Question 1 (2 points) The economic way of thinking will help you Question 1 opti

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Question 1 (2 points)
The economic way of thinking will help you
Question 1 options:
1) make decisions in financing your home.
2) decide whether the U.S. government should encourage or discourage immigration.
3) make better decisions concerning your education.
4) all of these
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Question 2 (2 points)
Which of the following statements is TRUE about scarcity?
Question 2 options:
1) Both rich and poor people face the problem of scarcity.
2) Scarcity exists only when supply is insufficient to meet demand.
3) Scarcity exists only when a shortage exists.
4) Scarcity can be eliminated when a country becomes richer.
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Question 3 (2 points)
According to the circular flow, the dollar value of a nation's output is equal to
Question 3 options:
1) profits.
2) total income.
3) net income minus taxes.
4) wages.
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Question 4 (2 points)
A fundamental principle in demand analysis is that a change in price leads to
Question 4 options:
1) movement along the demand curve.
2) a rightward shift of the demand curve.
3) a leftward shift of the demand curve.
4) a complementary movement on the supply curve.
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Question 5 (2 points)
In a market system, the costs associated with exchanging goods are known as
Question 5 options:
1) voluntary costs.
2) signaling costs.
3) wholesale costs.
4) transaction costs.
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Question 6 (2 points)
In economics, another term for satisfaction is
Question 6 options:
1) income elasticity.
2) price elasticity.
3) utility.
4) marginal productivity.
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Question 7 (2 points)
A representative unit that measures the want-satisfying power of a good is
Question 7 options:
1) a margin.
2) purchasing power.
3) income.
4) a util.
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Question 8 (2 points)
The term marginal means
Question 8 options:
1) total.
2) cumulative.
3) subjective.
4) additional.
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Question 9 (2 points)
The change in the total utility as a result of increasing consumption by one unit is known as
Question 9 options:
1) marginal utility.
2) average utility.
3) proportional utility.
4) utils.
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Question 10 (2 points)
On a hot summer day, a construction worker enters a McDonald's fast-food restaurant. He orders the first Big Mac. He consumes it within 3 minutes. He then orders a second Big Mac and consumes it in 10 minutes. He eats only half of the third one in 18 minutes and throws away the rest. The store manager offers him the fourth for free. The construction worker says: "No thanks." Why?
Question 10 options:
1) For the construction worker, total utility increased at an increasing rate.
2) Marginal utility increased at an increasing rate.
3) Marginal utility declined as he consumed additional Big Macs.
4) The law of diminishing marginal utility does not apply to consumption of Big Macs.
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Question 11 (2 points)
Which of the following statements is true with respect to total utility and marginal utility?
Question 11 options:
1) Marginal utility always rises as total utility increases.
2) Marginal utility can decline as total utility rises.
3) Total utility is not related to marginal utility.
4) Total utility can decline while marginal utility rises.
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Question 12 (2 points)
Your allergies are bad this summer so your allergist writes you a prescription to relieve your symptoms. When you get to the pharmacy, you notice the name brand allergy medicine is more expensive than its generic equivalent. You purchase the generic equivalent and demonstrate all of the following EXCEPT
Question 12 options:
1) the principle of substitution of one product for another.
2) the principle of diminishing marginal utility.
3) when price decreases, the quantity demanded increases.
4) a price change may affect consumer optimum.
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Question 13 (2 points)
Economists generally define the short run as being
Question 13 options:
1) that period of time in which at least one of the firm's inputs, usually plant size, is fixed.
2) that period of time in which all inputs are variable.
3) any period of time less than one year.
4) any period of time less than six months.
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Question 14 (2 points)
In economics, how long is the long run?
Question 14 options:
1) More than 12 months
2) 24 months or longer
3) 5 years or more
4) Whatever time it takes a firm to vary all inputs
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Question 15 (2 points)
When El Torito Restaurant is deciding how many waiters to hire for a holiday weekend, it is making a ________ decision.
Question 15 options:
1) plant-size
2) long-run
3) short-run
4) fixed-input
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Question 16 (2 points)
Any activity that results in the conversion of resources into products that can be used in consumption is
Question 16 options:
1) planning.
2) investment.
3) production.
