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48 Cards in this Set
- Front
- Back
The equilibrium solution for the payoff below matrix is:
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1.1 |
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Refer to the graph above. If this monopolist produces 700 units of output per day, it:
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can increase profit by producing less |
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The total satisfaction one gets from one's consumption of a product is called: |
Total Utility |
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Fifth worker is hired |
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Which of the following is not likely to change the supply of personal computers? |
An increase in consumers' incomes. |
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Refer to the graph below. Assuming a marginal external cost equal to the tax shown in the above graph, the market price necessary to induce consumers to purchase the efficient quantity each year is: |
P2
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To maximize profits, a perfectly competitive firm should produce where marginal: |
cost equals marginal revenue. |
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The supply of leather jackets would be expected to increase as a result of: |
a decrease in the cost of producing leather jackets. |
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Basic research is more likely to be funded by the federal rather than state and local government because |
Basic research is largely a public good; benefits flow to the whole world, not just the state. |
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The demand for a good is inelastic. Which of the following would be an explanation for this? |
The good is a necessity. |
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When Americans find that the euro is rising in price, it is getting: |
more expensive for Americans to buy European products but cheaper for Europeans to buy American products. |
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The opportunity cost for a student of attending college for a year is best measured by the: |
value of the next-best activity forgone by attending college. |
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An individual with a highly elastic demand for gasoline will: |
cut consumption more than an individual with a highly inelastic demand when price goes up. |
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Refer to the graph above. Suppose Country X exports agricultural goods to Country Y in exchange for industrial goods. This pattern of trade increases consumption in both countries only if: |
X's production possibility curve is B while Y's is A. |
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Rent control makes apartments: |
hard to find. |
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A perfectly competitive firm will be profitable if price at the profit-maximizing quantity is above: |
ATC |
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Oligopoly is characterized by: |
Few Sellers |
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The law of diminishing marginal productivity implies that the marginal product of a variable input: |
Eventually declines
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The consumption of an additional unit of a good provides additional satisfaction, which is called: |
marginal utility |
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A perfectly competitive firm's marginal revenue is: |
equal to the selling price. |
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Along a straight-line demand curve elasticity: |
rises as price rises. |
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If there is an improvement in technology one would expect |
a shift downward (or to the right) of the supply curve. |
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The demand for a good is elastic. Which of the following would be the most likely explanation for this? |
The good is a large portion of one's total income. |
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The best example of a positive externality is: |
education. |
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The profit-maximizing condition for a perfectly competitive firm is: |
P = MC. |
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An industry that has many sellers offering slightly differentiated products is called: |
monopolistically competitive. |
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A natural monopoly: |
occurs when a single firm can supply the entire market demand for a product at a lower average total cost than would be possible if two or more firms supplied the market. |
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Which policy is likely to be the most efficient in dealing with automobile emission pollution? |
An emission tax |
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Along a downward-sloping straight line demand curve beginning at the price where demand intersects the price axis, as price declines revenue |
rises then declines. |
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What do economists mean when they say there is "market failure"? |
Free markets yield results that economists do not consider socially optimal. |
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Refer to the graph above. Areas C and D represent: |
the loss of surplus by consumers resulting from a monopoly. |
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Your opportunity cost of taking this course is: |
the net benefit of the activity you would have chosen if you had not taken the course. |
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If the U.S. dollar appreciates against the Japanese yen, then: |
Japanese goods will be cheaper in the United States |
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In general, the greater the elasticity the: |
larger the responsiveness of quantity to changes in price. |
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The unwillingness of individuals to share in the cost of a public good is called the: |
free rider problem. |
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A perfectly competitive firm in the long run: |
makes zero economic profits. |
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Refer to the graph above. If government establishes a minimum wage at $5.15 per hour: |
the number of job seekers will exceed the number of job vacancies, resulting in some unemployment. |
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Countries gain from trade by producing: |
the goods they can produce at the lowest opportunity cost. |
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The optimal quantity of pollution control occurs at the point where the: |
marginal social cost equals the marginal social benefit of pollution |
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The exchange rate is the |
price of one currency in terms of another. |
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Refer to the graph above. The areas that represent the net gain to society of eliminating monopoly are: |
D and B. |
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Suppose a monopolist is at the profit-maximizing output level. If the monopolist sells another unit of output, then: |
producer surplus falls but consumer surplus rises. |
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If a positive externality exists in the provision of education when education is provided in a perfectly competitive market without government intervention, then at the market equilibrium level of education: |
additional net gains to society are possible by raising the level of education. |
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The prisoner's dilemma is a well-known game in which: |
independent action is not necessarily the best joint action, but is the best independent action |
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If a negative externality is to be internalized to the decision maker the |
producers' marginal costs should be increased by an amount equal to the marginal external cost resulting from production of the good. |
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New York City has been experiencing a housing emergency for quite some time. Apartments are difficult to come by. In fact, the vacancy rate has been below 5 percent since World War II. The most likely cause of the housing emergency is: |
a price ceiling on rent lower than equilibrium price. |
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If a positive externality is to be taken full advantage of the: |
consumer of the good should receive a subsidy equal to the marginal external benefit resulting from production (or consumption) of the good. |
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At the socially optimum quantity of production price equals: |
marginal cost. |