Question
Answered step-by-step

Question 1 (2 points) Lilly is the price-taking owner of an apple...

Question 1 (2 points)

 

 

 

 

 

 

 

 

 

Lilly is the price-taking owner of an apple orchard. The price of apples is high enough that Lilly is earning positive economic profits. In the long run, Lilly should expect

 

Question 1 options:

 

1) 

lower apple prices due to the exit of some existing firms

 

 

2) 

lower apple prices due to the entry of new firms

 

 

3) 

no change in the price of apples due to entry/exit of firms

 

 

4) 

higher apple prices due to the exit of some existing firms

 

 

Question 2 (2 points)

 

 

 

 

 

 

 

 

 

Mikail's perfectly competitive camera memory card-producing factory is making positive economic profits. If the price of memory cards is $6, Mikail's output is 3,000 cards a month, and his monthly average total cost is $7, what are his monthly profits?

 

Question 2 options:

 

1) 

$21,000

 

 

2) 

$18,000

 

 

3) 

$3,000

 

 

4) 

-$3,000 (loss)

 

 

Question 3 (Mandatory) (2 points)

 

 

 

 

 

 

 

 

 

Perfect competition is characterized by:

 

Question 3 options:

 

fierce quality competition

 

 

widely recognized brands

 

 

rivalry in advertising

 

 

the inability of any one firm to influence price

 

 

Question 4 (Mandatory) (2 points)

 

 

 

 

 

 

 

 

 

A perfectly competitive firm will earn a profit and will continue producing the profit-maximizing quantity of output in the short run if the price is:

 

Question 4 options:

 

greater than the average fixed cost, AFC

 

 

less than marginal cost, MC

 

 

greater than average variable cost (AVC), but less than average total cost (ATC)

 

 

greater than average total cost, ATC

 

 

Question 5 (Mandatory) (2 points)

 

 

 

 

 

 

 

 

 

The short-run supply curve for a perfectly competitive firm is:

 

Question 5 options:

 

the marginal cost curve above the shut-down price

 

 

the average total cost curve above the break-even price

 

 

the marginal cost curve above the break-even price

 

 

the average variable cost curve above the shut-down price

 

 

Question 6 (Mandatory) (2 points)

 

 

 

 

 

 

 

 

 

De Beers became a monopoly by:

 

Question 6 options:

 

establishing control over diamond mines

 

 

technological superiority

 

 

economies of scale

 

 

ownership of a patent

 

 

Question 7 (Mandatory) (4 points)

 

 

 

 

 

 

 

 

 

Because tourist demand for airline flights is relatively ________, small ________ in ticket price will result in relatively ________ in additional tourists

 

Question 7 options:

 

elastic; reductions; large increases

 

 

inelastic; reductions; small increases

 

 

elastic; increases; small increases

 

 

inelastic; increases; small decreases

 

 

Question 8 (Mandatory) (2 points)

 

 

 

 

 

 

 

 

 

The demand curve facing a monopolist is:

 

Question 8 options:

 

downward sloping, the same as that facing a perfectly competitive firm

 

 

upward sloping, the same as that facing a perfectly competitive firm

 

 

horizontal, the same as that facing a perfectly competitive firm

 

 

downward sloping, unlike the horizontal demand curve facing a perfectly competitive firm

 

 

Question 9 (Mandatory) (2 points)

 

 

 

 

 

 

 

 

 

If a monopolist is producing a quantity that generates MC < MR, then profit:

 

Question 9 options:

 

can be increased by increasing production

 

 

is maximized only if MC = P

 

 

can be increased by decreasing production

 

 

is maximized

 

 

Question 10 (Mandatory) (2 points)

 

 

 

 

 

 

 

 

 

The city bus system charges lower fares to senior citizens than to other passengers. Assuming that this pricing strategy increases the profits of the bus system, we can conclude that senior citizens must have a ________ for bus service than other passengers

 

Question 10 options:

 

more elastic demand

 

 

lower demand

 

 

less elastic demand

 

 

greater demand

 

 

Question 11 (Mandatory) (2 points)

 

 

 

 

 

 

 

 

 

The practice of selling the same product at different prices in different markets, without corresponding differences in costs, is:

 

Question 11 options:

 

output prioritizing

 

 

monopolizing

 

 

privatizing

 

 

price discrimination

 

 

Question 12 (Mandatory) (2 points)

 

 

 

 

 

 

 

 

 

Oligopoly is a market structure that is characterized by a:

 

Question 12 options:

 

large number of relatively small independent firms producing differentiated products

 

 

large number of relatively small independent firms producing identical products

 

 

small number of independent firms producing identical or differentiated products

 

 

small number of interdependent firms producing identical or differentiated products

 

 

Question 13 (Mandatory) (2 points)

 

 

 

 

 

 

 

 

 

The largest HHI possible is ________ and the industry is a(n) ________

 

Question 13 options:

 

100,000; oligopoly

 

 

100,000; monopoly

 

 

10,000; monopoly

 

 

10; monopoly

 

 

Question 14 (Mandatory) (2 points)

 

 

 

 

 

 

 

 

 

Which of the following scenarios best describes an oligopolistic industry?

