Sample Final Econ Essay Example

Sample Final Econ Essay Example Sample Final Econ Paper Sample Final Econ Paper A unapologetically competitive industry is characterized by a. NY firms, differentiated products, and barriers to entry. B. Many firms, differentiated products, and free entry. A few firms, identical products, and free entry. D. A few firms, differentiated products, and barriers to entry. 3. If the rent for apartments in New York City were fixed below the current price, then we would expect a. An increase in the number of people wanting to rent apartments in New York City. B. A decrease in the number of people wanting to rent apartments in New York City. C. An increase in the number of apartments available for rent in New York City. D. None of the above is correct. 4. If an increase in income results in a decrease in the quantity demanded off good, then for that good, the a. Cross-price elasticity of demand is negative. Price elasticity of demand is elastic. Income elasticity of demand is negative. Income elasticity of demand is positive. 5. If two goods are complements, their cross-price elasticity will be a. Positive. Negative. Equal to the difference between the income elasticity of demand for the two goods. 6. Which of these assumptions is often realistic for a firm in the short run? A. The firm can vary both the size of its factory and the number of workers it employs. The firm can vary the size of its factory but not the number of workers it employs. C. The firm can vary the number of workers it employs but not the size of its factory. D. The firm can vary neither the size of its factory nor the number of workers it employs. 7. A production function describes how a firm maximizes profits. How a firm turns inputs into output. The minimal cost of producing a given level of output. The relationship between cost and output. Table 13-1 Number of Workers Total Output Marginal Product 2 3 50 4 8. Refer to Table 13-1. What is total output when 1 worker is hired? . 120 160 9. On a 100-acre farm, a farmer is able to produce 3,000 bushels of wheat when he hires 2 workers. He is able to produce 4,400 bushels of wheat when he hires 3 workers. Which of the following possibilities is consistent with the property of diminishing marginal product? A. The farmer is able to produce 5,600 bushels of wheat when he hires 4 workers. B. The farmer is able to produce 5,800 bushels of wheat when he hires 4 workers. C. The farmer is able to produce 6,000 bushels of wheat when he hires 4 workers. D. Any of the above could be correct. Table 13-5 Number of Workers Output ,oho 2,000 2,700 3,200 5 3,500 6 3,600 1,000 units. 00 units. 700 units. 500 units. Figure 13-10 1 1 . Refer to Figure 13-10. The three average total cost curves on the diagram labeled TACT , TACT, and TACT most likely correspond to three different a. Time horizons. Products. Firms. Factory sizes. Table 13-14 Listed in the table are the long-run total costs for three different firms. Quantity Firm A Firm B 200 Firm C 300 1,500 12. Refer to Table 13-14. Which firm is experiencing discomposes of scale? Firm A only Firm B only Firm C only Firm A and Firm B only 13. Suppose you make Jewelry. If the price of gold falls, then we would expect you to a. E willing and able to produce less Jewelry than before at each possible price. B. Be willing and able to produce more Jewelry than before at each possible price. C. Face a greater demand for your Jewelry. Face a weaker demand for your Jewelry. 14. Workers at a bicycle assembly plant currently earn the mandatory minimum wage. If the federal government increases the minimum wage by $1. 00 per hour, then it is likely that the a. Demand for bicycle assembly workers will increase. Supply of bicycles will shift to the right. Supply of bicycles will shift to the left. Rim must increase output to maintain profit levels. 5. A improvement in production technology will shift the supply curve to the right. Supply curve to the left. Demand curve to the right. Demand curve to the left. 16. If a good is inferior, then an increase in income will result in a. An increase in the demand for the good. A decrease in the demand for the good. A movement down and to the right along the demand curve for the good. D. A movement up and to the left along the demand curve for the good. 17. Suppose that a decrease in the price of good X results in fewer units of good Y being demanded. This implies that X and Y are a. Complementary goods. Aroma goods. Inferior goods. Substitute goods. 18. Suppose the American Medical Association announces that men who shave their heads are less likely to die of heart failure. We could expect the current demand for a. Hair gel to increase. Razors to increase. Combs to increase. Shampoo to increase. 19. You love peanut butter. You hear on the news that 50 percent of the peanut crop in the South has been wiped out by drought and that this will cause the price of peanuts to double by the end of the year. As a result, your demand for peanut butter a. Ill increase but not until the end of the year. Increases today. Shifts left today. 20. Ford Motor Company announces that next month it will offer $3,000 rebates on new Mustangs. As a result of this information, todays demand curve for Mustangs a. Shifts to the right. Shifts to the left. Shifts either to the right or to the left, but we cannot determine the direction of the shift from the given information. D. Will not shift; rather, the demand curve for Mustangs will shift to the right next month. Table 4-3 Price Berets Demanded Ermines Groves Scars $0. 00 20 16 8 $0. 50 18 12 $1. 00 14 10 $1. 50 2. 00 $2. 50 21. Refer to Table 4-3. If these are the only four buyers in the market, then the market quantity demanded at a price of $1 is a. 4 units. 7. 75 units. 14 units. 31 units. 22. Suppose that gasoline prices increase dramatically this month. Lola commutes 100 miles to work each weekday. Over the next few months, Lola drives less on the weekends to try to save money. Within the year, she sells her home and purchases one only 10 miles from her place of employment. These examples illustrate the importance of a. The availability of substitutes in determining the price elasticity of demand. B. Stickiest versus a luxury in determining the price elasticity of demand. C. The definition of a market in determining the price elasticity of demand. D. The time horizon in determining the price elasticity of demand. 23. Holding all other forces constant, if decreasing the price of a good leads to an increase in total revenue, then the demand for the good must be a. Unit elastic. Inelastic. Elastic. None of the above is correct because a price increase always leads to an increase in total revenue. 24. Which of the following statements about oligopolies is not correct? A. An oligopolies market has only a few sellers. The actions of any one seller can have a large impact on the profits of all other sellers. C. Oligopolies firms are interdependent in a way that competitive firms are not. D. Unlike monopolies and unapologetically competitive markets, oligopolies prices do not exceed their marginal revenues. 25. A group of firms that act in unison to maximize collective profits is called unapologetically competitive industry. Monopoly. Cartel. 26. A movie theater can increase its profits through price discrimination by charging a higher price to adults and a lower price to children if it a. N prevent children from buying the lower-priced tickets and selling them to adults. Has some degree of monopoly pricing power. Can easily distinguish between the two groups of customers. All of the above are correct. 27. A monopoly is an inefficient way to produce a product because a. It can earn both short-run and long-run profits. It faces a downward-sloping demand curve. The cost to the monopolist of producing one more unit exceeds the value of that unit to potential buyers. D. It produces a smaller level of output than would be produced in a competitive market.