Econ Final! - Flashcards | StudyHippo.com

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resources are scarce

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The overriding reason why households & societies face many decisions is that

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All of the above

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Which of the following products would be considered scarce?

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All of the above

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Which of the following is an example of something economists study?

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Dani must decide btwn going to Florida or Brazil for spring break

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Which of the following statements best represents the principle represented by the adage, "There is no such thing as a free lunch"?

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quality refers to uniform distribution of those benefits & efficiency refers to maximizing benefits from scarce resources

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The terms equality & efficiency are similar in that they both refer to benefits to society. However they are different in that

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equality is increased & efficiency is decreased

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When the gov implements programs such as progressive income tax rates, which of the following is likely to occur?

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what you give up to get that item

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The opportunity cost of an item is

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$315

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Suppose that you have received $300 as a birthday gift. You can spend it today or you can put the money in a bank account for a year and earn 5% interest. The opportunity cost of spending the money today, in terms of what you could have after one year, is

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takes an action only if the marginal benefit of that action exceeds the marginal cost of that action

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A rational decisionmaker

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with any nation

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England can benefit from trade

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All of the above are correct

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Which of the following steps does an economist take when studying the economy?

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sometimes make assumptions that are contrary to features of the real world

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In constructing models, economists

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both (a) and (b) are correct

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A circular-flow diagram is a model that

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households are buyers and firms are sellers

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In the markets for g/s in the circular-flow diagram,

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on the production possibilities frontier

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Production is efficient if the economy is producing at a point

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produce inside its production possibilities frontier

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Unemployment would cause an economy to

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people face trade-offs

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The production possibilities frontier provides an illustration of the principle that

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there is a technological improvement

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A production possibilities frontier can shift outward if

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how individual households and firms make decisions

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Microeconomics is the study of

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maintain federal funds rate

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On Jan 27, 2016, the FOMC recently decided to:

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benefit both Steve and Tom

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Tom produces baseball gloves and baseball bats. Steve also produces baseball gloves and baseball bats, but Tom is better at producing both goods. In this case, trade could

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the rate of tradeoff btwn the two goods being produced depends on how much of each good is being produced

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A production possibilities frontier is bowed outward when

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Korea's opportunity cost of shoes is the inverse of its opportunity cost of soccer balls

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If Korea is capable of producing either shoes or soccer balls or some combination of the two, then

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All of the above are correct

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Suppose Susan can wash three windows per hour or she can iron six shirts per hour. Paul can wash two windows per hour or he can iron five shirts per hour.

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both (a) and (c) are correct

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Based on the recent launch of trust barometer in Davos at the annual Economic Forum, the report showed:

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Abby does not like flowers and Liam does not like brownies

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Abby bakes brownies and Liam grows flowers. In which of the following cases is it impossible for both Abby and Liam to benefit from trade?

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Positive statement

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Based on the 2015 NFL Regular Season, Carolina Panthers (15-1) team has better win record than Denver Broncos (12-4) team. From an economic perspective, this is a:

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Normative Statement

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Based on question number 27 above, Carolina Panthers should win the Super Bowl 50, From an economic perspective, this is a:

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the rate of tradeoff btwn the two goods being produced is constant

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A production possibilities frontier is a straight line when

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1.6 bushels of squash

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Suppose a gardener produces both tomatoes and squash in his garden. If he must give up 8 bushels of squash to get 5 bushels of tomatoes, then his opportunity cost of 1 bushel of tomatoes is

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All of the above are examples of markets

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Which of the following is an example of a market?

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None of the above is correct

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In a competitive market, the price of a product

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and sellers are price takers

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In competitive markets, buyers

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perfect competition

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The highest form of competition is called

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seller, and that seller sets the price

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A monopoly is a market with one

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a local cable television company

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Which of the following would most likely serve as an example of a monopoly?

