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ECON test 2
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Questions in this quiz (78)
1The profit maximizing production point for a business firm occurs when
- AP=MR
- BTC=TR
- CP=ATC
- DTFC=TVC
- EMR=MC
2Oligopolies features
- Athe absence of barriers to entry
- BExtensive price competition
- Cone dominant seller
- Dstrategic interdependence of firms
3All statements are true about a natural monopoly except
- ANatural monopolies are often regulated by the government
- BBreaking up such a monopoly into smaller companies is a good strategy for improving market efficiency
- Cin an unregulated market, price=AR
- Dit is caused by a decreasing long run average total cost curve for production
- Eit profit maximizes at MR=MC
4which factor is the least important consideration in designing a tax
- Aamount of interference with market efficiency by the tax
- Bhow to decide how to spend the money from the tax
- Cfairness of the tax
- Dlow administration and the compliance costs of the tax
- Eunderstandable of the tax
5The incidence of a tax depends on the relative difference between buyers and sellers of their
- Amarginal utilities
- Bprice elasticities
- Cmarginal costs
- Dincome
6Which of the following is NOT a major way by which monopolistically competitive firms can differentiate their products
- Aunique packaging
- Badvertising
- Cproducing homogenous products
- Dsuperior service
7Short run total average variable cost is
- Aa fixed amount over all levels of production
- Bvariable and depends on the level of output
- Cthe same as total costs
- Dinversely related to output
- Ethe only type of cost in the short run
8Which statement does not apply to imperfect competition firms
- Afirms are not trying to maximize profits
- Bsuch firms have some market power
- Csellers respond to each other
- Dnon price competition is used
9Which statement is not true about a single competitive firm
- Aprofit is maximized at MR=MC
- BThe market pushes the firm to produce at P=ATC
- CThe firm faces a downward sloping demand curve
- Dproduction is efficient at P=MC
- EIt is a price taker where AR=MR
10consumer surplus is
- Awhen consumers have more goods than they need
- Bhow much each buyer is willing to pay for a good
- Cwhen a demand curve is derived from
- Dthe difference between what consumers are willing to pay and what they do pay
11The expenditures approach to measuring GDP is calculated by
- AValue added to products
- Badding up all market sales
- CC+I+G+(X-M)
- DWages +Corporate profit+ personal business income +interest +rent
12Sky west airlines should add an additiional flight at houghton airport when
- Amarginal revenues exceeds average total cost
- Bmarginal revenue exceeds marginal costs
- Cmarginal revenues exceeds total fixed cost
- Daverage ticket price exceeds average total cost
13Economics of scale are
- Awhen smaller producers have a cost advantage over larger producers
- Blikely to lead to a more competitive market
- Cassociated with the download portions of the long run average total cost
- Dimportant in price discrimination
- Ecan cause a barrier to entry monopoly
14Which of the following characteristics is typical of a monopoly
- Aeasy entry and exit for firms
- Bdifferentiated products
- CFirm is a price taker
- DSignificant barriers to entry
15If the Cleawater cotton candy company fires its workers and shuts down, it incurs cost of $40,000
if it produces at full capacity it incurs cost of $90,000
one would conclude that- AVariable cost at half capacity are 40,000
- BFixed costs are 50,000
- Cthe costs of variable input at full capacity is 50,000
- Dfixed costs are 90,000
16The marginal cost curve
- Aintersects the ATC at its minimum point
- Bintersects the AFC at its minimum point
- Calways declines
- Ddisappears in the long run
17Homogeneous products (all products are alike) are most closely associated with
- Aperfect competition
- Bmonopolistic competition
- Coligopolies
- Dmonopolies
18National Income is
- AGDP depreciation
- BGDP depreciation- indirect business taxes
- CGDP Depreciation - indirect business taxes + net income adjustment
19Which activity wouldnt be included in the GDP
- Acooking your own dinner
- Bbuying a new computer
- Chiring someone to plow your snow
- Dbuying lunch at the MUB
20Monopoly Market
- AA market structure of numermous firms with differiented products
- Bone seller of a good or service
- Ca market structure of a few mutually interdependent firms
