Podcast
Questions and Answers
Price controls generally serve a positive economic function.
Price controls generally serve a positive economic function.
False
Which of the following would need to be true for Internet access to qualify as a club good?
Which of the following would need to be true for Internet access to qualify as a club good?
In the long run, firms generally experience diseconomies of scale, first because the large initial costs are spread over a small amount of output. Eventually, economies of scale decrease the long-run average total costs (LRATC) as output increases.
In the long run, firms generally experience diseconomies of scale, first because the large initial costs are spread over a small amount of output. Eventually, economies of scale decrease the long-run average total costs (LRATC) as output increases.
False
In a perfectly competitive market, the long-run market supply curve tends to be horizontal or nearly so (very price sensitive). What is another way to state this fact?
In a perfectly competitive market, the long-run market supply curve tends to be horizontal or nearly so (very price sensitive). What is another way to state this fact?
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Calculate the amount of consumer surplus transferred to the monopolist in the monopoly situation shown.
Calculate the amount of consumer surplus transferred to the monopolist in the monopoly situation shown.
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Which of these is an unintended consequence of a price ceiling?
Which of these is an unintended consequence of a price ceiling?
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Why don't you ever hear politicians advocating for a minimum wage of $50/hour?
Why don't you ever hear politicians advocating for a minimum wage of $50/hour?
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The equilibrium price and quantity are $2 and 50. A price floor of $1 is put in place. The equilibrium output:
The equilibrium price and quantity are $2 and 50. A price floor of $1 is put in place. The equilibrium output:
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If a price floor of $7 is established, the resulting ______ will be ______ units.
If a price floor of $7 is established, the resulting ______ will be ______ units.
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Which of the following groups is helped by a price floor on carrots?
Which of the following groups is helped by a price floor on carrots?
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Match the terms on the left with their corresponding descriptions on the right.
Match the terms on the left with their corresponding descriptions on the right.
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Richard owns a tea company. He buys raw tea leaves, sorts and grades them, before selling them to stores.
He recently moved into a larger factory, so that he can sell tea to more stores.
How would Richard know if he is experiencing diseconomies of scale from increasing the size of his factory?
Richard owns a tea company. He buys raw tea leaves, sorts and grades them, before selling them to stores. He recently moved into a larger factory, so that he can sell tea to more stores. How would Richard know if he is experiencing diseconomies of scale from increasing the size of his factory?
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Holding all else constant, a decrease in the market demand for a product in a competitive market would cause:
Holding all else constant, a decrease in the market demand for a product in a competitive market would cause:
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Diminishing marginal product begins with the ______ worker.
Diminishing marginal product begins with the ______ worker.
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The market for pens is perfectly competitive and is currently in equilibrium. What will happen if pens become more popular among university students?
The market for pens is perfectly competitive and is currently in equilibrium. What will happen if pens become more popular among university students?
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The output effect for a monopolist refers to the:
The output effect for a monopolist refers to the:
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Which of the following is the best example of rent seeking?
Which of the following is the best example of rent seeking?
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You are thinking of moving to Oregon, where the state minimum wage is $14.20/hour. The federal minimum wage is $7.25/hour & the market equilibrium wage is $19/hour.
What wage will you be paid?
You are thinking of moving to Oregon, where the state minimum wage is $14.20/hour. The federal minimum wage is $7.25/hour & the market equilibrium wage is $19/hour. What wage will you be paid?
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The market works efficiently in the absence of externalities if the good is:
The market works efficiently in the absence of externalities if the good is:
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John earns $40,000 a year. He quits and invests $100,000 of his own money (which could have earned 10% in annual interest) to start a business. His opportunity cost is:
John earns $40,000 a year. He quits and invests $100,000 of his own money (which could have earned 10% in annual interest) to start a business. His opportunity cost is:
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For some cafes, operating from 3PM to 4PM isn't the most profitable hour—and if every hour was like that, the coffee shop wouldn't make a profit because they couldn't pay the rent. But staying open is about ______.
For some cafes, operating from 3PM to 4PM isn't the most profitable hour—and if every hour was like that, the coffee shop wouldn't make a profit because they couldn't pay the rent. But staying open is about ______.
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The Pedernales Electric Coop estimated the demand and marginal revenue for electricity services to be P = 16 - 2Q and MR = 16 - 4Q. The MC of electricity is $4. What is the profit-maximizing price?
The Pedernales Electric Coop estimated the demand and marginal revenue for electricity services to be P = 16 - 2Q and MR = 16 - 4Q. The MC of electricity is $4. What is the profit-maximizing price?
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Which type of congestion charge will be the most effective at managing traffic flow?
Which type of congestion charge will be the most effective at managing traffic flow?
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In the following table find the value of A:
In the following table find the value of A:
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Identify the profit-maximizing OUTPUT level in the table.
Identify the profit-maximizing OUTPUT level in the table.
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Which of the following statements about a monopoly is false?
Which of the following statements about a monopoly is false?
