that the E & O Pietro Winery is a price taker in factor markets. When wages are $15 an hour, E & O Pietro Winery will hire ___________________ workers to maximize its profit. at least 12 at most 12 exactly 12 there is not sufficient information about the price of wine to answer this question

exactly 12

When compared to perfect competition, the theoretical disadvantages of monopolistic competition are __________ and __________, whereas the practical benefit that consumers get in return is __________. product variety, excess capacity, marginal cost pricing deadweight losses, product variety, excess capacity product variety, deadweight losses, average cost pricing excess capacity, deadweight losses, product variety

excess capacity, deadweight losses, product variety

neither public goods nor common resources are

excludable public goods

All else equal, if workers are in an industry that is experiencing rapid improvements (or advances) in technology which is complementary to labor, they can expect to see a reduction in demand for final products see a reduction in the need for physical capital experience wage increases as their productivity is enhanced from technology advances have their wages decline

experience wage increases as their productivity is enhanced from technology advances

Use the following information to answer the questions below. A firm's labor demand curve is represented in the figure below. Assume this firm is a family-farm enterprise and as such is not subject to minimum wage laws. The firm is employing 2 workers when the price of output is $2. A recent report on productivity has indicated that the marginal product of the 2nd worker is 5 units per hour. In order to maximize profits, the firm should sell the output for a lower price reduce employment hire more workers increase the wage

hire more workers

in his 1776 book The Wealth of Nations, Adam Smith made the most famous observation in all of economics:

households

tradable pollution permits

i and ii

which of the following could be associated with positive consumption externalities

i and ii

according to the Coase theorem, private solutions to externalities can occur when

i and iv

demand is said to be elastic

if the quantity

demand is said to be inelastic

if the quantity

which of the following is a topic of study in microeconomics but not macroeconomics?

impact of minimum wage

In general, market structures that fall somewhere in between Monopoly and Perfect Competition are called oligopoly markets incomplete markets monopolistically competitive markets exclusively imperfectly competitive markets

imperfectly competitive markets

when externalities exist, buyers and sellers

incentive inefficient

because elephants roam freely in many countries in Africa, each individual African elephant poacher has

incentive to kill

when demand is price elastic in the current price range,

increase price decrease revenue

An oligopolist is part of a cartel that is collectively producing at the monopoly level of output. The oligopolist, being self-interested will lower production below the agreed-upon level and drive up prices further do nothing thus allowing the cartel to realize monopoly profits increase production beyond the agreed-upon level to undercut rivals within the cartel None of the above

increase production beyond the agreed-upon level to undercut rivals within the cartel

All else equal, if the price of the final product increases, profit maximizing firms in competitive markets will __________________ employment and the marginal product of labor will _________. increase, rise decrease, fall increase, fall decrease, rise

increase, fall

All else equal, if wages fall, profit maximizing firms in competitive markets will __________________ employment and the marginal product of labor will _________. decrease, rise increase, fall increase, rise decrease, fall

increase, fall

When the value of the marginal product of labor exceeds the going market wage, firms will _____________ profit by ______________ the number of workers hired. minimize, increasing decrease, increasing maximize, decreasing increase, increasing

increase, increasing

As the number of firms in an oligopoly market _________________ the market approaches a ____________________________. decreases, cartel equilibrium increases, monopoly market equilibrium increases, competitive market equilibrium decreases, competitive market equilibrium

increases, competitive market equilibrium

if a good is a necessity, the price elasticity of demand for the good would tend to be

inelastic

if the quantity supplied responds only slightly to large changes in price, then

inelastic

which of the following is the most correct statement about tax burdens

inelastic

Research indicates that the U.S. trend of increasing income _______________ since the 1970s, is likely to be a result of_____________. equality, increases in human capital investment equality, increased international trade with developing countries inequality, recent advancements in technology that increase the demand for skilled labor relative to unskilled labor inequality, increasing labor market discrimination

inequality, recent advancements in technology that increase the demand for skilled labor relative to unskilled labor

if a decrease in income increased the demand for a good, then

inferior

suppose that john receives a pay increase. we would expect

inferior goods decrease

Rawls claims that from the perspective of the "original position" behind the "veil of ignorance," support for government transfers and income redistribution can be thought of as a(n) divinely inspired policy insurance policy against the risk of finding oneself in the lower half of the income distribution correction for capital income imbalances ethical subsidy to low-skilled workers

insurance policy against the risk of finding oneself in the lower half of the income distribution

the downward-sloping demand curve reflects which of the following?

