Ashworth Semester Exam C13S Microeconomics

C13S : Microeconomics
Question 1
There is a negative relationship between two variables if:
they move in opposite directions.
they move in the same direction.
one variable changes and the other does not.
neither variable moves.

Question 2
A firm produces its product using both capital and labor. When it does not change its capital usage, but doubles its labor input, its output increases by less than 50 percent. Which of the following is the most likely explanation of this finding?
The principle of opportunity cost
The principle of diminishing returns
The marginal principle
The spillover principle

Question 3
The price of iPhones has fallen dramatically. Which of the following is likely to happen?
The quantity of iPhones supplied will decrease.
The quantity of iPhones supplied will increase.
The supply of iPhones will decrease.
The supply of iPhones will increase.

Question 4
If the demand for school ball caps is inelastic, an increase in price will result in:
a decrease in profits.
an increase in total revenue.
a decrease in total revenue.
an increase in the quantity demanded.

Question 5
An electrician licensing program in the state of North Carolina requires each electrician to obtain a license and renew it each year. Which of the following is a result of having the licensing program in North Carolina?
A decrease in total surplus
Excess demand for electrical service
An increase in the quality of electrician
All of the above are a result of the licensing program.

Question 6
The self-interest theory of government was suggested by:
James Buchanan.
Charles M. Tiebout.
bureaucrats.
the European Union.

Question 7
Suppose that the only input used in the generation of solar energy is sunlight, which has a zero cost. The average total cost of producing electricity is:
zero.
equal to the marginal cost.
equal to the average fixed cost.
immeasurably high.

Question 8
When a firm increases output and the costs rise disproportionately slower, then the long-run average cost curve is __________ and the firm is experiencing __________ .
horizontal; constant returns to scale
downward sloping; constant returns to scale
upward sloping; diseconomies of scale
downward sloping; economies of scale

Question 9
Limit pricing occurs when a firm sets price:
equal to marginal cost.
equal to average cost.
at different amounts for different groups of consumers.
so low that other firms are prevented from entering the market.

Question 10
Which of the following statements about featherbedding is correct?
It could increase production costs, resulting in higher prices for products.
The quantity of labor demanded by firms could actually decrease.
It could lead to a lower wage and smaller employment in the long run.
All of the above.

    

  

Ashworth Semester Exam C13V Microeconomics (New)

There is a negative relationship between two variables if:
they move in opposite directions.
they move in the same direction.
one variable changes and the other does not.
neither variable moves.

A firm produces its product using both capital and labor. When it does not change its capital usage, but doubles its labor input, its output increases by less than 50 percent. Which of the following is the most likely explanation of this finding?
The principle of opportunity cost
The principle of diminishing returns
The marginal principle
The spillover principle

The price of iPhones has fallen dramatically. Which of the following is likely to happen?
The quantity of iPhones supplied will decrease.
The quantity of iPhones supplied will increase.
The supply of iPhones will decrease.
The supply of iPhones will increase

If the demand for school ball caps is inelastic, an increase in price will result in:
a decrease in profits.
an increase in total revenue.
a decrease in total revenue.
an increase in the quantity demanded.

An electrician licensing program in the state of North Carolina requires each electrician to obtain a license and renew it each year. Which of the following is a result of having the licensing program in North Carolina?
A decrease in total surplus
Excess demand for electrical service
An increase in the quality of electrician
All of the above are a result of the licensing program.

The self-interest theory of government was suggested by:
James Buchanan.
Charles M. Tiebout.
bureaucrats.
the European Union.

Suppose that the only input used in the generation of solar energy is sunlight, which has a zero cost. The average total cost of producing electricity is:
zero.
equal to the marginal cost.
equal to the average fixed cost.
immeasurably high.

When a firm increases output and the costs rise disproportionately slower, then the long-run average cost curve is __________ and the firm is experiencing __________ .
horizontal; constant returns to scale
downward sloping; constant returns to scale
upward sloping; diseconomies of scale
downward sloping; economies of scale

Limit pricing occurs when a firm sets price:
equal to marginal cost.
equal to average cost.
at different amounts for different groups of consumers.
so low that other firms are prevented from entering the market.

