Which is NOT a weakness of the policy of mandatory separation of recyclables? A) It actually pays people to use more recyclable material, and thus more material in total. B) It is costly for households in terms of time spent. C) It is costly for the government to monitor. D) Individuals may shift away from […]
Date: September 9th, 2020
Melon Computer Company manufacturers its computer components in Singapore and assembles the computers intended for sale in North America in its plant in Arizona. If the U.S. reduces the corporate income tax rate next year, what is the likely outcome for Melon Computer Company? A) Reduce the transfer price for computer components and increase downstream […]
Date: September 9th, 2020
Refer to Scenario 12.2. What is the profit maximizing level of output? A) 171.43 B) 120 C) 150 D) all of the above E) none of the above ANSWER C
Date: September 9th, 2020
Your indifference curves for good X (horizontal axis) and good Y (vertical axis) are vertical lines because you do not gain any satisfaction from consumption of Y. As the price of X declines, the change in consumption of X is entirely composed of the: A) income effect. B) substitution effect. C) Giffen effect. D) independent […]
Date: September 9th, 2020
Consider a linear, upward sloping supply curve. If the supply curve shifts upward, then: A) the price elasticity of supply will increase. B) the price elasticity of supply will increase if the slope of the supply curve is greater than one. C) the price elasticity of supply will increase if the slope of the supply […]
Date: September 9th, 2020
Which of the following is true about the demand curve facing the dominant firm? A) It equals market demand minus fringe firms’ supply curve. B) It is identical to market demand. C) It equals market demand minus demand facing the fringe firms. D) It is horizontal. ANSWER A
Date: September 9th, 2020
Refer to Scenario 7.2. This production function is an example of which of the following types of production functions? A) Cobb-Douglas B) Leontief C) Fixed proportions D) Lagrange E) none of the above ANSWER A
Date: September 9th, 2020
A logarithmic variable cost function implies that A) marginal cost is increasing at a decreasing rate. B) marginal cost is increasing at an increasing rate. C) marginal cost is constant. D) marginal cost is decreasing as quantity increases. ANSWER A
Date: September 9th, 2020
The main point of the second theorem of welfare economics is that: A) efficiency is more important than equity. B) efficiency may be achieved, but equity is not a feasible goal. C) any attempt to achieve an equitable outcome must occur off the contract curve. D) any equitable outcome can be achieved by reallocating the […]
Date: September 9th, 2020
For a monopsony buyer of an input, the marginal expenditure curve A) lies above the average expenditure curve. B) lies below the average expenditure curve. C) is identical to the average expenditure curve. D) lies below the input demand curve. ANSWER A
Date: September 9th, 2020
