A cubic cost function implies: A) a U-shaped average variable cost curve. B) a U-shaped marginal cost curve. C) a U-shaped average cost curve. D) all of the above ANSWER D
Date: September 9th, 2020
Assume there are only two individuals in an economy, Lisa and Bart. The utility possibilities frontier for these individuals is given as: 120 = UL + UB where UL is Lisa’s utility and UB is Bart’s utility. Lisa’s current level of utility is 20, Bart’s level of utility is 90. This combination is: A) inefficient. […]
Date: September 9th, 2020
Refer to Figure 9.7. Before the policy was implemented, producer surplus was A) $30. B) $60. C) $45,000. D) $90,000. E) $180,000. ANSWER C
Date: September 9th, 2020
You interview with an athletic footwear manufacturer that has annual advertising expenditures of $32 million and total sales revenue of $100 million, and the firm selects the profit maximizing level of advertising expenditures. If the advertising elasticity of demand is 0.4, then you know that “Rule of Thumb for Advertising” implies that the demand for […]
Date: September 9th, 2020
Which of these statements is generally accepted by economists? Perfect competition A) provides both equity and efficiency. B) provides equity but not necessarily efficiency. C) provides efficiency but not necessarily equity. D) generally satisfies neither efficiency nor equity. ANSWER C
Date: September 9th, 2020
If error in setting the policy is possible, A) a standard generates smaller welfare losses than a fee when the MSC and MCA are both relatively flat. B) a standard generates smaller welfare losses than a fee when the MSC and MCA are both relatively steep. C) a standard generates smaller welfare losses than a […]
Date: September 9th, 2020
Under an infinitely inelastic supply of land, the economic rents to land ________ if the price of land doubles. A) increase by less than 100% B) double C) increase by more than 100% D) none of the above ANSWER B
Date: September 9th, 2020
A variable cost function of the form: VC = 23 + Q + 7Q2 implies a marginal cost curve that is A) linear. B) downward sloping. C) U-shaped. D) quadratic. ANSWER A
Date: September 9th, 2020
Refer to Figure 4.2. The income effect on the quantity of clothing purchased is: A) the change from C1 to C3. B) the change from C1 to C2. C) the change from C2 to C3. D) the change from C3 to C2. E) none of the above ANSWER C
Date: September 9th, 2020
When did housing prices start to fall during the most recent housing boom? A) 2005 B) 2006 C) 2007 D) 2008 ANSWER B
Date: September 9th, 2020
