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Microeconomics Midterm CHS
Microeconomics Midterm CHS
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Microeconomics
Flashcards
57 cards
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Questions
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Answers
1
Look below
business
firm
monopoly
oliglopoly
2
Land, Labor, Capital, and Entrepreneurship are examples of...
Factors of production
Public goods
Substitutes
inferior goods
3
Which will increase demand for tuba makers...
increase in tax on tubas
increase in price of tuba lessons
an effective price ceiling for tubas
increase in price of tubas
4
Which of the following will not cause a shift in the demand curve of a factor of production?
supply of the factor
demand for the goods produced by the factor of production
prices of the goods produced by the factor of production
price of substitute factors
5
Which of the following factors can cause a firm's cost curves to shift upward?
An increase in wages
An increase in the output price
A decrease in the firm's output
An increase in the firm's output
6
Price discrimination is a situation when a producer
All of the above
Charges many prices
Charges same price
Charges different prices in different markets
7
Which of the following is true about a firm's average variable cost?
it will never equal marginal cost
it will be negative if marginal costs decline
it will rise if it is greater than marginal cost
it will equal average total cost when fixed costs are zero
8
Antitrust laws are designed mainly to
promote a competitive market environment
facilitate mergers of firms to increase efficiency
protect businesses from unfair foreign competition
regulate prices charged by natural monopolies
9
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 worker's wages
a decrease in the demand for air travel
an increase in the demand for air travel
10
If a loud party disturbs neighbors who would like to sleep. Which of the following would lead to an efficient solution?
Permit people to throw parties as they please
Place a tax on parties equal to the value party goers place on the party
Permit parties only on Tuesdays and Saturdays
Place a tax on partices equal to the value of the lost sleep
11
The opportunity cost of owning a business is equal to which of the following?
A
D
B
C
12
In Duopoly, there are
Large corporations
None of the above
Many firms
Two firms controlling the Market
13
Look below
perfect competition
imperfect competition
monopoly
oliglopoly
14
If the demand for potatoes increases whenever a person's income increases, then they are a
free good
perfect good
normal good
public good
15
If demand is elastic, then price and total revenue move in _____ directions.
opposite
same
16
As a result of minimum wage, this arises
I.) increase job search activity
III.) decreased search activity
II.) illegal hiring
I and II
17
Which is likely to have most elastic demand
All of the above
Sprite
Cigarrettes
Life-sustaining pills
18
According to consumer behavior,this decreases first as additional units of a good are consumed?
total utility
physical utility
average utility
marginal utility
19
What is true about a price floor?
it must be below the equilibrium for it to have an influence
an effective price floor will increase the quantity demanded
the price floor tends to create a shortage of the good
is desired by the producers of a good/service
20
An industry w/ a small number of firms selling a standardized/differentiated product is called
monopoly
duopoly
oligopoly
competitive industry
21
Look below
A
B
D
C
22
The basic economic problem of all countries is the existence of
taxes and budget deficits
scarcity
monopolies and unions
public and private industries
23
If a one-of-a-kind Etruscan vase is offered for sale at an auction, which of the following
D
A
C
B
24
If bologna is an inferior good which of the following is true?
it is the better good
The supply and demand of bologna will decrease
An increase in consumer income will increase the demand
An increase in consumer income will decrease the demand
25
Unlike a perfectly competitive firm, a monopoly
has an upward sloping total revenue curve
faces a horizontal demand curve
faces a downward sloping demand curve
can charge any price it wants
26
The difference between revenue received and the variable costs of production for each unit...
producer utility
producer surplus
producer cost
producer benefit
27
Which will shift the demand curve for textbooks to the left?
decrease in number of buyers
Decrease in demand for a substitute in production
decrease in taxes on textbook suppliers
decrease in price of a substitute product
28
One justification for government regulation of a monopoly is that the unregulated monopoly
earns a normal profit
has a very elastic demand curve
charges a price higher than a competitive market price
sells too much of the product
29
When the opportunity for price discrimination arises,
market segments w/ rel. elastic demand pays higher prices
demand is horizontal
consumer surplus disappears
market segments w/ rel. inelastic demand pays higher prices
30
Obstacles to efficiency are....