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decrease in quantity demanded

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A movement upward and to the left along a demand curve is called a(n)

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decrease quantity demanded

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An increase in the price of a good will

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inferior good

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If a decrease in income increases the demand for a good, then the good is a(n)

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a consumer's income will cause the demand curve for mac & cheese to shift to the left

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If mac & cheese is an inferior good, then an increase in

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how much buyers & sellers respond to changes in market conditions

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In general, elasticity is a measure of

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reduce their quantity demanded more in the long run than in the short run

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When consumers face rising gasoline prices, they typically

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buyers respond substantially to changes in the price of the good

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Demand is said to be price elastic if

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buyers do not respond much to a change in price

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If demand is price inelastic, then

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greater than 1

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Demand is elastic if the price elasticity of demand is

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less than 1

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Demand is inelastic if the price elasticity of demand is

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more elastic demands

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Goods with many close substitutes tend to have

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tends to be inelastic

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For a good that is a necessity, demand

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music downloads

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Which of the following is likely to have the most price elastic demand?

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toothpaste

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Which of the following is likely to have the most price inelastic demand?

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when policymakers believe that the market price of a g/s is unfair to buyers or sellers

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Price controls are usually enacted

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both to raise revenue for public purposes and to influence market outcomes

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Policymakers use taxes

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ceiling

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A legal maximum on the price at which a good can be sold is called a price

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is below the price ceiling

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If a price ceiling is not binding, then the equilibrium price

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there will be no effect on the market price or quantity sold

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If a price ceiling is not binding, then

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The number of firms selling laptop computers decreases

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Suppose the gov has imposed a price ceiling on laptop computers. Which of the following events could transform the price ceiling from one that is not binding into one that is binding?

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binding price ceiling is imposed on a market

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A shortage results when a

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(i) and (iii) only (causes a surplus & is set at a price above the equilibrium price)

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A binding price floor

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(iv) only (is set at a price below the equilibrium price)

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A nonbinding price floor

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Negarive rates

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According to Feb 12, 2016 news article, the average investors can expect the FOMC to consider:

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a market that fails to allocate resources efficiently

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The term market failure refers to

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one person's actions on the well-being of a bystander

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An externality is the impact of

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negative externality

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A cost imposed on someone who is neither the consumer nor the producer is called a

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a beneficial effect on a bystander who does not pay the person who causes the effect

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A positive externality arises when a person engages in an activity that has

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making it illegal to "disturb the peace"

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Dog owners do not bear the full cost of the noise their barking dogs create and often take too few precautions to prevent their dogs from barking. Local govs address this problem by

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Both a and b are correct

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Since restored historic buildings convey a positive externality, local govs may choose to

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self-interested paper producers will not consider the full cost of the dioxin pollution they create.

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Dioxin emission that results from the production of paper is a good example of a negative externality because

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All of the above are correct.

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Which of the following is an example of an externality?

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Both a and b are correct

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Which of the following represents a way that a gov can help the private market to internalize an externality?

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negative externalities

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Refer to Figure 10-1. This graph represents the tobacco industry. The industry creates

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(iii) only (maximize profit)

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Economists normally assume that the goal of a firm is to

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All of the above could be correct

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An entrepreneur's motivation to start a business arises from

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total revenue

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The amount of money that a firm receives from the sale of its output is called

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total cost

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Which of the following can be added to profit to obtain total revenue?

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$150

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If Danielle sells 300 wrist bands for $0.50 each, her total revenues are

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implicit costs

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Bubba is a shrimp fisherman who could earn $5,000 as a fishing tour guide. Instead, he is a full-time shrimp fisherman. In calculating the economic profit of his shrimp business, the $5,000 that Bubba gave up is counted as part of the shrimp business's

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(i) and (ii) only (workbooks containing practice problems and rent for the storefront)

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Katya owns a math-tutoring business. Her accountant most likely includes which of the following costs on her financial statements?

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implicit costs

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The difference btwn accounting profit and economic profit is

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Both b and c are correct

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Explicit costs

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will never exceed accounting profit

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Economic profit

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influence the market price of the good it sells

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A firm has market power if it can

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Entry is limited

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Which of the following is not a characteristic of a competitive market?

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dairy farming

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Which of the following industries is most likely to exhibit the characteristic of free entry?

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a similar product

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One of the defining characteristics of a perfectly competitive market is

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marginal revenue equals marginal cost

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The profit-maximizing level of output,

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All of the above are correct

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Which of the following statements best expresses a firm's profit-maximizing decision rule?

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(P - ATC) x Q

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We can measure the profits earned by a firm in a competitive industry as

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less than average variable cost

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In the short run, a firm operating in a competitive industry will shut down if price is

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$4.50

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Refer to Figure 14-1. The firm's short-run supply curve is its marginal cost curve above

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above $6.30

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Refer to Figure 14-1. The firm will earn a positive economic profit in the short run if the market price is

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is a price taker, whereas a monopolist is a price maker

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A competitive firm

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marginal cost equals price, while a monopolist produces where price exceeds marginal cost.

