question
(T/F) If the price of good x increases and the demand for good y decreases then the goods x and y are gross substitutes
answer
False
question
(T/F) The graphical change in the area above the price and between the Hicksian demand curve and the price axis, is a theoretically appealing way of measuring the effect of a price change on consumer welfare.
answer
True
question
(T/F) In a two good world there can never be goods that are net complements.
answer
True
question
Which of the following statements about the elasticities is not true.
A.
An elasticity is the ratio of two percentage changes.
B.
Our comparative statics derivatives, such as the effect of own price on optimal quantity can be reweighted to make elasticities.
C.
Elasticities correct the problem of scale involved in comparing different changes for one good, but we still should not compare elasticities across goods.
D.
We can manipulate a consumer's budget constraint to create a relationship among income elasticities and expenditure shares.
E.
All the above are true statements.
A.
An elasticity is the ratio of two percentage changes.
B.
Our comparative statics derivatives, such as the effect of own price on optimal quantity can be reweighted to make elasticities.
C.
Elasticities correct the problem of scale involved in comparing different changes for one good, but we still should not compare elasticities across goods.
D.
We can manipulate a consumer's budget constraint to create a relationship among income elasticities and expenditure shares.
E.
All the above are true statements.
answer
C.
Elasticities correct the problem of scale involved in comparing different changes for one good, but we still should not compare elasticities across goods.
Elasticities correct the problem of scale involved in comparing different changes for one good, but we still should not compare elasticities across goods.
question
When adding individual demands to create a market demand we should pay special attention to.....
A.
Putting quantity on the vertical axis because it is the dependent variable.
B.
Utility functions, because they are ordinal not cardinal.
C.
The price of the good in question, since it may be different for different consumers.
D.
The income of each consumer, since changes for different consumers may affect demand differently.
A.
Putting quantity on the vertical axis because it is the dependent variable.
B.
Utility functions, because they are ordinal not cardinal.
C.
The price of the good in question, since it may be different for different consumers.
D.
The income of each consumer, since changes for different consumers may affect demand differently.
answer
D.
The income of each consumer, since changes for different consumers may affect demand differently.
The income of each consumer, since changes for different consumers may affect demand differently.
question
(T/F) If leisure is a normal good, our theory predicts that an increase in the wage will lead to an ambiguous change in labor supply.
answer
True
question
(T/F) The fundamental tradeoff in welfare programs says that in order to better target resources at the most needy, you have to give them incentives to work more.
answer
False
question
(T/F) Our simple class model predicts that the existence of social security reduces privately held savings.
answer
True
question
According to the applications of the consumer model we discussed in class. Which of the following statements is not true.
A.
Some individuals might respond to a wage increase by working less.
B.
A public education system which offers a non-tradeable, fixed amount education will cause some people to consume less education.
C.
Traditional welfare programs provided many low income people with incentives to work less.
D.
Social Security cannot increase the sum of government and private saving.
E.
All of the above are true.
A.
Some individuals might respond to a wage increase by working less.
B.
A public education system which offers a non-tradeable, fixed amount education will cause some people to consume less education.
C.
Traditional welfare programs provided many low income people with incentives to work less.
D.
Social Security cannot increase the sum of government and private saving.
E.
All of the above are true.
answer
D.
Social Security cannot increase the sum of government and private saving.
Social Security cannot increase the sum of government and private saving.
question
Which of the following statements about the elasticity relationships discussed in class is not true.
A.
The Slutsky equation can be rewritten in terms of total, income and substitution elasticities
B.
The income elasticities of all goods in the model, weighted by their respective budget shares, must sum to 1.
C.
The own price, cross price, and income elasticities for a single good must sum to 1.
D.
We can manipulate a consumer's budget constraint to create a relationship among income elasticities and expenditure shares.
A.
The Slutsky equation can be rewritten in terms of total, income and substitution elasticities
B.
The income elasticities of all goods in the model, weighted by their respective budget shares, must sum to 1.
C.
The own price, cross price, and income elasticities for a single good must sum to 1.
D.
We can manipulate a consumer's budget constraint to create a relationship among income elasticities and expenditure shares.
answer
C.
The own price, cross price, and income elasticities for a single good must sum to 1.
The own price, cross price, and income elasticities for a single good must sum to 1.
question
Which of the following statements about the labor leisure model is true.
A.
The consumer has a utilty function that represents preferences over labor and leisure.
B.
The price of leisure is equal to the wage.
C.
The consumers "full income" is the amount of consumption the individual gets if he chooses leisure = T.
D.
Giving the individual non-labor income must cause him to work more.
A.
The consumer has a utilty function that represents preferences over labor and leisure.
B.
The price of leisure is equal to the wage.
C.
The consumers "full income" is the amount of consumption the individual gets if he chooses leisure = T.
D.
Giving the individual non-labor income must cause him to work more.
answer
B.
