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Home / My courses / Current Term (Term 1, 2016-2017) / ECON 1580 - AY2017-T1 / Final Exam (Days 1 - 4) / Review Quiz #1

Sunday, 23 October 2016, 3:35 PM


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Sunday, 23 October 2016, 3:38 PM
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Question A criticism of oligopolistic firms is that they:


Correct
Select one:
Mark 1.00 out of
1.00 a. have high concentration ratios.

Flag question b. are associated with unstable prices.

c. experience economies of scale.

d. retard research and development.

The correct answer is: have high concentration ratios.

Question Efficient production implies that it is:


Correct
Select one:
Mark 1.00 out of
1.00 a. possible to produce more of all goods and services.

Flag question b. it is possible to produce more of one good without producing less of another.

c. not possible to produce more of one good without producing less of another
good.

d. producing at a combination of goods which lies between the production


possibilities curve and the origin.

The correct answer is: not possible to produce more of one good without producing less of
another good.

Question Water is considered a scarce good rather than a free good because:
Correct
Mark 1.00 out of Select one:
1.00
a. it has alternative uses.
Flag question
b. it does not have alternative uses.

c. scarce goods are less expensive than free goods.

d. free goods are more expensive than scarce goods.

The correct answer is: it has alternative uses.

Question A curve that represents combinations of two goods that yield equal levels of satisfaction is
Correct a/an:

Mark 1.00 out of


Select one:
1.00
a. indifference curve.
Flag question
b. budget curve.

c. marginal utility curve.

d. price-consumption curve.

The correct answer is: indifference curve.

Question When an increase in the firm's output reduces its long-run average cost, it experiences:
Correct
Select one:
Mark 1.00 out of
1.00 a. economies of scale.

Flag question b. diseconomies of scale.

c. constant returns to scale.

d. variable returns to scale.

The correct answer is: economies of scale.

Question Which of the following is an example of structural unemployment?


Correct
Select one:
Mark 1.00 out of
1.00 a. An autoworker who is temporarily laid off from an automobile company due to
a decline in sales.
Flag question
b. A geologist who is permanently laid off from an oil company due to a new
technological advance.

c. A worker at a fast-food restaurant who quits work and attends college.

d. A real estate agent who leaves a job in Texas and searches for a similar,
higher paying job in California.
The correct answer is: A geologist who is permanently laid off from an oil company due to a
new technological advance.

Question An indifference curve shows combinations of two goods that yield:


Correct
Select one:
Mark 1.00 out of
1.00 a. equal prices.

Flag question b. equal money income.

c. equal satisfaction.
d. increasing prices.

The correct answer is: equal satisfaction.

Question After graduation from college you will receive a substantial increase in your income from a
Correct new job. If you decide that you will purchase more T-bone steak and less hamburger, then for
you hamburger would be considered a/an:
Mark 1.00 out of
1.00
Select one:
Flag question
a. normal good.

b. substitute good.

c. complementary good.

d. inferior good.

The correct answer is: inferior good.

Question A demand curve that is perfectly inelastic:


Correct
Select one:
Mark 1.00 out of
1.00 a. will be vertical.

Flag question b. will be horizontal.

c. will be upward sloping.

d. has an elasticity equal to 1 everywhere on the curve.

The correct answer is: will be vertical.

Question The law of demand implies that:


Correct
Select one:
Mark 1.00 out of
1.00 a. consumers are not responsive to price changes.
Flag question
b. consumers will, all other things unchanged, buy more at lower prices.

c. sellers will, all other things unchanged, offer more on the market at higher
prices.

d. sellers will, all other things unchanged, offer less on the market at lower
prices.

The correct answer is: consumers will, all other things unchanged, buy more at lower prices.

Question The cross price elasticity of demand for Coke with respect to the price of Pepsi has been
Correct estimated to be 0.61. If the price of Pepsi falls by 10 percent in a period, how will that affect
the demand for Coke in that period, all other things unchanged?
Mark 1.00 out of
1.00
Select one:
Flag question
a. The demand for Coke will increase but by less than 6.1 percent.

b. The demand for Coke will increase by 6.1 percent.

c. The demand for Coke will not change because many people prefer Coke over
Pepsi.

d. The demand for Coke will fall.

The correct answer is: The demand for Coke will fall.

Question If total revenue goes down when price falls, the price elasticity of demand is said to be:
Correct
Select one:
Mark 1.00 out of
1.00 a. price inelastic.

Flag question b. unit price elastic.

c. price elastic.

d. positive.

The correct answer is: price inelastic.

