ECON 1002 Microeconomics Final Exam Many Sets ECON 1002 Microeconomics Final Exam Many Sets

ECON 1002 Microeconomics Final Exam Many Sets Click below link for Answer https://www.sobtell.com/q/tutorial/default/206948-econ-1002-microeconomics-finalexam-many-sets https://www.sobtell.com/q/tutorial/default/206948-econ-1002-microeconomics-finalexam-many-sets 1 Diseconomies of scale are seen when __________.

• the long run average cost curve is rising • the fixed cost curve does not change over the scope of production • the marginal revenue curve intersects the marginal cost curve • the marginal cost curve intersects the average cost curve

Economies, Constant and Diseconomies of Scale 2 A group of activists wants to develop a process for targeting businesses that pollute the air.

Their process map would begin with which shape?

• • • •

Process Mapping--Efficiency 3 Which statement below is correct?

• Private goods are nonrival and excludable.

• Common goods are rival and nonexcludable.

• Common goods are nonrival and excludable.

• Public goods are rival and excludable.

Public Goods, Private Goods, and the “Tragedy of the Commons” 4 Which of the following accurately describes market equilibrium?

• It is the difference between the actual price paid for a good and the highest amount the consumer would have paid.

• It is dominance achieved over another company due to decreased opportunity cost, increased efficiency in process and lower marginal cost.

• It is when the price is such that the quantity supplied of a good or service is equal to the quantity demanded.

• It is the difference between actual payment for a good and the least amount a producer would have agreed to receive for the good.

Market Equilibrium 5 Pollution by-product that impacts third parties is which type of failure?

• Government failure due to externalities • Market failure due to moral hazard

• Government failure due to moral hazard • Market failure due to externalities

Details on Regulatory Intervention and Market Failure 6

Which economic below is NOT present on the graph shown here?

• Substitution effect • Optimal choice • Change in income • Change in price

Budget Constraints: Change in Price 7 The idea that a consumer must be able to evaluate all of the choices offered fulfills the assumptions of which of the following, related to preference behavior?

• Completeness • Non-satiation • Consumer choice • Transitivity

Consumer Choice Theory 8 Which of the following is an example of the "tragedy of the commons?"

• It is difficult to keep common people out of private gardens because they are rivalrous and excludable.

• It is difficult to keep people from polluting the air because it is rivalrous but not exclusive.

• It is difficult to keep people from watching a fireworks display even if they don't pay because it is not rivalrous and not exclusive.

• It is difficult to keep people from watching the same movie because it is not rivalrous.

Public Goods, Private Goods, and the “Tragedy of the Commons” 9 Consumer surplus exists in which of the following situations?

• Craig is happy to purchase three DVDs at $15 each.

• The price of movie tickets falls and Ralph takes his entire family to the movies.

• Sam decides not to purchase a new bicycle until the price falls by $10.

• Sarah is willing to pay the $60 ticket price for an upcoming concert, but is happy to buy a ticket from her roommate for $45.

Market Equilibrium 10 A store devotes more space to bicycles so it now has less space for books.

This is an example of what decision-making relationship for the rational firm?

• Opportunity cost • Cost minimization • Profit maximization • Infinite resources

Decision Making Relationships: Rational Firm 11 When sales double, a pizza restaurant finds its costs for sauce, dough and electricity increase, because these are __________.

• variable costs • sunk costs • fixed costs • implicit costs

Cost: Total, Marginal and Average 12 Ben recently took a 20% cut in pay at work.

Which of the following is most likely to happen as a result?

• Ben will bring his lunch to work rather than going to a restaurant.

• Ben will work more hours, as his leisure is now relatively more expensive.

• Ben will drive to work more, rather than taking the bus, as driving is faster.

• Ben will hire a career consultant in order to secure a new job.

Budget Constraints: Change in Income 13 A firm trying to maximize profit will produce up to the point that marginal revenue is __________.

• less than marginal benefit • equal to marginal cost • equal to marginal benefit • greater than marginal cost

Cost and Benefit Optimization for Producers 14 Select the definition of output effect.

• Amount of revenue lost from lowering the price enough to sell one more unit • The additional revenue from raising the price of a good • The revenue that results from selling additional units of a good or service.

• Market price multiplied by the number of units sold

Revenue: Total, Marginal and Average

15 Where the supply curve is more inelastic than the demand curve, who bears more of the burden of a tax?

• Consumers • There is not enough information to answer this question • Producers • Both consumers and producers share the burden equally

Taxation and Subsidy 16

Based on this graph, what amount should the company choose to produce to maximize profit?

• 80 • 49 • 0 • 65 • 71

Output Optimization: Total Revenue / Total Cost 17

Given the following production function for a train engine manufacturing company, at what point (or points) should the firm produce?

• A • E&D • B&E • D

Production Function and Constraints 18 Which of the following is NOT an obstacle to the implementation of environmentally sustainable business practices?

