Spanish

Assume that as your income increases (all else constant), your consumption of hot dogs decreases. We can assume that you consider hot dogs an _______ good.

Inferior

2. When the government removes a binding price floor:

Quantity demanded will increase and quantity supplied will decrease

3. You own a restaurant. Which of the following is not an explicit cost of the business?

The possibility of earning interest on capital you invested in your business

4. The price of an item increases from $40 to $60 and as a result quantity demanded of it decreases from 12 units to 6 units. The price elasticity of demand using the mid point method is:

1.67

5. Look at the figure Supply and demand in the market for butter. The market is in equilibrium at point C. A reputable scientist writing in a major scientific publication debunks the theory that consuming butter is harmful (all else constant). What will most likely be the new equilibrium price in the market for butter?

P1

6. When a water distribution network is constructed, the decreasing average cost of production that leads to the network being monopolized by a firm is known as:

Natural monopoly

7. If an industry comprises of three firms with market shares of 50%, 30%, and 20%, respectively. Suppose the second and third firms merge, the HHI for the industry after the merger is:

5000

8. If Kansas produces only coal and corn, with fixed amounts of land, labor, and capital resources. Which of the following best sets the stage for economic growth?The percentage of Kansas residents with a college degree rises from 25% to 30%

The percentage of Kansas residents with a college degree rises from 25% to 30%

9. Any profit-maximizing firm produces where the marginal cost equals the marginal revenue in

Each of the above types of markets

10. Look at the figure. If a monopolist were to behave like a perfectly competitive firm it would charge price _______.

P

11. Look at the graph below. An effective price floor would be at price _______ and a _______ would result from the difference between points _______.

B; surplus; f and e

12. The table below presents information about the productivity of printers and personal computers in China and USA in units of output per hour of work.

Printers, printers

13. Matt wants to calculate profits of his restaurant business. He pays $50,000 per year in overhead (part of fixed cost). $80,000 in wages and $20,000 in insurance. He forgoes $50,000 per year that he could make as a teacher. If his total revenue equals $140,000, that means his accounting profit is ______ and his economic profit is _______.

-$10,000, -$60,000

14. Look at the figure below. A non-binding price floor is represented by:

P3

15. Suppose Sarah's pottery studio produces 5 units of output, its average cost is $100, average variable cost is $80. The fixed cost must be $

100

16. Which of the following describes a "how much" decision?

Should I buy a third hot dog?

17. In an oligopoly:

Firms recognize their interdependence

18. For most restaurants, the average total cost curve _____ at _____ levels of output, then ______ at ______ levels.

Falls; low; rises; high

19. If two firms are identical in all respects except that one has more of the fixed input capital than another, the total product curve for the firm with more capital:

Will lie above the total product curve for the firm with less capital

20. Raclette is a popular wintertime dish in Switzerland. It is essentially melted Raclette cheese over boil new potatoes. If Raclette cheese and potatoes are complements, and the price of Raclette cheese decreased (holding all else constant), we would expect to see:

An increase in demand for new potatoes

21. Look at the playoff matrix. The dominant strategy equilibrium occurs when ADM produces ____ million pounds and Ajinomoto produces _____ million pounds.

40; 40

22. The most likely reason that the government implements a ______ is because it feels the price is too high for ______.

Price ceiling; consumers

23. For a downward sloping demand curve, after a price increase, the quantity effect tends to:

Decrease revenue

24. Amit and Ali are charged with murder. They are interviewed by the police separately about their involvement in the crime. They can either confess or stay silent.

To confess; to confess

25. If the Kenyan government sets the floor price for coffee at $5 per pound, when the equilibrium price is $10. This will:

Result in no change in the market price of coffee

26. If the price of ice cream is below its equilibrium price, there will be a

Shortage of ice cream, and its price will rise

27. For most firms economic profit is:

Less than accounting profit

28. Graph 1 is for a firm in a perfectly competitive industry. Graph 2 is for a monopolist. If each firm's goal is to maximize its profit, the firm in Graph 1 should sell _____ units and the firm for Graph 2 should sell ______ units.

B/D

29. When the government policy is to regulate the quantity of a good that can be bought and sold rather than the price at which it is transacted, it uses a:

Quota

30. The table Willingness to Pay for Basketball Snekaers shows each player's willingness to pay for basketball sneakers. Assume that each player wants to buy at most, one pair of sneakers. If the price of basketball sneakers is $130, which player(s) will purchase sneakers?

Jamichale and Corey

31. The following playoff matrix, refers to two producers of bottled water. Each has two strategies available to it: a high price and a low price. Which player(s) does(do) not have a dominant strategy:

Purple Rain

32. Suppose a firm can sell 5 units of output at a price of $5 or 6 units of output at a price of $4. What is the quantity effect of the marginal revenue of the sixth unit?

$-1

33. Marginal revenue for a monopolist is:

Less than the price

34. Suppose Sarah's pottery studio produces 5 units of output, its average cost is $100, average fixed cost is $20. The variable cost must be $

400

35. Look at the figure. The total product of labor for four workers is _____ bushels.

64

36. Consider a production possibility frontier for a country. If this country wants to achieve economic growth one way it can do so is with the help of

More resources and better technology

37. Look at the following table. The marginal product of the second worker is _____, and the fifth worker is ______.

10, 4

38. If the demand for a golf course is price-inelastic and your local public golf course increases the greens fees for using the course, you expect:

An increase in total revenue received by the course

39. Ride-sharing services like Uber may resort to higher prices during peak times in the hope of increasing revenue on the assumption that consumer demand is:

price-inelastic

40. After spending a day producing shirts, Sam can make 10, and Time can make 5. If they spend a day making caps, Sam can make 4 caps, and Tim can make 6. We know that _____ has a comparative advantage in _____, and that _____ has a comparative advantage in ______.

Sam; shirts and Time; caps

41. In the market for maternal health care, by recommending expectant mothers to undergo C-Section deliveries regardless of its benefit to them (all else constant), physicians are causing a(an) _______ in the equilibrium price of C-section deliveries and a(an)______ in the equilibrium quantity of C-Section deliveries

Increase, increase

42. Technological improvements will:

Shift the production possibility frontier outward

43. Suppose mangoes and bananas are substitutes. Holding all other things constant, this means that when the price of mangoes increase, the:

Demand for bananas will increase

44. If a price ceiling of $1.50 per can of soda is imposed when the market is in equilibrium, there will be:

No change in the market equilibrium quantity for soda

45. If Jeremy purchases the same number of salads every time regardless of its price, then Jeremy's price elasticity of demand for salads is:

Perfectly inelastic

46) All else equal, if a firm increases the price of its good by 10% and sells for 15% fewer units, which of the following is true?

The firm's product has an elastic demand and its revenue decreases

47) Look at the figure. The profit-maximizing level of output for a monopolist is_.

R

48) Michael rents 5% more movies when his income increases by 20%. Based on this information we know that movies:

Are a normal good

49) If a perfectly competitive firm decreases production from 16 units to 15 units and the market price is $20 per unit total revenue for 15 units is:

$300

50) Which of the following cost concepts is not correctly defined?

ATC= VC + FC