- Da market structure of numerous firms with a standardized product
21Which choice does not limit the accuracy of measuring a county's GDP
- AExclusion of nonmarket transactions
- Bnot measuring the value- added of government output
- Ca countrys involvement in trade
- Dlimitations on the ability to measure components of the GDP
22Hotelling's Paradox is associated with
- Aperfect competition firms
- Bmonopoly firms
- Cmonopolistic competition firms
- Doligopoly firms
23In the short run, a competitive firm will continue to produce even if it experiences an economic loss if
- Athe market price exceed the average variable cost
- Bthe market price exceeds the average fixed cost
- CTotal Cost exceed marginal cost
- Dtotal revenue exceeds total costs
24The business cycle refers to
- Aa predictable business trend
- BSeasonal Changes
- Ca pattern of products development
- Dalternating periods of economic growth and contractions
25The largest component of GDP
- AConsumption expenditure by consumers (C)
- Bbusiness purchases (I)
- CGovernment purchase (G)
- DNet Trade (X-M)
26which choice is not a suggested cause of the business cycle
- AMarket equilibrium
- Bexternal shocks to the economy
- Cexpectations about the future trend
- DCreative destruction
27The goal of antitrust law is to
- APrevent all large corporations
- Bnationalize all for profit corporations
- Cprevent market or monopoly power from being exercised
- Dprevent all mergers between corporations in the same industry
28disposable personal income is
- AGDP- depreciation
- BGDP-depreciation-indirect business taxes
- CGDP- depreciation - indirect business taxes +net income adjustment
- DGDP- depreciation - indirect business taxes +net income adjustment -personal income taxes
29Henry George proposed a tax on __________ to take advantage of its price inelasticity of supply
- Aincome
- Bfood
- Cland
- Doil
30Which choice is not true about the sherman act of 1890
- AProhibits Consumer price discrimination
- BAntitrust act
- Cmakes restraint of trade illegal
- Dwas used against standard oil
31Which of the following is the best definition of GDP
- AThe total dollar value of all final goods and services produced in the economy during a given year
- BThe total value of all goods and services produced in the economy during a given year
- Cthe total value of all primary intermediate and final goods and services produced in the economy during a given year
- Dthe total value of all goods and service produced and sold in the economy during a given year
32Net domestic product is
- AGDP-Depreciation
- BGDP-Depreciation-indirect business taxes
- CGDP- depreciation-indirect business taxes +net income adjustment
- DGDP- depreciation -indirect business taxes + net income adjustment - personal income taxes
33Clayton act makes it illegal to
- AMonopolize a market
- Brequire a tying contact
- Cprice fixing in a market
- Dmerger with a competitior
34the income (factor payment) approach to measuring GDP is calculated by
- AValue added to products
- Badding up all market sales
- Cadding up all economic activity C+I+G+(X-M)
- DWages + corporate profit + personal business income + interest+ rent
3519030s was a period of
- Astagflation
- Bmodest economic growth
- CHigh economic growth based on tax cuts
- Dhigh economic growth on new technologies
- Edepression
36monopolistic competition market
- Aa market structure of numerous firms with differtiated products
- Bone seller of a good or service
- Ca market structure of a few mutually interdependent firms
- Da market structure of numerous firms with a standardized product
37Full employment occurs by government definition when
- Athere is no unemployment
- Bno frictional unemployment
- Cno structural unemployment
- Dno cyclical unemployment
38which individuals is not associated with a theory about the cause of the business cycle
- Amarx
- Bmalthus
- Cbentham
- Dschempeter
39employment caused by the lack of skills for the available jobs is known as
- AFrictional
- Bseasonal
- Cstructural
- Dcyclical
40Which individual is considered unemployed by the govt
- Asomeone to stays at home to take care of kids
- Ba 14 year old looking for a job after school
- Ca recent graduate working part time at mcdonalds while looking for a full time job
- Da laid off worker waiting to be called back to work
41Suppose that US Steel sells steel to GM for $10,000 and then this steel used in a Cadillac XLR that is sold to a car dealership fro $80,000. The car dealer then sells the car to a family for $100,000. The value added by the car dealership is