inverse relationship

The marginal product of capital is equal to the incremental profit associated with accessing funds in the stock market is equal to the increase in output obtained from a one-unit increase in capital is equal to the increase in capital necessary to generate a one-unit increase in output is equal to the incremental cost of equity financing

is equal to the increase in output obtained from a one-unit increase in capital

suppose that the price of product x is reduced from $1.45 to $1.25 and, as a result, the quantity of x demanded increases from 2,000 to 2,200. the demand for x in the given price range

is inelastic

The income distribution in a market economy is largely determined by rental income from land ownership is largely determined by factors that determine wages (i.e., labor productivity) is independent of market forces in the allocation of scarce labor resources is largely determined by capital income (i.e., returns on investment in capital and capital productivity)

is largely determined by factors that determine wages (i.e., labor productivity)

Advertising that conveys information about the prices of different goods being offered for sale is likely to enhance the ability of markets to allocate scarce resources more efficiently is psychological rather than informational increases brand loyalty and product differentiation all of the above

is likely to enhance the ability of markets to allocate scarce resources more efficiently

Income mobility studies suggest that poverty cannot be alleviated by privately sponsored anti-poverty or charity programs is a long-term problem for a relatively large number of families and households is not a long-term problem for most families or households cannot be alleviated by government sponsored anti-poverty programs

is not a long-term problem for most families or households

market demand or the market demand curve for a particular good or service

is the sum

Evidence of irrational or taste-based discrimination in labor markets is easily quantified by economists for most races by simply observing differences in average wage rates between groups is very difficult to verify by reference to differences in average wage rates alone is more easily identified on the basis of race than gender is conclusively identified by the very large differences in average wages rates between men and women even after controlling for all other factors

is very difficult to verify by reference to differences in average wage rates alone

suppose that the demand for French bread increases. what will happen to producer surplus in the market for the French bread

it decreases

When a profit maximizing oligopolist makes a production decision it should ensure that the output effect is dominant it generally must consider the behavior of competing rival firms it should ensure that the price effect is dominant it must always assume that competing firms will maintain their current levels of production

it generally must consider the behavior of competing rival firms

the main reason for using the midpoint method to compute the coefficient of elasticity is

it gives

The prisoners' dilemma is an important game to study because most games present zero-sum alternatives it identifies the fundamental difficulty in maintaining cooperative agreements strategic decisions faced by prisoners are always identical to those faced by firms engaged in illegal collusive agreements All of the above

it identifies the fundamental difficulty in maintaining cooperative agreements

when the government prevents prices from adjusting naturally to supply and demand,

it impedes

When the player of a game chooses a dominant strategy it is the best strategy, only if other players are cooperative the game can never reach a Nash equilibrium it is the best strategy, regardless of choices made by other players it always leads to a Nash equilibrium that makes all players equally well off

it is the best strategy, regardless of choices made by other players

If a regulated natural monopoly is unable to generate profits at the "marginal-cost pricing" regulated level of production the regulated monopolist should try to minimize losses in the long run it may be necessary for the government to subsidize the natural monopolist, which requires raising taxes or cutting public spending elsewhere the regulated monopolist should always exit the industry the government should always purchase the monopoly and run it in the public sector

it may be necessary for the government to subsidize the natural monopolist, which requires raising taxes or cutting public spending elsewhere

Advertising enhances the competitive structure of markets when it reduces the elasticity of demand for a product it is psychological rather than informational it provides information that is useful to consumers in choosing among a variety of products it increases brand loyalty

it provides information that is useful to consumers in choosing among a variety of products

what is de answer to prev

it would continue to make an economic profit, but would not be operating at a level consistent with profit maximization

upon what does a country's standard of living depend?