4) discounting.
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Question 17 (2 points)
Marginal physical product and average physical product are measured in
Question 17 options:
1) dollars.
2) profit terms.
3) units of production.
4) the same units as marginal cost and average total cost.
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Question 18 (2 points)
When total product is increasing at a decreasing rate, marginal product is
Question 18 options:
1) positive and increasing.
2) positive and decreasing.
3) constant.
4) negative.
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Question 19 (2 points)
Which of the following would NOT be considered a fixed cost of production?
Question 19 options:
1) Wages paid to labor
2) The opportunity cost of capital
3) Interest payments on a loan
4) Insurance payments on plant and equipment
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Question 20 (2 points)
The marginal cost curve intersects
Question 20 options:
1) the average fixed cost curve at its minimum.
2) the average total cost curve at its maximum.
3) the minimum of the average fixed cost, average variable cost and the average total cost curves.
4) the minimum of the average variable cost and average total cost curves.
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Question 21 (2 points)
Which of the following is NOT a characteristic of a perfectly competitive market?
Question 21 options:
1) The products sold by the firms in the market are homogeneous.
2) There are many buyers and sellers in the market.
3) It is difficult for a firm to enter or leave the market.
4) Each firm is a price taker.
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Question 22 (2 points)
The perfectly competitive firm cannot influence the market price because
Question 22 options:
1) it has market power.
2) its production is too small to affect the market.
3) it is a price maker.
4) its costs are too high.
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Question 23 (2 points)
All firms in a perfect competition industry
Question 23 options:
1) are price makers.
2) produce differentiated products.
3) produce identical products.
4) lose money.
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Question 24 (2 points)
A firm in a perfectly competitive industry is a
Question 24 options:
1) price taker.
2) quantity taker.
3) quality maker.
4) price maker.
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Question 25 (2 points)
Under the perfectly competitive market structure, the demand curve of an individual firm is
Question 25 options:
1) perfectly inelastic.
2) downward sloping.
3) relatively inelastic.
4) perfectly elastic.
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Question 26 (2 points)
Monopoly producers face
Question 26 options:
1) many competitors producing the same product.
2) only a few competitors producing the same product.
3) at least one competitive producer of the same product.
4) no competitive producers of the same product.
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Question 27 (2 points)
A firm can be the sole supplier of a good and is still not a monopolist if
Question 27 options:
1) the firm is not large.
2) the good produced is not important to the economy.
3) the firm is not making excessive profits.
4) there are very close substitutes for the good.
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Question 28 (2 points)
A monopolist is
Question 28 options:
1) a firm with annual sales over $50 million.
2) a single supplier of a good for which there is no close substitute.
3) a large firm that makes all the other firms in the industry do what it wants.
4) a supplier of a good that everyone needs with the result that it makes large profits.
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Question 29 (2 points)
Which of the following are barriers to entry?
Question 29 options:
1) Economies of scale
2) Patents and copyrights
3) Control of resources
4) All of these
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Question 30 (2 points)
Shortly after the turn of the century, U.S. Steel owned most of the iron ore reserves in the country. This is an example of
Question 30 options:
1) monopoly due to government restrictions.
2) a barrier to entry from owning an important resource.
3) a barrier to entry from scale economies.
4) monopoly due to governmental entry restrictions.
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Question 31 (2 points)
A tax that is imposed on an imported good is called a
Question 31 options:
1) tariff.
2) quota.
3) government license.
4) patent.
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Question 32 (2 points)
A firm that faces a downward sloping demand curve is known as a
Question 32 options:
1) price taker.
2) utility maximizer.
3) price searcher.
4) perfect competitor.
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Question 33 (2 points)




Given the data in the above table, what is the marginal revenue when the 12th unit is sold?
Question 33 options:
1) $7.00
2) $5.00
3) $3.00
4) $1.00
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Question 34 (2 points)
Which of the following is NOT a characteristic of monopolistic competition?
Question 34 options:
1) Product differentiation
2) Barriers to entry into the market
3) Advertising
4) A significant number of sellers
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Question 35 (2 points)
Which of the following describes monopolistic competition?