- A80,000
- B100,000
- C20,000
- D180,000
42Firms in a monopoly industry maximize profits by
- Aequating total revenue and total cost
- Btreating price as a given and maximizing output
- Cproducing the level of output at which MR=MC
- DProducing the level of output at which TR=TC
43In the TV show, the nanny, ms. fran fine ends up marrying her boss, mr. sheffield, the father of the three children she takes care of. she continues to take care of the children and he continues to provide for her after the marraige, GDP, would reduce due to the situation like these
how does this example highlights a drawback of GDP- AGDP does not account for underground activity
- BGDP does not account for at home services
- CGDP does not account for changes in inflation
- DGDP does not account for happiness and well being
44Which statement is not true about a natural monopoly
- AThe LRAC curve is downward sloping in the production range
- Bit produces in the economies of scale range of the LRAC curve
- CThe industry natural moves toward a monopoly
- DIt is created by a government barrier to competition
45Which of the following is not a major way by which monopolistically competitive firms differentiate their products
- Aunique packaging
- Badvertising
- Cproducing homogenous products
- Dsuperior service
46The 1970s was a period of
- AStagflation
- Bhigh economic growth based tax cuts
- Chigh economic growth based on new technologies
- DDepresssion
47Which group is not considered part of the labor force
- Aindividuals that are institutionalized
- Bindividuals with a full time job
- Cworkers temporarily laid off
- Dindividuals looking for work
48unemployment caused by the business cycle is known as
- AFrictional unemployment
- Bseasonal unemployment
- Cstructural unemployment
- Dcyclical unemployment
49Gross domestic product is the total market value of all
- Afinal goods and services produced ina country annually
- Bfinal and intermediate goods produced in a country annually
- CAll goods and services produced in a country annually
- Dall goods produced by a country's corporations annually
50An oligopoly
- Ais a market structure of numerous firms with differentiated products
- Bis the only seller of a good or services
- Cis a market structure of a few consumers of a products
- Dis a market structure of a few mutually interdependent firms
51The major source of revenue for the US govt is
- Acorporate income taxes
- Bexcise, customs , taxes on estates and gifts
- Ctaxes on govt owned resources
- Dindividuals income and social security taxes
52an industry producing in the downward range of the long run ATC curve is likely to become
- Aperfectly competitive market
- Bmonopolistic competition market
- Cnatural monopoly market
- Dhighly competitive industry
53The market structure associated with many firms selling a standardized product is
- Aperfect competition
- Bmonopoly
- Cmonopolistic competition
- Doligopoly
54Which of the following is not a problem in using GDP to measure standard of living
- Afailure to include environment impacts
- Bfailure to include the value of nonmarket work
- Cfailure to include exports and imports
- Dfailure to include the value of investments in human capital
55If the competitive firm can sell a unit of corn for $27 and it has an average variable cost of $24 per unit and the marginal cost is $26 per unit, the firm should
- AExpand output
- BReduce imput
- Cincrease price
- Dcut output to zero
56firms in an oligopoly industry maximizes profits by
- Aequating total revenue and total cost
- Btreating price as a given and maximizing output
- Cproducing the level of output at which MR=MC
- Dproducing the level of output at which TR=TC
57which of the following characteristics is typical of a monopoly
- Aeasy entry and exits for firms
- Bdifferentiated products
- Cfirm is a price taker
- Dsignificant barriers to entry
58which of the following is false
GDP can be calculated by summing- Atotal market value of all final goods and services within a country's borders in a given year
- Ball factor payments within a country's borders in a given year
- Cthe values added for all goods and services
- Dgovernment spending and tax revenues
59Camille's chicken operates in a monopolistically competitive market. If camille implements a new free delivery service for customers
- Athis is a form of non price competition
- Btotal revenue will increase
- Ctotal cost will decrease
- Dher firm will be acting as if it were perfectly competitive market
