Econ Test 1-3 Review - Assignment Essays

question

The tendency of people to value something more highly when they own it is called the

answer

endowment effect

question

When a market is in equilibrium, the total amount of consumer surplus must be____ the total amount of a producer surplus.

answer

Not larger, not equal, not less than... None of the above

question

Producer surplus is the price received____ summed over the quantity sold.

answer

minus its marginal cost of production

question

When the Smiths were shopping for thier present home, the asking price from the previous owner was $250,000. The Smiths had decided they would pay no more than $245,000 for the house. After negotiations, the smihts actually purchased the house for 239,000. Therefore, the previous owner earned a producer surplus of.

answer

an amount unknown given the information

question

When a tax is imposed on a good or service, buyers respong only to the price that____ the tax, and sellers respond to the price that___ the tax.

answer

includes;excludes

question

The supply of oil is more elastic than the demand for oil. If oil is taxed $10 per barrel, how will the tax be divided between the buyers and sellers?

answer

The buyers will pay more of the tax than the sellers

question

The amount of a tax paid by the sellers will be larger the more____ the demand and the more____ the supply.

answer

elastic;inelastic

question

The stricter the enforcement of a price ceiling, the

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Larger is the difference between the black market price and the legal market price of the good.

question

The government of Healthyland imposes a tax on sellers of salt. The tax is .10 per pound. With no tax, the price of salt is .40 per pound. The demand for salt is perfectly inelastic and the elasticity of supply is 1.5. With the tax, the price of salt paid by buyers in Healthyland is

answer

.50 cents per pound

question

If a production quota is set below the equilibrium quantity, at the quota quantity, marginal benefit is___ marginal cost and the level of production is____

answer

greater than; inefficient

question

If enforcement is aimed at both buyers and sellers of an illegal good, its equilibrium price will___ and its equilibrium quantity will____

answer

be undetermined;decrease

question

Your marginal utility from a hamburger

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depends on how many hamburgers you've already eaten

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Utility is best defined as

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the satisfaction from consuming a good

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Pam buys only thread and fabric, and she buys the quantities that maximize her utility. Her marginal utility from a spool of thread is 30 units and her marginal utility from a yard of fabric is 60 units. If the price of a spool of thread is $4, then you are sure that the price of a yard of fabric is___

answer

question

Sergio consumes only beef and snails and is maximizing his utility. If the price of beef is less than the price of snails, then we definitely know that___

answer

the marginal utility from the last pound of snails purchased is greater than the marginal utility from the last pound of beef purchased.

question

What is not a characteristic of a monopoly?

answer

easy entry and exit

question

A monopoly that sells every unit of its output at the same price is a

answer

single-price monopoly

question

The marginal revenue curve for a single-price monopoly

answer

lies below the market demand curve

question

A monopolist will leave the market if it incurs an economic loss in the long run?

answer

True

question

Deadweight loss measures the inefficiency as the loss of

answer

consumer surplus plus producer surplus

question

Which of the following is true about a perfect price discriminating monopolist?

answer

The firm produces the efficient level of output

question

The WaveHouse on Mission Beach in San Diego features the Bruticus Maximus, a ten foot wave, which tests the skills of even the most talented surf and wake board riders on the planet. WaveHouse is the only place in San Diego where this service is offered. If you are a member of WaveHouse, you can ride for half the price that a non-member pays. This is an example of:

answer

Price discrimination among groups of buyers

question

The smallest quantity of output at which long-run average cost is at a minimum is a firm's

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minimum efficient scale

question

A perfectly competitive firm's marginal cost exceeds its marginal revenue at its current output. To increase its profit, the firm will

answer

decrease its output

question

By producing less, a firm can reduce

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its variable costs but not its fixed costs

question

Homer's Holesome Donuts has determined that its profit-maximizing quantity is 10,000 donuts per year. Homer's earns 12,000 in revenue from the sale of these donuts. Homer's has two costs. First eh pays 16,000 in annual rental payments for its five-year lease on its store. Second homer incurs an additional cost of 5,000 for ingredients. Homer's economic profit is equal to

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economic loss of 9,000

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Over a given period, economic depreciation is the change in capital equipmen'ts

answer

market value

question

Economic efficiency occurs when the firm produces a given output at the least cost?

