Microeconomics - Assignment Essays

question

What is meant by saying that economics is an empirical science

answer

Economic theories will be tested by seeing how well they correspond to real world phenomena

question

When studying individuals' economic behavior, economists assume that

answer

Individuals act as if they were rational

question

The value of a model is determined by

answer

the usefulness of its predictions in the real world

question

Resources are also known as

answer

Factors of production

question

In the above figure, the opportunity cost of moving from point D to point C is

answer

25 ukuleles

question

A market demand schedule for a product indicates that

answer

There is a negative relationship between price and quantity demanded

question

An improvement in technology in the production of computers would

answer

Increase the supply of computers

question

Suppose a price ceiling is set above the equilibrium price. Now suppose that policymakers decide to raise price ceiling. This increase in the price ceiling will cause which of the following to occur?

answer

None of the above

question

If the government imposed a price celling on gasoline above this good's current market clearing price, there would be

answer

No change in the price of gasoline

question

An effluent fee

answer

Gives a firm the right to pollute if it pays a tax on what it discharges

question

When the purchase price of an asset is less than its sale price, then there is a

answer

Capital loss

question

Comparative advantage is defined as

answer

Producing one good at a lower opportunity cost then another country can

question

In the market for euros, the supply of euros is

answer

Upward sloping, because higher dollar prices of euros means that US goods are cheaper to Europeans

question

Macroeconomics deals with ________ while microeconomics deals with ______.

answer

Economywide choices; choices of individuals

question

The conversion of resources to consumer goods or services is called

answer

Production

question

Refer to the above figure. Excess quantity demanded will exist when

answer

The price is between $0 and $6

question

Which of the following is not an example of transaction cost?

answer

The enjoyment of owning the good

question

All of the following are assumptions of both market in public-sector decision making except

answer

Decisions are based on majority rule

question

Some economists argue that corporate income taxes are typically not paid by firms, but bye

answer

Stockholders, employees, and consumers

question

Which of the reasons given for tariff protection make consumers better off by generating lower prices?

answer

None provides lower prices for domestic consumers

question

If the price of the Brazilian real is $.60 and the US resident purchases a Brazilian - manufactured item for 60,000 real, there will be

answer

A quantity demanded of 60,000 real and the quantity supplied of $36,000

question

Professor's economic students are constructing models for how gasoline prices change. Maria's model has very realistic assumptions and is quite complex. Annas model is less complicated and less realistic. Maria's model correctly predicts gas price increases 5% of the time. Anna's model predicts correctly 15% of the time. On the basis of useless or "goodness," professor will give which student model the higher grade and why?

answer

Anna's model gets the higher grade because it predicts accurately more often

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Division of labor

answer

Leads to an increase in the amount of output in the economy

question

All of the following will affect the position of the demand curve except

answer

Prices of resources used to produce the product

question

Refer to the above table. What is the absolute price elasticity of demand when a price rises from $9 to $9.50

answer

2.85

question

In an extreme hypothetical instance in which the price change of a good elicited no change in quantity demanded, we would say that the item is

answer

Perfectly inelastic

question

According to the above table, what is the absolute price elasticity of demand when the price rises from $5.50 to $6?

answer

1.21

question

Using the above table, diminishing marginal utility begins after the ________ glass of water is consumed

answer

1st

question

Refer to the above figure. Which point represents the highest level of utility?

answer

Point D

question

A business owned by two or more joint owners, or partners, who share the responsibilities and the profits of the firm and are individually liable for all debts is a(n)

answer

Partnership

question

Unlimited liability is found in

answer

Proprietorships and partnerships

question

In the above table, the marginal product of the second worker is

answer

question

Suppose that one worker can produce 15 cookies, two workers can produce 35 cookies together, and three workers can produce 65 cookies together. What is the average product of the first three workers?

answer

21.67 cookies

question

In the short run, a firm should shut down when

answer

P<AVC

question

In a decreasing-cost industry, an increase in industry output will

answer

Lead to a lower market price

question

The more substitutes there are for a monopolist's product

answer

The more elastic is the demand curve

question

A monopolist finds the output (Q*) rate that maximizes profit. It finds the price by

answer

Taking the height of the demand curve at output rate Q*

question

Persuasive advertising is the type of advertising that

answer

Is used to induce a consumer to discover previously unknown tastes and preferences

question

Monopolistic competition and perfect competition are different in that

answer

Only monopolistically competitive firms advertise

question

The success of cartel rests upon

answer

Inducing all members to limit their combined output and charge the same price

question

When the fox is guarding the henhouse, this is an example of the

answer

Capture hypothesis

question

Ajax has just discovered that the marginal revenue product generated by the last worker hired was $125 while the marginal factor cost was $85. What should Ajax do?