its ability to produce

Equilibrium price in markets characterized by oligopoly is usually________________ than in monopoly markets and _______________ than in perfectly competitive markets. higher, lower lower, higher higher, higher lower, lower

lower, higher

Research that compares wages for men and women who have similar education levels, similar job experience, and similar life situations suggests that male-female earnings differentials are actually quite small, ceteris paribus markets are grossly inefficient in allocating labor resources that differ by gender orientation government regulation and transfer programs have largely been responsible for reducing or eliminating the gender wage gap male-female earnings differentials are "widespread and severe" due to taste-based discrimination by employers

male-female earnings differentials are actually quite small, ceteris paribus

Monopolistically competitive firms are typically characterized by many firms selling identical products few firms selling similar or identical products many firms selling similar, but not identical products few firms selling highly different products

many firms selling similar, but not identical products

If XYZ company chooses not to produce anything this month, its ________ will be zero for the month. marginal cost average cost opportunity cost total cost

marginal cost

The cost to produce one additional unit is called fixed cost marginal cost average cost variable cost

marginal cost

A profit-maximizing firm will choose to increase production when marginal cost is less than average total cost marginal revenue is less than marginal cost marginal cost is less than marginal revenue average total cost is less than marginal cost

marginal cost is less than marginal revenue

When a profit maximizing, perfectly competitive firm moves down its labor demand curve, _________________ is falling and ________________ is ______________________. marginal cost, average cost, rising marginal cost, marginal product, rising marginal product, marginal cost, falling marginal product, marginal cost, rising

marginal product, marginal cost, rising

To the best of their ability, a profit maximizing producer always chooses to produce the level of output where average revenue is greater than marginal cost. average variable cost exceeds marginal cost. marginal revenue equals marginal cost. average total cost is less than average revenue.

marginal revenue equals marginal cost.

When a monopolist faces a downward sloping market demand curve, its average revenue is less than the price of its product. marginal revenue is always less than the price of the units it sells. marginal revenue is greater than the price of the units it sells. average revenue is always less than marginal revenue.

marginal revenue is always less than the price of the units it sells.

A profit maximizing monopolist will produce the number of units that coincides with the level of output at which average revenue is just equal to marginal cost. total economic revenue is just equal to opportunity cost. marginal revenue is just equal to marginal cost. average revenue is just equal to average total cost.

marginal revenue is just equal to marginal cost.

Firms maximize profits when marginal cost equals average cost. supply. marginal revenue. All of the above.

marginal revenue.

Evidence suggests that most business owners are generally interested in making profits, but only when all forms of discrimination are illegal unable to determine the link between discrimination and profitability more interested in making a profit than in indulging taste-based discriminating against a particular group more interested in indulging taste-based discrimination than in making profits

more interested in making a profit than in indulging taste-based discriminating against a particular group

an increase in the price of oranges would

movement upwards

In order to sell more of its product a monopolist must sell in international markets. must sell to the government. must lower its price on all units it sells. must use its market power to force up the price of complementary products.

must lower its price on all units it sells.

A(n) ________ is a situation in which economic actors interacting with one another each choose their best strategy given the strategies the others have chosen. Nash equilibrium competitive equilibrium open market solution socially optimal solution

nash equilibrium

each of the following would be considered a common resource except

national defense

A ________ arises when there are economies of scale over a large relevant range of output usually due to relatively high fixed costs. natural monopoly government-created monopoly resource monopoly all of the above

natural monopoly

An industry is a(n) ________ when a single firm can supply a good or service to an entire market at a lower cost than two or more firms could. government-created monopoly resource monopoly natural monopoly efficient monopoly

natural monopoly

If firms in a monopolistically competitive industry are making economic profits new firms will eventually enter the market barriers to entry will be strengthened firms will likely be subject to regulation some firms must eventually exit the market

new firms will eventually enter the market

in a market with a binding price floor, rationing among suppliers is accomplished through

non-price mechanisms

The position one takes about the government's role in redistributing income is largely one of egalitarian principles positive economic efficiency enhanced opportunity normative political philosophy

normative political philosophy

in panel (a), the price ceiling

not binding

Markets which are characterized by only a few sellers with large market shares that sell similar or nearly identical (homogeneous) products are typically referred to as monopoly markets competitive markets aggressive markets oligopoly markets

oligopoly markets

an externality exists when

one person

Firms can have (i) accounting profits and economic losses (ii) accounting profits and economic profits (iii) accounting losses and economic losses (iv) accounting losses and economic profits only (i) and (iv) only (ii) and (iii) (i), (ii), (iii) and (iv) only (i), (ii), and (iii) all of the above

only (i), (ii), and (iii)