The price of leisure is equal to the wage.
The price of leisure is equal to the wage.
question
(T/F)Decreasing returns to scale for a production function means that if all inputs are doubled, output will be less than doubled.
answer
True
question
The average product of labor reaches its maximum . . .
A.
at the point of inflection of the total product curve.
B.
where the slope of the total product curve is steepest
C.
where the slope of the marginal product curve is zero
D.
where marginal and average productivity are equal
E.
Both C and D.
A.
at the point of inflection of the total product curve.
B.
where the slope of the total product curve is steepest
C.
where the slope of the marginal product curve is zero
D.
where marginal and average productivity are equal
E.
Both C and D.
answer
D.
where marginal and average productivity are equal
where marginal and average productivity are equal
question
A firm's isoquant shows . . .
A.
The combinations of capital and labor that will produce a certain amount of output.
B.
The amount of labor needed to produce a given level of output with capital held constant.
C.
The combinations of capital and labor that cost the same amount
D.
The capital, labor combinations associated with a certain marginal productivity of labor.
A.
The combinations of capital and labor that will produce a certain amount of output.
B.
The amount of labor needed to produce a given level of output with capital held constant.
C.
The combinations of capital and labor that cost the same amount
D.
The capital, labor combinations associated with a certain marginal productivity of labor.
answer
A.
The combinations of capital and labor that will produce a certain amount of output.
The combinations of capital and labor that will produce a certain amount of output.
question
Graphically the average product of labor is illustrated by . . .
A.
The slope of the total product curve
B.
The slope of the marginal product curve
C.
The slope of the line segment connecting the origin with the relevant point on the total product curve.
D.
The slope of the line segment connecting the origin with the relevant point on the marginal product curve.
A.
The slope of the total product curve
B.
The slope of the marginal product curve
C.
The slope of the line segment connecting the origin with the relevant point on the total product curve.
D.
The slope of the line segment connecting the origin with the relevant point on the marginal product curve.
answer
C.
The slope of the line segment connecting the origin with the relevant point on the total product curve.
The slope of the line segment connecting the origin with the relevant point on the total product curve.
question
Which of the following production functions exhibits a constant elasticity of substitution
A.
q = 3K + 2L
B.
q = Kœ Lœ .
C.
q = min(K,L).
D.
all of the above
E.
A and C only.
F.
A and B only.
A.
q = 3K + 2L
B.
q = Kœ Lœ .
C.
q = min(K,L).
D.
all of the above
E.
A and C only.
F.
A and B only.
answer
D.
all of the above
all of the above
question
(T/F) According to our growth accounting formula, less than half of U.S. output growth in the early 20th century was explained by labor and capital increases.
answer
True
question
(T/F) There is no difference between the notions of firm costs used by economists and those used by accountants.
answer
False
question
(T/F) If we know the firms quantity to be produced we can find the optimal inputs to use through a maximization problem that uses an isocost line as the constraint.
answer
False
question
For a firm with constant returns to scale:
A.
The long run total cost function will be quadratic
B.
The Long run average and marginal cost functions will always be equal
C.
The long run marginal cost function will always be below the average cost function.
D.
The cost minimization problem will always yield an interior solution.
A.
The long run total cost function will be quadratic
B.
The Long run average and marginal cost functions will always be equal
C.
The long run marginal cost function will always be below the average cost function.
D.
The cost minimization problem will always yield an interior solution.
answer
B.
The Long run average and marginal cost functions will always be equal
The Long run average and marginal cost functions will always be equal
question
In the short run . . .
A.
All inputs are fixed
B.
Firms will optimally choose a quantity of labor that would be efficient in the long run.
C.
The firm has short run average cost curves that are above their long run average costs except at one point.
D.
The firm has short run marginal cost curves that do not intersect their long run average costs.
A.
All inputs are fixed
B.
Firms will optimally choose a quantity of labor that would be efficient in the long run.
C.
The firm has short run average cost curves that are above their long run average costs except at one point.
D.
The firm has short run marginal cost curves that do not intersect their long run average costs.
answer
C.
The firm has short run average cost curves that are above their long run average costs except at one point.
The firm has short run average cost curves that are above their long run average costs except at one point.
question
For a firm with the total cost function TC* = q.8v.4w.6 which of the following statements are true.
A.
The firm faces decreasing average costs
B.
An increase in either the price of labor (w) or the price of capital (v) will increase the firms Total costs.
C.
The firm has Marginal costs greater than Average costs for small values of q.
D.
All of the above are true
E.
None of the above are true
F.
Only A and B are true
A.
The firm faces decreasing average costs
B.
An increase in either the price of labor (w) or the price of capital (v) will increase the firms Total costs.
C.
The firm has Marginal costs greater than Average costs for small values of q.
D.
All of the above are true
E.
None of the above are true
F.
Only A and B are true
answer
F.
Only A and B are true
Only A and B are true
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
