Micro Econ 131
For the Colorado beef industry to be classified as perfectly competitive, ranchers in Colorado must have ________ on prices and beef must be a _________ product.
No noticeable effect; standardized
Suppose a taxpayer has an income of a $70,000 any taxable income of $60,000 and pays $9000 in taxes. If the taxpayers says she is taxed at a 15% tax rate, she is referring to the
Nominal tax rate
If the demand for personal computers (PC) shift to the right as consumers incomes rise, PCs are
Normal goods
Suppose Cesar I locate his entire budget to the purchase of soft drinks and chips. The marginal utility Of the last bottle of soft drinks Bridges is 12 utils, and each bottle cause $1.50. The marginal utility of the last bag of chips purchase is eight utils , and each bag cost one dollar. In order to maximize his utility, Caesar should:
Not change anything because he has made the choice that gives him the most total utility
Which of the following is most likely a fixed cost?
Property taxes
The entry of firms into a market, ceteris pariibus,
Reduces the economic profit of each firm already in the market.
If the equilibrium price in a perfectly competitive market for milk is $4.99 per gallon, then an individual firm in this market can
Sell an additional gallon of milk at $4.99
Shift first & direction: The government reduces environment restrictions on offshore oil drilling along the Pacific coast.
Shift Supply; right
Shift first & direction: Evidence shows full face snorkel mask have an increased incidence of accidental drowning.
Shift demand; left
Shift first & direction: People become more healthwise and prefer a power bars over donuts
Shift demand; left
Shift first & direction: A hurricane destroyed several hotels in the major resort destination
Shift supply; left
Shift first & direction: Much of Florida citrus crop is destroyed by a hurricane
Shift supply; left
And example of a social insurance program is
Social Security payments for the disabled
The result of a Gov. intervention in the market, in the case of market failure, is that:
Society may be worse off.
When the price of FedEx shipping increases, the demand for UPS shipping service increases, Ceteris paribus. FedEx and UPS are therefore:
Substitutes
Retain earnings are
The amount of corporate profit not paid out in dividends
Dividends are
The amount of corporate profits paid out for each share of stocks
Which of the following statements exemplifies the law of diminishing marginal utility?
The more I go to school, the more I want to do something else.
When firms are independent,
The profit of one firm depends on how its rival respond to its strategic decisions.
If an oligopolist is going to change its price or output, it's initial concern is
The response of its competitors
Price discrimination is best defined as
The selling of an identical good at different prices to different consumers by a single seller.
If the percentage of income paid in taxes increases as incomes rises, then the tax system is
progressive
The concentration ratio measures the
proportion of total output produced by the four largest producers in a specific market
A monopoly can be temporary because of:
technological change
The present discounted value of $2000 to be received one year from now, if the interest rate is 2.5 percent, is closet to:
$1951
Lashandra is the owner/operator of an interior design firm. Last year she earned $400,000 in total revenue. Her explicit costs were $200,000 (assume that this amount represents the total opportunity cost of these resources). During the year she received offers to work for other design firms. One offer would have paid her $120,000 per year and the other would have paid her $130,000 per year. Lashondra's economic profit is equal to
$70,000
Which of the following is not a determinant of market power?
Age of the industry
Capital gains are
An Increased in the market value of an asset
If income rises by 10% and the quantity sold by a particular vehicle falls by 12%, then the particular type of vehicle is
An inferior good
In a market economy, the people who receive the goods and services produced in those who:
Are willing and able to pay the market price
An example of monopolistic competition is the ____________ market.
Automobile
Which of the following is an example of a financial intermediary
Banks
The percentage of the US population living in poverty in 2014 was
Between 12 and 16%
When a corporation issues a bond, it is
Borrowing funds from the initial buyer of the bond
If the price of Coke rises by 5% and the sale of Pepsi go up by 10%, we can conclude that
Both goods are substitute goods because the cross price elasticity is +2
Which of the following describes how resources are typically allocated in the US economy?
By markets
Inequalities in income caused by market forces:
Can provide incentives and rewards for achievements
Sellers can game profits from price discrimination because
Charging different prices based on willingness to pay can increase revenues without increasing costs
A consequence of the economic problem of scarcity is that:
Choices have to be made about how resources are used
The price of a stock will decrease, ceteris paribus, for all of the following reasons except
Consumer confidence increases
Zoe's bakery that P<ATC and P> AVC. Zoe should:
Continue to operate even though she is taking an economic loss.
Toby operates a small deli downtown. The deli industry is monopolistically competitive. If some delis leave the industry, Toby's __________ curve will shift to the ____________.
Demand; right
For the monopolistically competitive wild-caught seafood market, the demand curve for any individual firm is __________, and there are ________ producers of seafood.
Downward sloping; many
Suppose Mary is willing to pay up to $1000 for a used stand up paddleboard, but she finds one she finds on Craigslist she really likes for $1200. her _______ is __________.
Economic surplus ; $0
Taxes paid divided by total income is the
Effective tax rate
Because tourist demand for airline flights is relatively __________, small ________ in ticket price will result in relatively ________ in additional tourist.
Elastic; reductions; large increases.
Sam's surf shop has total costs of $2000 when it's not producing and surfboards. This mean that
Fixed costs are $2000
Which of the following is a factor of production for the Little biscuit bread company?
Flour
According to the law of supply, a supply curve:
Has a positive slope
If they state legislature wishes to raise revenue by increasing certain sale taxes, it would increase sales taxes on goods that:
Have elastic demand
Destiny owns a small flower shop in the industry is perfectly competitive. She is considering whether or not to hire an additional worker. The wage rate for the worker is $400 per week; the marginal product the additional work it would be 40 units per week; and the price of the units produced is $12 per unit. What should destiny do?
Hired the additional worker
Monopolistically competitive industries are characterized by all of the following except
Homogeneous products
Food stamps, Medicaid, and housing subsidize are all examples of
In kind transfers
Kip will work fewer hours if his salary increases . For Kip, the________ effect must outweigh the _________ effect.
Income; substitution
Microeconomics focuses on the performance of:
Individual consumers, firms and markets
Bonds may be issued by all of the following except
Individuals
Marginal Cost
Is the change in total cost cost when hiring one more factor of production.
Profit
Is the difference between total revenue and total cost.
A monopolistic competitive industry is characterized by ___________ concentration ratios and _________ entry barriers.
Low; low
A leftward shift in a demand curve and a leftward shift in a supply curve both result in a:
Lower equilibrium
Sam owns a taco restaurant, and he conducted a customer survey that indicates that the price elasticity of demand for his restaurant is 4.2. You would advise Sam to:
Lower his price to increase revenue, "Taco Tuesday"
In which of the following types of markets does a single firm have the most market power?
Monopoly
The taxation principle that says people with higher incomes should pay more in taxes than those with lower incomes is called
Vertical equity
Which of the following industries is likely to have the highest concentration ratio?
Video game systems
In monopolistic competition:
firms advertise to increase demand for their product.
Because of monopoly, consumers experience ___________ than with perfect competition.
higher prices
