Reference no: EM133311865
Questions
1. In the long run in a monopolistically competitive industry, the profit maximizing level of output is less the output where Average Total Cost is minimized. This is called:
productive efficiency.
firm's products will be different from other firms in the industry.
allocative efficiency
excess capacity.
2 Mutual interdependence in an oligopolistic industry means that:
When each firm must consider the possible reaction of rival firms when setting prices.
the firms are "price takers".
there must be product differentiation
that entry of new firms is blocked.
3. Which of the following best defines an oligopoly?
where the last remaining firm had no sales.
where one big firm has sales that is more than 90% of the market.
where the four biggest firms have total sales that are less than 5% of the market.
where the four biggest firms have total sales that are more than 40% of the market.
4. When price is equal to marginal cost, then there is:
allocative efficiency
neither (a) allocative nor (b) productive efficiency
productive efficiency
both (a) allocative and (b) productive efficiency
5. Which is an example of an external benefit?
a rise in health care costs in a neighborhood from breathing diesel truck exhaust.
a fall in the price of gasoline because of lower crude oil prices.
a decrease in taxes to stimulate the economy which has high unemployment.
the value of your home can go up if your neighbors' homes are well kept.
6. Which of the following is an example of government regulation to limit the external cost of consuming gasoline?
direct negotiation between drivers and those who are affected by auto exhaust.
filing a lawsuit against car owners damages caused by pollution from cars.
mandatory smog control devices on automobiles.
a government subsidy to purchase automobiles.
7. Which of the following statements is true about public goods?
Neither, most public goods are produced by private firms AND most goods and services produced by the government are private goods.
Most public goods are produced by the government.
Most goods and services produced by the government are public goods.
Public goods are both produced by the government AND most goods and services produced by the government are public goods.
8. The view that a higher minimum wage will cause and increase in unemployment is based on:
the supply and demand model of the labor market where the minimum wage is a price floor.
studies of employment in fast-food restaurants
the view that higher minimum wages will trigger a recession, causing unemployment to rise.
the view that higher wages will lead to more spending, production and employment.
9. There is a great deal of inequality of earnings in the labor market. Which of the following is true AND is NOT explained by the theory of human capital? Why:
women, on average, earn the same as men with a similar level of education.
women, on average, earn less than men with a similar level of education.
women, on average, earn more than men with a lower level of education.
women, on average, earn less than men with a higher level of education.