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Econ
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| Question | Answer |
|---|---|
| What Causes A movement along the demand curve | Change in Price |
| As a rule, one should purchase a good or engage in an activity if...? | The marginal benefit is greater than or equal the marginal cost |
| This occurs when quantity supplied exceeds quantity demanded | Surplus |
| What is the main characteristic of monopolistic Competition? | Product differentiation |
| What happens When a minimum wage is introduced | More unemployment and higher wages for the few low skilled workers who keep their jobs |
| What is a Strategy a firm with market power might use to maximize its profit | Engage on Price discrimination based on willingness to pay |
| Percentage Change in Quantity Demand of Good X Divided By Percentage change in Price of Y | Cross Price Elasticity of Demand |
| When Demand elasticity is equal to three (3), What does an increase in Price Cause? | A decrease in total revenue |
| What happens to Supply and Demand and the Equilibrium Price and Quantity in the market for Potato Chips when new labelling machines speed up | Supply Shift Right, Demand Shift left, Price Falls, Quantity Uncertain |
| A market in which there are many buyers and many sellers of an identical product. Real-world examples are very rare and include some agricultural products and markets for some minerals. What market structure is it? | perfect competition. |
| A market with many businesses competing, but each selling differentiated products. Examples are many and include athletic shoes, laundry detergent, and shampoo. | Oligopoly. |
| What type of relationship exists between the level of a company's market power and the price that its owner is able to charge for its product? | Positive |
| When a company has market power, it is _____ in its market. | A price maker |
| Which of the following is a characteristic of monopoly that is not present in other market structures? | There is only one seller. |
| According to the Rational Rule for Sellers, a seller should choose the output level where _____ and the price level | Marginal cost equals marginal revenue; that is on the seller's demand curve at that output level. |
| One of the market failures caused by market power is: | Underproduction |
| Which of the following market structures has the steepest firm demand curve, all else equal? | Monopoly |
| To avoid harm to society, the government often becomes the supplier of a good or service when the respective market: | Would be a natural monopoly, and the good or service is considered essential |
| Publix has a large aisle that displays many different kinds mouth wash. This observation determines that the mouth wash market is: | A monopolistically competitive market |
| The following characteristics of 1. many buyers- each is small relative to the market; 2. many sellers - each is small relative to the market; 3. identical goods and 4. buyers and sellers are price takers describe: | Perfect competition |
| True or False: On a global economic scale most businesses tend to operate in imperfectly competitive markets: | True |
| What is collusion? | An agreement to limit competition |
| On a graph, which two curves are used to evaluate the opportunity cost between quantity and price? | Firm demand curve and marginal revenue curve |
| In a perfectly competitive market, the price ceiling: | Reduces economic surplus |
| The extent in which a seller can charge higher prices without losing many sales to competing businesses is | Market power |
| Suppose a firm can sell one unit of product for $50, two units for $45 each, three units for $40 each, or four units for $35 each. When the firm sells three units, marginal revenues is equal | $30 |
| The average-fixed-cost curve.. | is always decreasing. |
| International Trade is most likely to generate short-term unemployment in | Import-competing industries |
| How is comparative advantage defined? | You produce the things you are especially good at, and buy from others, the goods you are less efficient in producing. |
| What is not a source of comparative advantage? | Supply and demand |
| Who benefits from tariff protection? | Domestic producers of the good produced |
| Globalization refers to: | A more integrated and interdependent world |
| Apples suppliers prepare sale of 100 million iPhones. Apple updated its projections and informed suppliers it expected iPhone demand to be lower. Given this reduction in demand how will the marginal revenue product of employees selling the iPhone change? | The marginal revenue product will decrease |
| Mid-century America's baby boom dramatically increased school enrollments. It also increased the number of teachers and teacher salaries. We model this event as | An increase in the demand for teachers |
| The marginal product of labor tells us: | The additional output produced by the extra employee hired |
| If the firm hires to a point where the marginal expense of labor is greater than the marginal revenue product of labor, then | Profits could be increased by reducing employment |
| When the price of capital increases, a firm will | Employ less labor due to the increase in costs |
| If the Marginal Revenue Product (MRP) of labor at a firm is $5 an hour, and the wage is $4 an hour, what should the firm do? | Hire more workers |
| If the MRP of labor at a particular firm is $7 an hour, and the wage is $8 an hour, what should the firm do? | Fire more workers |
| Goods X and Y are complementary goods. The price of Good X decreases. What probably happens to the wages of workers in the Y industry? | Wage increase |
| If the substitution effect is initially stronger than the income effect, and then the income effect is stronger than the substitution effect at high wage levels, then the labor supply curve will be | Backward-bending |
| Wages are the price of | Labor |
| Which of the following combinations would most likely lead to a drop in hiring at a bookstore? | Increased wage and decreased book prices |
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Knjcooks