Economic growth can be illustrated by A) A movement along a country%u2019s PPC.

Question

Economic growth can be illustrated by A) A movement along a country%u2019s PPC.
B) A movement from a point inside the PPC to a point closer to the PPC.
C) A PPC which becomes steeper.
D) A shift to the right of the PPC. Economic growth can be illustrated by A) A movement along a country%u2019s PPC.
B) A movement from a point inside the PPC to a point closer to the PPC.
C) A PPC which becomes steeper.
D) A shift to the right of the PPC. Economic growth can be illustrated by Economic growth can be illustrated by 2. What happens to equilibrium price and quantity when there is a simultaneous increase in demand and decrease in supply? A) We expect equilibrium quantity to increase, but equilibrium price is indeterminate.
B) We expect equilibrium quantity to decrease, but equilibrium price is indeterminate.
C) We expect equilibrium price to decrease, but equilibrium quantity is indeterminate.
D) We expect equilibrium price to increase, but equilibrium quantity is indeterminate.
2. What happens to equilibrium price and quantity when there is a simultaneous increase in demand and decrease in supply? A) We expect equilibrium quantity to increase, but equilibrium price is indeterminate.
B) We expect equilibrium quantity to decrease, but equilibrium price is indeterminate.
C) We expect equilibrium price to decrease, but equilibrium quantity is indeterminate.
D) We expect equilibrium price to increase, but equilibrium quantity is indeterminate.
What happens to equilibrium price and quantity when there is a simultaneous increase in demand and decrease in supply? What happens to equilibrium price and quantity when there is a simultaneous increase in demand and decrease in supply? 3. Consider the figure above. What is the absolute value of the price elasticity of demand when price increases from $1.50 to $2.00? 4. On a downward sloping demand curve, total revenue is at its maximum A) on the upper portion of the demand curve
B) on the lower portion of the demand curve
C) at the midpoint of the demand curve
D) when price is highest
4. On a downward sloping demand curve, total revenue is at its maximum A) on the upper portion of the demand curve
B) on the lower portion of the demand curve
C) at the midpoint of the demand curve
D) when price is highest
On a downward sloping demand curve, total revenue is at its maximum On a downward sloping demand curve, total revenue is at its maximum 5. Which of the graphs above show the law of diminishing marginal productivity? 6. Labor Marginal
Product 0 1 8 2 10 3 13 4 12 5 8 6 7 7 4 8 3 Dexter%u2019s Dog Treats Bakery makes dog biscuits in designer flavors. Dexter pays each of his workers the same wage, and labor is his only variable cost of production. Production information for Dexter%u2019s firm is shown in the table above. From this information we know that Dexter%u2019s marginal cost A) increases as output increases from 0 to 31, but decreases after that.
B) decreases as output increases from 0 to 31, but increases after that.
C) increases as output increases from 0 to 13, but decreases after that.
D) decreases as output increases from 0 to 13, but increases after that.
6. Labor Marginal
Product 0 1 8 2 10 3 13 4 12 5 8 6 7 7 4 8 3 Dexter%u2019s Dog Treats Bakery makes dog biscuits in designer flavors. Dexter pays each of his workers the same wage, and labor is his only variable cost of production. Production information for Dexter%u2019s firm is shown in the table above. From this information we know that Dexter%u2019s marginal cost A) increases as output increases from 0 to 31, but decreases after that.
B) decreases as output increases from 0 to 31, but increases after that.
C) increases as output increases from 0 to 13, but decreases after that.
D) decreases as output increases from 0 to 13, but increases after that.
Labor Marginal
Product 0 1 8 2 10 3 13 4 12 5 8 6 7 7 4 8 3 Dexter%u2019s Dog Treats Bakery makes dog biscuits in designer flavors. Dexter pays each of his workers the same wage, and labor is his only variable cost of production. Production information for Dexter%u2019s firm is shown in the table above. From this information we know that Dexter%u2019s marginal cost Dexter%u2019s Dog Treats Bakery makes dog biscuits in designer flavors. Dexter pays each of his workers the same wage, and labor is his only variable cost of production. Production information for Dexter%u2019s firm is shown in the table above. From this information we know that Dexter%u2019s marginal cost 7. Consider the graph above. Each short run average total cost curve represents a different 8. A perfectly competitive firm using multiple inputs maximizes profit by hiring inputs until the A) marginal product per dollar for all inputs is equal to the wage
B) marginal product for all inputs is equal to the wage
C) marginal product is the same for all inputs.