Question 35 options:
1) Homogenous products
2) P = MR = MC
3) Advertising plays a key role
4) There is only one seller in the industry
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Question 36 (2 points)
In a monopolistically competitive market there are
Question 36 options:
1) many firms producing an identical product.
2) many firms producing similar but not identical products.
3) many firms producing totally different products.
4) few firms producing identical products.
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Question 37 (2 points)
All of the following are assumptions of monopolistic competition EXCEPT
Question 37 options:
1) many buyers and sellers.
2) homogeneous product.
3) easy entry of new firms in the long run.
4) profit-maximizing behavior.
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Question 38 (2 points)
Which of the following is NOT a feature of a monopolistically competitive market?
Question 38 options:
1) numerous buyers and sellers
2) differentiated products
3) advertising
4) a homogeneous product
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Question 39 (2 points)
Monopolistic competition means
Question 39 options:
1) monopolies from several countries compete in the global market.
2) a large number of firms producing homogeneous products.
3) a large number of firms producing differentiated products.
4) few firms producing differentiated products.
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Question 40 (2 points)
Which of the following is most likely to be a monopolistically competitive firm?
Question 40 options:
1) a soybean farmer
2) a lettuce farmer
3) a municipal water district
4) a fast food restaurant
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Question 41 (2 points)
Long-run equilibrium is characterized by zero profits in
Question 41 options:
1) monopolistic competition only.
2) perfect competition only.
3) both perfect competition and monopolistic competition.
4) market structures in which there are barriers to entry.
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Question 42 (2 points)
A monopolistic competitor finds its profit-maximizing rate of output by
Question 42 options:
1) equating the marginal revenue from advertising with the marginal revenue from selling the good.
2) setting average revenue equal to average total cost.
3) equating marginal revenue and marginal cost.
4) equating price and marginal revenue.
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Question 43 (2 points)
In a long-run monopolistically competitive equilibrium,
Question 43 options:
1) P = ATC, and ATC is not at its minimum value.
2) P = ATC, and ATC is at its minimum value.
3) P > ATC, and ATC is at its minimum value.
4) P > ATC, and ATC is not at its minimum value.
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Question 44 (2 points)
To differentiate its product, a monopolistic competitive firm will engage in all of the following advertising practices EXCEPT
Question 44 options:
1) direct marketing.
2) mass marketing.
3) interactive marketing.
4) indirect marketing.
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Question 45 (2 points)
Which of the following does NOT help explain why oligopolies exist?
Question 45 options:
1) Economies of scale
2) Mergers
3) Product homogeneity
4) Barriers to entry
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Question 46 (2 points)
Strategic behavior and game theory are features of which market structure?
Question 46 options:
1) Perfect competition
2) Monopoly
3) Monopolistic competition
4) Oligopoly
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Question 47 (2 points)
If Ford Motor Company and General Motors Corporation were to merge, this would represent
Question 47 options:
1) a vertical merger.
2) a horizontal merger.
3) a cartel.
4) an up-and-down merger.
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Question 48 (2 points)
The main objective of the members of a cartel is to
Question 48 options:
1) earn economic profits.
2) produce efficiently.
3) make the industry more competitive.
4) obtain a patent.
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Question 49 (2 points)
A tit-for-tat strategy is one in which oligopolies
Question 49 options:
1) cooperate as long as other members cooperate, but if anyone cheats, they cut the price until the cheater reverts to cooperation.
2) cooperate almost all of the time, but occasionally do not cooperate in order to fool the antitrust authorities.
3) keep cutting prices to punish rivals until the competitive price is reached.
4) try to avoid the problems of the prisoners' dilemma, but actually make themselves worse off.
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Question 50 (2 points)
The analytical framework in which two or more firms compete for certain payoffs that depend on the strategy that the others employ is
Question 50 options:
1) game theory.
2) the concentration ratio.
3) a horizontal merger.
4) network effect.
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Explanation / Answer

1.4) all of these 2.2) Scarcity exists only when supply is insufficient to meet demand. 3.2) total income. 4.3) a leftward shift of the demand curve. 5.4) transaction costs. 6.3) utility. 7.4) a util. 8.4) additional. 9.1) Marginal uti 10.3) Marginal utility declined as he consumed additional Big Macs. please rate appreciated

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