 

Question 14 options:

 

Thousands of soybean farmers sell their output in a global commodities market

 

 

A single cable company serves customers in a small town

 

 

Coca-Cola and Pepsi sell most of the soft drinks consumed around the world

 

 

A college has one bookstore selling textbooks to students

 

 

Question 15 (Mandatory) (2 points)

 

 

 

 

 

 

 

 

 

Microsoft sets prices for its new line of computers, and Dell and HP follow. This practice is known as________.

 

Question 15 options:

 

price extortion

 

 

price leadership

 

 

kinked demand behavior

 

 

antitrust pricing

 

 

Question 16 (Mandatory) (2 points)

 

 

 

 

 

 

 

 

 

The market for dentists in most communities can be considered a ________ because there are a large number of similar but not identical substitutes in the market

 

Question 16 options:

 

an oligopoly

 

 

perfect competition

 

 

a monopoly

 

 

monopolistic competition

 

 

Question 17 (Mandatory) (2 points)

 

 

 

 

 

 

 

 

 

In a monopolistically competitive industry:

 

Question 17 options:

 

a firm maximizes profits when MR = MC yet P > MC

 

 

to maximize profits, firms set MR = MC, and people would be better off if output were reduced

 

 

people would be better off if output were reduced

 

 

output could be increased without an increase in total cost

 

 

Question 18 (Mandatory) (2 points)

 

 

 

 

 

 

 

 

 

In many cities you can stay at a Holiday Inn in the downtown area, in a suburban community, or near the airport. These Holiday Inn establishments are examples of product differentiation by:

 

Question 18 options:

 

quality

 

 

location

 

 

style

 

 

type

 

 

Question 19 (Mandatory) (2 points)

 

 

 

 

 

 

 

 

 

Toby operates a small deli downtown. The deli industry is monopolistically competitive. In the long run, Toby will produce where:

 

Question 19 options:

 

price equals marginal cost, P = MC

 

 

price equals marginal revenue, P = MR

 

 

marginal revenue equals marginal cost, MR= MC

 

 

price equals minimum average total cost, P = Min ATC

 

 

Question 20 (Mandatory) (2 points)

 

 

 

 

 

 

 

 

 

In the United States in the early twenty-first century, 70% of total income, by far the largest share, took the form of:

 

Question 20 options:

 

interest income

 

 

rental income

 

 

corporate profits

 

 

compensation of employees

 

 

Question 21 (Mandatory) (2 points)

 

 

 

 

 

 

 

 

 

Over the past several years, the demand for phone operators has fallen dramatically. Which of the following would be a reason for this development?

 

Question 21 options:

 

a decrease in the technology associated with phone equipment

 

 

an increase in the supply of phone operators

 

 

an increase in the number of automated answering services

 

 

higher prices for long-distance service

 

 

Question 22 (Mandatory) (2 points)

 

 

 

 

 

 

 

 

 

When a tenant in a rent-controlled apartment sublets the apartment to another renter at a rent higher than the price ceiling

 

Question 22 options:

 

there is a decrease in quantity demanded

 

 

there is an increase in quantity demanded

 

 

it is inefficient

 

 

we say that the transaction takes place on a black market

 

 

Question 23 (Mandatory) (2 points)

 

 

 

 

 

 

 

 

 

When the minimum wage increases

 

Question 23 options:

 

fewer workers are willing to work off the books

 

 

unemployment among skilled workers decreases

 

 

employment of unskilled workers increases

 

 

unemployment among unskilled workers increases

 

 

Question 24 (Mandatory) (2 points)

 

 

 

 

 

 

 

 

 

Which of the following is more likely to increase your own labor productivity?

