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64.
Refe r to the figure ab ove. Thids imperfectly competitive firm's demand function gives
info rmation that is used to determi ne:
If you w ere to d raw the margi nal revenue curve in this figure it woul d:
A. lie on top of the demand curve.
B. intersect the dem and curve at a price of $35.
C. intersect the horizontal axis at a quantity of 35.
D. have a slope equal to the reciprocal of the slope of the d emand cu rve
66.
Refe r to the figure above. If this firm were to sell 20 units of outp ut, its total revenue would
be:
A. $50.
B. $100.
C. $140.
D. $1,000.
67. Refe r to the figure ab ove. If this firm were to incre ase sales from 20 units to 30 units of
output, its
margi nal revenue woul d be:
A. $20.
B. $200.
C. $0.
D. -$20.
68. Refer to the figure above. If this monopolistic firm's margial cost is constant at $30, its profit
maximizing output is:
A. 50 units .
B. 40 units .
C. 20 units .
D. 30 units .
71. Once a firm has determined the quantity of output it wishes to sell, the price it can charge
is determined by:
A. the cost of making the product.
B. the demand curve that the firm faces.
C. market demand for the product minus cost.
D. the explicit cost of making the product plus the implicit costs incurred by the firm owner
72. If the demand curve facing the monopolist is Price = 70 - 14 Q, then the
slope of its marginal revenue curve is:
A. -28.
B. -14.
C. -7.
D. -1.
76. Because the monopolist c harges a price in excess of marginal costs, it must be the case
that the
monopolist:
82.
Refe r to the figure ab ove. The firm illustrat ed in the g raph is a(n):
A. centralized planne r.
B. black market suppli
er. C. perfect comp
etitor.
D. natural monopolist.
83. Refe r to the figure ab ove. If the firm choos es to operate, to profit maximize, the firm will
choose to produce _
_ units and charge a price of _
.
A. 3.5; $33.5 0
B. 7; $19.3 0
C. 3.5; $22.5 0
D. 3.5; $5
84. Refer to the table above. The marginal reve ue of the third unit of output is:
A. $24.
B. $6.
C. $2.
D. $0.
85. Refe r to the table a bove. The marginal reve nue of the fifth unit of
output is:
A. $0.
B. $2.
C. $6.
D. -$2.
86. Refer to the table above. The profit maximizing quantity and price for this monopolist are:
A. 1 unit an d $10.
B. 2 units and $9.
87.Refe r to the figure ab ove. The profit maximizing price for the monopolist is :
A. C.
B. G.
C. B.
D. E.
88.Refe r to the figure ab ove. At the profit-maximizing level of output, the monopolist
collects total
reven ues equal to the area
A. 0BKA.
B. 0CEA.
C. 0GIH.
D. 0GLA.
89.
Refe r to the figure ab ove. The profit-m aximizing level of outp ut for the monopolist is _
and
the profit-m aximizing price is _
.
A. 50; $20
B. 33.33; $13.33
C. 33.33; $26.67
D. 50; $26.67
90. The reason economists consider monopoly socially undesirable is that the monopolist:
A. always ea rns excessive profits.
B. can charge any price he wants .
C. exploits the inelastic nature of demand.
D. produces less than the socially effic ient amount
108. Price discrimination means chargi ng:
A. higher p rices to women and mino rities.
B. different p rices to different consumers because p roduction costs
are different.
C. the same price to all consume rs even if production costs are different.
D. different p rices to different consumers when production costs are the
same.
109. Perfect price disc rimination occ urs w hen:
A. each buy er p ays his or her margi nal cost.
B. most buyers pay their reservation p rice.
C. each buy er p ays exactly his or her rese
rvation p rice.
D. the buye r with the highest reservation price sets the mark et
price.
111. Cam pus Bookstore is the only textbook s upplie r in the to wn, a profit-maximizing
business. The tabl e below represents the rese rvatio n prices for the eight students
enrolled in th e class for which this book is required.
Assume that the marginal and average total cost for each b ook is $12.
Refe r to the inform ation above. H ow much s hould the b ookstore charge for this book if
it must charge a single p rice to all c ustomers?