• CEOs have a fiduciary responsibility to guarantee returns on investments.

• Environmental impact is not an issue for most investors when assessing the value of an investment.

• Investor awareness of climate change as a risk has increased enough to be addressed by the SEC. • Environmentally sustainable business practices might not be profitable in the short term.

Sustainable Returns--Investor Impact 19 Which of the following causes the budget constraint to make a non-parallel shift inward?

• The budget goes up.

•

The price of one item goes up.

• The consumer's income goes up.

• The consumer's satisfaction goes up.

Budget Constraints: Change in Price 20 Maria had to decide whether to work an additional shift over the weekend or use the time to work on her lawn.

The sacrifice Maria makes by choosing one option over the other next best alternative is referred to as the __________.

• opportunity cost • short-run constraint • marginal benefit • utility

Decision Making Relationships: Rational Consumer 21 Ben's Bagels charges $10 per dozen bagels and he sells 30 dozen bagels each day. Ben's costs of production total $150 each day. Ben recently quit his job where he earns $100 per day in order to open his bagel store.

Ben's accounting profit per day would be __________.

• $50 • $150

• $450 • $300

Accounting Profit 22 If the variable costs for a firm are $57, the fixed costs are $143, and the firm sells 40 units, what are the firm's average total costs?

• $5.00 • $25.00 • $20.00 • $10.00

Cost: Total, Marginal and Average 23 Marginal cost is equal to the __________.

• average fixed cost plus average variable cost • average total cost minus the fixed cost • total cost minus fixed costs • change in total cost involved with producing one more unit

Cost: Total, Marginal and Average

24 Select the statement that is true about perfect competition.

• In perfect competition, firms have the power to set their own prices.

• There are many real-world examples of perfect competition.

• With perfect competition, information is withheld about the market.

• Perfect competition is a simplified view of a market.

Perfect Competition 25 When Joe went back to college to finish his degree in Economics, he cut back from full-time to part-time work at his firm. During this time, the lease on his SUV ran out and he leased a smaller compact car as a result.

The smaller compact car is an example of which type of good?

• Veblen • Normal • Inferior • Giffen 1 Which example below represents a fixed input?  Utility bills  Raw materials for construction  Office space being rented 

Hourly employees Production Function and Constraints 2 This graph below shows three indifference curves for blankets and pillow cases.

Consider choice A and determine why this would NOT be the optimal choice.  The consumer cannot afford this choice.  It does not provide the consumer with the highest level of utility possible.  Additional income would be left over with this choice.  These indifference curves violate the conditions of consumer theory.

Optimal Choice 3 The additional income a company generates from selling one more unit due to this is called which of the following?  Output effect  Break even point  Diseconomies of scale  Price effect Revenue: Total, Marginal and Average 4 Which one of the following is NOT an example of a practice that contributes to anthropomorphic climate change?  Emissions of greenhouse gases  Deforestation and use of pesticides  Overuse and grazing of lands  Change in migration patterns Assessing Costs of Anthropomorphic Climate Change--Regulatory Intervention 5 Which of the following is a characteristic of monopolistic competition?  Cooperation between firms is sometimes used to maintain prices. 

Firms sell homogenous products.  Advertising increases the cost of production.  Predatory price cutting occurs.

Monopolistic Competition 6 Which of the following is not considered a factor of production?  The property that a factory is built on  Interest earned on an investment  The employees for a gas station  A printer to make copies for a company Resource Allocation for Firms 7 Movement along the supply curve is most likely caused by which of the following?  Changes in input prices  Changes in market price  Technological changes  Government taxes or subsidies Changes in Supply and Movements along Supply Curve 8 In anticipation of the college's athletic banquet, Lauren considered purchasing gifts for several members of the athletics club who had put a lot of time and effort into making it such a successful program. Lauren decided to buy roses for the women and a leather-bound portfolio and resume paper combination for the men.

Which of the following scenarios corresponds to cross-price elasticity?  Lauren cannot decide which color of roses to buy because they are all priced the same.  A local high school’s prom is also the same weekend as the ceremony, so the price of roses has increased.  Lauren worked overtime last week and made more money. As a result, she decided to purchase the more expensive portfolios that have the university logo on the front, and she decided to buy one more than she had originally planned. 

The price of resume paper has decreased. Because of this, Lauren can now afford to purchase more paper and an additional portfolio and still be within her budget for gifts.

Cross-Price Elasticity 9 If Bundle of Goods A contains two pizzas and three sodas, and Bundle B contains three pizzas and three sodas, then Patrick will select Bundle B based on the principle of __________.  non-satiation  transitivity  utility theory  completeness Consumer Choice Theory 10 Given the information on this graph, this firm needs to produce which of the following number of units to start making a profit?  10  11  12  14 Breakeven Point 11 Number of Employees Total Production Labor Marginal Revenue Product 0 0 0 1 9 9 2 24 15 3 36 12 4 43 7

Marginal Product of

If the price of the item is $15.00 per unit and the employees cost $125 each, how many employees should the firm hire to maximize their profit?  One employees  Two employees 

Four employees  Three employees Output Optimization: Marginal Revenue Product 12 Brent decides to purchase ground beef to make tacos rather than pricier steak because his weekly budget restricts his expenditure on food.

Brent is acting as a rational consumer in that he is recognizing that __________.  he needs to stay within his budget constraint  he is spending beyond his budget to feed his family  he is purchasing where his marginal cost is greater than his marginal benefit  he is keeping his total costs below his variable costs Cost and Benefit Optimization for Consumers 13 If the goal is to maximize profit, at which point on the graph would a firm’s output be optimized?  Point 2  Point 4  Point 1  Point 3 Output Optimization: Marginal Revenue / Marginal Cost 14 When a firm uses five machines, it can produce 600 units daily. A sixth machine allows the firm to product 880 units.

Which of the following is true regarding production?  The marginal product for the fifth machine is 600 and the average product is 120 units.  The marginal product for the sixth machine is 280 units and the average product is 147 units.  The marginal production for the sixth machine is 880 units and total production would be 1,480 units.  The total production for 11 machines would be 1,480 units with an average production of 164 units.

Product: Total, Marginal, Average, and (Marginal) Revenue 15 Which indicators show change at the same time as the economy and thus give a sense of where the economy is in relation to the business cycle?  Leading indicators  Lagging indicators  Coincident indicators  All of the given answer choices are correct Coincident Indicators 16 Which statement below is NOT true regarding process mapping?  Almost all business practices and decisions have been documented in some way or another.  Process mapping is used for evaluating sustainable business solutions.  A process map is a visual representation of the stages in a process.  Process mapping forms a foundation for efficiency evaluation.

Process Mapping--Efficiency 17 Which scenario below is an example of consumer surplus?  A car dealership sells exactly as many cars as it has in stock.  George is willing to pay up to $20,000 for a car, but he finds one he likes for $15,000.  Tom usually charges $75/hour but in certain cases is willing to go as low as $65/hour.  A grocery store that usually charges $7/pound for beef is willing to lower the price to $5/pound when a huge shipment comes in.

Market Equilibrium 18 Which of the following is NOT an obstacle to the implementation of environmentally sustainable business practices?  Investor awareness of climate change as a risk has increased enough to be addressed by the SEC.  CEOs have a fiduciary responsibility to guarantee returns on investments. 

Environmental impact is not an issue for most investors when assessing the value of an investment.  Environmentally sustainable business practices might not be profitable in the short term.

Sustainable Returns--Investor Impact 19 Ben's Bagels charges $10 per dozen bagels and he sells 30 dozen bagels each day. Ben's costs of production total $150 each day. Ben recently quit his job where he earns $100 per day in order to open his bagel store.

Ben's accounting profit per day would be __________.  $150  $450  $50  $300 Accounting Profit 20 In which type of market structure might we see firms attempting to collude with one another to set prices?  Monopoly  Perfect competition  Monopolistic competition  Oligopoly Oligopoly 21 Which definition below defines perfectly elastic demand?  Any change in price always results in a very significant change in demand.  A change in price of one good affects a consumer’s decision to purchase a different good.  This is the degree to which demand changes in response to a change of price.  This is a situation in which a change in price will never change a consumer’s decision to buy a certain good.

Defining Elasticity 22 Which of the following statements best describes the minimum wage?

 It is a price floor that decreases producer surplus as compared to the free market equilibrium price and output.  It is a price floor that decreases consumer surplus as compared to the free market equilibrium price and output.  It is a price ceiling that decreases consumer surplus as compared to the free market equilibrium price and output.  It is a price ceiling that decreases producer surplus as compared to the free market equilibrium price and output.

Welfare Analysis 23 Which of the following is NOT an example of a constraint limiting a decision?  Peter opts to purchase frozen pizza for an upcoming party; he doesn't have enough money to have pizza delivered.  Frank decides to wait until he can afford to put 20% down on a new house, and continues to rent.  Susan can't apply for the job she really wants because the hours conflict with her university classes.  Bella decides not to purchase another pair of shoes; she thinks they are too similar to those she already owns.

Resource Allocation for Consumers 24 An estimate of the money and paperwork spent complying with environmental regulations could be compared to the advantages of cleaning up pollution.

This method of determining the value of the environment is known as __________.  cost-benefit analysis  healthcare costs  hedonic pricing  contingent valuation Assessing Costs of Waste and Pollution--Environmental Economics 25 Assuming ceteris paribus, which of the following is FALSE?  When the price of a good rises, the quantity supplied of that good rises.

 When the price of a good falls, the quantity supplied of that good falls.  When the price of a good falls, the quantity demanded of that good rises.  When the price of a good rises, the quantity demanded of that good rises.

Demand Supply