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A perfectly competitive firm produces where

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one buyer

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Which of the following is not a characteristic of a monopoly?

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barrieres to entry

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The fundamental source of monopoly power is

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own a key resource

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The simplest way for a monopoly to arise is for a single firm to

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a local electrical cooperative

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Which of the following would be most likely to have monopoly power?

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An entrepreneur opens a popular new restaurant.

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Which of the following is not an example of a barrier to entry?

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All of the above are correct.

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Patents, copyrights, and trademarks

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Panel B represents the typical demand curve for a perfectly competitive firm, and Panel A represents the typical demand curve for a monopoly.

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Refer to Figure 15-3. Which of the following statements is correct?

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A.

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Refer to Figure 15-4. The marginal revenue curve for a monopoly firm is depicted by curve

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both a monopoly and a competitive firm

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A monopolistically competitive market has characteristics that are similar to

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competition and monopoly

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Which of the following pairs illustrates the two extreme examples of market structures?

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monopolistically competitive

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The market for novels is

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imperfectly competitive markets

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The general term for market structures that fall somewhere btwn monopoly and perfect competition is

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monopolistic competition and oligopoly

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The two types of imperfectly competitive markets are

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Both a and c are correct

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The higher the concentration ratio, the

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many firms, differentiated products, and free entry

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A monopolistically competitive industry is characterized by

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downward-sloping demand curve because the firm's product is different from those offered by other firms

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A firm in a monopolistically competitive market faces a

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price exceeds marginal cost

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For a monopolistically competitive firm, at the profit-maximizing quantity of output,

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$80

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Refer to Figure 16-3. What price will the monopolistically competitive firm charge in this market?

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oligopoly

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A market structure with only a few sellers, each offering similar or identical products, is known as

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in oligopoly markets there are only a few sellers

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One way in which monopolistic competition differs from oligopoly is that

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oligopolistic but not perfectly competitive markets

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Game theory is important for understanding which of the following market types?

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strategically

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In choosing among alternative courses of action, Raj must consider how others might respond to the action he takes. In the language of game theory, we say that Raj must think

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depend on both how much output it produces and how much output its rival firms produce

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In an oligopoly, each firm knows that its profits

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how people behave in strategic situations

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In general, game theory is the study of

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duopoly

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If two firms comprise the entire soft drink market, the market would be a(n)

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collusion

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An agreement among firms in a market about quantities to produce or prices to charge is called

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When oligopoly firms collude, they are behaving as a cartel

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Which of the following statements is correct?

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All of the above are correct.

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As the number of sellers in an oligopoly becomes very large,

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factors of production

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The inputs used to produce g/s are called

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(i), (ii), and (iii) only

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Suppose that a college professor is creating an exam in her university office. Which of the following would be an example of a factor of production used by the professor?

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has little or no control over the wage it pays its workers

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To say that a firm is competitive in the labor market is to say that the firm

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derived demand

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Because a firm's demand for a factor of production is derived from its decision to supply a good in the market, it is called a

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All of the above are correct

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The term "factor market" applies to the market for

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the demand for a factor of production is a derived demand.

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Factor markets are different from product markets in an important way because

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interest

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Which of the following is not an example of a factor of production?

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output per additional unit of labor

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The marginal product of labor is defined as the change in

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diminishing marginal product

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If hiring more workers results in each additional worker contributing successively smaller amounts of output, then which of the following is present?

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is the firm's demand for labor.

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For a profit-maximizing, competitive firm, the value of the marginal product of labor

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profit

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When deciding whether to hire an additional worker, firms need only consider how the additional worker would affect

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price of output by the marginal product of labor

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The value of the marginal product of labor is calculated by multiplying the

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low, other things equal.

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When the supply of workers is plentiful, one would predict that market wages would be

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All of the above are correct

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The characteristics of jobs and workers affect

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job characteristics and worker characteristics

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Difference in wages can be explained by differences in

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compensating differential

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A difference in wages that arises to offset the nonmonetary characteristics of different jobs is known as

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the stress they face

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Air-traffic controllers get paid high wages given their level of education. They also get frequent breaks and may only work a few days a week. Which of the following could explain their high wage?