answer

Increase the amount produced

question

Refer to the above table. If the marginal revenue product is $21, how many workers will the profit maximizing monopolist hire and what wage will they pay each worker?

answer

2; $19

question

Which of the following would be considered income in kind?

answer

Food stamps

question

Which of the following constitutes an external cost of driving an automobile?

answer

Pollution

question

Referred to the above table. At a price below $5, the absolute price elasticity of demand is

answer

Below 1

question

Refer to the above figures. Which panel best represents marginal utility?

answer

Panel C

question

Economic profits are found by total revenues minus

answer

Explicit and implicit costs

question

A firm's long-run average cost curve is

answer

The locus of points representing the minimum unit cost of producing any given rate of output when all inputs may be adjusted

question

A firm should never produce any output if

answer

P<AVC

question

Which of the following statements concerning a monopolist is false?

answer

A monopolist will charge the highest price at which any individual will purchase the product

question

The major similarity between monopolistic competition and perfect competition is

answer

That both assume many buyers and sellers

question

A market situation in which there are a few large firms is called

answer

Oligopoly

question

The hypothesis that regulators eventually adopt policies that benefit the producers in the industry is known as the

answer

Capture hypothesis

question

The additional revenue a firm obtains when it hires an additional worker (holding other inputs constant) is the

answer

Marginal revenue product (MRP) of labor

question

Which of the following is not one of the reasons for declining union membership in the United States?

answer

The AFL-CIO merger and creation of the Change to Win Federation reduced competition among unions

question

If an employer pays employees according to the volume of business revenue they individually generate, then the employer is applying the

answer

Productivity standard

question

The above table shows marginal cost and marginal benefits of clean air in a particular industrial area. In the table, when the quantity of clean air is at 75 percent,

answer

The marginal benefit of clean air is less then the marginal cost

question

The longer any price change process, the

answer

Greater is the price elasticity of demand

question

To remain is consumer optimum

answer

A price decrease requires an increase in consumption

question

Economic profits are equal to

answer

Total revenues minus the implicit and explicit costs of all inputs used

question

An increase in long-run average costs resulting from increases and output is

answer

Attributed to diseconomies to scale

question

Refer to the above table. The table represents information on the costs for Ajax Corporation. Ajax operates in a perfectly competitive market and the price of the product is $9. What does profit equal when quantity equals 3?

answer

1 of 63

question

What is meant by saying that economics is an empirical science

answer

Economic theories will be tested by seeing how well they correspond to real world phenomena

question

When studying individuals' economic behavior, economists assume that

answer

Individuals act as if they were rational

question

The value of a model is determined by

answer

the usefulness of its predictions in the real world

question

Resources are also known as

answer

Factors of production

question

In the above figure, the opportunity cost of moving from point D to point C is

answer

25 ukuleles

question

A market demand schedule for a product indicates that

answer

There is a negative relationship between price and quantity demanded

question

An improvement in technology in the production of computers would

answer

Increase the supply of computers

question

Suppose a price ceiling is set above the equilibrium price. Now suppose that policymakers decide to raise price ceiling. This increase in the price ceiling will cause which of the following to occur?

answer

None of the above

question

If the government imposed a price celling on gasoline above this good's current market clearing price, there would be

answer

No change in the price of gasoline

question

An effluent fee

answer

Gives a firm the right to pollute if it pays a tax on what it discharges

question

When the purchase price of an asset is less than its sale price, then there is a

answer

Capital loss

question

Comparative advantage is defined as

answer

Producing one good at a lower opportunity cost then another country can

question

In the market for euros, the supply of euros is

answer

Upward sloping, because higher dollar prices of euros means that US goods are cheaper to Europeans

question

Macroeconomics deals with ________ while microeconomics deals with ______.

answer

Economywide choices; choices of individuals

question

The conversion of resources to consumer goods or services is called

answer

Production

question

Refer to the above figure. Excess quantity demanded will exist when

answer

The price is between $0 and $6

question

Which of the following is not an example of transaction cost?

answer

The enjoyment of owning the good

question

All of the following are assumptions of both market in public-sector decision making except

answer

Decisions are based on majority rule

question

Some economists argue that corporate income taxes are typically not paid by firms, but bye

answer

Stockholders, employees, and consumers

question

Which of the reasons given for tariff protection make consumers better off by generating lower prices?