taxes and subsidies
all of the above
monopoly
Price & quantity regulations
31
An outward shift in the PPF curve can be cause by an increase in
inflation
unemployment
the labor force
demand
32
A profit-maximizing firm will shut down in the short run if
marginal cost is greater than average total cost
price is less than average variable cost
marginal cost is equal to average total cost
price is less than average total cost
33
When a perfectly competitive labor market is in equilibrium,
individual firms face a perfectly elastic labor supply curve
individual firms face downward sloping labor supply curves
individual firms face upward sloping labor demand curves
individual firms are considered "price makers"
34
A measure of the satisfaction received from some type of economic activity...
regional utility
utility
marginal utility
total utility
35
Look below
D
C
B
A
36
Shape of Total Fixed Cost (TFC) Curve is
None of the above
45 degree line
Horizontal
Vertical
37
The owner of a competitive firm making zero economic profit is making...
serious resource allocation errors
is making less than normal profits
nothing
what she would make in her next best alternative job
38
Which of the following is true of perfect competitors?
Demand for its product is downward sloping
Advertising is an important tool of the firm
The firm will earn zero economic profits in the long run
Its profits increase if it charges a price lower than the market price
39
In the absence of intervention, imperfect competition, externalities, all result in which?
Prices are too low
nothing would change
Market Failure
quantity of output are too high
40
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
prices of the goods produced by the factor of production
price of substitute factors
supply of the factor
41
Which of the following is true if a perfectly competitive market is in long-run equilibrium?
marginal revene is equal to average total cost
average variable costs are decreasing
new firms will ender the industry
market price will eventually decrease
42
Which is true for perfect competition?
sellers and buyers are abundant
each buyer and seller is a price taker
all of the above
no restrictions on entry in (or exit from) market
43
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
44
If a new procedure reduces the cost of making Frisbees demand will shift __ and supply will shift ___.
demand no change, supply shifts left
demand no change, supply shifts right
demand shifts left and supply shifts right
Demand and supply shift right
45
A country CAN have a comparative advantage in both goods.
False
True
46
Consumer surplus is represented by the area
OABC
ABC
ACD
BCD
47
Which market structures produce where marginal cost equals marginal revenue?
Monopoly only
Perfect Competition only
Monopolistic Competition
All 4 market structures
48
Look below
D
B
A
C
49
If the minimum wage for teenagers increased to a rate higher than their market equilibrim wage
A
B
D
C
50
Which of the following illustrates consumer surplus?
X is willing to accept a job at $7.50/hour and is offered $7.00/hour
A thirsty athlete pays .85₡ for a cold drink when she would have paid $1.50
Z pays the sale price of $15 for the same shirt they refused to $18 before
artichokes prices are now 50% less
51
Micro is the study of how households and firms make decisions and how they interact in markets
False
True
52
A production possibility frontier will be a straight line when
it can never be a straight line
efficiency is achieved
opportunity costs are constant
utility is maximized
53
If the price of one good increases and the demand of another good decreases, then the goods are
complementary goods
normal goods
inferior goods
luxury goods
54
Which of the following statements is true for a firm in a perfectly competitive industry?
Average revenue equals marginal revenue
marginal revenue is decreasing
Average revenue is initially negative and then becomes +
Marginal revenue is increasing
55
A monopoly that results from economies of scale (increasing returns to scale).
Natural Monopoly
Duopoly
Monopolistic Competition
Oligopoly
56
A drought effects the supply of pineapples at the same time there is a discover that they prevent cancer. P & Q will...
Price and Quantity increase
Price decreases, Quantity is indeterminate
Price increases, Quantity is indeterminate
Price increases, quantity decreases
57
What happens to the market of cars when the government taxes the production of cars?
there will be movement along the demand curve
the supply curve will shift to the right
the supply curve will shift to the left
the demand curve will shift to the right