A. $36
B. $18
C. $24
D. $12
112. Assume that the marginal and average total cost for each b ook is $12.
Refe r to the inform ation above. At the profit maximizing price h ow m any books will they
sell?
A. 3
B. 4
C. 5
D. 7
113. Assume that the marginal and average total cost for each b ook is $12.
Refe r to the inform ation above. W hat will be the economic profit for the bookstore when
selling its profit-m aximizing quantity?
A. $60
B. $120
C. $180
D. $240
114.Assume that the marginal and average total cost for each b ook is $12.
Refe r to the inform ation above. If the bookstore is selling the socially effic ient number of bo
oks, how many will it sell?
A. 8
B. 5
C. 6
D. 7
115. Assume that the marginal and average total cost for each b ook is $12.
Refe r to the inform ation above. If the bookstore can charge two different pric es for this
book, how many books will the bookstore sell?
A. More than 8.
B. Less than 5.
C. Exactly 5.
D. More than 5.
116. Assume that the marginal and average total cost for each b ook is $12.
If the bookstore can charge two different prices for this book, the economic profit for the
bookstore is
A. greater than $120
B. less than $120
C. exactly $120
D. exactly
115. Campus Bookstore is the only textbook supplier in the town, a profit-maximizing
business. The table
below represents the reservation prices for the eight students enrolled in the class for which
this book
is required.
Assume that the marginal and average total cost for each book is $12.
Refer to the information above. If the bookstore can charge two different pric es for this book,
the list
price for the book will be _____ and the discounted price for the book will be ____.
A. $18; less than $12
B. $60; $36
C. $36; less than $36
D. more than $36; less than $12
116. Campus Bookstore is the only textbook supplier in the town, a profit-maximizing
business. The table
below represents the reservation prices for the eight students enrolled in the class for which
this book
is required.
Assume that the marginal and average total cost for each book is $12.
Refer to the information above. If the bookstore can charge two different pric es for this book,
how
many books will the bookstore sell?
A. More than 8.
B. Less than 5.
C. Exactly 5.
D. More than 5.
117. Campus Bookstore is the only textbook supplier in the town, a profit-maximizing
business. The table
below represents the reservation prices for the eight students enrolled in the class for which
this book
is required.
Assume that the marginal and average total cost for each book is $12.
If the bookstore can charge two different prices for this book, the economic profit for the
bookstore is
______.
A. greater than $120
B. less than $120
C. exactly $120
D. exactly $48
CHAPTER 9
41. An agreement among firms to restrict production with the goal of earning economic profits
is a:
A. pure monopoly.
B. oligopoly.
C. cartel.
D. duopoly.
42. Most cartels end or cease to be effective because:
A. of enforcement of antitrust legislation.
B. of the incentive to cheat on the cartel agreement.
C. the dominant member firm buys out the other firms.
D. consumers discover the cartel agreement and buy instead from other firms.
43. Cartels would be more stable if:
A. firms that cheat on the agreement could be legally punished.
B. firms that cheat on the agreement were better informed about the value of agreement.
C. demand for the output was more variable.
D. the cartel profit were higher than the profit each individual firm could earn without the
cartel.
44. Quick Buck and Pushy Sales produce and sell identical products and face zero marginal
and average
cost. Below is the market demand and marginal revenue curves for the product.
Refer to the figure above. The profit-maximizing quantity for a monopolist with this demand
curve is
_____ units, which the monopolist would sell for ______.
A. 3,000; $1.00
B. 1,000; $1.50
C. 2,000; $1.50
D. 1,000; $2.50
45. Quick Buck and Pushy Sales produce and sell identical products and face zero marginal
and average
cost. Below is the market demand and marginal revenue curves for the product.
Refer to the figure above. If Quick Buck and Pushy Sales decide to collude and work as a pure
monopolist so that each firm will produce half the quantity demanded by the market, what will
be the
economic profit for Quick Buck?
A. $1,000
B. $1,500
C. $2,000
D. $3,000
46. Quick Buck and Pushy Sales produce and sell identical products and face zero marginal
and average
cost. Below is the market demand and marginal revenue curves for the product.