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an advanced degree

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Which of the following is not an example of a compensating differential? Job A pays more than Job B because Job A requires

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human capital

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The accumulation of investments in people, such as education and on-the-job training,is known as

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the golf clubs a professional golfer uses to play golf

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Which of the following is not considered human capital?

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distorts incentives

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When the gov redistributes income to achieve greater equality, it

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the objective is to enhance equality and a side effect is that the allocation of resources becomes less efficient.

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When the gov enacts policies to redistribute income,

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Governments can sometimes improve market outcomes.

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Which of the following is correct?

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$90,000

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Refer to Table 20-1. Seventy-five percent of all families have incomes below what level?

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a bit more inequality than the typical country

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When we compare the income distribution of the United States to those of other countries, we find that the U.S. has

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Sweden

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Refer to Table 20-10. Which country has the most equal income distribution?

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income only

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The poverty rate is based on a family's

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the percentage of the population whose family income falls below a specified level.

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The poverty rate is

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Both a and b are correct.

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Refer to Figure 20-2. Which of the following is consistent with the date reported in the figure?

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The market for the good is broadly defined.

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For a particular good, a 5 percent increase in price causes a 2 percent decrease in quantity demanded. Which of the following statement is most likely applicable to this good?

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Michael must decide btwn going to Europe or Asia for spring break

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Which of the following statements best represents the principle represented by the adage, "There is no such thing as a free lunch"? (2)

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the percent decrease in the quantity demanded exceeds the percent increase in the price

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Refer to Figure 5-4. Assume the section of the demand curve from A to B corresponds to prices btwn $6 and $12. Then, when the price increases form $8 to $10,

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people face trade-offs

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The production possibilities frontier provides an illustration of the principles that

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households and firms

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Which two groups of decision makers are included in the simple circular-flow diagram?

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the actions of buyers and sellers

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In markets, prices move toward equilibrium because of

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the x-coordinate

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The first number in any ordered pair is

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an inferior good

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Suppose good X has a negative income elasticity of demand. This implies that good X is

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All of the above are correct

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Refer to Figure 10-11. Which of the following statements is correct?

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are in balance

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The dictionary defines equilibrium as a situation in which forces

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productivity

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The amount of g/s produced from each unit of labor input is called

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the invisible hand

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The self-interest of the participants in an economy is guided into promoting general economic self-interest by

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the free market

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The "invisible hand" refers to

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may improve market outcomes in the presence of externalitites

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In a market economy, gov intervention

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sellers are to a change in price

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The price elasticity of supply measures how responsive

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income elasticity of demand for that good

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To determine whether a good is considered normal or inferior, one could examine the value of the

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demand curves

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Refer to Figure 2-17. The curves shown are

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rises

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When each person specializes in producing the good in which he or she has a comparative advantage, total production in the economy

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All of the above are correct

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Education yields positive externalities. For example, a more educated population

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both Sam and Annie are made better off by trade

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Annie is an excellent baker and Sam has a plentiful farm. If Sam trades eggs and butter to Annie for some of Annie's bread and pastries,

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economics

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The study of how society manages its scarce resources is most closely associated with which field of study?

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The US Department of Justice sued AT&T to block its merger with T-Mobile

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Which of the following is a positive, as opposed to a normative, statement?

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linear, downward-sloping demand curve.

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The price elasticity of demand changes as we move along a

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$3.30

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Refer to Scenario 10-1. Suppose the equilibrium quantity of gasoline is 1,150 gallons; that is, QMarket = 1,150. Then the equilibrium rice of a gallon could be

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0.625 mixers

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Refer to Table 3-25. The opportunity cost of 1 toaster for Maya is

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a change in the price of restaurant meals

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Refer to Figure 2-18. Which of the following could result in a movement from point A to point B?

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property rights

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For markets to work well, there must be

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be positive, and your roommate's would be negative

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You and your college roommate eat 3 packages of Ramen noodles each week. After graduation last month, both of you were hired at several times your college income. You still enjoy Ramen very much and buy even more, but your roommate plans to buy fewer Ramen in favor of foods she prefers more. When looking at income elasticity of demand for Ramen, yours would

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$8

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Refer to Figure 10-8. What is the equilibrium price in this market?