D) marginal product per dollar is the same for all inputs
8. A perfectly competitive firm using multiple inputs maximizes profit by hiring inputs until the A) marginal product per dollar for all inputs is equal to the wage
B) marginal product for all inputs is equal to the wage
C) marginal product is the same for all inputs.
D) marginal product per dollar is the same for all inputs
A perfectly competitive firm using multiple inputs maximizes profit by hiring inputs until the A perfectly competitive firm using multiple inputs maximizes profit by hiring inputs until the 9. If a perfectly competitive firm chooses output such that MR>MC, then A) it could expand output and make more profit.
B) it could decrease output and make more profit.
C) it is maximizing profit.
D) it should shut down.
9. If a perfectly competitive firm chooses output such that MR>MC, then A) it could expand output and make more profit.
B) it could decrease output and make more profit.
C) it is maximizing profit.
D) it should shut down.
If a perfectly competitive firm chooses output such that MR>MC, then If a perfectly competitive firm chooses output such that MR>MC, then 10. In the long run, the price in a perfectly competitive market will A) equal ATC at its minimum.
B) be determined by the intersection of the firm's supply and demand curves.
C) equal MC at its minimum.
D) be determined by the intersection of the firm's marginal cost and average variable cost curves.
10. In the long run, the price in a perfectly competitive market will A) equal ATC at its minimum.
B) be determined by the intersection of the firm's supply and demand curves.
C) equal MC at its minimum.
D) be determined by the intersection of the firm's marginal cost and average variable cost curves.
In the long run, the price in a perfectly competitive market will In the long run, the price in a perfectly competitive market will 11. In long run equilibrium, a monopolistically competitive firm will produce a quantity A) where average total cost is at a minimum.
B) that is less than the quantity where average total cost is at a minimum.
C) that is more than the quantity where average total cost is at a minimum.
D) where marginal cost intersects average total cost.
11. In long run equilibrium, a monopolistically competitive firm will produce a quantity A) where average total cost is at a minimum.
B) that is less than the quantity where average total cost is at a minimum.
C) that is more than the quantity where average total cost is at a minimum.
D) where marginal cost intersects average total cost.
In long run equilibrium, a monopolistically competitive firm will produce a quantity In long run equilibrium, a monopolistically competitive firm will produce a quantity 12. Refer to the figure above. If this firm is monopolistically competitive and is maximizing profit, its total cost is 13. Informative advertising is usually associated with A) normal goods
B) inferior goods
C) search goods
D) experience goods
13. Informative advertising is usually associated with A) normal goods
B) inferior goods
C) search goods
D) experience goods
Informative advertising is usually associated with Informative advertising is usually associated with 14. An attempt to monopolize a market is outlawed by the A) Sherman Act
B) Clayton Act
C) Federal Trade Commission Act
D) None of these
14. An attempt to monopolize a market is outlawed by the A) Sherman Act
B) Clayton Act
C) Federal Trade Commission Act
D) None of these
An attempt to monopolize a market is outlawed by the An attempt to monopolize a market is outlawed by the 15. Suppose an industry has 6 firms each with 10% of sales, and 8 firms each with 5% of sales. The HHI for this industry is A) 100
B) 800
C) 1000
D) 1400
E) None of these
15. Suppose an industry has 6 firms each with 10% of sales, and 8 firms each with 5% of sales. The HHI for this industry is A) 100
B) 800
C) 1000
D) 1400
E) None of these
Suppose an industry has 6 firms each with 10% of sales, and 8 firms each with 5% of sales. The HHI for this industry is Suppose an industry has 6 firms each with 10% of sales, and 8 firms each with 5% of sales. The HHI for this industry is 16. Consider a market in equilibrium. At the equilibrium quantity the marginal benefit to the consumer is less than the marginal social cost of production. In this situation A) total economic surplus would rise if production were reduced below equilibrium
B) there is a negative production externality
C) the demand curve is below the marginal social cost curve at the equilibrium quantity
D) all of these are true