Refer to the figure above. Quick Buck and Pushy Sales have agreed to each produce half the
profitmaximizing monopolist quantity, set the monopoly price and split the profits evenly.
Suppose Quick
Buck cheats on Pushy Sales and reduces its price to $1.00 each while Pushy Sales continues to
comply with the collusive agreement. Quick Buck would then sell _____ units and Pushy Sales
would
sell ______ units.
A. 0; 3,000
B. 1,500; 1,500
C. 2,000; 1,000
D. 3,000; 0
47. Quick Buck and Pushy Sales produce and sell identical products and face zero marginal
and average
cost. Below is the market demand and marginal revenue curves for the product.
Refer to the figure above. Quick Buck and Pushy Sales have agreed to each produce half the
profitmaximizing monopolist quantity, set the monopoly price and split the profits evenly.
Suppose Quick
Buck cheats on Pushy Sales and reduces its price to $1.00 each while Pushy Sales continues to
comply with the collusive agreement. What will be the economic profit for Quick Buck?
A. $6,000
B. $1,500
C. $2,000
D. $3,000
48. Quick Buck and Pushy Sales produce and sell identical products and face zero marginal
and average
cost. Below is the market demand and marginal revenue curves for the product.
Refer to the figure above. Quick Buck and Pushy Sales have agreed to each produce half the
profitmaximizing monopolist quantity, set the monopoly price and split the profits evenly.
Suppose Quick
Buck cheats on Pushy Sales and reduces its price to $1.00 and Pushy Sales matches the price
cut.
Consumers are evenly split between the two firms. What will be the economic profit for Quick
Buck?
A. $1,000
B. $1,500
C. $2,000
D. $3,000
49. Suppose Acme and Mega produce and sell identical product with zero marginal and
average cost.
Following is the market demand and marginal revenue curves for the product.
Refer to the figure above. The profit-maximizing quantity and price for a monopolist with this
demand
curve are _____.
A. 50 units and $2
B. 100 units and $2
C. 50 units and $3
D. 100 units and $1
50. Suppose Acme and Mega produce and sell identical product with zero marginal and
average cost.
Following is the market demand and marginal revenue curves for the product.
Refer to the figure above. If Acme and Mega decide to collude and work as a pure monopolist
such
that each firm will produce half the quantity demanded by the market, what will be the
economic profit
for Mega?
A. $0
B. $50
C. $100
D. $150
51. Suppose Acme and Mega produce and sell identical product with zero marginal and
average cost.
Following is the market demand and marginal revenue curves for the product.
Refer to the figure above. Suppose Mega and Acme have colluded to work as a pure
monopolist, but
Mega cheats on Acme and reduces its price to $1.00 each. Mega would then sell ____ units and
Acme would sell _____ units.
A. 150; 50
B. 100; 50
C. 150; 0
D. 100; 0
52. Suppose Acme and Mega produce and sell identical product with zero marginal and
average cost.
Following is the market demand and marginal revenue curves for the product.
Refer to the figure above. Suppose Mega and Acme have colluded to work as a pure
monopolist, but
Mega cheats on Acme and reduces its price to $1.00 each. How much profit will Mega earn?
A. $75
B. $100
C. $150
D. $200
53. Suppose Acme and Mega produce and sell identical product with zero marginal and
average cost.
Following is the market demand and marginal revenue curves for the product.
Refer to the figure above. Suppose Mega and Acme have colluded to work as a pure
monopolist, but
Mega cheats on Acme and reduces its price to $1.00 each. If Acme matches the price cut and
customers are evenly split between the two firms, what will Acme's economic profit be?
A. $75
B. $100
C. $150
D. $200
54. OPEC is an example of a:
A. monopsony.
B. cartel.
C. monopoly.
D. duopoly.
CHPATER 10
18. Suppose that a vaccine is developed for a highly contagious strain of flu. The likelihood
that anyone
will get this flu decreases as more people receive the vaccine. One of the demand curves in
the
diagram reflects private benefits and the other reflects social benefits.
Refer to the figure above. Private incentives will lead to _____ people receiving the vaccine at a
cost
of _____.
