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ECON 351>FINAL EXAM
MICROECONMICS LATEST.
Ceteris paribus " means: an association of variables. all other things remain constant. a cause and effect relationship. considering the influences of other variables. An increase in the federal minimum wage causes an increase in unemployment among teenagers" is a: statement of positive economics. statement of normative economics. testable value judgment. fallacy of composition. As consumption of a good increases, the extra satisfaction received from consuming an additional unit of the good decreases." This statement is known as the law of: demand. increasing costs. diminishing marginal utility. diminishing marginal returns. total utility. Because of unseasonable cold weather, much of the peach crop has been destroyed." This statement indicates that the: price of peaches will fall. quantity of peaches that will be available at any given price has decreased. demand for peaches will shift to the left. quantity of peaches that will be available at any given price have increased.
I'm tired of eating muffins for breakfast. Today, I'm trying a bagel." These statements most clearly reflect the: law of increasing returns to scale. second law of demand. law of diminishing marginal utility. law of comparative advantage.
A chain saw is an example of which of the following factors of production? Land. Labor. Capital. None of these. A change in supply cannot be caused by a change in: resource prices. technology. prices of other goods. the price of the good itself. the number of suppliers. A common characteristic of oligopolies is: interdependence in pricing decisions. independent pricing decisions. low industry concentration. few or no plant-level economies of scale. A competitive car wash currently hires 4 workers, who together can wash 80 cars per day. The market price of car washes is $5 per wash, and the price of workers is $60 per day. The car wash should hire a fifth worker if it would increase total production to at least: 92 cars per day. 100 cars per day. 104 cars per day. 110 cars per day.
A competitive firm maximizes its profits (or minimizes is losses) by producing the quantity where the market price equals the firm's: marginal cost.
labor. decrease in the quantity demanded of labor. an increase in wages.
A demand curve for The Steel Porcupines' concert tickets would show the: quality of service that customers demand when they buy a ticket. number of people who like to attend the concert. number of tickets the promoters are willing to sell at each price. number of concert tickets that will be purchased at each price. A demand curve shows the relationship between: price and quantity demanded. the demand and supply schedules. demand and supply equilibrium. leakages and injections. price and technology. A demand curve that has constant price elasticity of demand coefficient equals to one at all points is a(n): rectangular hyperbola. downward-sloping straight line. upward-sloping straight line. none of these. A downward-sloping portion of a long-run average total cost curve is the result of: economies of scale. diseconomies of scale. diminishing returns. the existence of fixed resources. A factor of production is the same as: the amount of a
an opportunity cost. a resource. A fall in marginal utility reflects: the water and diamond paradox. X the law of supply. the principle of diminishing marginal utility. decreased consumption of a good. the fact that total utility must be declining. A farm is able to produce 5,000 bushels of peaches per season on 100 acres. Assume it adds one more acre and is able to produce 6,000 bushels per season. The marginal product of the additional acre of land for this farm is: 6,000 bushels per acre per year. 5,000 bushels per acre per year. 1,000 bushels per acre per year. 11, bushels per acre per year. A farmer is deciding whether or not to add fertilizer to his or her crops. If the farmer adds 1 pound of fertilizer per acre, the value of the resulting crops rises from $80 to $100 per acre. According to marginal analysis, the farmer should add fertilizer if it costs less than: $12.50 per pound. $20 per pound. $80 per pound. $ per pound. A firm operating in a perfectly competitive market is a price taker because: no firm has a significant market share. no firm's product is perceived as different. setting a price higher than the going price results in zero sales.
all of these.
entrepreneurial costs.
A fishing boat owner brings 50,000 fish to market and the market price is $4 per fish. Her average
variable cost of 50,000 fish is $1 and the fixed cost of the boat is $100,000, what is her profit per fish?
A firm will employ an additional unit of labor as long as the employment of labor adds more to the firm's revenue than it does to the firm's: product price. accounting profit. residual claim. cost. A firm that places its assets in the custody of a board of trustees is called a: trust. combination. cartel. all of these. A horizontal demand curve indicates perfectly elastic demand.
True
False X
A hurricane destroyed the peach crop in South Carolina. Shortly thereafter the price of peaches rose significantly. These events suggest that a(n):
decrease in the supply of peaches caused the price of peaches to rise. X increase in the supply of peaches caused the price of peaches to rise. increase in demand caused the price of peaches to rise. decrease in demand caused the price of peaches to rise. A lower price elasticity of demand coefficient occurs when: many substitutes exist. the quantity demanded is more responsive. few substitutes exist. the market is broadly defined. A major characteristic of the theory of oligopoly is that: there are no real-world examples. the reactions of each firm depends on how the firm believes rivals will react. in reality few oligopolies survive more than 10 years. none of these. X A monopolist always earns an economic profit.
True
False
A monopolist can earn an economic profit only when: marginal cost equals marginal revenue. marginal cost equals price. X average total cost is less than price. all of these. A merger between an auto manufacturer and a steel mill would result in which of the following?
result. below the market equilibrium price.
A market consequence of a price floor program is that: a shortage of the product will develop. producers will stop supplying the product. some rationing device must then be instituted. a surplus of the product will develop. there will be an excess demand for the product.
X
A major technological advance would be represented on a production possibilities curve by a(n): movement off the production possibilities curve toward a point outside the curve. movement toward the curve from a point inside the curve. outward shift of the entire curve. movement to the left along the curve to a higher point. A manufacturer will sell its product only to retailers who agree to buy its brand. This is an example of: price discrimination. exclusive dealing X. a tying contract. interlocking directorates. A monopoly is a sole , and a monopsonist is a sole
. buyer in a product market; seller in a product market X seller in a product market; seller in a labor market buyer in a product market; seller in a labor market seller in a product market;
