Firms do not have market power in which of the following market structures?
A) perfect competition only
B) perfect competition and monopolistic competition
C) oligopoly
D) monopoly
If a firm produces 20 units of output and incurs a total cost of $1,000 and a variable cost
is $700, calculate the firm’s average fixed cost of production if it expands output to 25
units.
A) $300
B) $15
C) $12
D) It is impossible to determine without additional information.
Producing where marginal revenue equals marginal cost is equivalent to producing
where
A) average total cost equals average revenue.
B) average fixed cost is minimized.
C) total revenue is equal to total cost.
D) total profit is maximized.
A four-firm concentration ratio measures
A) the fraction of an industry’s sales accounted for by the four largest firms.
B) the production of any four firms in an industry.
C) how the four largest firms became so concentrated.
D) the fraction of employment of the four largest firms in an industry.
An increase in the equilibrium quantity of a product will result
A) when the quantity supplied of the product exceeds the quantity demanded.
B) when there is an increase in supply and an increase in demand for the product.
C) when there is an increase in supply and a decrease in demand for the product.
D) when there is an decrease in demand and a decrease in the cost of inputs used to
make the product.
Table 4-7
Table 4-7 shows the demand and supply schedules for labor market in the city of Pixley.
If a minimum wage of $12.50 is mandated there will be a
A) shortage of 40,000 units of labor.
B) surplus of 40,000 units of labor.
C) shortage of 80,000 units of labor.
D) surplus of 80,000 units of labor.
Table 2-14
Table 2-14 shows the number of labor hours required to produce a motorcycle and a
guitar in Ireland and Scotland.
Does either Ireland or Scotland have an absolute advantage and if so, in what product?
A) Scotland only has an absolute advantage in guitars.
B) Ireland only has an absolute advantage in guitars.
C) Scotland has an absolute advantage in both products.
D) Ireland only has an absolute advantage in motorcycles.
Figure 4-4 Figure 4-4 shows the market for tiger
shrimp. The market is initially in equilibrium at a price of $15 and a quantity of 80.
Now suppose producers decide to cut output to 40in order to raise the price to $18.
What is the value of the deadweight loss at the equilibrium price of $15?
A) $0
B) $40
C) $60
D) $100
Suppose Mexico and the United States are on the gold standard. If there is a half an
ounce of gold in the dollar, and one quarter an ounce of gold in the peso, then the
exchange rate is
A) $1 = 2 pesos.
B) $1 = 4 pesos.
C) $1 = 1/2 peso.
D) $1 = 1/4 peso.
E) $0.50 = 1/2 peso.
The study of how people make decisions in situations where attaining their goals
depends on their interactions with others is called
A) Nash equilibrium.
B) the prisoner’s dilemma.
C) game theory.
D) dominant strategy equilibrium.
Table 7-6 Production and
Consumption Production
Without Trade With Trade
Estonia and Morocco can produce both swords and belts. Table 7-6 shows the
production and consumption quantities without trade, and the production numbers with
trade. If the actual terms of trade are 1 belt for 1.5 swords and 70 belts are traded, how
many swords will Estonia consume?
A) 95
B) 100
C) 105
D) 200
Which of the following is not an advantage of starting a new business as a
proprietorship?
A) The owner has complete control over the business.
B) A proprietorship has few government rules and regulations to comply with.
C) Business profits are only taxed once, not twice.
D) A proprietorship can easily attain additional funding.
Table 16-2
Neem Products sells its Ayurvedic Neem toothpaste in two completely isolated markets
with demand schedules as shown in Table 16-2. The average cost of production is
constant at $2 per tube. What is the total revenue received from both markets
combined?
A) $30
B) $34
C) $68
D) $70
If the implied exchange rate between Big Mac prices in the United States and the
Philippines is 68 pesos per dollar, but the actual exchange rate between the United
States and the Philippines is 43 pesos per dollar, which of the following would you
expect to see?
A) a depreciation of the dollar
B) a decrease in the demand for Philippine pesos
C) a decrease in the demand for dollars
D) an appreciation of the Philippine pesos
As a firm hires more labor in the short run, the
A) level of total product stays constant.
B) output per worker rises.
C) extra output of another worker may rise at first, but eventually must fall.
D) costs of production are increasing at a fixed rate per unit of output.
A good can serve as money only if
A) government mandates that the good must be accepted in payment of debts.
B) it is declared by authorities to be legal tender.
C) it has intrinsic value or if it is backed by precious metals.
D) citizens accept the good as a means of payment for transactions and debts.