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Microeconomics P1
Microeconomics P1
60 terms
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Microeconomics
Flashcards
60 cards
F
Practice quiz
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Host live
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Questions
60
Answers
1
Look below
A
B
D
C
2
An outward shift in the PPF curve can be cause by an increase in
unemployment
inflation
demand
the labor force
3
Look below
False
True
4
One justification for government regulation of a monopoly is that the unregulated monopoly
earns a normal profit
has a very elastic demand curve
sells too much of the product
charges a price higher than a competitive market price
5
An industry w/ a small number of firms selling a standardized/differentiated product is called
oligopoly
duopoly
monopoly
competitive industry
6
Antitrust laws are designed mainly to
regulate prices charged by natural monopolies
facilitate mergers of firms to increase efficiency
protect businesses from unfair foreign competition
promote a competitive market environment
7
Look below
C
D
B
A
8
The law of diminishing marginal utility is most useful for explaining the...
diminishing marginal product of capital
shape of PPF
law of supply
law of demand
9
Look Below
B
D
C
E
10
Economic growth can be depicted on a PPF curve by what?
movement upward along the curve
movement downward along the curve
movement from one point to another
rightward shift of the curve
11
If the increase in price of one good decreases the demand for another good, then the goods are
complementary goods
normal goods
inferior goods
luxury goods
12
Which of the following will not cause a shift in the demand curve of a factor of production?
demand for the goods produced by the factor of production
price of substitute factors
supply of the factor
prices of the goods produced by the factor of production
13
Look below
B
A
C
D
14
Look below
D
A
C
B
15
Which is true for a perfect competition?
sellers and buyers are abundant
all of the above
no restrictions on entry in (or exit from) market
each buyer and seller is a price taker
16
Land, Labor, Capital, and Entrepreneurship are examples of...
Public goods
Factors of production
Substitutes
inferior goods
17
If the demand for potatoes increases whenever a person's income increases, then they are a
free good
normal good
a perfect good
public good
18
According to consumer behavior,this decreases first as additional units of a good are consumed?
marginal utility
average utility
total utility
physical utility
19
Look below
total utility
regional utility
utility
marginal utility
20
Look below
D
B
A
C
21
Which of the following factors can cause a firm's cost curves to shift upward?
An increase in wages
An increase in the firm's output
A decrease in the firm's output
An increase in the output price
22
When a perfectly competitive labor market is in equilibrium,
individual firms are considered "price makers"
individual firms face downward sloping labor demand curves
individual firms face downward sloping labor demand curves
everyone who wants to work has the opportunity to do so
23
If bologna is an inferior good which of the following is true?
it is the better good
An increase in consumer income will increase the demand
An increase in consumer income will decrease the demand
The supply and demand of bologna will decrease
24
Which of the following is true about a firm's average variable cost?
it will never equal marginal cost
it will equal average total cost when fixed costs are zero
it will rise if it is greater than marginal cost
it will be negative if marginal costs decline
25
Look Below...
C
B
A
D
26
Which will increase wages for tuba makers...
an effective price ceiling for tubas
increase in price of tuba lessons
increase in tax on tubas
increase in price of tubas
27
Look below
A
C
B
28
Look below
D
E
C
B
29
The basic economic problem of all countries is the existence of
inflation and unemployment
public and private industries
monopolies and unions
taxes and budget deficits
30
Look below
D
A
B
C
31
The owner of a competitive firm making zero economic profit is making...
serious resource allocation errors
is making less than normal profits
what she would make in her next best alternative job
nothing
32
What happens to the market of cars when the government taxes the production of cars?
the demand curve will shift to the right
the supply curve will shift to the left
the supply curve will shift to the right
there will be movement along the demand curve
33
Look below
producer benefit
producer utility
producer surplus
producer cost
34
What is true about a price floor?
to assist the producers of a good/service
it must be below the equilibrium for it to have an influence
the price floor will ten to create a shortage of the good
an effective price floor will increase the quantity demanded
35
As a result of minimum wage, this arises
II.) illegal hiring
I.) increase job search activity
III.) decreased search activity
I and II
36
Shape of Total Fixed Cost(TFC) Curve is
45 degree line
Horizontal
Vertical
None of the above
37
When the opportunity for price discrimination arises,
consumer surplus decreases
market segments w/ rel. elastic demand pays higher prices
market segments w/ rel. inelastic demand pays higher prices
demand is horizontal
38
Obstacles to efficiency are....
taxes and subsidies
monopoly
Price & quantity regulations
all of the above
39
Price discrimination is a situation when a producer
Charges same price
All of the above
Charges different prices in different markets
Charges many prices
40
Look below
E
D
B
A
41
Look below
B
C
D
A
42
Which of the following statements is true for a firm in a perfectly competitive industry?
Marginal revenue is increasing
Average revenue equals marginal revenue
Average revenue is initially negative and then becomes +
marginal revenue is decreasing
43
Look below
monopoly
oliglopoly
firm
business
44
A production possibility frontier will be a straight line when
efficiency is achieved
it can never be a straight line
resources are not specialized
utility is maximised
45
Which is likely to have most elastic demand
Cigarrettes
All of the above
Sprite
Life-sustaining pills
46
A profit-maximizing firm will shut down in the short run if
marginal cost is equal to average total cost
marginal cost is greater than average total cost
price is less than average total cost
price is less than average variable cost
47
In Duopoly, there is/are
Large corporations
Many firms
None of the above
Two firms controlling the Market
48
Look Below
C
B
D
A
49
Look below
A
C
D
B
50
Unlike a perfectly competitive firm, a monopoly
faces a downward sloping demand curve
has an upward sloping total revenue curve
can charge any price it wants
faces a horizontal demand curve
51
Look below.
C
B
A
D
52
A monopoly that results from economies of scale (increasing returns to scale).
Natural Monopoly
Oligopoly
Monopolistic Competition
Duopoly
53
Consumer surplus is represented by the area
BCD
OABC
ACD
ABC
54
Which will shift the supply curve for textbooks to the left?
decrease in price of a joint product
decrease in taxes on textbook suppliers
Decrease in demand for a substitute in production
decrease in number of buyers
55
Which of the following is true if a perfectly competitive market is in long-run equilibrium?
new firms will ender the industry
market price will eventually decrease
average variable costs are decreasing
marginal revene is equal to average total cost
56
Which of the following will likely shift the demand curve for aircraft mechanics rightward?
a decrease in the productivity of aircraft mechanics
an increase in the demand for air travel
an increase in worker's wages
a decrease in the demand for air travel
57
In the absence of intervention, imperfect competition, externalities, all result in which?
quantity of output are too high
Market Failure
Prices are too low
nothing would change
58
Look below
perfect competition
monopoly
oliglopoly
imperfect competition
59
The Slope of Indifference Curve indicates
Marginal Rate of Substitution of x for y
Prices of x and y
Change in prices
Slope of the budget line
60
The statement: buyers and sellers exchange goods and services on a voluntary basis, describes?
marginal cost
allocation of resources
opportunity cost
marginal benefit
