ECON 360 Previous Exam Questions

question

convex

answer

A diminishing marginal rate of substitution (MRS) implies that indifference curves are ______________

question

slope upward

answer

If one good is undesirable, then each indifference curve will _________________

question

-Ps/Pf

answer

If food is on the vertical axis and shelter on the horizontal axis, the slope of the budget line is given by _____________

question

adding horizontally

answer

One aggregates individual demand curves by _________________

question

always slopes down for an inferior good

answer

An Engel curve _______________

question

rotating a budget line over a set of indifference curves

answer

A demand schedule (and curve) is derived by __________________

question

steeper

answer

for a normal good, the income-compensated demand curve is _______________ than the ordinary demand curve

question

those with the least to lose are the ones who miss the flight

answer

If an airline overbooks, it pays people who volunteer to leave the overbooked flight. This system is better than drawing randomly from a hat the people who should miss the flight because __________________________________

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falls as one travels down on an indifference curve

answer

Diminishing marginal rate of substitution implies that the marginal rate of substitution ______________________

question

the marginal rate of substitution equals the slope of the budget constraint

answer

excluding corner solutions, in consumer equilibrium, what is true?

question

perfectly inelastic, has elasticity of 0

answer

a vertical demand curve is ___________________

question

choose more education because they do not need to pay double for private education

answer

If an educational voucher system were adopted where parents could spend their share of education tax dollars at any school of their choice, then we could expect families to _____________________

question

neglects the fact that in the second year, consumers substitute relatively cheaper goods for relatively more expensive goods

answer

The consumer price index overestimates inflation because it ____________________

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want to buy more now

answer

Higher impatience makes one ___________________

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Y1(1+r) + Y2

answer

Suppose you receive Y1 of your income this period and Y2 of your income in the next period. If you can either borrow or lend at an interest rate r. What is the most you can consume in the future period?

question

citations

answer

The output of economists in studies cited by David Colander in the outside reading is measured as _________________

question

an infinite elasticity of substitution production function, a linear production function

answer

The production function Q = 3K + 2L where Q is output and K and L are capital and labor is an example of ______________________________

question

decreasing returns to scale

answer

the production function Q = 4K^.25L^.5 exhibits _____________________

question

are L-shaped

answer

the isoquants of the production function Q = min(5K, 3L) ___________________

question

-MPL/MPK

answer

With labor on the horizontal axis and capital on the vertical axis, the slope on an isoquant is _______________

question

are a straight line

answer

The isoquants for the production function Q = 3K + 8L ____________________

question

the slope of the production function at a given amount of labor

answer

The marginal product of labor in a short run production function can be depicted as _________________________

question

greater the elasticity fo substitution of labor for capital, greater the elasticity of consumer demand for the final goods the firm produces

answer

Marshall's laws indicate that the demand for labor is more elastic the _________________________

question

the inability to substitute depicted by a Leontief production function

answer

A baby sigma (as defined in class) equal to 0 denotes __________________

question

when the production function exhibits constant returns to scale

answer

The long run average cost curve is the same as the long run marginal cost curve __________________

question

decreases as quantity increases

answer

The vertical distance between the average variable cost and average total cost curves ______________

question

(TFC + TVC)/Q

answer

ATC equals ________________

question

answer

Let the TC curve be given by the equation TC(Q) = 6Q. The FC curve can be expressed as ________

question

the average total costs are increasing

answer

Say at the current output level marginal costs = $20 and the average total cost = $10. From this information, we know that _______________________

question

is steeper than the firm's long run marginal cost curve

answer

A firm's short run marginal cost curve __________________

question

yield oscillations in prices and quantities that go on forever

answer

Assume an inverse demand curve P(t) = 100-Q(t) and a supply curve Q(t) = 1.0P(t-1). A shift up in demand in such a market will ___________________________

question

has the same vertical intercept as the demand curve, has twice the slope as the demand curve

answer

the marginal revenue curve for a monopolist facing a linear demand curve ________________________

question

answer

The marginal revenue facing a monopolist is zero when the elasticity of demand is _______

question

demand is inelastic

answer

Ekonochek Inc is a profit maximizing monopoly selling 1000 tons of chocolate at $185 a ton, based on demand for its product. What would NOT reflect the elasticity of demand at which the company operates?