16. Consider a market in equilibrium. At the equilibrium quantity the marginal benefit to the consumer is less than the marginal social cost of production. In this situation A) total economic surplus would rise if production were reduced below equilibrium
B) there is a negative production externality
C) the demand curve is below the marginal social cost curve at the equilibrium quantity
D) all of these are true
Consider a market in equilibrium. At the equilibrium quantity the marginal benefit to the consumer is less than the marginal social cost of production. In this situation Consider a market in equilibrium. At the equilibrium quantity the marginal benefit to the consumer is less than the marginal social cost of production. In this situation 17. The Clean Air Act of 1990 reduces the negative externalities caused by power plant air and water pollution by A) direct government regulation
B) issuing tradable pollution permits to each power plant
C) encouraging private bargaining between the power plants and the parties affected by the pollution
D) taxing power plant emissions
17. The Clean Air Act of 1990 reduces the negative externalities caused by power plant air and water pollution by A) direct government regulation
B) issuing tradable pollution permits to each power plant
C) encouraging private bargaining between the power plants and the parties affected by the pollution
D) taxing power plant emissions
The Clean Air Act of 1990 reduces the negative externalities caused by power plant air and water pollution by The Clean Air Act of 1990 reduces the negative externalities caused by power plant air and water pollution by 18. When a good is rival it means that A) one person%u2019s use of a good does not diminish the amount available for others to consume
B) one person%u2019s use of a good diminishes the amount available for others to consume
C) the owner of the good can prevent others from consuming the good
D) the owner of the good cannot prevent others from consuming the good
18. When a good is rival it means that A) one person%u2019s use of a good does not diminish the amount available for others to consume
B) one person%u2019s use of a good diminishes the amount available for others to consume
C) the owner of the good can prevent others from consuming the good
D) the owner of the good cannot prevent others from consuming the good
When a good is rival it means that When a good is rival it means that 19. Quantity of the public good Willingness to pay of person 1 Willingness to pay of person 2 1 100 55 2 90 50 3 80 45 4 70 40 5 60 35 Consider the table above. How much is society willing to spend on a total of 3 units of this public good? A) $90
B) $155
C) $420
D) $530
19. Quantity of the public good Willingness to pay of person 1 Willingness to pay of person 2 1 100 55 2 90 50 3 80 45 4 70 40 5 60 35 Consider the table above. How much is society willing to spend on a total of 3 units of this public good? A) $90
B) $155
C) $420
D) $530
Quantity of the public good Willingness to pay of person 1 Willingness to pay of person 2 1 100 55 2 90 50 3 80 45 4 70 40 5 60 35 Consider the table above. How much is society willing to spend on a total of 3 units of this public good? 1 100 55 2 90 50 3 80 45 4 70 40 5 60 35 Consider the table above. How much is society willing to spend on a total of 3 units of this public good? 20. The classic case of adverse selection is the market for A) health insurance
B) lemons and oranges
C) used cars
D) new cars

20. The classic case of adverse selection is the market for A) health insurance
B) lemons and oranges
C) used cars
D) new cars
The classic case of adverse selection is the market for The classic case of adverse selection is the market for
Economic growth can be illustrated by A) A movement along a country%u2019s PPC.
B) A movement from a point inside the PPC to a point closer to the PPC.
C) A PPC which becomes steeper.
D) A shift to the right of the PPC. 2. What happens to equilibrium price and quantity when there is a simultaneous increase in demand and decrease in supply? A) We expect equilibrium quantity to increase, but equilibrium price is indeterminate.
B) We expect equilibrium quantity to decrease, but equilibrium price is indeterminate.
C) We expect equilibrium price to decrease, but equilibrium quantity is indeterminate.
D) We expect equilibrium price to increase, but equilibrium quantity is indeterminate.
3.
Consider the figure above. What is the absolute value of the price elasticity of demand when price increases from $1.50 to $2.00? A) 0.2
B) 0.714
C) 1.4
D) 0.1428
4. On a downward sloping demand curve, total revenue is at its maximum A) on the upper portion of the demand curve
B) on the lower portion of the demand curve
C) at the midpoint of the demand curve
D) when price is highest
5.