In the short run, a firm in a monopolistically competitive market earns economic profits earns economic losses will never shut down will shut down if price falls below average total cost only a or b are possible

only a or b are possible

When analyzing a firm's behavior, it is important to include all ________ of production. explicit costs opportunity costs sunk costs externalities

opportunity costs

In general, libertarians would argue that equality of ________________ is more important than equality of ________________, even though neither are likely to be fully achieved. income, opportunity labor compensation, capital compensation opportunity, income capital compensation, labor compensation

opportunity, income

When a monopolist increases the number of units it sells, there are two effects on revenue, the _________________ and the _______________________. competitive effect, monopoly effect demand effect, supply effect output effect, price effect competition effect, cost effect

output effect, price effect

the Ogallala aquifer is a large underground pool of fresh water under several western states in the United States. any farmer with land above the aquifer can at present pump water out of it. we might expect that

over time

if the use of a common resource is not regulated

overused

in the figure shown, which panel(s) best represent(s) a binding rent control in the short run

panel (a)

in the figure shown, the binding price ceiling is shown in

panel (b)

in the figure shown, which panel(s) best represent(s) a binding rent control in the long run

panel (c)

Which of the following graphs would represent a profit maximizing monopolistically competitive firm? (da previous diagram 👀) Panel a Panel b Panel c Panel d

panel a

‍♂️ans to previous

panel a

😢flip

panel a

The graphs below depict the effect on incumbent firms of entry and exit in a monopolistically competitive market. (previous diagram) If firms in a monopolistically competitive market are earning economic losses, which of the graphs shown would reflect the change in demand for incumbent firms as the market adjusts to its new equilibrium? Panel d Panel b Panel a Panel c

panel b

an.s to previous

panel b

Use the panel of figures below to answer the following questions. (previous diagram) Which of the panels shown depicts a monopolistically competitive firm earning economic profits in the short run? Panel c Panel b both Panels c and d none of the above

panel c

ans. to. prev.

panel c

.ans to prev my good man

panel d

Use the panel of figures below to answer the following questions. (previous diagram) Which of the panels shown could not characterize a short-run or a long-run equilibrium in a monopolistically competitive market? Panel c Panel b Panel d Panel a

panel d

Use the following information to answer the questions below. Gertrude Kelp owns a commercial fishing fleet off the coast of Alaska. As part of her business she hires someone to captain the boats in her fleet, and workers that are considered part of the crew. In the market for fresh pacific salmon, Gertrude is one of thousands of fisher-persons. While Gertrude usually catches a significant number of fish each year, her contribution to the entire harvest of salmon is negligible relative to the size of the market. Gertrude would be considered a ___________________ in the fresh pacific salmon market. monopolistic competitor monopolist oligopolist perfect competitor

perfect competitor

Use the following information to answer the questions below. Gertrude Kelp owns a commercial fishing fleet off the coast of Alaska. As part of her business she hires someone to captain the boats in her fleet, and workers that are considered part of the crew. In the market for fresh pacific salmon, Gertrude is one of thousands of fisher-persons. While Gertrude usually catches a significant number of fish each year, her contribution to the entire harvest of salmon is negligible relative to the size of the market. If the price of fresh pacific salmon was to decrease significantly, it is most likely that Gertrude would reduce her demand for crew workers become a seller in the factor market try to increase her catch to make up for lost revenue hire more crew workers

reduce her demand for crew workers

If price is less than marginal cost, a perfectly competitive firm will increase its output increase its output reduce its output reduce its output, but only if diseconomies of scale occur none of the above