 

Question 24 options:

 

a law that prohibits firms to layoff

 

 

the creation of a labor union with the consent of the firm

 

 

an increase in the minimum wage paid by the firm

 

 

more training and education investment paid by the firm

 

 

Question 25 (2 points)

 

 

 

 

 

 

 

 

 

Two goods, X and Y are substitutes if

 

Question 25 options:

 

price of y goes up when demand of X goes down

 

 

demand of Y goes down if price of x goes down

 

 

 price of Y goes down when demand of X goes up

 

 

demand of Y goes up when price of X goes down

 

 

Question 26 (2 points)

 

 

 

 

 

 

 

 

 

The price-quantity relationship between two complementary goods is 

 

Question 26 options:

 

positive

 

 

neutral

 

 

unknown

 

 

negative

 

 

Question 27 (2 points)

 

 

 

 

 

 

 

 

 

Assume the elasticity of demand of good X is 1, and it is put on sale for 40% less. This will lead to 

 

Question 27 options:

 

increase in total revenue

 

 

decrease in total revenue

 

 

no change in total revenue

 

 

none of the above

 

 

Question 28 (2 points)

 

 

 

 

 

 

 

 

 

If Ex,y = -2

 

Question 28 options:

 

X and Y are relatively inelastic substitute goods 

 

 

X and Y are relatively elastic complementary goods 

 

 

X and Y are relatively inelastic complementary goods 

 

 

X and Y are relatively elastic substitute goods 

 

 

Question 29 (2 points)

 

 

 

 

 

 

 

 

 

Income elasticity of good X is -.63

 

Question 29 options:

 

X is an elastic good

 

 

X is an inelastic good

 

 

X is an inferior good

 

 

X is a normal good

 

 

Question 30 (6 points)

 

 

 

 

 

 

 

 

 

The equilibrium price and quantity of good X are $10 and 100 respectively. Government reduced the price of X to $8. As a result, quantity demanded increased to 150 but quantity supplied went down to 80. So, the market outcome is

 

Question 30 options:

 

surplus of 50

 

 

shortage of 50

 

 

shortage of 1600

 

 

shortage of 560

 

 

Question 31 (2 points)

 

 

 

 

 

 

 

 

 

Minimum wage is a

 

Question 31 options:

 

positive concept

 

 

normative concept

 

 

market concept

 

 

equilibrium concept

 

 

Question 32 (3 points)

 

 

 

 

 

 

 

 

 

Production function is

 

Question 32 options:

 

a technological relationship between inputs and output

 

 

expressed as a dependent-independent relationship between output and one or more inputs

 

 

may be a short run or a long run concept

 

 

all of the above

 

 

Question 33 (5 points)

 

 

 

 

 

 

 

 

 

Assume the following production function: Q = f(L,K), where, Q= output, L = units of labor, K = units of capital.  Now assume the producer found the following result in the short run

MPL > MPK

In order to maximize profit, the produce should

 

Question 33 options:

 

continue production with the same quantity of labor and capital

 

 

should substitute labor for capital until MPL = MPK

 

 

should substitute capital for labor until MPL = MPK

 

 

should continue production until MPK > MPL

 

 

Question 34 (2 points)

 

 

 

 

 

 

 

 

 

In which of the four output markets P = MC?

 

Question 34 options:

 

perfect competition

 

 

monopolistic competition

 

 

oligopoly

 

 

monoply

 

 

Question 35 (2 points)

 

 

 

 

 

 

 

 

 

In a perfectly competitive market, pure profit does not exist in the long run because of the assumption of 

 

Question 35 options:

 

large number of buyers and sellers

 

 

homogeneous product

 

 

single price

 

 

free entry and exit of firms

 

 

Question 36 (2 points)

 

 

 

 

 

 

 

 

 

In which of the four markets, the producer may charge demand price?

 

Question 36 options:

 

perfect competition

 

 

monopolistic competition

 

 

oligopoly

 

 

monopoly

 

 

Question 37 (2 points)

 

 

 

 

 

 

 

 

 

Which economic condition must be satisfied for price discrimination to be possible? 

 

Question 37 options:

 

Segmenting the market

 

 

no resale of the product

 

 

different elasticity of demand of the product

 

 

all of the above

 

 

Question 38 (2 points)

 

 

 

 

 

 

 

 

 

In an oligopoly market, price is not determined at the point of

MR =MC because

 

Question 38 options:

 

oligopolies are big business and they have significant market power

 

 

oligopolies usually collude explicitly to fix price

 

 

there is no unique MR curve

 

 

all of the above

 

 

Question 39 (2 points)

 

 

 

 

 

 

 

 

 

The basis for international trade is 

 

Question 39 options:

 

mutual interdependence

 

 

agreement between two or more countries

 

 

comparative advantage

 

 

absolute advantage

 

 

Question 40 (2 points)

 

 

 

 

 

 

 

 

 

The most common types of trade protection are quota, tariff and non-tariff barriers. If protection is necessary, economists favor tariff as a measure of protection because

 

Question 40 options:

 

it does not distort consumer choice

 

 

it generates revenue

 

 

it benefits producers of domestic goods 

 

 

all of the above

 

 

Question 41 (2 points)

 

 

 

 

 

 

 

 

 

Which Federal Act outlawed monopolistic business practices?

