One of the key characteristics of oligopoly is that
a. firms are independent of each other.
b. firms face different cost conditions.
c. each firm is aware that its actions will influence other firms and that the actions of
the other firms affect it.
d. it is easy to enter the industry.
e. none of the above
Sometimes labor unions try to increase the demand for the product they produce. They
do so because the demand for labor is derived; and the __________ the demand for the
product labor produces, the __________labor and the __________ wages will be,
ceteris paribus.
a. higher; greater the supply of; lower
b. higher; lower the demand for; higher
c. higher; higher the demand for; higher
d. lower; higher the demand for; higher
Exhibit 5-2
If the tuition is set at $50 there will be
a. a shortage at 10 a.m. and a surplus at 8 a.m.
b. a surplus at 10 a.m. and a shortage at 8 a.m.
c. equilibrium at 8 a.m. and a surplus of seats at 10 a.m.
d. equilibrium at 8 a.m. and a shortage of seats at 10 a.m.
Total utility for the first four oranges is
a. 11 utils.
b. 60 utils.
c. 52 utils.
d. 15 utils.
e. 40 utils.
In the median voter model, we assume that
a. voters will vote for the friendlier of two candidates.
b. voters will vote for the candidate who comes closer to matching their views.
c. the candidate who occupies the far right has a better chance of winning the election
than the candidate who occupies the far left.
d. there are three candidates running for the same office.
e. b and c
When the government imposes a tariff on imported goods, it _____________ prices for
domestic consumers, ________________ consumers’ surplus and _________________
the producers’ surplus for domestic producers.
a. raises; lowers; raises
b. lowers; raises; raises
c. lowers; raises; lowers
d. raises; lowers; lowers
e. none of the above
Wage discrimination exists when individuals of __________ are paid different wage
rates.
a. varying ability and productivity
b. different ethnic origins
c. different religions
d. equal ability and productivity
e. b, c, and d
In order for a monopolist to be earning a profit, price must be greater than
a. average total cost.
b. marginal revenue.
c. total cost.
d. marginal cost.
If the marginal cost curve for a firm first declines and then rises, it follows that the MPP
of the variable input
a. is constant.
b. first declines and then rises.
c. first rises and then declines.
d. continually declines.
e. none of the above
If the wage rate is constant and diminishing marginal returns have already set in, then
a. the wage rate must increase.
b. marginal cost increases.
c. marginal cost decreases.
d. the wage rate must decrease.
Price is the only rationing device that can be used in a modern economy.
a. True
b. False
In economics, scarcity implies
a. disutility.
b. utility.
c. choice.
d. inefficiency.
e. a, c, and d
In the case of a monopsony, higher wage rates (over some range) do not necessarily
imply fewer persons working.
a. True
b. False
Which of the following statements is false?
a. The monopolistic competitor, like the perfectly competitive firm, is
resource-allocative efficient.
b. The monopolistic competitor produces that quantity of output at which price equals
marginal cost.
c. The monopolistic competitor produces the quantity of output with the lowest per-unit
costs.
d. a, b, and c
Rational ignorance exists primarily because
a. voters are apathetic.
b. politicians tend to voice the same general views, so there is no reason to learn more
about the issues.
c. the costs of becoming informed outweigh the benefits of doing so.
d. any of the above
Exhibit 4-6
At a wage of $7, there will be a __________ of unskilled workers equal to __________
thousand workers.
a. shortage; 10
b. surplus; 20
c. surplus; 10
d. shortage; 20
e. surplus; 15