SS201_251 Practice Problems for WPR2 AY08-02

SS201_251 Practice Problems for WPR2 AY08-02 - SS201...

Info icon This preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
SS201 Practice Problems for WPR2 (Spring 08): This document contains practice problems for WPR2. The answers to the questions that follow will not be graded, but all cadets are required to complete the practice problems prior to the Lesson 20 Review . Working through the practice problems will set you up for success on the WPR. Practice Problems for WPR2: 1. Multiple Choice 1. Suppose that an MBA degree creates no externality because the benefits of an MBA are internalized by the student in the form of higher wages. If there are no government subsidies for MBAs, then which of the following statements is correct? a. The equilibrium quantity of MBAs will equal the socially optimal quantity of MBAs. b. The equilibrium quantity of MBAs will be greater than the socially optimal quantity of MBAs. c. The equilibrium quantity of MBAs will be less than the socially optimal quantity of MBAs. d. There is not enough information to answer the question. 2. A competitive firm earns positive economic profits in the short-run when the price it receives is: a. greater than average fixed cost b. greater than the minimum of average variable cost c. equal to the minimum of average total cost d. greater than the level of average total cost at its chosen level of output 3. When a good is excludable: 4. As the number of firms in an oligopoly increases: 5. Bill owns 3 acres of beautiful wooded land. He has created a short walking trail through the woods. Because the terrain is hilly, the only safe entrance to the trail is at the front of Bill's property. When Bill decides to move to be closer to his grandchildren, he donates the land to the state with the understanding that the land will be used as a state park. Because the trail is short, only about 50 people can comfortably enjoy it. This state park is an example of a good that is:
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon