Why might a police officer not pull over someone speeding two miles over the speed limit? A) The explicit costs of stopping the driver over are too high. B) The opportunity costs of stopping the driver are too high. C) The opportunity costs of topping he driver are too low. D) The explicit costs of […]
Date: September 9th, 2020
The saying “What’s that got to do with the price of tea?” reflects A) two markets where general equilibrium analysis would be most useful. B) two markets where general equilibrium analysis likely won’t be very useful. C) two markets where the products are clearly closely related. D) two markets where firms are incredibly greedy. […]
Date: September 9th, 2020
Reparations for slavery in the United States would A) be consistent with the Pareto principle. B) be inconsistent with the Pareto principle. C) have nothing to do with the Pareto principle. D) be unconstitutional. ANSWER B
Date: September 9th, 2020
There are two closely related crops, X and Y, with the following demand functions QX = 180 – 2PX + PY and QY = 150 + PX – PY where QX is the quantity of X, PX is the price of X, QY is the quantity of Y, and PY is the price of Y. […]
Date: September 9th, 2020
If two or more markets are closely related, A) a partial equilibrium analysis will tend to overstate the price impact of a supply shock. B) a partial equilibrium analysis will tend to accurately predict the price impact of a supply shock. C) a partial equilibrium analysis will tend to understate the price impact of a […]
Date: September 9th, 2020
If firms are producing efficiently, but consumers can reallocate goods amongst themselves, A) the equilibrium is not efficient. B) the equilibrium is efficient. C) the consumers are behaving irrationally. D) the firms are too greedy. ANSWER A
Date: September 9th, 2020
When comparing partial equilibrium effects to general equilibrium effects one can conclude that A) general equilibrium effects are always larger. B) partial equilibrium effects are always larger. C) the effects are of equal size. D) one cannot determine before the fact which effect is greater. ANSWER D
Date: September 9th, 2020
The high cost of advertising during the Super Bowl will A) not affect the efficient level of output because advertising is a sunk cost. B) will affect the efficient level of output because profits will fall significantly. C) not affect the efficient level of output because advertising is a fixed cost. D) Not enough information […]
Date: September 9th, 2020
If Option A costs $40 and yields 20 units of output, and Option B costs $50 and yields 30 units of output, A) Option B and Option A are equally economically efficient. B) Option B is economically efficient relative to Option A. C) Option A is economically efficient relative to Option B. D) It is […]
Date: September 9th, 2020
If a technological change occurs such that the production function shifts from q = 10K0.5 L0.5 to q = 10.5K0.3 L0.5, then the technological change is A) both neutral and non-neutral. B) neutral. C) non-neutral. D) Not enough information given. ANSWER A
Date: September 9th, 2020