question

elasticity of demand = 1

answer

The price markup would be greatest for a monopolist facing what elasticity of demand?

question

increase production

answer

A monopoly has a marginal revenue of $3, a marginal cost of $2.90, an AVC of $3.24, and a price of $3.90. It should ____________________

question

MRi = MRj = MC

answer

A multi-market monopolist determines production in each market i and j by setting _____________________

question

answer

The deadweight loss in a perfectly price-discriminating monopoly is _______

question

the sum of consumer and producer surplus is less than it could be

answer

A single price profit maximizing monopolist is inefficient because _________________

question

100 + 10Q

answer

The marginal factor cost curve of a typical monopsonist facing a supply curve of P = 100 + 5Q is ______________

question

lower

answer

In monopsony compared to competition, prices are _____________

question

the market is a monopsony

answer

An increase in the minimum wage could increase employment if ________________

question

will benefit most from one particular move no matter what the opponent does

answer

In a prisoner's dilemma game, a dominant strategy would mean that one of the players ___________________

question

the order of the moves matter

answer

In sequential games ____________________

question

equating the expected payoffs of hawks and doves

answer

In the hawk vs dove evolutionary game, one gets the equilibrium proportion of hawks and doves by ___________________

question

each firm take the quantities produced by its rivals as given

answer

In a Cournot duopoly model ____________

question

the profit-maximizing level of output for one duopolist as related to the amount supplied by the other

answer

A reaction function in a Cournot duopoly indicates _________________________

question

one duopolist takes the other duopolist's price as given

answer

The Bertrand model assumes --------------------

question

a leader duopolist assumes the other behaves like a Cournot duopolist

answer

The Stackelberg model assumes _____________

question

raise or lower its price, but the other firms will keep their prices constant

answer

A Chamberlain model assumes a firm can _________________________

question

raise its price and other firms will keep their prices constant, but the other firms will lower prices when the firm lowers its price

answer

A kinked demand curve model assumes a firm can __________________________

question

12.5 miles

answer

A 100 mile perimeter road encircles an island. There are four equally spaced rest areas on the road. The maximum distance anyone can be from a rest stop is _______________

question

maximize number of patrons

answer

According to Harold Hotelling, along a two mile beach, food stands often locate at the one-mille post instead of at the 1/2 and 1.5 mile points to __________________________

1 of 53

question

convex

answer

A diminishing marginal rate of substitution (MRS) implies that indifference curves are ______________

question

slope upward

answer

If one good is undesirable, then each indifference curve will _________________

question

-Ps/Pf

answer

If food is on the vertical axis and shelter on the horizontal axis, the slope of the budget line is given by _____________

question

adding horizontally

answer

One aggregates individual demand curves by _________________

question

always slopes down for an inferior good

answer

An Engel curve _______________

question

rotating a budget line over a set of indifference curves

answer

A demand schedule (and curve) is derived by __________________

question

steeper

answer

for a normal good, the income-compensated demand curve is _______________ than the ordinary demand curve

question

those with the least to lose are the ones who miss the flight

answer

question

falls as one travels down on an indifference curve

answer

Diminishing marginal rate of substitution implies that the marginal rate of substitution ______________________

question

the marginal rate of substitution equals the slope of the budget constraint

answer

excluding corner solutions, in consumer equilibrium, what is true?

question

perfectly inelastic, has elasticity of 0

answer

a vertical demand curve is ___________________

question

choose more education because they do not need to pay double for private education

answer

If an educational voucher system were adopted where parents could spend their share of education tax dollars at any school of their choice, then we could expect families to _____________________

question

neglects the fact that in the second year, consumers substitute relatively cheaper goods for relatively more expensive goods

answer

The consumer price index overestimates inflation because it ____________________

question

want to buy more now

answer

Higher impatience makes one ___________________

question

Y1(1+r) + Y2

answer

question

citations

answer

The output of economists in studies cited by David Colander in the outside reading is measured as _________________

question

an infinite elasticity of substitution production function, a linear production function

answer

The production function Q = 3K + 2L where Q is output and K and L are capital and labor is an example of ______________________________

