Economics Concepts Quiz

Oil Pump Question

• To minimize costs when producing 7 barrels of oil, produce 3 barrels from Oil Pump One and 4 barrels from Oil Pump Two.

Marginal Costs Question

• If the price per bushel is $1, firm A should produce 10 bushels, firm B should produce 30 bushels, and firm C should produce 0 bushels.

Natural Monopoly Question

• A natural gas supplier in a city is an example of a natural monopoly.

Medicare Spending Question

• In this election scenario, neither candidate is likely to win.

Profit-Maximizing Condition Question

• The profit-maximizing condition for a monopolist is MR = MC.

Public Good Solution Question

• Widespread taxation is a solution for efficient allocation of public goods.

Economies of Scale Question

• Economies of scale are the advantages of large-scale production, reducing average cost as quantity increases.

Adam Smith's Invisible Hand Question

• Adam Smith believed each individual is "led by an invisible hand" to promote ends not intended.

Public Good Definition Question

• A public good is nonrival and nonexcludable.

Club Goods Question

• Club goods are excludable but nonrival goods.

Common Resources Question

• Common resources are nonexcludable and rival goods.

Taking Advantage of Economies Of Scale Question

• Breaking up a monopoly into smaller companies is one way to take advantage of economies of scale.

Advertising Efficiency Question

• Advertising is not an efficient solution to the problem of nonexcludability and nonrivalry.

Sugar Quotas Question

• Sugar quotas harm U.S. sugar farmers while benefiting the candy and soda industries.

Comparative Advantage Question

• The United States has a comparative advantage in goods produced by skilled workers.

Price in Competitive Markets Question

• A competitive market produces output at lower prices than a monopoly market.

Rational Ignorance Question

• Rational ignorance describes voters who are uninformed about politics. They are unlikely to make good voting decisions and more likely to base decisions on unreliable/low-quality information.

Single Firm Market Supplier Question

• If one firm can supply the entire market at a lower cost than two or more firms, it is considered a natural monopoly.

Perfectly Competitive Market Pricing Question

• In a perfectly competitive market each firm sells at the same price.

Quantity Imported Question

• In the provided graph the quantity imported is 600 units.

Forced Rider Question

• A forced rider is someone who pays taxes that help maintain a service but does not directly utilize the service.

Private Goods Attributes Question

• Private goods are excludable, priced, and rivalrous.

Monopoly Power Source Question

• A patent is one source of monopoly power granted by the government.

Consumer Inference from Advertising Question

• Consumers can infer that a product with extensive advertising is likely successful or needed more promotion.

Free Rider Example Question

• A free rider is someone who benefits from a good or service but doesn't pay.
• A university sorority asking for donations for a party is an example of a free rider situation.

Monopolists Are People Question

• Gains to monopolists are just as important as the losses incurred to consumers.

Protectionism Definition Question

• Protectionism refers to government policies that restrict imports.

Economic Freedom and Living Standards Question

• The lowest economic freedom country on the chart is Haiti.

Tax Level for Election Victory Question

• Jack Johnson could support a tax level of 6% to ensure election victory according to the provided graph.

Monopolistically Competitive Industry Example Question

• Sodas are an example of a monopolistically competitive industry.

Public Good Example Question

• National defense is an example of a public good.

Special Interest Issue Definition Question

• A special interest issue is an issue where a single small group benefits significantly while many people bear a small cost. This issue is typically driven by special interest groups.

Special Interest Groups and Voter Knowledge Question

• Special Interest Groups have an incentive to educate voters and influence legislation to their benefit. Voters tend to be rationally ignorant and less informed about politics than special interest groups.

Fast-Food Restaurant Strategy Question

• Burger King's special order strategy in the 1990s was a monopolistically competitive strategy.

Production and Consumption with Tariffs Question

• Domestic production and consumption increase because of tariffs.

Political Success Strategy Question

• To achieve political success, concentrate benefits and diffuse costs.

Tariff on Goods Question

• If the world supply is inelastic and local demand is elastic, the outcome is a small deadweight loss and relatively larger tax revenue.

Consumer Price for Leather Question

• In the absence of tariffs, the consumer price would be between $50-100.

Economic Profit Calculation Question

• Economic profit is calculated by subtracting explicit and implicit costs from revenues.

Profit Maximizing Monopolist Question

• A profit-maximizing monopolist produces where MC = MR.

Patent Prevention of Monopolies Question

• A patent is one way to legally prevent a monopoly to some extent.

Monopoly Profit and Incentives for Research Question

• Monopoly profit encourages firms to conduct research and develop new drugs because it provides them an incentive to make more money.

Price for 12 Units of Output Question

• The price for 12 units of combined output from the provided table is $20.

Test your knowledge on key economics concepts including natural monopolies, marginal costs, and economic principles like Adam Smith's invisible hand. This quiz covers various topics that are essential for understanding economics and market dynamics. Perfect for students and enthusiasts alike!