answer

True

question

When a firm experiences economies of scale, its ____ costs curve slopes ___ as output increases.

answer

long-run average, downward

question

An example of a short-run fixed factor of production is

answer

capital equipment

question

A cost that has already been made and cannot be recovered is called a

answer

sunk cost

question

Health care costs are expected to rise more than 10% into 2011, according to a survey of insurers by ABC . Which of the following would be a fixed cost in a hospital?

answer

An MRI machine

question

Health care costs are expected to rise more than 10% into 2011, according to a survey of insurers by ABC . If the increase in costs is expected to solely come from increased costs to buy MRI and X-Ray machines, then for the health care industry:

answer

Fixed costs are increasing

question

As a consumer consumers more and more of a product in a particular time period, eventually marginal utility

answer

declines

1 of 34

question

The tendency of people to value something more highly when they own it is called the

answer

endowment effect

question

When a market is in equilibrium, the total amount of consumer surplus must be____ the total amount of a producer surplus.

answer

Not larger, not equal, not less than... None of the above

question

Producer surplus is the price received____ summed over the quantity sold.

answer

minus its marginal cost of production

question

answer

an amount unknown given the information

question

When a tax is imposed on a good or service, buyers respong only to the price that____ the tax, and sellers respond to the price that___ the tax.

answer

includes;excludes

question

The supply of oil is more elastic than the demand for oil. If oil is taxed $10 per barrel, how will the tax be divided between the buyers and sellers?

answer

The buyers will pay more of the tax than the sellers

question

The amount of a tax paid by the sellers will be larger the more____ the demand and the more____ the supply.

answer

elastic;inelastic

question

The stricter the enforcement of a price ceiling, the

answer

Larger is the difference between the black market price and the legal market price of the good.

question

answer

.50 cents per pound

question

If a production quota is set below the equilibrium quantity, at the quota quantity, marginal benefit is___ marginal cost and the level of production is____

answer

greater than; inefficient

question

If enforcement is aimed at both buyers and sellers of an illegal good, its equilibrium price will___ and its equilibrium quantity will____

answer

be undetermined;decrease

question

Your marginal utility from a hamburger

answer

depends on how many hamburgers you've already eaten

question

Utility is best defined as

answer

the satisfaction from consuming a good

question

answer

question

Sergio consumes only beef and snails and is maximizing his utility. If the price of beef is less than the price of snails, then we definitely know that___

answer

the marginal utility from the last pound of snails purchased is greater than the marginal utility from the last pound of beef purchased.

question

What is not a characteristic of a monopoly?

answer

easy entry and exit

question

A monopoly that sells every unit of its output at the same price is a

answer

single-price monopoly

question

The marginal revenue curve for a single-price monopoly

answer

lies below the market demand curve

question

A monopolist will leave the market if it incurs an economic loss in the long run?

answer

True

question

Deadweight loss measures the inefficiency as the loss of

answer

consumer surplus plus producer surplus

question

Which of the following is true about a perfect price discriminating monopolist?

answer

The firm produces the efficient level of output

question

answer

Price discrimination among groups of buyers

question

The smallest quantity of output at which long-run average cost is at a minimum is a firm's

answer

minimum efficient scale

question

A perfectly competitive firm's marginal cost exceeds its marginal revenue at its current output. To increase its profit, the firm will

answer

decrease its output

question

By producing less, a firm can reduce

answer

its variable costs but not its fixed costs

question

answer

economic loss of 9,000

question

Over a given period, economic depreciation is the change in capital equipmen'ts

answer

market value

question

Economic efficiency occurs when the firm produces a given output at the least cost?

answer

True

question

When a firm experiences economies of scale, its ____ costs curve slopes ___ as output increases.

answer

long-run average, downward

question

An example of a short-run fixed factor of production is

answer

capital equipment

question

A cost that has already been made and cannot be recovered is called a

answer

sunk cost

question

Health care costs are expected to rise more than 10% into 2011, according to a survey of insurers by ABC . Which of the following would be a fixed cost in a hospital?

answer

An MRI machine

question

answer

Fixed costs are increasing

question

As a consumer consumers more and more of a product in a particular time period, eventually marginal utility

answer

declines

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