1. A key determinant of recent labor productivity has been A. family size. C. in
ID: 1195856 • Letter: 1
Question
1. A key determinant of recent labor productivity has been
A. family size. C. information technology.
B. equilibrium wages. D. an increase in product demand.
2. The deadweight loss that’s associated with monopolistically competitive markets is a result of
A. operating in a constant-cost industry.
B. advertising costs.
C. pricing below marginal cost in order to increase market share.
D. pricing above marginal cost.
3. The practice of selling a product to retailers and requiring the retailers to charge a specific
price for the product is called
A. fixed retail pricing. C. resale price maintenance.
B. unfair trade. D. cost-plus pricing.
4. When advertising fosters brand loyalty, critics claim that it
A. impedes competition.
B. lowers the quality of goods in the market.
C. alters a firm’s supply curve.
D. increases competition in the market.
5. The profit-maximizing employment rule for a competitive firm ensures that
A. output price will equal marginal cost.
B. revenue will be maximized.
C. total costs will be minimized.
D. price will always exceed cost of production.
6. Which of the following statements is correct?
A. Over time, government has been less lenient toward advertising in order to enhance
the ability of markets to allocate resources efficiently.
B. Over time, government has been more lenient toward advertising in order to enhance
competition in markets.
C. Over time, government has been more lenient toward advertising in order to enhance
brand loyalty.
D. Over time, government has been less lenient toward advertising in order to decrease
elasticity of demand for specific products.
7. When the number of firms in a market is small, firms
A. generally organize as a cartel.
B. are less concerned about competitors’ behavior, since there’s always sufficient
demand to keep all firms happy.
C. are guaranteed an economic profit.
D. must generally consider how competing firms respond to their decisions.
8. When a profit-maximizing firm makes a decision to employ a worker, that decision is
based on
A. the individual contribution that the worker makes to the profit of the firm.
B. how much output the worker can produce.
C. the familial relationship between the employer and the employee.
D. the total output produced by the firm.
9. Why might it be rational to trust a brand name more than an unknown product?
A. Brand name products are lower-priced.
B. Brand name products are better quality.
C. Brand name companies have invested heavily in their reputations.
D. Greater market share means greater quality.
10. For a perfectly competitive firm to maximize profit, any rise in the market wage must be
A. offset by a decrease in the value of marginal product.
B. followed by an increase in employment.
C. followed by a decrease in the marginal product of labor.
D. followed by an increase in the marginal product of labor.
11. Markets that are characterized by a few sellers who sell similar or identical products are
typically referred to as
A. aggressive markets. C. monopoly markets.
B. oligopoly markets. D. competitive markets.
12. Which of the following could decrease labor demand?
A. An increase in migrant workersl
B. A decrease in demand for the final product produced by labor
C. A decrease in the labor supply
D. An increase in the marginal productivity of workers
Explanation / Answer
1. Correct answer is (C) information technology. This is direct as labor productivity will affected by the latter.
2. Correct answer is (D) pricing above marginal cost.
Explanation: Equilibrium condition: MR=MC and P>MC. Therefore this results in dead weight loss in the economy.
3. Correct answer is (C) resale price maintenance
4. Correct answer is (D) impedes competition. This is direct as brand loylty increases this acts as a deterrant for the other comapines to flourish.
5. Correct answer is (A) output price will equal marginal cost.
Expalnation:
Goal of Firm: Profit maximization
Condition for labor: VMPL= P X MPL
Condition for firms: VMPL=W---(1)
MC= W/MPL
==> W=MC X MPL---(2)
From 1 & 2
MC X MPL= P X MPL
==> P = MC
6. Correct answer is (B) Over time, government has been more lenient toward advertising in order to enhance competition in markets. This is the current stance of most of the neo liberal governments.
7. Correct answer is (A) generally organize as a cartel. This helps in enhancing the profits to exhorbitant levels.
8. Correct answer is (A) the individual contribution that the worker makes to the profit of the firm.
Explaniation:
Wages are paid seeing the value of marginal product of individual workers.
9. Corrrect answer is (C) Brand name companies have invested heavily in their reputations.
10. Correct answer is (D) followed by an increase in the marginal product of labor.
Expalnation:
P= W/MPL at equilibrium. In perfect competition P is fixed, so if W incresce, MPL also increases in same proportion to keep P fixed.
11. Correct answer is (B) oligopoly markets
12. Correct answer is (A) An increase in migrant workers.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.