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ECO365 MCQ 30 questions (Score:90%)

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Question;1;Because you can only obtain more of one good by;giving up some of another good, the shape of a production possibility curve is;downward-sloping;perfectly vertical;perfectly horizontal;upward-sloping;2. Refer to the table shown. The average product when eight;workers are employed is _____6;Number of workers;Total Output;1;4;2;10;3;18;4;28;5;35;6;41;7;45;8;48;9;50;10;49;3. A resource is said to;have a comparative advantage if;it is equally suited to;the production of all goods.;its suitability to the;production of one good changes as it produces more of that good.;its suitability to the;production of one good does not change as it produces more of that good.;it;is better suited to the production of one good than to the production of an;alternative good.;4 Refer to the graph shown. Initially, the market;is in equilibrium with price equal to $3 and quantity equal to 100. Government;imposes a tax on suppliers of $1 per unit. The effect of the tax is to;?;lower the price;consumers pay from $3 to $2.;lower the price sellers;keep after paying the tax.;raise the price consumers pay from $3 to $4.;raise the price sellers keep after paying the;tax.;5;Refer to the table;shown. Diminishing marginal productivity begins when the;?;fourth worker is hired.;sixth worker is hired.;third worker is hired.;fifth;worker is hired;6Refer to the graph shown. If this;monopolistically competitive firm maximizes profit, it will;charge $45 per dress.;charge $85 per dress.;charge $78 per dress.;shut down because it cannot cover its;opportunity costs;7 The price of a ticket to a rock concert is set;at $35. All the tickets for the concert sell out 1 hour after they go on sale;and there are still 1,000 fans who want to buy tickets. It follows that;the quantity of tickets;demanded is equal to the quantity supplied at the $35 price.;the equilibrium price of;tickets to the concert is less than $35.;the equilibrium price of tickets to the concert is more than $35.;the equilibrium price of tickets to the concert;is $35.;8 Which of the following statements is true?;Many different;production processes can be economically efficient, but only the method that;involves the lowest possible cost is technically efficient.;Many different production processes can be technically efficient;but only the method that involves the lowest possible cost is economically;efficient.;There are many;production processes that are both technically and economically efficient, but;only one of these involves the lowest possible cost.;There is only one production process that is;technically efficient, and this process is also economically efficient.;9 State what type of business combination is;occurring in the following scenario: Samsung and Sony become partners in a flat;screen manufacturing company.;Joint venture;Conglomerate;Vertical merger;Horizontal merger;10 Suppose a firm finds that an additional dollar;spent on labor increases output more than does an additional dollar spent on;machines. Under these conditions, the firm;should substitute;machines for labor if it wants to increase economic efficiency;is economically;efficient;is technically efficient;should;substitute labor for machines if it wants to increase economic efficiency;11Economists and laypeople see the pros and cons of international;trade in different ways. Which of the following is one of those ways?;Laypeople enjoy the;benefits of trade in terms of lower consumer prices.;Laypeople recognize that;the United States has a comparative advantage in services.;Laypeople tend to think of foreign trade only in terms of;manufactured goods.;Laypeople believe in the law of one price and;economists do not.;12 The morel is a prized mushroom that is often abundant;in the Western United States in years after forest fires. Suppose two companies;are buying morels from workers willing to find them. One company offers to pay;workers $5.00 per pound, and the other company will pay workers only $4.00 per;pound. Economists would say that;the lower-paying company;will attract the more creative and innovative pickers and the higher-paying;company will attract the others.;this situation violates the law of one price and is not likely to;persist.;the higher-paying company;will attract the more creative and innovative pickers and the lower-paying;company will attract the others.;the company willing to pay only $4.00 has a;comparative advantage in selling morels.;13 Which of the following is the best example of a macroeconomic;externality?;One person saving less;without considering the effect on their retirement needs;One person starting a;business without knowing whether the goods will sell;Many people saving more without considering the effect on;unemployment;One person spending more in order to help;stimulate the economy;14 If MR < MC, a monopolist should;maintain the same level of production.;stop producing.;decrease production.;increase;production.;15 Opponents of government intervention in the;economy argue that externalities;may not be effectively corrected by the government.;are themselves the;inevitable result of