Which of the following statements about featherbedding is correct?
It could increase production costs, resulting in higher prices for products.
The quantity of labor demanded by firms could actually decrease.
It could lead to a lower wage and smaller employment in the long run.
All of the above.

   

Ashworth Semester Exam -C13V Microeconomics

C13V : Microeconomics
Question-1
Which of the following is NOT demonstrated by a production possibility curve?
Scarcity
Opportunity cost
Necessity for choice due to scarcity
Price

Question-2
The market price __________ the equilibrium price.
can be higher than, but never lower than
can be lower than, but never higher than
can be higher than, or lower than
is always equal to

Question-3
The poverty line is set:
by the U.S. Bureau of the Census (based on family food budgets).
at the same income level right now as it's been since 1982.
so high that over 30% of all Americans are officially poor.
by the United Nations for every country in the world.

Question-4
If a monopolist has a straight-line demand curve, then its marginal revenue curve will:
be the same as the demand curve.
fall twice as quickly as the demand curve.
lie below the demand curve at all points.
cross the demand curve.

Question-5
As long as total utility is increasing, we know that marginal utility is:
positive.
decreasing.
increasing.
negative.

Question-6
A key reason that our gasoline prices elevated rapidly from 2006 to 2008 was:
tight global supplies and high prices.
the war in the Middle East.
greed by oil exporting countries.
inflation.

Question-7
In order for real wages to grow:
productivity must grow.
productivity must fall.
money wages must grow.
money wages must fall.

Question-8
The substitution effect and the output effect work in the:
same direction some of the time.
same direction all of the time.
opposite direction some of the time.
opposite direction all of the time.

Question-9
The law of demand holds for:
individuals, but not for markets.
markets, but not for individuals.
both individuals and for markets.
neither individuals nor for markets.

Question-10
A firm will maximize its profits or minimize its loss at the output where:
the difference between price and marginal cost is at its maximum.
total cost equals total revenue.
marginal cost equals marginal revenue.
total revenue equals variable cost.

  

 

C13 Module 7 Question Answer SCORE 94 PERCENT

Assignment Instructions

Answer all of the questions below in 2-3 paragraphs each.  Your final submission should be a minimum of two (2) double spaced typed pages. 

Be sure to save an electronic copy of your answers before submitting it to Ashworth College for grading.  Unless otherwise stated, you should answer in complete sentences, and be sure to use correct English, spelling, and grammar.  Sources must be cited in APA format.

Your response should be a minimum of two (2) double-spaced pages; refer to the Length and Formatting instructions for additional details.

 

1.	What determines a household's consumption possibilities?	25 Points
2.	How would you answer someone who says that marginal utility theory is useless because utility cannot be observed?	25 Points
3.	What is consumer surplus? How is consumer surplus calculated?	25 Points
4.	What is a firm and what is the fundamental economic problem that all firms face?	25 Points

    

C13 Module 5 Question and Answer SCORE 92 PERCENT

Answer all of the questions below in 2-3 paragraphs each.  Your final submission should be a minimum of two (2) double spaced typed pages. 

Be sure to save an electronic copy of your answers before submitting it to Ashworth College for grading.  Unless otherwise stated, you should answer in complete sentences, and be sure to use correct English, spelling, and grammar.  Sources must be cited in APA format.

Your response should be a minimum of two (2) double-spaced pages; refer to the Length and Formatting instructions for additional details.

