Sunday
November 23, 2014

Homework Help: economics

Posted by shubh on Tuesday, September 14, 2010 at 3:41am.

1. 1. Derived demand refers to
a) demand curves derived from utility functions
b) an individual demand curve estimated from a market demand curve
c) a market demand curve estimated from individual demand curves
d) demand for a resource derived from the demand for the product produced by that resource
e) demand for a product derived from the demand for the resource used to make that product

2. 2. Which of the following is an example of a permanent resource price differential?
a) When the price of oil increases, oil exploration increases.
b) When the price of CDs falls, CD production decreases.
c) When demand for land in a city increases, its price increases above prices of land elsewhere.
d) When demand for computer programmers increased, more people went into that field.
e) When the price of oil rose, demand for solar panels increased.

3. 3. If the supply of oceanfront lots is fixed and perfectly inelastic,
a) the demand for the resource determines its price and the level of economic rent
b) the demand for the resource determines its price and none of the revenue is economic rent
c) the supply of the resource determines its price and all revenue is economic rent
d) the supply of the resource determines its price and none of the revenue is economic rent
e) the supply curve is horizontal

4. 4. Economic rent is defined as
a) the opportunity cost of a resource
b) the payment to a resource in excess of its opportunity cost
c) opportunity cost
d) total earnings
e) the part of a homeowner's housing that is included in GDP accounts

5. 5. A TV actor used to be a teacher. Aside from the salary, he likes both jobs equally well. If he can earn $50,000 as a teacher and $300,000 as an actor, what are his economic rent and opportunity costs as an actor?
a) Economic rent is $250,000; opportunity costs are $50,000.
b) Economic rent is $50,000; opportunity costs are $250,000.
c) Economic rent is $50,000; opportunity costs are $300,000.
d) Economic rent is $300,000; opportunity costs are $50,000.
e)Economic rent is $300,000; opportunity costs are $350,000.

6. 6. The change in total cost of production that results from a change in the amount of a resource used is
a) average resource cost
b) marginal resource cost
c) marginal product
d) marginal revenue product
e) average revenue product

7. 7. The demand for labor is likely to increase when
a) the supply of the good it produces falls
b) the demand for the good it produces rises
c) the supply of the good it produces rises
d) the demand for the good it produces falls
e) the real wage rate rises

8. 8. Jason can maximize his satisfaction by allocating time among market work, nonmarket work, and leisure so that the expected marginal utility of the last unit of time spent in each activity is identical.
a) True
b) False

9. 9. A consumer maximizes utility by allocating time so that the expected marginal utilities of the last unit of time spent in each activity are identical.
a) True
b) False

10. 10. The amount of time an individual is willing to offer for a wage depends on the
a) all of the following
b) value of time devoted to leisure activities
c) boredom, discomfort, and aggravation associated with work
d) value of time devoted to nonmarket work
e) satisfaction gained from goods purchased with the wages

11. 11. In many cities, garbage collectors earn more than social workers. What could explain this wage differential?
a) Social work provides more nonmonetary rewards than garbage collecting does.
b) There is a greater demand for social workers.
c) There is a greater supply of trash collectors.
d) Collecting garbage requires less skill.
e) Social work is a less prestigious profession.

12. 12. The source of power for a labor union is its ability to
a) increase the supply of labor
b) decrease the demand for capital
c) increase the quantity supplied of labor
d) decrease the quantity supplied of labor
e) decrease the supply of labor

13. 13. As the wage decreases, the substitution effect causes the quantity of labor supplied to:
a) increase
b) increase only if the individual desires more leisure time
c) increase only if the substitution effect outweighs the income effect
d) decrease
e) decrease only if the individual lowers the value of leisure time

14. 14. Which of the following is an example of roundabout production?
a) Paul pays Ringo to wash his car.
b) A church has a bake sale to raise money for a new narthex.
c) Jane saves her money to buy a stereo.
d) Robinson Crusoe makes a fish net to help him catch more fish per day.
e) Business owners in Minneapolis buy blocks of Minnesota Twins baseball tickets to help guarantee that the team will stay in town.

15. 15. The opportunity cost of producing capital is
a) decreased current production of consumption goods
b) increased future production of consumption goods
c) the decreased amount of future capital available
d) abundant capital accumulation
e) the amount of roundabout production

16. 16. Most companies that sell CDs by mail deliver in 1 to 2 weeks. Mosey Music, Inc., takes 4 weeks to deliver CDs. We should expect that Mosey
a) will lose all its customers
b) will not lose customers because the good in question is CDs, not the delivery date
c) will have to charge more for its CDs to make up for the business it loses through slow delivery
d) will have to charge less for its CDs to compete with firms that deliver CDs faster
e) will be able to charge the same amount for its CDs as other firms do, as long as the CD quality is the same

17. 17. If the market interest rate increases, then
a) the cost of borrowing increases and so saving falls
b) the opportunity cost of consuming a good in the future increases and saving, therefore, increases
c) the opportunity cost of consuming a good in the future increases and saving, therefore, falls
d) the reward for saving diminishes and so present consumption increases
e) the reward for saving increases and so saving increases

18. 18. If I own a share of stock in Apple, I own
a) only the right to vote in elections of corporate directors
b) a claim to a share of Apple's net income and assets as well as the right to demand annual dividend payments
c) the right to demand annual dividend payments as well as the right to vote in elections of corporate directors
d) only the right to demand annual dividend payments
e) a claim to a share of Apple's net income and assets as well as the right to vote in elections of corporate directors

19. 19. As large-scale production became more profitable during the Industrial Revolution, the easiest way to finance the required factories and heavy machinery was
a) sole proprietorships
b) partnerships
c) letting government take over
d) the corporate structure
e) family businesses

20. 20. Ronald Coase's study, 'The Nature of the Firm,' argued that firms are formed to take advantage of situations in which hierarchies are more efficient than markets.
a) True
b) False

21. 21. Production through the firm is often more efficient than market exchange when
a) production requires many transactions among many resource owners
b) production requires few transactions between two resource owners
c) the cost of transacting business through market relations is less than the cost of undertaking the same activity within the firm
d) inputs are easily identified, measured, priced, and hired
e) the costs of determining inputs and negotiating contracts are low

22. 22. The reason used car dealers are able to make a profit by buying used cars at a low price and selling them at a higher price is that
a) they sell lemons
b) they can't take advantage of unsuspecting consumers
c) they are attempting to maximize their profits
d) the transaction costs to some buyers is less than it would be without the used car dealers

23. 23. 'It doesn't hurt to get more information' is good advice
a) especially when the opportunity cost of acquiring the information is high
b) when information is less than perfect
c) as long as the marginal benefit of information is greater than the marginal cost of information
d) as long as the marginal benefit of information is equal to the marginal cost of information
e) as long as the marginal benefit of information is less than the marginal cost of information

24. 24. If a seller knows more about the good than the buyer does, there exists
a) perfect information
b) an externality
c) a low marginal benefit of information for the buyer
d) asymmetric information
e) optimal search

25. 25. The tendency for the poorest risks to buy health insurance and the tendency of the insured to take more risks with their health are known as
a) moral hazard and adverse selection, respectively
b) the winner's curse and adverse selection, respectively
c) adverse selection and natural selection, respectively
d) adverse selection and moral hazard, respectively
e) the winner's curse and moral hazard, respectively

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