Quiz Facts 10- Economics - Microeconomics

Based on your answer to part (a), find the profit-maximizing output level for each farmer.

The hedonic price method

Julia is offered two options of government subsidies: $100 food stamp or $100 cash. If she receives $100 cash, she will spend $80 on food

4

An example of moral hazard is

5

The number of substitutes available has hurt the business of the United States Postal Service.

6

Economics studies how decision makers use scarce resources to satisfy unlimited wants

7

If nation A has an absolute advantage over nation B in the production of a product, this implies that:

8

Suppose the value of income elasticity of demand for a private college education is equal to 1.5 . This means that:

9

Under monopsony, the wage rate

10

Preferred Budgets ($ in millions)45678910Number of voters (in thousands)516253022193Table 15.3Table 15.3 shows the preferred budget for a new performance center and the number of voters in a community who prefer that budget. If Dawn proposed $6 million while Terry proposed $9 million, whose budget will be selected if everyone votes?

11

If demand is given by Q = Ap-b where A and b are positive constants, the absolute value of price elasticity of demand

12

The Federal Reserve banks could probably have prevented many of the bank failures in the early 1930s by: a. raising the reserve requirement of the commercial banks

13

The following diagram shows a consumer's demand schedule for a good. At a price of $2, consumer surplus is:

14

A higher income tends to make demand for a given good ______ elastic.

15

Economic analysis that focuses on bounded rationality and psychological insights is known as: a. behavioral economics. b. Keynesian economics. c. Austrian economics

16

What is the average cost per unit for producing 3 units? a. 200. b. 260. c. 70

17

Table 1.1 shows the hypothetical trade-off between different combinations of Stealth bombers and B-1 bombers that might be produced in a year with the limited U.S. capacity, ceteris paribus. Table 1.1Production Possibilities for BombersCombinationNumber of B-1 BombersOpportunity cost (Foregone Stealth)Number of Stealth BombersOpportunity cost (Foregone B-1)S0NA10 T1 9 U2 7 V3 4NAOn the basis of Table 1.1, what is the opportunity cost of producing at point S rather than point T?

18

Which of the following pairs of goods are NOT complements?

19

HI (Hospital Insurance) is financed by a payroll tax, while SMI (Supplementary Medical Insurance) is financed out of general revenues.

20

A normal good has a ________ income elasticity of demand and quantity demanded ________ as income rises

21

Refer to the following figure. The price of capital is $50 per unit:<img src="https://sciemce.com/files/4/ppg__tttt0824191027__f1q278g1.jpg" alt="" style="vertical-align: 0.0px;" height="335" width="345" />What is the marginal rate of technical substitution at each cost minimizing equilibrium point?

22

Assuming all of the following people have the same education and experience, which one is likely to earn the highest wage, based on typical patterns in the United States?

23

State income tax revenues are much less than sales tax revenues.

24

The Lawn Ranger, a landscaping company, has total costs of $5,000 and total fixed costs of $3,000. The Lawn Ranger's total variable costs are

25

The four largest firms account for approximately 95% of U.S. cigarette sales. The U.S. cigarette industry would be best classified as a(n)

26

A discouraged worker is one who:

27

Which of the following statements best describes the relationship between GDP and standard of living?

28

Suppose a monopolist faces the following demand curve.<img src="https://sciemce.com/files/4/ppg__1420829190920__f1q73g1.jpg" alt="" style="vertical-align: 0.0px;" height="147" width="170" />The monopolist maximizes its profits by:

29

Foreign exchange rates tend toward equality around the world because of the actions of

30

______________ is the total quantity of a good provided in a given period.

31

The payoff matrix below shows the payoffs (in millions of dollars) for two firms, A and B, for two different strategies, investing in new capital or not investing in new capital. <img src="https://sciemce.com/files/4/ppg__1420829190927__f1q460g1.jpg" alt="" style="vertical-align: 0.0px;" height="208" width="404" />An industry spy comes to firm B and claims to know what firm A has decided. Given that each firm already knows the payoff matrix, how much would this information be worth to firm B?

32

The current system of international finance is a

33

The flexibility of a firm's techniques of production is an important determinant of its costs.

34

While on a construction site, Hank, an electrician, slips and falls on an oil-covered floor and injures his back. Hank is not to blame for the accident, and he will keep his job. However, he must stay home for at least two months while he recuperates. Which of the following will pay benefits to Hank while he recovers?

35

When one country can produce a given amount of a good using fewer inputs than any other country,

36

Tradeable effluent markets

37

Since 1970, the composition of federal expenditures has:

38

When it comes to ________ goods, it is important to remember only one level of output can be realized and consumers are ________ for that level.

39

The use of the same cost of capital (risk adjusted discount rate) for all capital projects in a corporation

40

Higher gasoline prices would likely raise the price of large, gas-guzzling automobiles

41

Double taxation of saving may

42

An income tax distorts the choice between present and future consumption.

43

For a firm to be engaged in predatory pricing, and for it to be successful: a. It would have to charge a price less than the average variable cost of production. b. It would have to drive rivals out of the market

44

Discuss the three ranges of the aggregate supply (AS) curve. What could cause the AS curve to shift to the left? What impact would a leftward shift of the AS curve have on the economy?

45

What is the name of the monopolist having a declining long-run average cost throughout the market?

46

In producing the efficient amount of a public good, government should take into account:

47

In making an investment decision, an entrepreneur

48

Which of the following helps low-income countries grow rapidly relative to high-income countries?

49

If you place $100 in a bank account that pays 6% at the end of each year, and you leave your $100 and all your interest in the bank, how much will you have in the bank at the end of 7 years with annual compounding?

50

Economic policy of the government is often based on

51

Fiona and Alicia divide their time equally between ironing shirts and cooking meals. Fiona can iron 5 shirts and cook 2 meals in an hour. Alicia can iron 6 shirts and cook 1 meal in an hour. If they have to iron 15 shirts and cook 5 meals, who should specialize in which activity?

52

Most of the Superfund has been spent on

53

Short-run supply determinants include

54

If two investments are uncorrelated:

55

When the government pays part of my university education, it is

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Quiz Facts 10- Economics - Microeconomics

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