 

1.	What is the difference between a "change in demand" and a change in "quantity demanded."	20 Points
2.	What is the difference between a "change in supply" and a change in "quantity supplied."	20 Points
3.	Holding demand constant, what is the only thing that can cause a change in quantity demanded?  What are the things that cause a change in demand?	20 Points
4.	How do changes in income affect the demand for a good?	20 Points
5.	How do substitute and complementary goods affect the demand for a good?	20 Points

C13 Microeconomics Final Exam SCORE 95 PERCENT

Question 1

2.5 / 2.5 points

Game theory is concerned with

Question options:

	A)  predicting the results of bets placed on games like roulette.
	B)  the choice of an optimal strategy in conflict situations.
	C)  utility maximization by firms in perfectly competitive markets.
	D)  the migration patterns of caribou in Alaska.
Question 2			2.5 / 2.5 points

A major threat to longer-term profits exists when barriers to entry into an industry are high.

Question options:

	True
	False
Question 3			2.5 / 2.5 points

Which of the following is an example of a game theory strategy?

Question options:

	A)  You scratch my back and I'll scratch yours.
	B)  If the shoe fits, wear it.
	C)  Monkey see, monkey do.
	D)  None of the above.
Question 4			2.5 / 2.5 points

Which of the following is correct concerning opportunity cost?

Question options:

	A)  Except to the extent that you pay more for them, opportunity costs should not include the cost of things you would have   purchased anyway.
	B)  To compute opportunity costs, you should subtract benefits from costs.
	C)  Opportunity costs and the idea of trade-offs are not closely related.
	D)  Rational people should compare various options without considering opportunity costs.
Question 5			2.5 / 2.5 points

To achieve more market power, firms can:

Question options:

	A)  Raise their profit margin on prices
	B)  Differentiate their products from the products of their rivals
	C)  Lobby the government to eliminate barriers to entry
	D)  Reduce their costs of production
	E)  Advertise that they charge low prices
Question 6			2.5 / 2.5 points

Carol's Candies is producing 150 boxes of candy a day. Carol's marginal revenue and marginal cost curves are shown in the figure above. To increase her profit, Carol should

Question options:

	A)  decrease output to increase profit.
	B)  maintain the current level of output to maximize profit.
	C)  increase output to increase profit.
	D)  Not enough information is given to determine if Carol should increase, decrease, or not change her level of output.
Question 7			2.5 / 2.5 points

Game theory refers to

Question options:

	A)  a plan for the actions that a player in a game will take under every conceivable circumstance that the player might face.
	B)  a situation in which each player chooses the strategy that yields the highest payoff, given the strategy chosen by the other players.
	C)  optimal decision making by microeconomic agents.
	D)  the branch of microeconomics concerned with the analysis of optimal decision making in competitive situations
Question 8			2.5 / 2.5 points

In perfect competition, a firm's marginal revenue equals its:

Question options:

	A)  Price
	B)  Supply curve
	C)  Total revenue
	D)  Average revenue
Question 9			2.5 / 2.5 points

A dominant strategy

Question options:

	A)  is a strong strategy.
	B)  guarantees a Nash equilibrium.
	C)  is a strategy that is better for a player than any other the player might choose, regardless of the other player's strategy.
	D)  depends on the other player's strategy
Question 10			0 / 2.5 points

Which one of the following would Adam Smith agree is an example of market failure requiring government interference?

Question options:

	A)  Many dot.com internet based companies go bankrupt in 2000.
	B)  Alex Rodriguez is offered $252 million to play baseball for 10 years.
	C)  Stock values of many high tech companies fall by more than 50% in 2000.
	D)  The production of steel pollutes the air and endangers the environment.
	E)  The price of heating oil continues to increase making it difficult, if not impossible, for the poor to be able to afford to heat their homes this winter.
Question 11			2.5 / 2.5 points

In the long run, the monopolist can remain in the industry at a price that is just below long-run average costs.

Question options:

	True
	False
Question 12			2.5 / 2.5 points

Which of the following is the best example of a public good?

Question options:

	A)  an amusement park like Disney World
	B)  a civic center owned and operated by the government
	C)  a state university
	D)  a regional flood control project
Question 13			2.5 / 2.5 points

In game theory, a choice that is optimal for a firm no matter what its competitors do is referred to as the dominant strategy.