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Supply curve C is more inelastic than supply curve D.

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Refer to Figure 5-19. Which of the following statements is correct?

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increases

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Refer to Figure 2-8. For this economy, as more and more hammers are produced, the opportunity cost of an additional hammer produced, in terms of nails,

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Quantity demanded changes proportionately less than the price

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Refer to Figure 5-4. Assume the section of the demand curve from B to C corresponds to prices btwn $0 to $15. Then, when the price changes from $7 to $9,

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All of the above are correct

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To say that a price ceiling is binding is to say that the price ceiling

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The social cost of producing good X includes the private cost plus the cost to bystanders of the externality

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Suppose that a negative externality is created by the production of good X. Which of the following statements is correct?

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each member of society has the same income

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Economists use the word equality to describe a situation in which

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negative externality

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A cost imposed on someone who is neither the consumer nor the producer is called a

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binding price ceiling is imposed on a market

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A shortage results when a

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those goods in which other nations have a comparative advantage

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Which goods will a nation typically import?

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incrementally alters an existing plan

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A marginal change is one that

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the central bank creating excessive amounts of money

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If a nation has high and peristent inflation, the most likely explanation is

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feasible, but not efficient

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A point inside the production possibilities frontier is

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The demand curve shifts to the right

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Movie tickets and DVDs are substitutes. If the price of DVDs increases, what happens in the market for movie tickets?

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when there is an increase in supply and a decrease in demand for the product

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A decrease in the equilibrium price for a product will result

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how society manages its scarce resources

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Economics is best defined as the study of

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the total cash expenditure needed to go to the movie plus the value of your time

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Your opportunity cost of going to a movie is

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the ability of free markets to reach desirable outcomes, despite the self-interest of market participants

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Adam Smith's "invisible hand" refers to

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All of the above

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Govs may intervene in a market economy in order to

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the central bank creating excessive amounts of money

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If a nation has high and persistent inflation, the most likely explanation is

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a simplified representation of some aspect of the economy

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An economic model is

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households are sellers, and firms are buyers

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The circular-flow diagram illustrates that, in markets for the factors of production

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move the economy along the production possibilities frontier

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An economy produces hot dogs and hamburgers. If a discovery of the remarkable health benefits of hot dogs were to change consumers' preferences, it would

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the influence of the gov budget deficit on economic growth

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All of the following topics fall within the study of microeconomics EXCEPT

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Law X will reduce national income

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Which of the following is a positive, rather than a normative, statement?

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Ron in washing, neither in mowing

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In an hour, David can was 2 cars or mow 1 lawn, and Ron can wash 3 cars or mow 1 lawn. Who has the absolute advantage in car washing, and who has the absolute advantage in lawn mowing?

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they both obtain consumption outside their production possibilities frontier

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When 2 individuals produce efficiently and then make a mutually beneficial trade based on comparative advantage,

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China will export shirts, and the US will export aircraft

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US makes an aircraft in 10,000 hours and a shirt in 2. China makes an aircraft in 40,000 hours and a shirt in 4. What will these nations trade?

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There are no gains from trade in this situation

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Mark can cook dinner in 30 mins and wash the laundry in 20. His roommate takes half as long to do each task. How should the roommates allocate the work?

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the price in hamburgers

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A change in which of the following will NOT shift the demand curve for hamburgers?

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supply, quantity demanded

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An increase in _ will cause a movement along a given demand curve, which is called a change in _.

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The demand curve shifts to the right

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Movie tickets and DVDs are substitutes. If the price of DVDs increase, what happens in the market for movie tickets?

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supply, lower

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The discovery of a large new reserve of crude oil will shift the _ curve for gasoline, leading to a _ equilibrium price.

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Prices and quantities both rise

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If the economy goes into a recession and incomes fall, what happens in the markets for inferior goods?

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an increase in the price of grapes, an input into jelly

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Which of the following might lead to an increase in the equilibrium price of jelly and a decrease in the equilibrium quantity of jelly sold?