60The largest area of expenditure for the federal govt
- Anational defense
- Bsocial programs
- Cinterest payments
- Dresearch and development program
61Seller power is limited by all the choices but
- Aantitrust laws
- Bfirms often do not work together well
- Ceconomies of scale
- Dcompetition from new firms
62which statement does not apply to monpolistic competition firms
- Afirms are not trying to maximize profits
- Bhotellings paradox holds
- Cmany sellers
- Dcompetition occurs among the firms
63The Sherman Act deals with
- ATaxes
- Bantitrust
- Cprice discrimination
- Dadvertising
64Personal income is defined as
- AGDP - depreciation
- BGDP - depreciation - indirect business taxes
- CGDP - depreciation - indirect business taxes + net income adjustment
- DGDP - depreciation - indirect business taxes + net income adjustment - personal income taxes
65A business firm has moved its offices. it must continues to pay $5000 per month for the old office space until its lease expires in one year. if it suceeds in renting the old place during the remaining year, it will have to pay $1500 per month fro local utility services , otherwise $0 if not leased
what is the minimum amount that the firm should lease the space at- A1500
- B3500
- C5000
- D6500
66Competitive market
- Aa market structure of numerous firms with differentiated products
- Bone seller of a good or service
- Ca market structure of a few mutually interdependent firms
- Da market structure of numerous firms with a standardized product
67Which statement is true about the impact of tax on a market
- Ait creates a deadweight loss
- Bit always has a neutral impact on a market
68All statments are true about a natural monopoly except
- Anatural monopolies are often regulated by the government
- Bbreaking up such a monopoly into smaller companies is a good strategy for improving market efficiency
- Cin an unregulated market, Price=AR
- Dit is caused by a decreasing long run average total cost curve fro production
69which statement is not true about deriving a supply curve from average cost curve
- Ayou always decide to produce where MR=MC
- Bthe supply curve is associated with the MC curve
- CIn the short run production occurs only if price is equal to or greater than AVC
- Dthe supply curve shifts with shifts in the MC curve
70In oligopoly, all the firm
- Acompete through prices only
- Bcompete through advertising only
- Ctake their competitors into accoutn when they make pricing decisions
- Dmay enter and exit from their market with ease
71The 1960s was a period of
- Astagflation
- Bhigh economics growth based tax cuts
- Chigh economics growth based on new technologies
- Ddepression
72suppose the MU/P for chips is less than the MU/P for bottled water
to maximize total utility the consumer should buy- Amore bags of chips and less water
- Bmore water, less chips
- Cmore of both
- Dless of both
73the diamond water paradox illustrates the importance of
- Arising opportunity cost in resource use
- Btotal utility in consumer decision- making
- Cmarginal utility as opposed to total utility in consumer decision making
- Dbeing able to measure utility directly
74short run average variable cost is
- Aa constant cost over all levels of production
- Bvariable and depends on the level of output
- Cthe same as total costs
- Dthe only type of cost in the short run
75an indifference curve shows
- Aequal amounts of production possibilites for two goods for society
- Bpoints of equal total utility for different quantities of two goods for an individual
- Cthe trade off of production for two goods to society
- Dthe constraints on two goods caused by prices and income
76a budget constraint in indifference curve analysis shows
- Aproduction possibities
- Bconsumption possibilites
- Csocietal demand for goods
- Dunlimited income
77The concept of utility captures
- Athe usefulness of a good to society
- Ba sellers preferences
- Cthe degree of versatility of a product
- Dan individuals tastes and preferences
78which assumption is not required in using indifference curve analysis
- Aconsumers want to maximize utility
- Butility can be measured
- Cconsumers make decisions that will maximize utility
- Dconsumer wants are non satiated
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- Social Science Quiz on ECON test 2, created by Madison Paul on 26/03/2018.
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- Madison Paul
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