A few sellers may behave as if they operate in a perfectly competitive market if the market demand is: A) highly inelastic. B) very elastic. C) unitary elastic. D) composed of many small buyers. ANSWER B
Date: September 9th, 2020
Cartels can more easily detect cheating by cartel members if the products sold by each member are largely homogeneous. As product quality varies, the observed prices charged by cartel members may be due to differences in the products, or they may be due to cheating. Which of the following goods would more difficult to monitor […]
Date: September 9th, 2020
Suppose the downward sloping labor demand curve shifts rightward in a labor market with a single employer (monopsony). What happens to the marginal expenditure curve? A) Shifts left B) Shifts right C) Remains the same D) We do not have enough information to answer this question. ANSWER C
Date: September 9th, 2020
Refer to Table 16.1. Which of the following statements is TRUE? A) Guatemala has an absolute advantage in producing tomatoes. B) Guatemala has an absolute advantage in producing beer. C) Guatemala has a comparative advantage in producing beer. D) Guatemala has a comparative advantage in producing tomatoes. E) all of the above ANSWER C […]
Date: September 9th, 2020
Given the information in Scenario 4.3, it would be correct to say that demand is: A) infinitely elastic. B) elastic, but not infinitely elastic. C) unit elastic (Ep = -1). D) inelastic, but not completely inelastic. E) completely inelastic. ANSWER D
Date: September 9th, 2020
Under Scenario 18.1, suppose the body of water lies on an international boundary, and the fishermen speak a different language than the factory managers. The efficient outcome cannot be achieved if the cost of hiring translators for both parties: A) is less than $4,000. B) equals $5,000. C) is greater than $6,000. D) none of […]
Date: September 9th, 2020
Consider a competitive market in which people consume at the point where their marginal rates of substitution between products X and Y are 3/5. In this same market, producers produce where their marginal rates of transformation between X and Y are also 3/5. However, producers are producing 7 of Y and 3 of X, and […]
Date: September 9th, 2020
Joe owns a small coffee shop, and his production function is q = 3KL where q is total output in cups per hour, K is the number of coffee machines (capital), and L is the number of employees hired per hour (labor). If Joe’s capital is currently fixed at K=3 machines, what is his short-run […]
Date: September 9th, 2020
Refer to Figure 9.9. At free trade, domestic consumer surplus would be A) $20,000. B) $27,500. C) $40,000,000. D) $45,000,000. E) $75,625,000. ANSWER E
Date: September 9th, 2020
Suppose the supply of coal is perfectly inelastic, and the price elasticity of demand for coal is -0.4. If the government imposes a binding price ceiling for coal at a price that is 20 percent below the market equilibrium price, what is the impact of this policy on the market quantity? A) Excess demand equals […]
Date: September 9th, 2020
