Mods 21-26

Quizzes

1. In the LR, entry and exit does not affect the DC of every other firm in the mkt. (t/f)

1. false

2. In the SR, a mono comp firm has an upward sloping marginal cost curve and a U-shaped total cost curve. (t/f)

2. true

3. The key to whether a firm in a mono comp in the SR will be profitable lies in the relationship btwn mcc and the dc. (t/f)

3. false

4. Collusion among firms in mono comps is possible in order to increase their mkt pwr. (t/f)

4. false

5. The mkt is in a LR EBM when there is exit/entry of firms. (t/f)

5. false

6. Each firm in mono comp faces a traditional down sloping DC an a down sloping MR. (t/f)

6. true

7. If the ATC curve lies above the DC at the profit-maxing lv of op, the firm will be profitable in the SR. (t/f)

7. false

8. In the LR, a mono comp firm earns zero profits. (t/f)

8. true

9. Anytime a monopsony chooses to hire additional labor, it must pay higher wages. (t/f)

9. true

10. If an individual decides to work fewer hours as a result of an increase in the wage rate, the income effect dominates. (t/f)

10. true

11. In the mkt for labor, labor is demed by households and supplied by firms. (t/f)

11. false

12. If an individual decides to work more hours as a result of an increase in the wage rate, the substitution effect dominates. (t/f)

12. true

13. Americans’ increasing consumption of leisure over time indicates the sub effect doms the income effect. (t/f)

13. false

14. When the sub effect doms, the labor sc will be upward-sloping. (t/f)

14. true

15. A labor mkt that consists of a monopsonist is called a monopoly. (t/f)

15. false

16. The opportunity cost of work is the foregone income that could have been earned working instead. (t/f)

16. false

17. Unions can sometimes play powerful role in bargaining for higher wages for their members. (t/f)

17. true

18. There is a direct relationship btwn educational attainment and earnings. (t/f)

18. true

19. Wage disparities exist in the real world across age, gender, and ethnicity. (t/f)

19. true

20. Dangerous and hazardous jobs oftentimes do not pay more. (t/f)

20. false

21. An example of a compensating wage differential would be Wells Fargo paying their employees a wage rate = to $15/hr. (t/f)

21. false

22. There are 2 main objectives to the marginal productivity theory of income distribution. (t’/f)

22. true

23. Recent data from the second qtr of 2020 showed that women had higher median weekly earnings compared to men at every age. (t/f)

23. false

24. The role of discrimination in the workplace impacts the profits of the firm. (t/f)

24. false

25. The Robinson-Patman act passed in 1950. (t/f)

25. false

26. The Sherman act prevents unfair methods of competition incl unfair/deceptive business pracs that affect interstate commerce. (t/f)

26. false

27. The cell phone service provider industry is a great example of a real-world oligopoly. (t/f)

27. true

28. A vertical merger is a type of merger where 2+ companies are in different stages of the same supply chain. (t/f)

28. true

29. A trust is another word used to describe a monopoly. (t/f)

29. true

30. The Clayton act was passed in 1890. (t/f)

30. false

31. A price war occurs when one firm sets a price an other firms follow suit. (t/f)

31. false

32. Tacit collusion is considered a normal state among oligopolies in the real world. (t/f)

32. true

33. The official poverty rate was 10.5% in 2019. (t/f)

33. true

34. An example of a social insurance program would be the Earned Income Tax Credit (eitc). (t/f)

34. false

35. The median household income was 70000 in 2019. (t/f)

35. false

36. The poverty rate refers to an annual amt of income below which an individual or family is offically considered poor. (t/f)

36. false

37. The poverty threshold refers to a state where an individual, fam, or comm lacks the fin means necessary to maintain a minimum standard of living. (t/f)

37. false

38. The poverty rate tends to ↑ during econ recessions an ↓ during econ expansions. (t/f)

38. true

39. The formula for the Gini coefficient is = to B/(A+B) (t/f)

39. false

40. An example of an in-kind benefit for a college student would be a computer. (t/f)

40. true

41. The used car mkt is known as the mkt for lemon in economics. (t/f)

41. true

42. Screening occurs when an individual attempts to reassure others that they are not hiding asym info. (t/f)

42. false

43. A deductible ensures that the individual has some personal stake in the transaction. (t/f)

43. true

44. Adverse selection refers to a situation in a mkt where there is a change in behavior after a transaction occurs btwn a buyer an a seller. (t/f)

44. false

45. Moral hazard refers to type of market phenomenon where one individual in a transaction knows more information than the other individual so the transaction is more likely to be favorable to the individual having the information which causes market prices to be adjusted in order to compensate for the potentially unfavorable result for the individual that does not have the information. (t/f)

45. false

46. Lack of all available info can distort econ decision in the mkt place an could also prevent mutually beneficial economic transactions from taking place. (t/f)

46. true

47. Adverse selection is particularly problematic in the insurance industry, but also in many other parts of the economy such as the used car mkt. (t/f)

47. true

48. An example of a moral hazard would be a person, who chooses to drink an drive on a regular basis after obtaining car insurance. (t/f)

48. true