reduce its output

comparative advantage is based on

relative opportunity costs

trade is based on

relative opportunity costs

The graph below represents the rental market for capital; use the graph to answer the following questions. As a result of a war, a significant loss of capital stock occurs (perhaps due to strategic bombing of manufacturing facilities). As a result of the loss of capital stock, the rental market for capital could possibly find a new equilibrium at rental price at P2, and capital services at K2 rental price at P2, and capital services at K1 rental price at P1, and capital services at K2 rental price at P1, and capital services at K1

rental price at P1, and capital services at K1

The graph below represents the rental market for capital; use the graph to answer the following questions. Assume that the market for final goods produced from capital services begins in equilibrium and then experiences a decrease in demand. This could possibly be reflected in a new market equilibrium for capital services at rental price at P2, and capital services at K2 rental price at P1, and capital services at K2 rental price at P2, and capital services at K1 rental price at P1, and capital services at K1

rental price at P2, and capital services at K1

Antitrust laws may _________ the ability of firms to ______________. enhance, reduce economic losses restrict, operate at the socially efficient level of production enhance, capture profits from concentration of market power restrict, capture efficiencies in production through mergers and economies of scale (synergies)

restrict, capture efficiencies in production through mergers and economies of scale (synergies)

Professional organizations and producer groups that represent firms in the same industry have an incentive to _______________ advertising through government regulation in order to ________________ competition on the basis of price. Research suggests that this type of rent-seeking ________________ prices in that industry. restrict, reduce, increases restrict, enhance, decreases encourage, reduce, increases encourage, enhance, decreases

restrict, reduce, increases

One hypothesis to explain the _____________ gap in wages between unskilled and skilled workers in the U.S. is that as the U.S. increased its participation in international trade, specialization and the pursuit of comparative advantage precipitated a _____________. falling, rise in domestic supply of skilled labor rising, fall in domestic demand for skilled labor falling, fall in domestic supply of skilled labor rising, rise in domestic demand for skilled labor

rising, rise in domestic demand for skilled labor

When employers sort employment applications into high-ability and low-ability people based solely on the attainment of a college degree (irrespective of major or experience), they are likely to be adhering to the neoclassical principle that most business owners are more interested in discriminating against a particular group than in maximizing profits human capital theory of education principle that education enhances the marginal productivity of labor among all applicants regardless of major or experience signaling theory of education

signaling theory of education

If unskilled labor is relatively plentiful and cheap in many developing foreign countries (such as China and India), and if the United States expands its trade with these foreign countries, all else equal, we would expect that the U.S. domestic demand for skilled labor will rise and unskilled labor will fall, potentially leading to rising wage inequality between domestic skilled and unskilled workers both skilled and unskilled domestic labor to be unaffected, assuming no barriers to free trade unskilled labor will rise and skilled labor will fall, potentially leading to wage compression between domestic skilled and unskilled workers both skilled and unskilled labor will rise proportionately

skilled labor will rise and unskilled labor will fall, potentially leading to rising wage inequality between domestic skilled and unskilled workers

In a monopolistically competitive market structure, because each good sold in the market is _________________ each firm is considered a _________________. slightly different, price taker the same, price setter or price maker slightly different, price setter or price maker the same, price taker

slightly different, price setter or price maker

positive externalities create a misallocation of resources because

social benefit

negative externalities create a misallocation of resources because

social costs

a common theme among examples of market failure is

some items

suppose that a decrease in the price of x results in less of good y sold. this would mean that x and y are

substitute goods

A(n) ________ cost is a cost that has already been committed and cannot be recovered. opportunity implicit fixed sunk explicit

sunk

Standard economic theory suggests that government anti-poverty programs be made available only to those with no other source of income tend to encourage higher rates of saving among recipient groups tend to create disincentives to work among recipient and taxpaying groups impose a very low marginal tax rate on income when means-tested recipient groups no longer qualify for the programs should rely only on in-kind transfers, never cash transfers

tend to create disincentives to work among recipient and taxpaying groups

One problem with regulating a natural monopolist on the basis of its average cost is a monopolist's costs, by definition, are higher than costs of perfectly competitive firms that it does not provide an incentive for the monopolist to reduce or minimize its costs, possibly encouraging the monopolist to overstate costs or become less efficient a monopolist is still able to generate excessive economic profits regulators are unable to control prices and/or production output, possibly encouraging the monopolist to overstate costs or become less efficient

that it does not provide an incentive for the monopolist to reduce or minimize its costs, possibly encouraging the monopolist to overstate costs or become less efficient