A. 75; $80
B. 75; $50
C. 50; $60
D. 50; $90
19. Suppose that a vaccine is developed for a highly contagious strain of flu. The likelihood
that anyone
will get this flu decreases as more people receive the vaccine. One of the demand curves in
the
diagram reflects private benefits and the other reflects social benefits.
Refer to the figure above. The dollar value of the external ______ is _____ per vaccine.
A. benefit; $30
B. cost; $20
C. benefit; $20
D. benefit; $75
20. Suppose that a vaccine is developed for a highly contagious strain of flu. The likelihood
that anyone
will get this flu decreases as more people receive the vaccine. One of the demand curves in
the
diagram reflects private benefits and the other reflects social benefits.
Refer to the figure above. Private benefits are measured by ______, and social benefits are
measured
by _____.
A. D-1; MC
B. D-2; MC
C. D-1; D-2
D. D-2; D-1
21. Suppose that a vaccine is developed for a highly contagious strain of flu. The likelihood
that anyone
will get this flu decreases as more people receive the vaccine. One of the demand curves in
the
diagram reflects private benefits and the other reflects social benefits.
Refer to the figure above. If the flu vaccine is provided by private markets, deadweight loss
will be
_______.
A. zero
B. $375
C. $500
D. $1,125
22. Suppose that a vaccine is developed for a highly contagious strain of flu. The likelihood
that anyone
will get this flu decreases as more people receive the vaccine. One of the demand curves in
the
diagram reflects private benefits and the other reflects social benefits.
Refer to the figure above. The socially optimal number of vaccines is _______.
A. 50
B. 75
C. 125
D. 150
23. Suppose that a vaccine is developed for a highly contagious strain of flu. The likelihood
that anyone
will get this flu decreases as more people receive the vaccine. One of the demand curves in
the
diagram reflects private benefits and the other reflects social benefits.
Refer to the figure above. This externality could most effectively be corrected by:
A. taxing vaccines.
B. encouraging people to negotiat e private payments to those who receive the vaccine.
C. subsidizing vaccines.
D. free provision of 275 vaccines
24. The major implication of the _______ is that individuals can solve many externalities if they
can buy
and sell the right to generate the externality.
A. Sherman Act
B. Coase Theorem
C. tragedy of the commons
D. prisoner's dilemma
CAHPTER 11
14. This graph illustrates the marginal costs and marginal benefits of acquiring information
before making
a major purchase.
If the original curves are MB and MC, the equilibrium value and quantity of information about
this
product are
A. V2, I2.
B. V3, I2.
C. V1, I1.
D. V3, I1
15. This graph illustrates the marginal costs and marginal benefits of acquiring information
before making
a major purchase.
Suppose the marginal cost and marginal benefit curves were MC and MB several decades ago.
However, because information about this product is now available on line, the
A. optimal value of information will increase.
B. optimal amount of information will increase.
C. optimal amount of information will stay the same, but it will cost less to acquire.
D. demand for information will increase.
16. This graph illustrates the marginal costs and marginal benefits of acquiring information
before making
a major purchase.
Suppose this graph describes a town in which the only way to gather any information about
the good
is through Consumer Reports . If the subscription price of Consumer Reports increases
A. the marginal benefit curve will shift from MB to MB1.
B. the marginal cost curve will shift from MC 2 to MC.
C. the marginal benefit curve will shift from MB1 to MB.
D. the marginal cost curve will shift from MC to MC2.
17.
Refer to the figure above. If the original curves are MB1 and MC1, the equilibrium value of
information
is ________ and the equilibrium quantity is _______.
A. $10; 8.
B. $15; 7.
C. $15; 9.
D. $20; 8.
18.
Refer to the figure above. The growth of access to the Internet would cause
A. the marginal benefit curve to shift from MB2 to MB1.
B. the marginal benefit curve to shift from MB1 to MB2.
C. the marginal cost curve to shift from MC2 to MC1.
D. the marginal cost curve to shift from MC1 to MC2.
19.
Refer to the figure above. If the relevant curves are MC1 and MB2, a rational consumer will
acquire
_____ units of information, the amount for which marginal benefit for information is _____ its
marginal
cost.