 

Question 41 options:

 

Federal Trade Commission Act

 

 

Clayton Antitrust Act

 

 

Sherman Antitrust Act

 

 

Robinson-Patman Act

 

 

Question 42 (2 points)

 

 

 

 

 

 

 

 

 

Balance of trade is 

 

Question 42 options:

 

total exports of capital and merchandise goods minus total imports of capital and merchandise goods

 

 

balance of mercahndise goods only

 

 

balance of tariff between two countries

 

 

balance of agreed upon quota of certain goods of two countries

 

 

Question 43 (2 points)

 

 

 

 

 

 

 

 

 

Which account is associated with balance of trade?

 

Question 43 options:

 

balance of payment account

 

 

current account

 

 

capital account

 

 

international transaction account

 

 

Question 44 (2 points)

 

 

 

 

 

 

 

 

 

The important reason why United States will continue to have a negative balance of payment is

 

Question 44 options:

 

ability of U.S. consumers to buy more foreign goods than the ability of foreign consumers to buy U.S. goods

 

 

Historically, U.S. government has not resorted to restricting imports

 

 

Historically, U.S. has not devalued the dollar to boost exports

 

 

All of the above

 

 

Question 45 (2 points)

 

 

Saved

 

 

 

 

 

 

Compared to a competitive firm, a monopolist

 

Question 45 options:

 

produces less

 

 

charges higher price

 

 

may not follow MR = MC rule in setting price 

 

 

all of the above

 

 


 

Answer & Explanation
Verified Solved by verified expert
<p>ongue vel laoreet ac, dictum vitae odio. Donec aliquet. Lorem ipsum dolor sit amet, consectetur adipiscing elit. Nam lacinia pulvinar tortor nec facilisis. Pellentesque dapibus efficitur laoreet. Nam risus ante, dapibus a molestie consequat, ultrices ac ma</p> Fusce dui lectus, congue vel laoreet ac, dictum vitae odio. Donec aliquet

Unlock full access to Course Hero

Explore over 16 million step-by-step answers from our library

Subscribe to view answer
  1. t, consectetu
  2. ongue vel laoreet ac, dictum vitae odio. Donec aliquet. Lorem ipsum dolor sit amet, cons
  3. facilisis. Pellentesque dapibus efficitu
  4. ce dui lectus, cong
  5. ultrices ac magna.
  6. fficitur laoreet. Nam risus ante, dapibus a molestie consequat, ultrices ac magna.
  7. ctum vitae odio.
  8. risus ante, dapibus a molestie consequat, ultrices ac magna. Fusce dui lec
  9. sus ante, dapibu
  10. acinia pulvinar tortor n
  11. itur laoreet. Nam risus ante, dapibus a molesti
  12. ipsum do
  13. inia pulvinar tortor nec facilisis. Pellentes
  14. gue vel laoreet ac, dictum vi
  15. pulvinar tortor nec facilisis. Pellentesque dapibus effi
  16. ng elit. Nam lacinia pulvinar tortor nec facilisis. Pellent
  17. cing elit. Nam lacinia pulvinar tortor nec fac
  18. ce dui lectus, congue vel laoreet ac, dictum vit
  19. at, ultrices ac magna. Fusce dui lectus, con
  20. , dictum
  21. fficitur laoreet. Nam ris
  22. et, consectetur adipiscing elit. Nam lacinia pulvin
  23. m ipsum dolor sit ame
Step-by-step explanation

consectet

dictum vitae odio. Donec aliq

dictum vitae odio. Donec alique

s ante, dapibus a molestie consequa

ac, dictum vitae odio. Donec al

amet, consectetur adipiscing elit. Nam lacinia pulvinar tortor nec facilisis. Pellentesq

consectetur adipiscing elit. Nam lacinia pulvinar tortor nec facilisis. Pellen

lestie consequaat, ul

gue

fficitur laoreet. Nam risus ante, dapibus a molestie consequat, ultrices ac magna.

Student reviews
100% (2 ratings)