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a small elasticity of demand

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A life-saving medicine without any close substitutes will tend to have

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1/2

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The price of a good rises from $8 to $12, and the quantity demanded falls from 110 to 90 units. Calculated with the midpoint method, the elasticity is

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inelastic at some points, and elastic at others

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A linear, downward-sloping demand curve is

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the supply curve is more elastic

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The ability of firms to enter and exit a market over time means that, in the long run,

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the demand curve is inelastic

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An increase in the supply of a good will decrease the total revenue producers receive if

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Tom, Harry, and Mary

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The price of coffee rose sharply last month, while the quantity sold remained the same. Each of five people suggests an explanation: Tom Dick Harry Larry Mary

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a surplus of the good to develop

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When the gov imposes a binding price floor, it causes

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increase, decrease, shortage

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In a market with a binding price ceiling, an increase in the ceiling will _ the quantity supplied, _ the quantity demanded, and reduce the _.

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a $1 per unit tax levied on producers of the good.

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A $1 per unit tax levied on consumers of a good is equivalent to

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the imposition of a binding price floor

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Which of the following would increase quantity supplied, decrease quantity demanded, and increase the price that consumers pay?

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the repeal of a tax levied on producers

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Which of the following would increase quantity supplied, increase quantity demanded, and decrease the price that consumers pay?

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supply is elastic, and demand is inelastic

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When a good is taxed, the burden of the tax falls mainly on consumers if

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Hillary's newly cut lawn makes her neighborhood more attractive

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Which of the following is an example of a positive externality?

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above, less

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If the production of a good yields a negative externality, then the social-cost curve lies _ the supply curve, and the socially optimal quantity is _ than the equilibrium quantity

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increases, more

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When the gov levies a tax on a good equal to the external cost associated with the good's production, it _ the price paid by consumers and makes the market outcome _ efficient

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They cause deadweight losses.

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Which of the following statements about corrective taxes is NOT true?

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$50

answer

The gov auctions off 500 units of pollution rights. They sell for $50 per unit, raising total revenue of $25,000. This policy is equivalent to a corrective tax of _ per unit of pollution.

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transaction costs make negotiating difficult

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The Coarse theorem does NOT apply if

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$50, $10

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Raj opens up a lemonade stand for two hours. He spends $10 for ingredients and sells $60 worth of lemonade. In the same two hours, he could have mowed his neighbor's lawn for $40. Raj has an accounting profit of _ and an economic profit of _.

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the production function gets flatter, while the total-cost curve gets steeper.

answer

Diminishing marginal product explains why, as a firm's output increases,

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Marginal cost is $8, and average total cost is $5.

answer

A firm is producing 1,000 units at a total cost of $5,000. If it were to increase production to 1,001 units, its total cost would rise to $5,008. What does this information tell you about the firm?

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Average total cost would decrease

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A firm is producing 20 units with an average total cost of $25 and marginal cost of $15. If it were to increase production to 21 units, which of the following must occur?

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average total cost and average fixed cost

answer

The gov imposes a $1,000 per year license fee on all pizza restaurants. Which cost curves shift as a result?

question

economies, falling

answer

If a higher level of production allows workers to specialize in particular tasks, a firm will likely exhibit _ of scale and _ average total cost.

question

takes its price as given by market conditions

answer

A perfectly competitive firm

question

marginal cost equals the price

answer

A competitive firm maximizes profit by choosing the quantity at which

question

marginal, average variable

answer

A competitive firm's short-run supply curve is its _ cost curve above its _ cost curve.

question

keep producing in the short run but exit the market in the long run

answer

If a profit-maximizing, competitive firm is producing a quantity at which marginal cost is btwn average variable cost and average total cost, it will

question

P = MC and P = ATC

answer

In the long-run equilibrium of a competitive market with identical firms, what is the relationship btwn price P, marginal cost MC, and average total cost ATC?

question

no change in the short run, down in the long run

answer

Pretzel stands in NYC are a perfectly competitive industry in long-run equilibrium. One day, the city starts imposing a $100 per month tax on each stand. How does this policy affect the number of pretzels consumed in the short run and in the long run?

question

decreasing average total cost

answer

A firm is a natural monopoly if it exhibits the following as its output increases:

question

P>MR and MR=MC

answer

For a profit-maximizing monopoly that charges the same price to all consumers, what is the relationship btwn price P, marginal revenue MR, and marginal cost MC?

question

stay the same, decrease

answer

If a monopoly's fixed costs increase, its price will _ and its profit will _.