Question options:

	True
	False
Question 14			2.5 / 2.5 points

The above figure shows the total revenue curve for Dizzy Discs. The demand curve for CD's sold by Dizzy Discs

Question options:

	A)  has positive slope.
	B)  has negative slope.
	C)  is horizontal.
	D)  is vertical.
Question 15			2.5 / 2.5 points

In the long run, firms under monopoly or oligopoly must earn normal profits.

Question options:

	True
	False
Question 16			2.5 / 2.5 points

Which one of the following does not occur in perfect competition?

Question options:

	A)  Firms and buyers are completely informed about the prices of the products of each firm in the industry
	B)  There are significant restrictions on entry into the industry
	C)  Firms already in the industry have no advantage over potential new entrants
	D)  There are many buyers
	E)  No single firm can exert a significant influence on the market price of the good
Question 17			2.5 / 2.5 points

Which of the following will increase the likelihood a person will experience periods of poverty?

Question options:

	A)  completing high school rather than dropping out
	B)  getting married before having a child
	C)  having a child as a teenage single parent
	D)  maintaining full-time employment
Question 18			2.5 / 2.5 points

As a firm loses its monopoly status, becoming more competitive as new firms enter the market, the ex-monopoly firm's demand curve:

Question options:

	A)  remains the same but is now only part of market demand
	B)  shifts to the left and becomes more elastic
	C)  shifts to the left and becomes more inelastic
	D)  shifts to the right and becomes more elastic
	E)  shifts to the right and becomes more inelastic
Question 19			2.5 / 2.5 points

According to Adam Smith's theory of the "invisible hand," businesses will produce the products consumers most desire because

Question options:

	A)  this will maximize consumer satisfaction.
	B)  the government requires them to do so.
	C)  this will maximize business profits.
	D)  this will maximize society's welfare.
	E)  this will generate consumer "good will."
Question 20			2.5 / 2.5 points

Which one of the following characteristics does not apply to oligopoly?

Question options:

	A)  The industry is often characterized by extensive non-price competition
	B)  A few large firms account for a high percentage of industry output
	C)  Each firm faces a downward sloping demand curve
	D)  Many small firms account for a high percentage of industry output
Question 21			2.5 / 2.5 points

Externalities can be positive because

Question options:

	A)  there is no concept for marginal benefit.
	B)  utility can be impacted positively as well as negatively
	C)  marginal damages do not last over time
	D)  positive externalities are subsidies
Question 22			2.5 / 2.5 points

In oligopoly:

Question options:

	A)  firms compete with each other only by raising and lowering quantity because prices are fixed
	B)  the fewness of firms creates mutual interdependence in pricing among the firms
	C)  the firm is the industry
	D)  firms have no difficulty entering and leaving the market
	E)  the firm having a natural monopoly sets price for the others
Question 23			2.5 / 2.5 points

Perfect competition occurs in a market where there are many firms each selling:

Question options:

	A)  A similar product
	B)  A unique product
	C)  A capital intensive product
	D)  An identical product
	E)  A competitive product
Question 24			2.5 / 2.5 points

One difference between perfect competition and monopolistic competition is that:

Question options:

	A)  In perfect competition, the products are slightly differentiated between firms
	B)  There are a smaller number of firms in perfectly competitive industries
	C)  Monopolistic competition has barriers to entry, whereas perfect competition has none
	D)  Firms in monopolistic competition have some degree of market power
	E)  There are a larger number of firms in monopolistic competition
Question 25			2.5 / 2.5 points

Price discrimination refers to charging different products in different markets.

