Questions:
1). The DeBeers company is a profit-maximizing monopolist that exercises monopoly power in the distribution of diamonds. If the company earns positive economic profits this year, the price of diamonds will:
2). Using 100 workers and 10 machines, a firm can produce 10,000 units of output; using 250 workers and 25 machines, the firm produces 21,000 units of output. These facts are best explained by:
3). Suppose that college tuition is higher this year than last and that more students are enrolled in college this year than last year. Based on this information, we can best conclude that:
4). A monopoly firm is different from a perfectly competitive firm in that:
5). The best example of positive externality is:
6). The theory that quantity supplied and price are positively related, other things constant, is referred to as the law of:
7). A reduction in the supply of labor will cause wages to:
8). Other things held constant in a competitive labor market, if workers negotiate a contract in which the employer agrees to pay an hourly of $17.85 while the market equilibrium hour rate is $16.50, the:
9). Alex is playing his music at full volume in his dorm room. The other people living on his floor found this to be a nuisance, but Alex doesn't care. Alex's music playing is an example of:
10). Oligopoly is probably the best market for technological change because:
11). A perfectly competitive firm facing a price of $50 decides to produce 500 widgets. Its marginal cost of producing the last widget is $50. If the firm's goal is to maximize profit, it should:
12). Graphically, a change in price causes:
13). In 1997, the federal government reinstated a 10 percent excise tax on airline tickets. The industry tried to pass on the full 10 percent ticket tax to consumers but was able to boost fares by only 4 percent. From this you can conclude that the:
14). In 2011, the Department of Justice sued AT&T to block its merger with the cell phone service provider T-Mobile. To defend itself against the charge, AT&T argued that the:
15). The law of diminishing marginal productivity implies that the marginal product of a variable input:
16). Suppose OPEC announces it will increase production. Using supply and demand analysis to predict the effect of increased production on equilibrium price and quantity, the first step is to show the:
17). Many call centers that provide telephone customer services for U.S. companies have been established in India, but few or none have been established in China. Why?
18). Suppose people freely choose to spend 40 percent of their income on health care, but then the government decides to tax 40 percent of that person's income to provide the same level of coverage as before. What can be said about deadweight loss in each case?
19). At one time, sea lions were depleting the stock of steelhead trout. One idea to scare sea lions away from the Washington coast was to launch fake killer whales, which are predators of sea lions. The cost of making the first whale is $16,000 ($5,000 for materials and $11,000 for the mold). The mold can be reused to make additional whales, and so additional whales cost $5,000 each. Based on these numbers, the production of fake killer whales exhibits:
20). There are many restaurants in the city of Raleigh, each one offering food and services that differ from those of its competitors. There is also free entry of sellers into the market, and each seller serves a very small fraction of the total number of meals served each day. The restaurant industry in Raleigh is best characterized as:
21). Suppose foreign shrimp prices drop by 32 percent and importers gain a 90 percent market share. From this information, what would economists strongly suspect about this industry?
22). For a monopolist, the price of a product:
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 of why few economists agreed with Perot?
24). Mr. Woodward's cabinet shop is experiencing rapid growth in sales. As sales have increased, Mr. Woodward has found it necessary to hire more workers. However, he has observed that doubling the number of workers has less than doubled his output. What is the likely explanation?
25). Price elasticity of demand is the:
26). Which of the following statements is true about a downward-sloping demand curve that is a straight line?
27). Strategic decision making is most important in:
28). Cartels are organizations that:
29). Microeconomics and macroeconomics are:
30). Microeconomics is the study of: