MGT285-3. ECONOMICS (MGT285-3) > TAKE ASSESSMENT: EXAM 2
Take Assessment: Exam 2
Top of Form
true
HTMLCONTROL Forms.HTML:Hidden.1
_3089_1
HTMLCONTROL Forms.HTML:Hidden.1
_675_1
HTMLCONTROL Forms.HTML:Hidden.1
_60617_1
HTMLCONTROL Forms.HTML:Hidden.1
null
HTMLCONTROL Forms.HTML:Hidden.1
_4656_1
Figure 6.4
Using Figure 6.4, the breakeven price for the perfectly competitive firm will be
P1.
P4.
P3.
P2.
Question 2
2 points
Save
A firm that faces a downward sloping demand curve is
a price setter.
a price taker.
a price provider.
a price creator.
Question 3
2 points
Save
Profit is maximized where
total revenues are greater than total costs.
marginal revenue equals marginal cost.
accounting profits are equal to zero.
accounting profit exceeds economic profit.
Question 4
2 points
Save
Clothing retailers have faced greater competition in recent years as more firms have entered the clothing market. Some has come from foreign competitors, but much of it is domestic competition. As a result there is much competition and
individual buyers and sellers cannot affect the market price; it is determined by the market forces of demand and supply.
firms have a great degree of flexibility in pricing their products; these products can be sold at a high profit level.
there are relatively few buyers and sellers in the market, and one individual firm can determine the market price.
most individuals cannot afford clothing.
Question 5
2 points
Save
A perfectly competitive firm finds that its total revenue is $74,000 and its total costs are $80,000. If its total variable costs are $75,000, what should the firm do?
decrease its selling price
shut down immediately
increase its selling price
continue to produce at the current price and quantity combination
Question 6
2 points
Save
All of the following are characteristics of a perfectly competitive market EXCEPT
high barriers to entry and exit.
buyers and seller have equal access to information.
large number of buyers and sellers.
homogeneous product.
Question 7
2 points
Save
A perfectly competitive firm earning zero economic profit
is not covering its variable costs.
is earning an accounting profit equal to the normal rate of return.
is not covering the opportunity cost of the resources it is using.
is earning an accounting profit of zero.
Question 8
2 points
Save
The demand curve for the perfectly competitive firm is
perfectly inelastic.
perfectly elastic.
downward sloping.
unit elastic.
Question 9
2 points
Save
When the perfectly competitive firm is making zero economic profit, it is earning a level of accounting profit equal to the normal rate of return.
True
False
Question 10
2 points
Save
A cartel is a monopoly arising from a patent.
True
False
Ques ...
3. Question 2
2 points
Save
A firm that faces a downward sloping demand curve is
a price setter.
a price taker.
a price provider.
a price creator.
Question 3
2 points
Save
Profit is maximized where
4. total revenues are greater than total costs.
marginal revenue equals marginal cost.
accounting profits are equal to zero.
accounting profit exceeds economic profit.
Question 4
2 points
Save
Clothing retailers have faced greater competition in recent years
as more firms have entered the clothing market. Some has come
from foreign competitors, but much of it is domestic
competition. As a result there is much competition and
5. individual buyers and sellers cannot affect the market price; it
is determined by the market forces of demand and supply.
firms have a great degree of flexibility in pricing their products;
these products can be sold at a high profit level.
there are relatively few buyers and sellers in the market, and
one individual firm can determine the market price.
most individuals cannot afford clothing.
Question 5
2 points
Save
A perfectly competitive firm finds that its total revenue is
$74,000 and its total costs are $80,000. If its total variable costs
are $75,000, what should the firm do?
decrease its selling price
6. shut down immediately
increase its selling price
continue to produce at the current price and quantity
combination
Question 6
2 points
Save
All of the following are characteristics of a perfectly
competitive market EXCEPT
high barriers to entry and exit.
buyers and seller have equal access to information.
large number of buyers and sellers.
7. homogeneous product.
Question 7
2 points
Save
A perfectly competitive firm earning zero economic profit
is not covering its variable costs.
is earning an accounting profit equal to the normal rate of
return.
is not covering the opportunity cost of the resources it is using.
is earning an accounting profit of zero.
8. Question 8
2 points
Save
The demand curve for the perfectly competitive firm is
perfectly inelastic.
perfectly elastic.
downward sloping.
unit elastic.
Question 9
2 points
Save
When the perfectly competitive firm is making zero economic
profit, it is earning a level of accounting profit equal to the
normal rate of return.
10. Question 11
2 points
Save
The demand curve for labor is
the marginal physical product curve for labor divided by the
price of the good.
the marginal revenue product curve for labor.
the marginal physical product curve for labor multiplied by the
price of labor.
the demand curve for the good produced divided by the price of
the good.
Question 12
2 points
11. Save
The cost of labor-saving machinery will affect the position of
the labor demand curve.
True
False
Question 13
2 points
Save
All of the following shift the labor supply curve EXCEPT
an increase in fringe benefits offered to employees.
12. change in working conditions.
changes in the demand for the final product.
changes in job flexibility.
Question 14
2 points
Save
Table 9.2
Quantity of Workers
Total Product
Marginal Physical Product
Marginal Revenue Product
0
0
1
7
2
18
13. 3
30
4
40
5
48
Refer to Table 9.2. Suppose the firm sells its product for $24
and that it hires 5 workers. What must be the going wage rate?
$2
$3
$5
$4
14. Question 15
2 points
Save
Which one of the following would increase the supply of labor
to an industry?
A minimum wage is imposed below the equilibrium wage.
Overall working conditions in the industry improve.
A minimum wage is imposed above the equilibrium wage.
Overall working conditions in the industry deteriorate.
Question 16
2 points
Save
What is a lockout?
15. a management technique in which high quantities of a good are
produced to create an inventory stockpile in anticipation of a
strike
a labor technique in which workers collude to slowdown the
work process
a management technique in which labor is prevented from
returning to work until a new contract is agreed upon
a labor technique in which the supply of labor is restricted
Question 17
2 points
Save
As the wage rate rises, other things constant, firms will
16. employ more workers.
employ fewer workers.
advertise their product more heavily.
lower the selling price of their product.
Question 18
2 points
Save
We assume that when new workers are hired, the marginal
physical product of labor will
decrease because of the law of diminishing marginal returns.
decrease because the new workers are likely to be less skilled
17. than the previously hired ones.
increase because more workers can always get more work done.
increase because large firms are more efficient.
Question 19
2 points
Save
If labor productivity increases,
the supply of labor will increase.
the supply of labor will decrease.
workers will earn wages higher than their marginal revenue
product.
the demand for labor will increase.
18. Question 20
2 points
Save
If demand for a product falls, the firms producing that product
will decrease their demand for labor.
True
False
Question 21
2 points
Save
Short-run cost relationships for a firm are
19. such that the firm can always lower its average variable cost by
producing more.
such that the firm can always lower its average total cost by
producing more.
determined by the law of diminishing marginal returns.
not affected by the productivity of labor.
Question 22
2 points
Save
Table 5.6
Quantity
Total Cost
0
90
1
22. 5
125
6
140
In Table 5.2, the average product for 5 units of labor is
25.0.
22.5.
15.0.
20.0.
Question 24
2 points
Save
23. When would a firm's accounting profit differ from its economic
profit?
when the firm's marginal cost is increasing
when the firm's total explicit costs differ from the opportunity
cost of all inputs used
when the firm's total revenue does not cover its fixed costs
when the firm has fixed costs
Question 25
2 points
Save
When marginal physical product begins to decline, marginal
cost begins to increase.
24. True
False
Question 26
2 points
Save
Total fixed cost is
the expenditure on imported raw materials.
the wages paid to consultants.
the cost that does not change as output changes.
the cost of and installing safety equipment.
25. Question 27
2 points
Save
Firms that have fixed costs do not incur any opportunity cost.
True
False
Question 28
2 points
Save
In the table below, what is the marginal cost of producing the
fifth unit?
Total Output
29. Question 30
2 points
Save
Table 5.3
Quantity of Workers
Total Product
Average Physical Product
Marginal Physical Product
0
0
1
3
2
7
3
12
4
16
5
18
30. 6
18
In Table 5.3, the law of diminishing returns sets in after the
________ worker.
first
third
second
fifth
Question 31
2 points
Save
31. Monopolistic competition means
monopolies from several countries compete in the global
market.
a large number of firms producing differentiated products.
a large number of firms producing homogeneous products.
few firms producing differentiated products.
Question 32
2 points
Save
The monopolistically competitive firm will produce a quantity
that is smaller than the output which would minimize average
total cost.
33. Question 34
2 points
Save
Figure 7.3
For the monopolistic competitor depicted in Figure 7.3, what is
the profit-maximizing quantity?
0
100
75
120
Question 35
2 points
Save
34. Figure 7.3
If the monopolistic competitor in Figure 7.3 produced 120 units
and sold them at a price of $10 each, how much profit would it
make?
over $300
$0
$240
$200
Question 36
2 points
Save
By saying that firms in an oligopoly are interdependent, we
35. mean that
actions by one will prompt reactions by others.
if one increases its profits, all others will increase profits as
well.
all firms sell identical products.
if one increases its profits, all others will lose profits.
Question 37
2 points
Save
Monopolistically competitive firms advertise in an attempt to
36. lower barriers to entry.
lower their average variable costs.
build brand loyalty.
increase barriers to entry.
Question 38
2 points
Save
Price discrimination is a form of barrier to entry.
True
False
37. Question 39
2 points
Save
A market structure characterized by a small number of
interdependent sellers is called a(n)
monopoly.
monopsony.
monopolistic competition.
oligopoly.
Question 40
2 points
Save
38. Both the perfect competitor and the monopolistic competitor
produce at the point where marginal revenue equals marginal
cost.
True
False
Question 41
2 points
Save
Which of the following best represents the concept of a public
good?
measures taken to combat air pollution
39. safety features on cars
automobile insurance
automobile repair services
Question 42
2 points
Save
Zero economic profit is evidence of market failure.
True
False
Question 43
40. 2 points
Save
A situation in which a market economy leads to too few or too
many resources going to a particular economic activity is known
as
competition.
destructive competition.
a market failure.
excessive competition.
Question 44
2 points
Save
To correct for positive externalities the government
41. can give a subsidy.
can impose a tax.
should create a public good.
should allow the price system do the correction.
Question 45
2 points
Save
Market failures occur when
externalities exist.
42. there is a change in quantity demanded.
there is an increase in demand.
wages increase.
Question 46
2 points
Save
If external benefits arising from consumption of a good are
taken into account in the market
the supply curve would shift to the left.
the supply curve would shift to the right.
the demand curve would shift to the right.
the demand curve would shift to the left.
43. Question 47
2 points
Save
A negative externality arises when a firm that is not successful
at keeping its costs down goes out of business.
True
False
Question 48
2 points
Save
Markets tend to overallocate resources to the production of a
good when
44. there are positive externalities.
there are negative externalities.
there are public goods produced.
equilibrium occurs.
Question 49
2 points
Save
Which of the following is an example of a negative externality?
pollution that results from consuming a good
45. donating money to a charity
having to pay a fine for a traffic violation
improving city parks so that residents will be more inclined to
use them
Question 50
2 points
Save
If the production of a good results in external costs, an
appropriate policy might be to
subsidize the production of the good.
tax the consumer's income and thus shift the demand curve to
the left.
tax the producer and thus shift the supply curve to the left.
46. subsidize the consumer.
1
HTMLCONTROL Forms.HTML:Hidden.1
_14112067_1
HTMLCONTROL Forms.HTML:Hidden.1
_14112067_1
HTMLCONTROL Forms.HTML:Hidden.1
Bottom of Form
_1479804236.unknown
_1479804268.unknown
_1479804284.unknown
_1479804292.unknown
_1479804296.unknown