Which of the graphs above show the law of diminishing marginal productivity? A) (a)
B) (b)
C) (c)
D) (d)
E) all of them
6. Labor Marginal
Product 0 1 8 2 10 3 13 4 12 5 8 6 7 7 4 8 3 Dexter%u2019s Dog Treats Bakery makes dog biscuits in designer flavors. Dexter pays each of his workers the same wage, and labor is his only variable cost of production. Production information for Dexter%u2019s firm is shown in the table above. From this information we know that Dexter%u2019s marginal cost A) increases as output increases from 0 to 31, but decreases after that.
B) decreases as output increases from 0 to 31, but increases after that.
C) increases as output increases from 0 to 13, but decreases after that.
D) decreases as output increases from 0 to 13, but increases after that.
7.
Consider the graph above. Each short run average total cost curve represents a different A) time horizon: short, medium or long run.
B) factory size: small, medium or large.
C) firm: firm A, firm B and firm C.
D) none of these
8. A perfectly competitive firm using multiple inputs maximizes profit by hiring inputs until the A) marginal product per dollar for all inputs is equal to the wage
B) marginal product for all inputs is equal to the wage
C) marginal product is the same for all inputs.
D) marginal product per dollar is the same for all inputs
9. If a perfectly competitive firm chooses output such that MR>MC, then A) it could expand output and make more profit.
B) it could decrease output and make more profit.
C) it is maximizing profit.
D) it should shut down.
10. In the long run, the price in a perfectly competitive market will A) equal ATC at its minimum.
B) be determined by the intersection of the firm's supply and demand curves.
C) equal MC at its minimum.
D) be determined by the intersection of the firm's marginal cost and average variable cost curves.
11. In long run equilibrium, a monopolistically competitive firm will produce a quantity A) where average total cost is at a minimum.
B) that is less than the quantity where average total cost is at a minimum.
C) that is more than the quantity where average total cost is at a minimum.
D) where marginal cost intersects average total cost.
12.
Refer to the figure above. If this firm is monopolistically competitive and is maximizing profit, its total cost is A) $460
B) $200
C) $400
D) $60
13. Informative advertising is usually associated with A) normal goods
B) inferior goods
C) search goods
D) experience goods
14. An attempt to monopolize a market is outlawed by the A) Sherman Act
B) Clayton Act
C) Federal Trade Commission Act
D) None of these
15. Suppose an industry has 6 firms each with 10% of sales, and 8 firms each with 5% of sales. The HHI for this industry is A) 100
B) 800
C) 1000
D) 1400
E) None of these
16. Consider a market in equilibrium. At the equilibrium quantity the marginal benefit to the consumer is less than the marginal social cost of production. In this situation A) total economic surplus would rise if production were reduced below equilibrium
B) there is a negative production externality
C) the demand curve is below the marginal social cost curve at the equilibrium quantity
D) all of these are true
17. The Clean Air Act of 1990 reduces the negative externalities caused by power plant air and water pollution by A) direct government regulation
B) issuing tradable pollution permits to each power plant
C) encouraging private bargaining between the power plants and the parties affected by the pollution
D) taxing power plant emissions
18. When a good is rival it means that A) one person%u2019s use of a good does not diminish the amount available for others to consume
B) one person%u2019s use of a good diminishes the amount available for others to consume
C) the owner of the good can prevent others from consuming the good
D) the owner of the good cannot prevent others from consuming the good
19. Quantity of the public good Willingness to pay of person 1 Willingness to pay of person 2 1 100 55 2 90 50 3 80 45 4 70 40 5 60 35 Consider the table above. How much is society willing to spend on a total of 3 units of this public good? A) $90
B) $155
C) $420
D) $530
20. The classic case of adverse selection is the market for A) health insurance
B) lemons and oranges
C) used cars
D) new cars

Explanation / Answer

1 A PPC which becomes steeper.
2 We expect equilibrium price to increase, but equilibrium quantity is indeterminate
3 1.4
4 at the midpoint of the demand curve
5 a
6 decreases as output increases from 0 to 13, but increases after that.
7 factory size: small, medium or large.
8 marginal product per dollar is the same for all inputs
9 expand output and make more profit.
10 equal ATC at its minimum
11 where marginal cost intersects average total cost.
12 $400
13 experience goods
14 Sherman act
15 800
16 All of these are true
17 taxing power plant emissions
18 one persons use of a good diminishes the amount available for others to consume
19 $420
20 Used cars

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