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Review Day
Review Day
30 terms
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StudBud Administration
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Practice quiz
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Questions
30
Answers
1
West Virginia has a state minimum wage of $8.75 they should raise it to $10. What type of statement is this?
Normative
Positive
2
Does Player 2 have a dominant strategy?
No
Yes Y
Yes X
3
After the externality what letter(s) make up deadweight loss?
G
BD
CEFG
BDCEFG
4
Under the competitive market environment, a perfectly competitive firm’s long run profits would be
a negative value
a positive value
zero
5
After the externality in this market what letters make up consumer surplus?
AB
BCDH
ABDEF
DH
6
Based on the table, which country has an absolute advantage in the production of each good?
USA both
USA Y, Canada X
USA X, Canada Y
Canada both
7
What is the Nash Equilibrium?
C , X
C , Y
B , X
B , Y
8
Using the table below identify what is the optimal quantity of pizza to be obtained?
20
50
30
40
9
Which of the following events can increase the market demand for a normal good?
Price of complements increases
Price of substitutes increases
Income decreases
10
What is the value of deadweight loss?
495
137.5
990
275
11
A negative externality in consumption exists when the consumption of a product results in…
costly competition for the product between potential buyers
damage to consumers of the product
benefits that are distributed to no one in particular
a cost to a third party
12
If a profit maximizing firm is earning negative profits but is covering their variable cost in the short run, they will
shut down
exit the market
keep producing
13
What is the Law of Demand?
Positive relationship between price and quantity
Negative relationship between price and quantity
14
In the market for cars the quantity demanded goes down 10%, while the price goes up 5%. What is the elasticity of demand
1/2
5
1/3
2
15
Your friend decides to take you out to Chipotle for lunch. You choose a burrito from the menu.
Tacos
Chips and Salsa
Rice bowl
Rice bowl, chips and salsa, tacos
16
For an apartment that is $650 quantity demanded is 500 while quantity supplied is 300. Is there excess demand or supply?
Excess demand of 200
Excess supply of 200
17
In the short-run, fixed cost
vary with level of output
do not vary with level of output
are equal to variable cost + total cost
18
What is the value of the subsidy in this market?
70
110
40
55
19
If there is excess demand of 200 how will the market respond?
Price will not change
Price will increase
Price will decrease
20
Which of the following events can increase the market supply of mobile phones?
Increase in the price of inputs
Fewer producers in the industry
Technological advances in production
21
When price elasticity of demand is elastic and prices rise, what happens to total revenue?
Total revenue increases
Total revenue does not change
Total revenue decreases
22
Consider the market for fresh eggs. Hens have died because of avian influenza. What do you expect to happen P* & Q*?
P* decreases Q* increases
P* increases Q* increases
P* increases Q* decreases
P* decreases Q* decreases
23
What is the equation for AVC
\frac{ΔTVC}{ΔQ}
\frac{TVC}{Q}
\frac{ΔTC}{ΔQ}
\frac{TC}{Q}
24
Government intervention will always create what?
Deadweight loss
Government loss
Taxes
Government revenue
25
What does it mean for a price ceiling to be binding?
Price ceilings can't be binding
It is equal to the equilibrium price
It is below the equilibrium price
It is above the equilibrium price
26
Which externality will shift the the private benefit curve to the right?
Negative externality from consumption
Positive externality from consumption
Negative externality from production
Negative externality from production
27
My income decreases 10% and my quantity demanded of rice increases 5%. What is the income elasticity value?
2
-1/2
-2
1/2
28
A price ceiling is placed on rent in Morgantown. As a result many properties are unmaintained. What does this describe?
Negative externality
Opportunity cost
Unintended consequences
Positive externality
29
My income price elasticity value is -1/2 what type of good is rice?
Inferior
Normal
30
When people act in self-interest & produce goods to trade in support of themselves, society typically ends up worse off.
True
False
