Econ CH 14-17 P

Econ CH 14-17 P - 4th Practice Exam Spring 2007 14. An...

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th Practice Exam – Spring 2007 14. An example of an externality occurs when a chemical factory Answer: overworks its employees. 15. Firm’s demand for a particular regulation is tied directly to the Answer: producer surplus pre firm created by the regulation and the number of firms. 16. In many stages, dentists who are licensed in other states cannot practice in the first state without passing a rigorous state exam. The regulation benefits dentists who are already practicing in the state. This requirement best illustrates Answer: the capture theory of regulation 17. graph q If marginal cost pricing is imposed on the natural monopoly in the figure above, then the price will Answer: $2 (MC=MR). 18. graph q If marginal cost pricing is imposed on the natural monopoly in the figure above, then the firm will Answer: incur an economic loss. 19. Which of the following groups lists the four factors of production? Answer: labor, capitol, land, entrepreneurship. 20. An increase in the demand for a factor normally Answer: increases both its equilibrium price and its equilibrium quantity. 21. graph q In the above figure, when the deman for labor is LD1, then total labor income is Answer: $4000. 22. table q Based on the production and revenue data in the above table, what is the marginal product of the 4 th worker? Answer: 4
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Econ CH 14-17 P - 4th Practice Exam Spring 2007 14. An...

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