Question A strategy that is the same regardless of the action of the other player in a game is said to be
Correct a:

Mark 1.00 out of


Select one:
1.00
a. competitive strategy.
Flag question
b. trigger strategy.

c. dominant strategy.

d. tit-for-tat strategy.
The correct answer is: dominant strategy.

Question Perfect competition is important to study because it:


Correct
Select one:
Mark 1.00 out of
1.00 a. is a theoretical extreme used for analysis.

Flag question b. is a realistic model of a few key markets.

c. is a realistic model of many different markets.

d. avoids all real-world problems and complexities.

The correct answer is: is a theoretical extreme used for analysis.

Question If the price of chocolate-covered peanuts decreases from $1.10 to $0.90 and the quantity
Correct demanded does not change, this indicates that, if other things are unchanged, the price
elasticity of demand is:
Mark 1.00 out of
1.00
Select one:
Flag question
a. 0.

b. -0.5.

c. -1.

d. -2.

The correct answer is: 0.

Question Diminishing marginal returns for the first four units of a variable input is exhibited by the
Correct marginal product sequence:

Mark 1.00 out of


Select one:
1.00
a. 50, 50, 50, 50.
Flag question
b. 50, 40, 30, 20.

c. 50, 110, 180, 260.

d. 50, 100, 150, 200.

The correct answer is: 50, 40, 30, 20.

Question An increase in demand in a perfectly competitive industry characterized by constant costs will
Correct cause a/an:

Mark 1.00 out of


Select one:
1.00
Flag question
a. permanent increase in price.

b. economic loss for firms.

c. increase in the quantity supplied in the short run and an increase in market
supply in the long run.
d. decrease in firm's marginal revenue.

The correct answer is: increase in the quantity supplied in the short run and an increase in
market supply in the long run.

Question In market capitalism:


Correct
Select one:
Mark 1.00 out of
1.00 a. factors of production are privately owned and decisions are made privately.

Flag question
b. factors of production are owned by the government but decisions are made
privately.

c. there is no role for government.

d. the consumer has few choices to make.

The correct answer is: factors of production are privately owned and decisions are made
privately.

Question A feature of monopoly that leads to unfavorable consequences is that it:


Correct
Select one:
Mark 1.00 out of
1.00 a. reduces income inequality.

Flag question b. sets marginal cost equal to marginal revenue rather than price.

c. produces more output than if perfectly competitive firms characterized the


same industry.
d. charges a lower price than if perfectly competitive firms characterized the
same industry.

The correct answer is: sets marginal cost equal to marginal revenue rather than price.

Question If consumer income, preferences, and the prices of all other goods remain constant while the
Correct price of X varies, the amount purchased of X is defined by the:

Mark 1.00 out of


Select one:
1.00
a. demand curve.
Flag question
b. price-consumption curve.
c. income-consumption curve.

d. price line.

The correct answer is: demand curve.

Question To determine whether an economy's output is growing or shrinking, one must keep track of:
Correct
Select one:
Mark 1.00 out of
1.00 a. changes in nominal GDP.

Flag question b. changes in the growth rate of nominal GDP.

c. changes in the general price level.

d. changes in real GDP.

The correct answer is: changes in real GDP.

Question In contrast to a monopoly firm, a perfectly competitive firm:


Correct
Select one:
Mark 1.00 out of
1.00 a. is a price taker.

Flag question b. faces a downward-sloping demand curve.

c. has only a moderate degree of monopoly power.

d. produces more than the efficient level of output.

The correct answer is: is a price taker.

Question If the production possibilities curve were a straight line sloping down from left to right, this
Correct would suggest that:

Mark 1.00 out of


Select one:
1.00
a. more of both goods could be produced moving along the curve.
Flag question
b. the two products must have the same price.
c. no factor of production has any particular comparative advantage over other
resources.

d. the utility of the two goods must be equal to consumers.

The correct answer is: no factor of production has any particular comparative advantage over
other resources.
Question The BEST example of making a choice at the margin is:
Correct
Select one:
Mark 1.00 out of
1.00 a. buying a new car.

Flag question b. quitting your job.

c. a coffee drinker drinking another cup of coffee.

d. attending college.

The correct answer is: a coffee drinker drinking another cup of coffee.

Question If the slope of the total product curve is decreasing, the slope of the total variable cost curve
Correct is:

Mark 1.00 out of


Select one:
1.00
a. increasing.
Flag question
b. decreasing.

c. unchanged.

d. at its minimum value.

The correct answer is: increasing.

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