A. 7, equal to
B. 7, more than
C. 8, more than
D. 8, equal to
20.
Refer to the figure above. Suppose MC1 is the marginal cost and MB1 is the marginal benefit
curve for
information about a flat screen TV. Should a rational consumer pay $20 to get 8 units of
information?
A. Yes, since at this price the marginal benefit of acquiring information exceeds its marginal
cost.
B. No, since at this price the marginal cost of acquiring information exceeds its
marginal benefit.
C. Yes, since at this price the marginal benefit of acquiring information equals its marginal
cost.
D. No, since at this price the marginal benefit of acquiring information exceeds its marginal
cost.
21. Growing technological sophistication of consumer goods tends to
A. shift the marginal cost of information curve to the right.
B. shift the marginal benefit of information curve to the right.
C. shift the marginal benefit of information curve to the left.
D. shift both the marginal benefit and the marginal cost of information to the right.
CAHPTER 12
43. Assume that this graph illustrates a perfectly competitive labor market.
C. $20; 175
D. $20; 100
44. Assume that this graph illustrates a perfectly competitive labor market.
According to this graph, ____ worker hours would be performed on a volunteer (unpaid) basis.
A. 0
B. 50
C. 100
D. 250
45. Assume that this graph illustrates a perfectly competitive labor market.
Suppose a minimum wage law required the wage to be at least $20 in this market. If that
happened,
A. there would be an excess supply of worker hours.
B. there would be excess demand for worker hours.
C. demand for worker hours would shift to the right.
D. there would be no change in the hourly wage paid or the number of worker hours hired.
46. Assume that this graph illustrates a perfectly competitive labor market.
47. Assume that this graph illustrates a perfectly competitive labor market.
50. Suppose that this graph describes the current labor market for high school teachers:
Suppose supply were to shift to the left. Why might that happen?
A. Distance learning and computer technology replace human teachers.
B. Women enter the workforce in greater numbers.
C. Immigration by families with children increase the need for more teachers.
D. More attractive employment opportunities become available in health careers.
51. Suppose that this graph describes the current labor market for high school teachers:
Given the wage equal to W*, immediately following a shift of the supply curve to the left
A. there will be a shortage of certified teachers.
B. there will be an excess supply of certified teachers.
C. the reservation wage of each remaining teacher will fall.
D. the market will be in equilibrium.
52. Suppose that this graph describes the current labor market for high school teachers:
Suppose the market were to re-equilibrate following a shift of the supply curve to the left. At
the new
equilibrium, wages would be
A. higher, and more teachers would be hired.
B. higher, and fewer teachers would be hired.
C. the same, but fewer teachers would be hired.
D. the same, and more teachers would be hired
.
53. A reduction in the workers' marginal productivity would result in
A. an increase in labor supply.
B. an increase in equilibrium employment level.
C. a reduction in the equilibrium wage rate.
D. a decrease in labor supply.
54. A decrease in demand for a firm's output results in a(n)
A. increase in labor supply.
B. decrease in labor demand.
C. decrease in labor supply.
D. increase in labor demand.
CHAPTER 13
16.
Refer to the figure above. If consumers had to pay the marginal cost for the medical
treatment, they
would choose to stay _____ day(s) in the hospital.
A. 0
B. 1
C. 2
D.3
17.
Refer to the figure above. If all consumers had first-dollar medical insurance for the medical
treatment, they would choose to stay ____ day(s) in the hospital.
A. 4
B. 1
C. 2
D. 3
18.
Refer to the figure above. The welfare loss due to a first-dollar insurance plan for the medical
treatment is ________.
A. $100
B. $200
C. $300
D. $400
19. To reduce the social loss due to first-dollar insurance coverage of the medical treatment,
A. the marginal cost should be reduced.
B. the marginal cost should be increased.
C. the marginal benefit should be reduced.
D. the consumer must bear some of the marginal cost
20. Lihat gambar di atas. MC1 Misalkan adalah biaya marjinal dan MB1 adalah kurva manfaat
marjinal untuk informasi tentang TV layar datar. Haruskah konsumen rasional membayar $ 20
untuk mendapatkan 8 unit informasi?