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It is best to reduce the level of pollution:
It is best to reduce the level of pollution:
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When offering online food ordering, many restaurants outsource the food production to ghost kitchens to expand their delivery capacity. This practice ______.
When offering online food ordering, many restaurants outsource the food production to ghost kitchens to expand their delivery capacity. This practice ______.
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Due to freedom of entry and exit, long-run economic profits of perfectly competitive firms are ______.
Due to freedom of entry and exit, long-run economic profits of perfectly competitive firms are ______.
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Compared to a perfect competitor, monopolies charge _____ and produce _____ output.
Compared to a perfect competitor, monopolies charge _____ and produce _____ output.
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A profit-maximizing monopolist will set its price and output where demand is unit elastic.
A profit-maximizing monopolist will set its price and output where demand is unit elastic.
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The deadweight loss associated with this monopoly is equal to:
The deadweight loss associated with this monopoly is equal to:
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Consider a market with the following equations:
Demand: Qd = 42 – 2P
Supply: Qs = 2 + 6P
Consider a market with the following equations: Demand: Qd = 42 – 2P Supply: Qs = 2 + 6P
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Connect each description on the left with the appropriate term on the right.
Connect each description on the left with the appropriate term on the right.
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A village has 6 residents, each of whom has an accumulated savings of $100. Each villager can use this money either to buy a government bond that pays 9% interest per year or buy a 1-year-old goat, send it onto the commons to graze, and sell it after a year.
The price the villager gets for the 2-year-goat depends on how much it grows while grazing on the commons, which in turn, depends on the number of goats sent into the commons.
What is the socially optimal number of goats for this village?
A village has 6 residents, each of whom has an accumulated savings of $100. Each villager can use this money either to buy a government bond that pays 9% interest per year or buy a 1-year-old goat, send it onto the commons to graze, and sell it after a year. The price the villager gets for the 2-year-goat depends on how much it grows while grazing on the commons, which in turn, depends on the number of goats sent into the commons. What is the socially optimal number of goats for this village?
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Suppose that for a particular firm the only variable input into the production process is labor and that output equals zero when no workers are hired. In addition, suppose that when the firm hires 2 workers, the total cost of production is $100. When the firm hires 3 workers, the total cost of production is $130. In addition, assume that the variable cost per unit of labor is the same regardless of the number of units of labor are hired. What is the firm's fixed cost?
Suppose that for a particular firm the only variable input into the production process is labor and that output equals zero when no workers are hired. In addition, suppose that when the firm hires 2 workers, the total cost of production is $100. When the firm hires 3 workers, the total cost of production is $130. In addition, assume that the variable cost per unit of labor is the same regardless of the number of units of labor are hired. What is the firm's fixed cost?
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Suppose that you are an owner of a firm that sells headphones. You are currently producing 7 headphones. If a new customer calls and offers to pay $30 but this requires you to produce one more headphone, should you take the $30?
Suppose that you are an owner of a firm that sells headphones. You are currently producing 7 headphones. If a new customer calls and offers to pay $30 but this requires you to produce one more headphone, should you take the $30?
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What happens to the average fixed cost as we increase output?
What happens to the average fixed cost as we increase output?
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For a monopolist, the firm's profit in the graph below is ______.
For a monopolist, the firm's profit in the graph below is ______.
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What amount could you pay your roommate to stop playing loud music, so that you both benefit? The dollar amounts in the table refer to how much each individual values each outcome. There is a range of possible answers. You need to write a $ amount on the front page which would be acceptable to both parties.
What amount could you pay your roommate to stop playing loud music, so that you both benefit? The dollar amounts in the table refer to how much each individual values each outcome. There is a range of possible answers. You need to write a $ amount on the front page which would be acceptable to both parties.
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Study Notes
Multiple Choice Answers
- Question 1: B
- Question 2: C
- Question 3: B
- Question 4: D
- Question 5: C
- Question 6: A
- Question 7: C
- Question 8: A
- Question 9: C
- Question 10: D
- Question 11: B
- Question 12: B
- Question 13: D
- Question 14: C
- Question 15: A
- Question 16: C
Short Answers
- Question 17: B
- Question 18: D
- Question 19: A
- Question 20: A
- Question 21: C
- Question 22: A
- Question 23: C
- Question 24: $110
- Question 25: 6
- Question 26: C
- Question 27: A
- Question 28: B
- Question 29: A
- Question 30: more; smaller
- Question 31: B
- Question 32: $100
- Question 33: Shortage of 16 units
-
Question 34: Connections:
- Streaming services: D (Club Good)
- Street lights: A (Public Good)
- An ERAS tour t-shirt: B (Private Good)
- Fish stocks in the ocean: C (Common Resource Good)
- Question 35: Socially optimal number of goats: 3
- Question 36: $40
- Question 37: NO
- Question 38: AFC falls
- Question 39: $200
- Question 40: $25.01-$29.99
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Description
Test your understanding of key economic concepts with this engaging quiz. Questions range from multiple-choice to short answers, covering various important topics in economics. Perfect for students looking to reinforce their knowledge and skills.
