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Pre Comp prep
All of the following are examples of a price ceiling EXCEPT
What is a monopoly?
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1
What is a monopoly?
A single company with all the control.
A really fun board game.
A single company with no control.
A group of companies with no control.
2
All of the following are examples of a price ceiling EXCEPT
cap on gas prices
tuition at a state college
a govt set price for farm goods
rent control
3
Marginal Analysis is a decision making tool that compares:
Marginal costs and marginal benefits
Marginal Product and benefits
Marginal utility and benefits
Costs and benefits
4
Rule of 72 allows a person
determine the toatl return on an investment
easily figure the rate of inflation
figure the future date when a bond must be payed back
to easily claculate when an investment will double in value
5
Economics is the study of
People allocating limited resources to satisfy unlimited wants
Government deciding what to produce
People controlling money in an economy
Consumers deciding what to buy
6
Invisible Hand Theory refers to
the redistributive effect of taxation and transfer payments
decisions motivated by self-interest serve societal interest
the ability of monopolistic sellers to raise prices
the fact that government controls economic functions
7
PED is unit elastic when...
PED is precisely one half, 0.5
PED is precisely one, 1
PED is precisely zero, 0
PED is tending towards infinity, ∞
8
Diminishing marginal product
each substruction unit of input results in a smaller amount in total output
each additional unit of input results in a larger amount in total output
each unit of input results in a larger amount in total output
each additional unit of input results in a smaller amount in total output
9
Production possibility curves....
indicate current outputs
indicate past outputs
indicate minimum possible outputs
indicate maximum possible outputs
10
Implicit Costs
Expenses paid for a given period of time
The money owed on a balance
Costs not paid outright, but implied
Costs paid outright
11
OPEC is a cartel that sells what?
diamonds
drugs
oil
gold
12
Monopolistic competiton differs from perfect competion because in monopolistically competive markets
there are barriers to entry
none of the above
firms sell a differentiated product
all firms earn long run profit
13
The law of supply states
As prices increase, supply increases
As prices increase, supply falls
As prices increase, demand falls
As prices increase, demand increases
14
Production possibilities curve
trade offs
graphs that show alternative ways of using a country's resources
opportunity costs
15
Total economic profit is
marginal revenue minus marginal cost
marginal revenue divided by marginal cost
total revenue minus total opportunity cost
total revenue divided by total cost
16
All of the following are factors of production EXCEPT
government permits
land
labor
entrepreneurship
17
collusion
illegal group of eliminating competition
group of suppliers with high prices; no competition
monopoly
secret agreement of competing producers to fix prices
18
What sort of tax system is hardest on the poor?
proportional
progressive
value added tax
regressive
19
Short Run Production
Only labor changes
Everything changes
Technology changes
Payments change
20
Explicit costs
costs that don't change with output
out of pocket costs
costs that change with output
non-expenditure costs
21
A negative externality is a _____ that someone must deal with.
regulation
cost
law
tax
22
In socialism most businesses are owned by _______.
everyone
a few rich people
the government
private owners
23
Total Utility
The extra satisfaction from consuming one more unit of a good
The most desirable alternative given up as a result of a decision
The total amount of satisfaction received from all units consumed of a good
The use of resources in such a way as to maximize the output of goods
24
What is opportunity cost?
Something that you earn
Something that you get when you take something
Something that you miss out on when choosing something
25
Short-run production
Long time
Flexible input
Short time
Has fixed cost
26
A production possibility curve shows that all things in life involve
effort
a tradeoff
costs
energy
27
Accounting Profit =
revenue minus explicit cost, does not include opportunity costs
revenue minus explicit cost minus implicit cost
revenue minus (explicit cost + implicit costs/opportunity costs)
28
Which market structure has hundreds of companies that make similar products?
duopoly
perfect competition
oligopoly
monopolistic competition
29
Long Run Production
When a business adds variable factors of production to fixed factors
Bonuses gained over a long period of time due to increased productivity
When businesses invest in capital goods to increase long term production
When a business can change the scale of all factors of production
30
Price Elasticity of Supply:
False
True
31
Which would be an example of a positive externality?
a new law requiring strict air pollution controls
increased police presence
a thriving stock market
someone playing loud music everyone likes
32
A copyright would protect what?
a picture of a famous person
lyrics
computer hardware
a new drug
33
What point on the production possibilities curve represents effecient production?
A point along the PPC
a point outside the PPC
a point outside and inside the PPC
A Point inside the PPC
34
Which example of consumer behaviour would create consumer surplus?
when a consumer throws away vegetables because they bought too much
when a consumer does not spend all of her income each month
when a good is purchased in order to resell it at a higher price
when a consumer pays less than they are willing to pay for a good
35
Specialization
Having a specific job
To be your mama's favorite
A kind of farming
Picking the tastiest fruits and nuts
36
Which of the following is an example of a tradeoff?
All of these
Showing up to take a test instead of sleeping at home
Buying a video game instead of saving money
Playing basketball instead of studying
37
Short Run Production is:
total product a firm must sell to cover its total cost
a stage where output increases
period of production so brief that only the LABOR changes
period of production long enough for adjustments in resource
38
Privately owned factors of production
Market
Traditional
Command
Mixed
39
Why is specialization important?