A. Ya, karena pada harga ini manfaat marjinal memperoleh informasi melebihi biaya marjinal.
B. Tidak, karena pada harga ini biaya marjinal memperoleh informasi melebihi manfaat
marjinal nya.
C. Ya, karena pada harga ini manfaat marjinal memperoleh informasi sama dengan biaya
marjinal.
D. Tidak, karena pada harga ini manfaat marjinal memperoleh informasi melebihi biaya
marjinal.
21. Tumbuh kecanggihan teknologi , barang konsumsi cenderung
A. menggeser biaya marjinal kurva informasi ke kanan.
B. menggeser manfaat marjinal kurva informasi ke kanan.
C. menggeser manfaat marjinal kurva informasi ke kiri.
D. menggeser kedua manfaat marjinal dan biaya marjinal informasi ke kanan.
Chapter 12
43. Asumsikan bahwa grafik ini menggambarkan pasar tenaga kerja sangat kompetitif.
Keseimbangan di pasar tenaga kerja ini adalah dengan upah dari _______ dan kerja sekitar
__________
jam kerja.
A. $ 30; 100
B. $ 30; 150
C. $ 20; 175
D. $ 20; 100
44. Asumsikan bahwa grafik ini menggambarkan pasar tenaga kerja sangat kompetitif.
Menurut grafik ini, ____ jam pekerja akan dilakukan pada sukarelawan (dibayar) dasar.
A. 0
B. 50
C. 100
D. 250
45. Asumsikan bahwa grafik ini menggambarkan pasar tenaga kerja sangat kompetitif.
Misalkan hukum upah minimum upah untuk setidaknya $ 20 di pasar ini. Jika itu terjadi,
A. akan ada kelebihan pasokan jam kerja.
B. akan ada kelebihan permintaan untuk jam kerja.
C. permintaan jam pekerja akan bergeser ke kanan.
D. tidak akan ada perubahan dalam upah per jam dibayar atau jumlah jam upahan.
46. Asumsikan bahwa grafik ini menggambarkan pasar tenaga kerja sangat kompetitif.
Chapter 13
16.
Lihat gambar di atas. Jika konsumen harus membayar biaya marjinal untuk
perawatan medis, mereka akan memilih untuk tinggal _____ hari (s) di rumah
sakit.
A. 0
B. 1
C. 2
D. 3
17.
B. $ 200
C. $ 300
D. $ 400
19. Untuk mengurangi kerugian sosial akibat asuransi pertama dolar dari
perawatan medis,
A. biaya marjinal harus dikurangi.
B. biaya marjinal harus ditingkatkan.
C. manfaat marjinal harus dikurangi.
D. konsumen harus menanggung sebagian dari biaya marjinal.
20.Lihat gambar di atas. Apa biaya marjinal satu kunjungan tambahan ke kantor dokter?
A. $ 50
B. $ 100
C. $ 150
D. $ 200
95.For many pure public goods like fireworks displays , weather forecasts, and television
broadcasts the margi nal cost of serving one mo re consum er is _ _, and therefore the optim
al quantity occurs when
A. zero; provision is infinite.
B. determined by average cost rath er than ma rginal c ost; price equals
average cost. C. greater th an average cost; governm ent provides the g
ood.
D. zero; margin al benefit equals zero.
33. The 20 resid ents of the village of To wneburg are consi deri ng hosting a fireworks show
next summer.
The total cost of the show is estimated to be $1,000 + $10 per u nit. Each resident's
dem and for fireworks is identical: P = 50 - 2 * units as shown below:
Cheap Charlie is on e of Towne burg's 20 resid ents. While Charlie enjoys fireworks as
much as the
next Towneburge r, when the fireworks fund-raising campai gn kic ks off, he claims
to hate them. Cheap Charlie is trying to
A. free ride.
B. rent seek.
C. force the village to b e more efficient.
D. log-roll.
85.What is the x-axis intercept of the village's collective demand for fireworks ?
A. 25
B. 50
C. 100
D. 500