Passed by congress in 1914, ________ strengthened ________ by authorizing private antitrust lawsuits against highly efficient large-scale firms, benefiting less efficient small-scale firms. the Sherman Act, the Clayton Act the Clayton Act, the Sherman Act the Antitrust Act, the Clayton Act none of the above

the Clayton Act, the Sherman Act

Passed by congress in 1890, ________ attempted to reduced the market power and the economies of scale of large and powerful "trusts". the 14th Amendment the Clayton Act the Sherman Act none of the above

the Sherman Act

if wages in the US are higher than in Mexico,

the US

at the equilibrium price

the amount

A key determinant of labor productivity is family size an increase in demand for the final product produced by labor the amount of human capital workers acquire through education and training equilibrium wages

the amount of human capital workers acquire through education and training

A key determinant of labor productivity is labor market supply the amount of physical capital available to workers the cultural value of work effort the market for final product demand

the amount of physical capital available to workers

paul decides to spend an hour playing basketball rather than studying or working at $6 an hour. his tradeoff is

the benefit

If empirical tests of the human capital theory find conclusive evidence that higher education enhances productivity, then optimal public policy would recommend that a college education should be required of all members of society compulsory schooling laws always increase social well-being the benefits of increased productivity need to be weighed against the opportunity costs of higher education everyone should be required to finish high school

the benefits of increased productivity need to be weighed against the opportunity costs of higher education

Differences in wages are most often or most likely to be a result of government regulations that restrict the free movement of wages the fact that some firms make more profit than others the conditions of supply and demand in different and varied labor markets labor market imperfections

the conditions of supply and demand in different and varied labor markets

If players in a repeated game follow a tit-for-tat strategy self-interest becomes irrelevant to the outcome of the game the cooperative solution is more likely to prevail than otherwise self-interest is likely to lead to a non-cooperative solution a cooperative solution would be impossible to enforce

the cooperative solution is more likely to prevail than otherwise

An example of an explicit cost of production would be the cost of foregone labor earnings for an entrepreneur the cost of flour for a baker the value a business derives from using the owner's computer to keep payroll records none of the above

the cost of flour for a baker

An example of an implicit cost of production would be the cost of leather used in manufacturing furniture the cost of paying minimum wage to high school students that work in a fast food restaurant the cost of space in your home used for a home office all of the above are implicit costs

the cost of space in your home used for a home office

the loss in total surplus (economic welfare) resulting from a tax is called

the deadweight loss

The Utilitarian case for redistributing income is based on the assumption of the diminishing marginal utility of income and wealth collective consensus behind the "veil of ignorance" a notion of fairness engendered by equality the rising marginal utility of income and wealth

the diminishing marginal utility of income and wealth

Use the graph below to answer the following questions. If this perfectly competitive labor market experiences a wage below $9, we would expect, the supply curve to shift up the excess demand to put upward pressure on wages the excess supply to put downward pressure on wages the demand curve to shift up

the excess demand to put upward pressure on wages

Use the graph below to answer the following questions. If this perfectly competitive labor market experiences a wage equal to $12, we would expect, the excess supply to put downward pressure on wages the supply curve to shift up the demand curve to shift up the excess demand to put upward pressure on wages

the excess supply to put downward pressure on wages

If marginal cost exceeds marginal revenue the firm may be at the profit maximizing level of output a profit maximizing firm should always increase the level of production. the firm may still be generating economic profit, but will not be maximizing profit. the firm must be incurring economic losses.

the firm may still be generating economic profit, but will not be maximizing profit.

the only determinant of quantity demanded or quantity supplied is

the good itself

One problem with government regulation of natural monopolies is that a benevolent government is likely to be interested in generating profits for political gain a government regulated outcome may increase the profitability of the monopoly regulated industries typically have rising average costs or diseconomies of scale the government typically has poor information about the socially optimal level of production

the government typically has poor information about the socially optimal level of production