government policies.;do not create problems;for the model.;should be corrected with regulations rather than;subsidies.;16State what type of business combination is occurring in the;following scenario: IBP meat processing firm buys American Cattle, a very large;cattle ranch.;Joint venture;Vertical merger;Horizontal merger;Conglomerate;17 Refer to the graph shown. At which point is elasticity;zero?;B;D ---- Elasticity is zero at quantity axis intercept;i.e. ad D;C;A;18 A Wall Street Journal headline reads;Cigar Shortage Draws New Brands into Market." The shortage resulted;from a renewed interest in smoking cigars. What best describes the facts behind;the headline?;Price is too low, quantity demanded exceeds quantity supplied.;The cigar market is in;equilibrium.;Price is too low, demand;exceeds supply.;A shift in supply has equilibrated supply and;demand.;?;19.Refer to the graph;shown. If hamburger dinners are produced by a perfectly competitive industry;with a market demand D;price will equal;marginal cost.;output will be the same as it would be under monopoly.;price will equal $6.;price will be greater than marginal revenue.;20 State what type of business combination is;occurring in the following scenario: Golf Smith, a golf supply retailer buys;its competitor, Vango golf.;Horizontal merger;Conglomerate;Joint venture;Vertical merger;21 According to the text, Microeconomics;Colander (2013), economics is the study of how;government policies can;be used to meet individuals' wants and desires.;human beings coordinate their wants and desires.;scarce resources are;allocated to their most productive uses.;governments allocate resources while facing;constraints.;22 Oligopoly is characterized by;low market;concentration.;inability to set price.;no barriers to entry.;few;sellers.;23 When Ross Perot ran for president as a third;party candidate in 1992, he argued that free trade with Mexico would result in;massive job losses in the United States because Mexican wages were so low.;Which of the following is the best explanation for why few economists agreed;with Perot?;Although economists agreed that in some areas the United States;would lose jobs, they expected that the United States would gain jobs in other;areas.;Economists believed that;the U.S. unemployment rate would rise.;Although economists;predicted that unemployment would rise, the increased profits of corporations;would raise stock prices enough to compensate for the lost jobs.;Economists did not believe that any jobs would;be lost in the United States;24 Refer to the graph shown. The figure shows the;demand and supply curves for eggs and shows two equilibrium points, E1;and E2. An increase in demand from D1 to D2;would cause;price to decline from;$1.25 to $1.00 a dozen and a shortage of 2,000 dozen eggs per week.;price to rise from $1.00;to $1.25 a dozen and a surplus of 2,000 dozen eggs per week.;price to rise from $1.00 to $1.25 a dozen and equilibrium quantity;to be 3,000 dozen eggs per week.;price to remain at $1.00 a dozen and a shortage;of 2,000 dozen eggs per week;25 Germany restricts the use of nonrefillable;bottles and cans. The European Union argues that the rules aren't just;protecting the environment, they also are protecting German beverage makers;from competition. The EU sees Germany's environmentalism as;?a quota?;a tariff;a regulatory trade restriction;an embargo;26 Oligopoly is probably the best market for;technological change because;funds for research and development are available in an oligopoly;due to innovation, which motivates the need for research and development.;the typical oligopoly;lacks the funds for research and development and therefore will use basic;research from universities.;pricing within the;typical oligopoly tends to be very close to average total cost because of the;entry of new rivals if its profits are excessively high.;research and development occurs only if;government subsidizes such activity, and government tends to subsidize;oligopolies;27 George Davis and Michael Wohlgenant estimate;that for every 1 percent increase in the price of Christmas trees, quantity;demanded falls by 0.6 percent. The demand for Christmas trees is;perfectly inelastic;inelastic;elastic;unit elastic;28State what type of business combination is occurring in the;following scenario: A tobacco producer buys a carbonated beverage plant.;Joint venture;Conglomerate;Vertical merger;Horizontal merger;29Suppose the minimum possible price of constructing homes is $50;per square foot. As a result of a sharp drop in the demand for home construction;the equilibrium price of home construction falls to $40 per square foot.;Assuming the home construction industry is perfectly competitive and there are;no specialized inputs, firms will;exit the industry, and;the price will remain at $40 in the long run.;enter the industry as;the price rises above $40 in the long run.;exit the industry, and the price will rise above $40 in the long;run.;exit the industry, and the price will fall below;$40 in the long run.;30Refer to the table shown. At what level of employment is the;marginal product of labor seven?;7;5 -- Correct;2;4

 

Paper#55961 | Written in 18-Jul-2015

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