When the price of a good falls, there will be __________.
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Question1. Question :When the price of a good falls, there will be __________.an outward shift in the good’s demand curveboth an outward shift in the good’s demand curve and a movement along the good’s demand curvea movement along the good’s demand curveno change in quantity demandedQuestion 2. Question :If the price of Pepsi increases, then there will be ________ of Pepsi.a decrease in the supplyan increase in the supplyan increase in the quantity supplieda decrease in the quantity suppliedQuestion 3. Question :Refer to the figure below. The equilibrium price and quantity are __________.image$2 and 12 units$6 and 9 units$8 and 6 units$10 and 1 unitQuestion 4. Question :In the automobile industry, workers have just negotiated a new contract giving workers a large raise. There has also been an increase in the number of licensed drivers who are in the market for a new car. In the market for new automobiles, the effects that these changes will have on the equilibrium price and quantity are: __________.price will increase, and quantity will decreaseprice will increase, and the effect on quantity is indeterminateprice will decrease, and quantity will increaseprice will decrease, and the effect on quantity is indeterminateQuestion 5. Question :In a market, the rationing function of prices results in __________.long queues or waiting linesa price ceilingequilibriuma shortage or surplusQuestion 6. Question :If a price floor is set below the current market clearing price, then __________.a surplus must immediately occura shortage must immediately occurthere will be incentives for black markets to developquantity demanded will remain equal to quantity supplied at the current market clearing priceQuestion 7. Question :A result of a positive externality in the production of a good is that __________.the price system will over-allocate resources to the production of that good or servicethe price system will under-allocate resources to the production of that good or servicethe market supply will be too highthe market demand will be too highQuestion 8. Question :A fundamental aspect of public goods is that they __________.are just like private goods EXCEPT that everybody wants to consume the same amounthave positive externalitiesare characterized by the principle of rival consumptioncan be consumed jointly by many people simultaneouslyQuestion 9. Question :The free-rider problem is encountered when __________.someone benefits from the consumption of a public good without paying his or her full shareall individuals who consume a public good pay for itall goods consumed and produced are private goodsall individuals are willing to pay for what they consumeQuestion 10. Question :If a seller lowers the price of a product when demand is price inelastic, then the seller can expect revenues to __________.risefallstay the sameeither rise or fall, but it is impossible to determine whichQuestion 11. Question :When two goods are unrelated, __________.the demands for both goods will be inelasticcross price elasticity of demand will be 0cross price elasticity of demand will be negativecross price elasticity of demand will be positiveQuestion 12. Question :If one’s demand for peanut butter decreases as income rises, then the income elasticity of demand for the product is __________.elasticinelasticunit elasticnegativeQuestion 13. Question :On a hot summer day, a construction worker enters a McDonald’s fast-food restaurant. He orders the first Big Mac. He consumes it within 3 minutes. He then orders a second Big Mac and consumes it in 10 minutes. He eats only half of the third one in 18 minutes and throws away the rest. The store manager offers him the fourth for free. The construction worker says: “No thanks.” Why?For the construction worker, total utility increased at an increasing rate.Marginal utility increased at an increasing rate.Marginal utility declined as he consumed additional Big Macs.The law of diminishing marginal utility does not apply to consumption of Big Macs.Question 14. Question :If a consumer concludes that the marginal utility of the last dollar spent on vegetables exceeds the marginal utility of the last dollar spent on junk food, he will respond byconsuming relatively more junk food and fewer vegetablesconsuming relatively more vegetables and less junk foodconsuming equal amounts of vegetables and junk foodhalting consumption of junk food altogetherQuestion 15. Question :The substitution effect shows that __________.if the price of a good increases, consumers buy more of that good and less of all othersif the price of a good falls relative to all other goods, consumers buy less of that good and more of all othersif the price of a good falls, consumers buy less of all goodsif the price of a good rises, consumers buy less of that good and more of othersQuestion 16. Question :Economists generally define the short run as being __________.that period of time in which at least one of the firm’s inputs, usually plant size, is fixedthat period of time in