An example of an implicit cost of production would be the cost of a delivery truck in a business that rarely makes deliveries the cost of raw materials for producing bread in a bakery the income an entrepreneur could have earned working for someone else all of the above are implicit costs

the income an entrepreneur could have earned working for someone else

Libertarianism identifies a role for government, but only when an egalitarian distribution of income is inconsistent with market outcomes workers lose their jobs as a result of structural changes in the economy such as global trade or technological advances that make some jobs obsolete the income distribution is altered by illegal and/or coercive means (i.e., theft or vandalism of private property, contract violations, fraud, etc.) attorneys are required to facilitate a free-market exchange

the income distribution is altered by illegal and/or coercive means (i.e., theft or vandalism of private property, contract violations, fraud, etc.)

When a profit maximizing firm makes a decision to employ an additional worker, that decision is based on the total output produced by the firm the familial relationship between the employer and the additional worker hired how much output all the other workers can produce the individual contribution that the additional worker makes to the profit of the firm

the individual contribution that the additional worker makes to the profit of the firm

Professional underwater rescue and salvage divers are known to have high wages and work an average of only 20 hours a week. The high wages are at least partially explained by the fact that the job is always fun and enjoyable the job is likely to be dangerous/hazardous and present more risks to the diver relative to other similar occupations the job requires a college degree the job is likely to be dull and boring relative to other occupations, so divers cannot tolerate working more than 20 hours a week

the job is likely to be dangerous/hazardous and present more risks to the diver relative to other similar occupations

price elasticity of demand for a good would tend to be more price sensitive, or elastic,

the longer

a rational decision maker takes an action only if

the marginal benefit is greater than the marginal cost

When a firm in a perfectly competitive market shuts down production, costs of all remaining firms in the market must fall. the market supply curve shifts left. market supply increases. the market supply curve shifts right.

the market supply curve shifts left.

If we observe a profit maximizing firm decreasing employment, then it is possible to infer that the value of marginal product of labor exceeds the market wage rate the firm is not likely to be minimizing losses the firm is definitely losing market share the market wage rate exceeds the value of the marginal product of labor

the market wage rate exceeds the value of the marginal product of labor

If government regulators force a natural monopolist to price its product at a level equal to marginal cost the monopolist will likely have economic losses that require a government subsidy to remain in operation the monopolist will likely increase its profit the monopolist will still cause a deadweight loss fewer consumers will have an ability to buy the monopoly product

the monopolist will likely have economic losses that require a government subsidy to remain in operation

sometimes, public policies have unintended and costly side-effects on society because

the policies

The law of diminishing marginal utility implies that more is always preferred to less the poor receive greater satisfaction than the rich from the last dollar of income they each receive the poor are less efficient at spending money than the rich the poor are always with us

the poor receive greater satisfaction than the rich from the last dollar of income they each receive

For a firm that operates in a perfectly competitive market it is restricted in the amount it can produce, otherwise price would be too low to make a profit the price of the product will decrease as production increases the price it charges for its product is not dependent on the quantity sold as quantity produced rises, the price of the final product must also rise

the price it charges for its product is not dependent on the quantity sold

The production function describes the relationship between quantity of inputs and quantity of output the most cost effective method of combining various inputs in the production process how inputs are most profitably used in production the relationship between a firm's revenue and level of production

the relationship between quantity of inputs and quantity of output

Categorizing a factor of production, such as a large piece of machinery, as a fixed cost or a variable cost often depends on if it is being categorized for accounting or for economic decision making purposes the cost of the factor of production the time horizon being considered All of the above

the time horizon being considered

A profit maximizing employer will always attempt to hire workers up to the point where marginal value exceeds marginal factor cost the value of the marginal product (or marginal revenue product) is just equal to the going market wage rate the marginal product of labor is just starting to rise the marginal product of labor is just starting to decline

the value of the marginal product (or marginal revenue product) is just equal to the going market wage rate

Assuming competitive markets, a worker's contribution to their firm's revenue is given by the production function the value of the marginal cost of labor (marginal factor cost) marginal product minus marginal cost the value of the marginal product of labor (marginal revenue product)

the value of the marginal product of labor (marginal revenue product)