answer

None provides lower prices for domestic consumers

question

If the price of the Brazilian real is $.60 and the US resident purchases a Brazilian - manufactured item for 60,000 real, there will be

answer

A quantity demanded of 60,000 real and the quantity supplied of $36,000

question

answer

Anna's model gets the higher grade because it predicts accurately more often

question

Division of labor

answer

Leads to an increase in the amount of output in the economy

question

All of the following will affect the position of the demand curve except

answer

Prices of resources used to produce the product

question

Refer to the above table. What is the absolute price elasticity of demand when a price rises from $9 to $9.50

answer

2.85

question

In an extreme hypothetical instance in which the price change of a good elicited no change in quantity demanded, we would say that the item is

answer

Perfectly inelastic

question

According to the above table, what is the absolute price elasticity of demand when the price rises from $5.50 to $6?

answer

1.21

question

Using the above table, diminishing marginal utility begins after the ________ glass of water is consumed

answer

1st

question

Refer to the above figure. Which point represents the highest level of utility?

answer

Point D

question

A business owned by two or more joint owners, or partners, who share the responsibilities and the profits of the firm and are individually liable for all debts is a(n)

answer

Partnership

question

Unlimited liability is found in

answer

Proprietorships and partnerships

question

In the above table, the marginal product of the second worker is

answer

question

Suppose that one worker can produce 15 cookies, two workers can produce 35 cookies together, and three workers can produce 65 cookies together. What is the average product of the first three workers?

answer

21.67 cookies

question

In the short run, a firm should shut down when

answer

P<AVC

question

In a decreasing-cost industry, an increase in industry output will

answer

Lead to a lower market price

question

The more substitutes there are for a monopolist's product

answer

The more elastic is the demand curve

question

A monopolist finds the output (Q*) rate that maximizes profit. It finds the price by

answer

Taking the height of the demand curve at output rate Q*

question

Persuasive advertising is the type of advertising that

answer

Is used to induce a consumer to discover previously unknown tastes and preferences

question

Monopolistic competition and perfect competition are different in that

answer

Only monopolistically competitive firms advertise

question

The success of cartel rests upon

answer

Inducing all members to limit their combined output and charge the same price

question

When the fox is guarding the henhouse, this is an example of the

answer

Capture hypothesis

question

Ajax has just discovered that the marginal revenue product generated by the last worker hired was $125 while the marginal factor cost was $85. What should Ajax do?

answer

Increase the amount produced

question

Refer to the above table. If the marginal revenue product is $21, how many workers will the profit maximizing monopolist hire and what wage will they pay each worker?

answer

2; $19

question

Which of the following would be considered income in kind?

answer

Food stamps

question

Which of the following constitutes an external cost of driving an automobile?

answer

Pollution

question

Referred to the above table. At a price below $5, the absolute price elasticity of demand is

answer

Below 1

question

Refer to the above figures. Which panel best represents marginal utility?

answer

Panel C

question

Economic profits are found by total revenues minus

answer

Explicit and implicit costs

question

A firm's long-run average cost curve is

answer

The locus of points representing the minimum unit cost of producing any given rate of output when all inputs may be adjusted

question

A firm should never produce any output if

answer

P<AVC

question

Which of the following statements concerning a monopolist is false?

answer

A monopolist will charge the highest price at which any individual will purchase the product

question

The major similarity between monopolistic competition and perfect competition is

answer

That both assume many buyers and sellers

question

A market situation in which there are a few large firms is called

answer

Oligopoly

question

The hypothesis that regulators eventually adopt policies that benefit the producers in the industry is known as the

answer

Capture hypothesis

question

The additional revenue a firm obtains when it hires an additional worker (holding other inputs constant) is the

answer

Marginal revenue product (MRP) of labor

question

Which of the following is not one of the reasons for declining union membership in the United States?

answer

The AFL-CIO merger and creation of the Change to Win Federation reduced competition among unions

question

If an employer pays employees according to the volume of business revenue they individually generate, then the employer is applying the

answer

Productivity standard

question

The above table shows marginal cost and marginal benefits of clean air in a particular industrial area. In the table, when the quantity of clean air is at 75 percent,

answer

The marginal benefit of clean air is less then the marginal cost

question

The longer any price change process, the

answer

Greater is the price elasticity of demand

question

To remain is consumer optimum

answer

A price decrease requires an increase in consumption

question

Economic profits are equal to

answer

Total revenues minus the implicit and explicit costs of all inputs used

question

An increase in long-run average costs resulting from increases and output is

answer

Attributed to diseconomies to scale

question

answer

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