which all inputs are variableany period of time less than one yearany period of time less than six monthsQuestion 17. Question :The marginal product of labor may increase rapidly initially as more __________.workers are able to specializetotal product is decreasingthe amount of other inputs is held constantworkers will get crowded in a fixed factoryQuestion 18. Question :A decrease in long-run average costs resulting from increases in output is __________.attributed to economies of scaleattributed to diseconomies of scaleattributed to constant returns to scaleattributed to the law of diminishing marginal productQuestion 19. Question :In a perfectly competitive industry __________.each firm is a price makerno buyer or seller can influence the market pricethere is apt to be a shortage of sellers of outputfirms can never make an economic profitQuestion 20. Question :A firm seeking to maximize economic profits should produce at the output at which __________.total revenue equals total costmarginal revenue equals marginal costaverage revenue equals average costmarginal revenue equals average revenueQuestion 21. Question :Price equals the minimum of long-run average cost __________.in a long-run equilibriumin a short-run equilibrium as well as in a long-run equilibriumwhenever average revenue equals marginal costalong a horizontal long-run supply curve but not along an upward sloping long-run supply curveQuestion 22. Question :To sell one more unit of a good, a monopolist must __________.lower the price on the last unit onlylower the price on all unitsraise the price only on the last unit soldraise the prices on all goodsQuestion 23. Question :Refer to the figure below. What is the profit-maximizing price and output?$9, 14$13, 14$11, 16$10, 17Question 24. Question :A monopolist engages in price discrimination __________.by charging a higher price to consumers whose demand is more elasticby charging a higher price when marginal cost is lowerby charging a lower price to consumers whose demand is more elasticby charging the same price to all consumersQuestion 25. Question :Compared to perfect competition, a monopolistically competitive market will produce ________ output and charge a ________ price.more; highermore; lowerless; higherless; lowerQuestion 26. Question :If firms in a monopolistically competitive industry are operating with positive economic profit, over time we would see __________.firms alter their advertising rates until they made at least normal profitssome firms entering the industry, causing the market supply curve to shift to the right, lowering pricesome firms entering the industry, causing the demand curves of the existing firms to shift to the leftsome firms entering the industry, causing the demand curves of the existing firms to shift to the rightQuestion 27. Question :The brand name of a firm __________.has nothing to do with the profitability of a firmhas been considered irrelevant by economists since profits for a monopolistic competitive firm are zero in the long-runrelates to consumers’ perception of product differentiation and to the market value of a firmis important in the short-run but not in the long-runQuestion 28. Question :Which of the following is NOT a necessary condition for oligopoly?Barriers to entryStrategic dependence of firmsDifferentiated productsEither a small number of firms or market dominance by a small number of firmsQuestion 29. Question :Refer to the payoff matrix below for the profits (in $ millions) of two firms (X and Y) making a decision to advertise or not. Which of the following is the outcome of the dominant strategy without cooperation?Both firm X and firm Y choose not to advertise.Both firm X and firm Y choose to advertise.Firm X chooses to advertise while firm Y chooses not to advertise.Firm X chooses not to advertise while firm Y chooses to advertise.Question 30. Question :Cheating in a cartel is more likely to occur if the industry __________.has a large number of firmshas homogeneous productshas easily observable priceshas little variation in pricesQuestion 31. Question :A firm will not hire additional workers once __________.it earns accounting profitsthe additional cost of a worker equals the additional revenue from the workertotal product is risingthe company reaches its breakeven output levelQuestion 32. Question :When the demand curve for an input is a derived demand this means that __________.the demand curve is derived from the demand for the final product being producedthe demand curve depends upon the MFCthe law of diminishing marginal product does not holdthe demand curve slopes upwardQuestion 33. Question :The equilibrium wage rate in an industry is determined by __________.finding where the market supply curve indicates that the substitution effect and income effect of a wage increase are offsettingthe intersection of the market demand curve for labor and the market supply curve for laborthe strength of the substitution effect relative to the elasticity of demand for laborwhether workers or management are better at negotiating
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