It eliminates the need for trade.
It leads to higher efficiency.
It causes the production possibilities graph to decrease.
It causes self-sufficiency.
40
Which of the following could be called a subsidy?
food stamps or SNAP
TANF
Social Security
WIC
41
Producer surplus is
The area below the demand curve and above the price
The area between the supply curve and the demand curve
the area below the price and above the supply curve
The area to the right of equilibrium
42
What are the factors of production?
Employment, ethics, age and gender
Land, labour, capital and enterprise
There are no factors of production
Land, labour and enterprise
43
What tax system has the rich pay the most in taxes?
value added
flat
progressive
Regressive
44
Implicit costs:
Are opportunity costs or hidden costs
Include only payments to labor
Include the value of all resources used to produce a good
Are used by accountants
45
The soft drink industry is a good example of a
oligopoly
monopoly
monopolistic competition
duopoly
46
oligopoly
pure competition
many selling similar products
few sellers in nonprice competition
opposite of pure competition
47
All of the following are determinants of demand EXCEPT
preferences
income
number of buyers
price
48
marginal cost =
change in total costs/change in output
total costs/output
change in fixed costs/ change in output
change in output/change in total cost
49
Your fixed costs as a business are also called your
variable costs
operating costs
total costs
overhead costs
50
long run production
change in demand
change everything
change in supply
change only labor
51
What is liquidity in business?
water
how quickly you can convert an asset to cash
money invested in a house
52
On a Production Possibilities Curve, where can you find an ineffecient point?
To the left of the curve
This point is not real
On the curve
To the right of the curve
53
The Communist Manifesto talked about struggle between
workers and owners
Races
rich and poor
govts and citizens
54
An example for oligopoly would be what industry?
gas stations
soft drinks
resturants
shoes
55
What is perfect competition?
When businesses try to make their product unique
When all businesses sell the same thing
When one business controls the market
When a few large businesses dominate the market
56
Who regulates the Federal Reserve?
the president
various federal courts
no one
congress
57
The law of supply says that as price goes up, _____ goes ______.
supply goes up
demand goes up
supply goes down
demand goes down
58
All of the following are determinants of supply EXCEPT
supplier expectations
availability of resources
govt actions
buyer income
59
Demand means one has the desire and _______ to purchase a good or service
want
Need
ability
Motivation
60
How does the price in a monopoly compare with the price of the same good in perfect competion?
the price is higher
the price is lower
the prices cannot be compared
the prices are the same
61
A person's credit score can go anywhere from ____ to ______.
250 to 800
300 to 800
350 to 800
300 to 850
62
Total utility
becomes negative at 4 units
increases at a diminishing rate, reaches a max, then declines
is maximized at 2 units
increases so long as additional units of Y are purchased
63
Unlike perfect competition, monopolistic competition features ______.
product differentiation
Freedom for buyers and sellers
Well informed buyers and sellers
Independent buyers and sellers
64
Deadweight losses
are a result of underproduction where MC exceeds MB.
are a result in which maximum willingness to pay = minimum acceptable price
occur as a result of either overproduction or underproduction.
are a result of overproduction where MB exceeds MC.
65
Oligopoly contains...
None
One seller
A few sellers
Many sellers
66
What is consumer surplus?
Area below price/below demand change
Area above price/ below demand curve
Area below price/ below supply curve
Area above price/ below supply curve
67
What is human capital?
None of these
The talents of a workforce
The money needed to start a business
Sum total of all goods and services in an economy
68
All of the following are negative externalities EXCEPT
police violence against citizens
traffic around a large mall
oil spill in Alaska
crime near a casino
69
Monopolistic competion has how many sellers?
One
Few
Many
70
Adam Smith said that people act out of
greed
hatred
self interest
compassion
71
price elasticity of supply =...
%change in QD/ %change in price
%change in QS / % change in price
% change in price / % change in QD
%change in price / % change in QS
72
The minimum wage is an example of a price
floor
ceiling
73
Total utility
equals the sum of MU of all units consumed.
is negative when marginal utility is declining
cannot decrease as a person consumes more and more of a good
has a constant rate of increase as consumption increases
74
When the marginal benefits of a decision equal or exceed the marginal costs, it is called. . .
a rational decision
equilbrium
scarcity
specilization
75
Explicit Costs
Direct cost affecting the business
Fixed cost
Variable cost
Indirect cost affecting the business
76
accounting profit
TR - explicit costs
TR - economic cost
the amount of money a person pays
a non-monetary opportunity cost
77
Price elasticity of demand
% change in income / % change in demand
% change in price/ % change in demand
% change in demand/ % change in price
% change in demand/ % change in income
78
Economic profit
=TR-TC
takes into account implicit and explicit costs.
=ATC-AVC
Green means go
79
Diminishing marginal utility
the money gained from producing one more product
limited materials with unlimited wants and needs
imports minus exports
Decreasing value in a product the more times it is consumed
80
On the diagram, what is the producer surplus?
A
D
C
B
81
Long Run Production
Technology changes
All of the above
Labor changes
Building they are in changes
82
Price floors usually create a/an ________ of a good or service.
excess
shortage