question

a quantity that is too low and a price that is too high

answer

Compared to the social optimum, a monopoly firm chooses

question

some potential consumers who forgo buying the good value it more than its marginal cost

answer

The deadweight loss from monopoly arises because

question

consumer surplus

answer

When a monopolist switches from charging a single price to perfect price discrimination, it reduces

question

It takes its price as given by market conditions.

answer

Which of the following conditions does NOT describe a firm in a monopolistically competitive market?

question

soft drinks

answer

Which of the following goods best fits the definition of a monopolistic competition?

question

marginal revenue is greater than marginal cost

answer

A monopolistically competitive firm will increase its production if

question

price is greater than average total cost

answer

New firms will enter a monopolistically competitive market if

question

Price is greater than marginal cost

answer

What is true of a monopolistically competitive market in long-run equilibrium?

question

decrease, increase

answer

If advertising makes consumers more loyal to particular brands, it could _ the elasticity of demand and _ the markup of price over marginal cost

question

a small number of firms are acting strategically

answer

The key feature of an oligopolistic market is that

question

less than, equal to

answer

If an oligopolistic industry organizes itself as a cooperative cartel, it will produce a quantity of output that is _ the competitive level and _ the monopoly level.

question

less than, more than

answer

If an oligopoly does not cooperate and each firm chooses its own quantity, the industry will produce a quantity of output that is _ the competitive level and _ the monopoly level.

question

less than, more than

answer

As the number of firms in an oligopoly grows large, the industry approaches a level of output that is _ the competitive level and _ the monopoly level.

question

even if cooperation is better than the Nash equilibrium, each person might have an incentive not to cooperate

answer

The prisoners' dilemma is a two-person game illustrating that

question

prevent firms from acting in ways that reduce competition.

answer

The antitrust laws aim to

question

70 percent

answer

Approximately what percentage of US national income is paid to workers, as opposed to owners of capital and land?

question

the value of the marginal product of labor

answer

If firms are competitive and profit-maximizing, the demand curve for labor is determined by

question

1/2 cake per hour

answer

A bakery operating in competitive markets sells its output for $20 per cake and hires labor at $10 per hour. To maximize profit, it should hire labor until the marginal product of labor is

question

demand, right

answer

A technological advance that increases the marginal product of labor shifts the labor-_ curve to the _.

question

slowdown, slowdown

answer

Around 1973, the US economy experienced a significant _ in productivity growth, coupled with a(n) _ in the growth of real wages

question

Wages fall, and the rental price of capital rises

answer

A storm destroys several factories, thereby reducing the stock of capital. What effect does this event have on factor markets?

question

human capital

answer

Ricky leaves his job as a high school math teacher and returns to school to study the latest developments in computer programming, after which he takes a higher-paying job at a software firm. This is an example of

question

a compensating differential.

answer

Lucy and Ethel work at a local department store. Lucy, who greets customers as they arrive, is paid less than Ethel, who cleans the bathrooms. This is an example of

question

efficiency wages

answer

Fred runs a small manufacturing company. He pays his employees about twice what other firms in the area pay, even though he could pay less and still recruit all the workers he wants. He believes that higher wages make his workers more loyal and hard-working. This is an example of

question

signaling

answer

A business consulting firm hires Vivian because she was a math major in college. Her new job does not require any of teh mathematics she learned, but the firm believes that anyone who can graduate with a math degree must be very smart. This is an example of

question

workers differ in their attributes and the types of jobs they have

answer

Measuring how much discrimination affects labor market outcomes is difficult because

question

employers

answer

The forces of competition in markets with free entry and exit tend to eliminate wage differentials that arise from discrimination by

question

4, 45

answer

In the United States, the poorest fifth of the population earns about _ percent of all income, while the richest fifth earns about _ percent.

question

has less equality than most advanced nations but more equality than many developing countries

answer

When income inequality is compared across countries, one finds that the United States

question

the distortionary effect on work incentives is not too large

answer

A utilitarian believes that the redistribution of income from the rich to the poor is worthwhile as long as

question

the station of life each of us was born into is largely a matter of luck

answer

Rawls's thought the experiment of the "original position" behind the "veil of ignorance" is meant to draw attention to the fact that

question

individuals with low income get transfers from the gov

answer

A negative income tax is a policy under which

question

increase the effective marginal tax rate that the poor face

answer

If the benefits from an antipoverty program are phased out as an individual's income increases, then the program will

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