Question options:

	True
	False
Question 26			2.5 / 2.5 points

In game theory, the outcome or consequence of a strategy is referred to as the

Question options:

	A)  payoff.
	B)  penalty.
	C)  reward.
	D)  end-game strategy.
Question 27			2.5 / 2.5 points

A game that involves multiple moves in a series of identical situations is called a

Question options:

	A)  sequential game.
	B)  repeated game.
	C)  zero-sum game.
	D)  nonzero-sum game.
Question 28			2.5 / 2.5 points

Game theory refers to

Question options:

	A)  a plan for the actions that a player in a game will take under every conceivable circumstance  that the player might face.
	B)  a situation in which each player chooses the strategy that yields the highest payoff, given the strategy chosen by the other players.
	C)  optimal decision making by microeconomic agents.
	D)  the branch of microeconomics concerned with the analysis of optimal decision making in competitive situations.
Question 29			2.5 / 2.5 points

Which of following is an example of a monopolistically competitive firm?

Question options:

	A)  Farmer Jones's wheat farm.
	B)  Post Breakfast Cereals.
	C)  TCI Cablevision, a supplier of cable T.V. services.
	D)  T.J.'s Clothes, a local retail clothing store.
	E)  None of the above.
Question 30			2.5 / 2.5 points

A game that involves interrelated decisions that are made over time is a

Question options:

	A)  sequential game.
	B)  repeated game.
	C)  zero-sum game.
	D)  nonzero-sum game.
Question 31			2.5 / 2.5 points

A firm that considers the potential reactions of its competitors when it makes a decision is engaged in strategic behavior.

Question options:

	True
	False
Question 32			2.5 / 2.5 points

Public goods can be

Question options:

	A)  provided privately
	B)  provided publicly
	C)  subject to free rider problems
	D)  all of the above
Question 33			2.5 / 2.5 points

To cure the problem of externalities, such as pollution, economists recommend that government:

Question options:

	A)  regulate polluters.
	B)  pursues a policy of laissez-faire, "hands off" businesses.
	C)  determine mandatory limits controlling the amount of pollution which businesses may generate.
	D)  use the market mechanism to control undesirable externalities.
Question 34			2.5 / 2.5 points

If a good is characterized by easy exclusion but many may concurrently use it without reducing the amount available for others, the good is a:

Question options:

	A)  private good
	B)  common property resource
	C)  toll goods
	D)  public good
Question 35			2.5 / 2.5 points

Extensive advertising can be a powerful barrier to entry into an industry:

Question options:

	True
	False
Question 36			2.5 / 2.5 points

_______, in his 1776 work _______, introduced the concept of the invisible hand.

Question options:

	A)  Eli Hecksher; The Wealth of Nations
	B)  Adam Smith; The Wealth of Nations
	C)  Paul Samuelson; Economics
	D)  Karl Marx; The Wealth of Nations
Question 37			0 / 2.5 points

Pure Strategy is:

Question options:

	A)  is a specific choice of a strategy from the player's possible strategies in the game, whereas a mixed strategy is a choice between quantity and price optimization.
	B)  is a specific choice of a strategy outside of the player's possible strategies in the game, whereas a mixed strategy is a choice among two or more pure strategies according to pre-specified probabilities.
	C)  is a specific choice of a strategy outside of the player's possible strategies in the game, whereas a mixed strategy is a choice between quantity and price optimization.
	D)  is a specific choice of a strategy from the player's possible strategies in the game, whereas a mixed strategy is a choice among two or more pure strategies according to pre-specified probabilities
Question 38			2.5 / 2.5 points

Suppose Kevin offers to match his competitors' price in an oligopoly market. This will have the effect of

Question options:

	A)  Eliminating his competitors' incentive to reduce price if his threat is credible.
	B)  Driving out his competition.
	C)  Increasing his competitors incentive to reduce price if his threat is credible.
	D)  Triggering an antitrust investigation.
	E)  None of the above.
Question 39			2.5 / 2.5 points

Under which type of market structure is price rigidity often predicted?

Question options:

	A)  Natural monopoly
	B)  Imperfect competition
	C)  Perfect competition
	D)  Pure monopoly
	E)  Oligopoly
Question 40			2.5 / 2.5 points

Industrial policy

Question options:

	A)  is strategic behavior that takes place at the national level.
	B)  may be accomplished by protecting and subsidizing selected industries.
	C)  is intended to provide competitive advantage to selected firms.
	D)  All of the above.