question

decreasing returns to scale

answer

the production function Q = 4K^.25L^.5 exhibits _____________________

question

are L-shaped

answer

the isoquants of the production function Q = min(5K, 3L) ___________________

question

-MPL/MPK

answer

With labor on the horizontal axis and capital on the vertical axis, the slope on an isoquant is _______________

question

are a straight line

answer

The isoquants for the production function Q = 3K + 8L ____________________

question

the slope of the production function at a given amount of labor

answer

The marginal product of labor in a short run production function can be depicted as _________________________

question

greater the elasticity fo substitution of labor for capital, greater the elasticity of consumer demand for the final goods the firm produces

answer

Marshall's laws indicate that the demand for labor is more elastic the _________________________

question

the inability to substitute depicted by a Leontief production function

answer

A baby sigma (as defined in class) equal to 0 denotes __________________

question

when the production function exhibits constant returns to scale

answer

The long run average cost curve is the same as the long run marginal cost curve __________________

question

decreases as quantity increases

answer

The vertical distance between the average variable cost and average total cost curves ______________

question

(TFC + TVC)/Q

answer

ATC equals ________________

question

answer

Let the TC curve be given by the equation TC(Q) = 6Q. The FC curve can be expressed as ________

question

the average total costs are increasing

answer

Say at the current output level marginal costs = $20 and the average total cost = $10. From this information, we know that _______________________

question

is steeper than the firm's long run marginal cost curve

answer

A firm's short run marginal cost curve __________________

question

yield oscillations in prices and quantities that go on forever

answer

Assume an inverse demand curve P(t) = 100-Q(t) and a supply curve Q(t) = 1.0P(t-1). A shift up in demand in such a market will ___________________________

question

has the same vertical intercept as the demand curve, has twice the slope as the demand curve

answer

the marginal revenue curve for a monopolist facing a linear demand curve ________________________

question

answer

The marginal revenue facing a monopolist is zero when the elasticity of demand is _______

question

demand is inelastic

answer

question

elasticity of demand = 1

answer

The price markup would be greatest for a monopolist facing what elasticity of demand?

question

increase production

answer

A monopoly has a marginal revenue of $3, a marginal cost of $2.90, an AVC of $3.24, and a price of $3.90. It should ____________________

question

MRi = MRj = MC

answer

A multi-market monopolist determines production in each market i and j by setting _____________________

question

answer

The deadweight loss in a perfectly price-discriminating monopoly is _______

question

the sum of consumer and producer surplus is less than it could be

answer

A single price profit maximizing monopolist is inefficient because _________________

question

100 + 10Q

answer

The marginal factor cost curve of a typical monopsonist facing a supply curve of P = 100 + 5Q is ______________

question

lower

answer

In monopsony compared to competition, prices are _____________

question

the market is a monopsony

answer

An increase in the minimum wage could increase employment if ________________

question

will benefit most from one particular move no matter what the opponent does

answer

In a prisoner's dilemma game, a dominant strategy would mean that one of the players ___________________

question

the order of the moves matter

answer

In sequential games ____________________

question

equating the expected payoffs of hawks and doves

answer

In the hawk vs dove evolutionary game, one gets the equilibrium proportion of hawks and doves by ___________________

question

each firm take the quantities produced by its rivals as given

answer

In a Cournot duopoly model ____________

question

the profit-maximizing level of output for one duopolist as related to the amount supplied by the other

answer

A reaction function in a Cournot duopoly indicates _________________________

question

one duopolist takes the other duopolist's price as given

answer

The Bertrand model assumes --------------------

question

a leader duopolist assumes the other behaves like a Cournot duopolist

answer

The Stackelberg model assumes _____________

question

raise or lower its price, but the other firms will keep their prices constant

answer

A Chamberlain model assumes a firm can _________________________

question

raise its price and other firms will keep their prices constant, but the other firms will lower prices when the firm lowers its price

answer

A kinked demand curve model assumes a firm can __________________________

question

12.5 miles

answer

A 100 mile perimeter road encircles an island. There are four equally spaced rest areas on the road. The maximum distance anyone can be from a rest stop is _______________

question

maximize number of patrons

answer

According to Harold Hotelling, along a two mile beach, food stands often locate at the one-mille post instead of at the 1/2 and 1.5 mile points to __________________________

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