Owners of land resources are compensated according to the number of laborers the land can support the purchase price of the stock of land the absolute level of production from the land the value of the marginal product of land (the land's marginal revenue product)

the value of the marginal product of land (the land's marginal revenue product)

When technological enhancements are made to a work environment, the wage gap between skilled and unskilled workers is likely to fall as modern technological advancements raise the demand for unskilled workers the wage gap between skilled and unskilled workers is likely to be unaltered the wage gap will rise only if the marginal productivity of unskilled workers is not altered the wage gap between skilled and unskilled workers is likely to rise as modern technological advancements raise the demand for skilled workers

the wage gap between skilled and unskilled workers is likely to rise as modern technological advancements raise the demand for skilled workers

The market for wheat is usually a close example of a perfectly competitive market because farmers generally have to put more effort into their work than workers in other industries just to be competitive wheat farmers have high fixed costs for land and machinery there are usually a few large farms in a particular region the wheat produced by many farmers is largely the same from one farmer to another

the wheat produced by many farmers is largely the same from one farmer to another

a market economy rewards people according to

their ability to produce things that other people are willing and able to pay for

what would be the best statement about a theory based on assumptions which are not always true?

theory is nonetheless

When price is greater than marginal cost for a perfectly competitive firm there are profit opportunities to be exploited by increasing production and output. the firm should decrease output to maximize profit. marginal cost must be rising. the firm is likely to be minimizing its losses.

there are profit opportunities to be exploited by increasing production and output.

when the price of a good or service changes,

there is a movement

Scarcity exists when

there is less of a good

Price discrimination is a rational strategy for a profit-maximizing monopolist when there is an opportunity for arbitrage across market segmentations consumers are unable to be segmented into identifiable markets there is no opportunity for arbitrage across market segmentations they want to increase the deadweight loss that results from profit-maximizing behavior

there is no opportunity for arbitrage across market segmentations

In markets characterized by oligopoly, there is often tension between cooperation with rivals and pursuit of self interest collusive agreements will always prevail collective profits are lower under cartel arrangements pursuit of self interest by profit maximizing firms always maximizes collective profits in the market

there is often tension between cooperation with rivals and pursuit of self interest

when government policies are being designed

there is usually

what do rent control and communist central planning have in common?

they both directly control

when policymakers set prices by legal decree,

they obscure

which is the best statement about the way economists study the economy?

they use controlled experiments

the main determinant of the price elasticity of supply is

time

in economics, the adage, "there is no such thing as a free lunch," means

to get something

governments can grant private property rights over resources that were previously viewed as public, such as fish or elephants. why would governments want to do so

to prevent

The real economic problem with monopolies is their ability to profiteer at the expense of consumers to buy political favors with their excessive profits to price their product at a level that forces consumers to pay more than they are willing or able to restrict output below the socially efficient level of production All of the above

to restrict output below the socially efficient level of production

The marginal product of labor (MPL) can be defined as Δ quantity of labor / Δ total output, where Δ denotes "change in" Δ quantity of labor / Δ total cost, where Δ denotes "change in" Δ profit / Δ quantity of labor, where Δ denotes "change in" Δ total output / Δ quantity of labor, where Δ denotes "change in"

total output / Δ quantity of labor, where Δ denotes "change in"

Accounting profit is equal to marginal revenue minus marginal cost total revenue minus the explicit cost of producing goods and services total revenue minus the total opportunity cost of producing goods and services total average revenue minus the total average cost of producing the last unit of a good or service

total revenue minus the explicit cost of producing goods and services

Economic profit is equal to total revenue minus the accounting cost of producing goods and services total revenue minus the explicit cost of producing goods and services total revenue minus the total opportunity cost of producing goods and services total average revenue minus the total average cost of producing the last unit of a good or service

total revenue minus the total opportunity cost of producing goods and services

Profit is defined as marginal revenue minus marginal cost total revenue minus total (opportunity) cost average revenue minus average total cost net revenue minus depreciation

total revenue minus total (opportunity) cost

When analyzing the welfare cost of a monopoly, economists use ________ as the most accurate measure of economic well-being. consumer surplus total surplus profit producer surplus total revenue

total surplus

which is the most accurate statement about trade?

trade can make

which of the following is not correct?

trade is based on absolute advantage