5 Steps To A 5 AP Microeconomics 2022 1st Edition Eric Dodge - Solutions

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Two rival firms operate in an oligopoly and, once a year, choose an advertising strategy. The firms can choose between an expensive television and radio advertising campaign (costly ads) or an inexpensive direct-mail advertising campaign (cheap ads). Television and radio cost more but reach more
Assume the following about the market for gizmos:• Gizmos are sold in a competitive market.• Gizmos have no close substitute.• The demand for gizmos is price inelastic but not perfectly inelastic.Suppose now that the government imposes a per-unit excise tax on producers of gizmos.(A) Using a
The graph below shows a firm that has monopolized the market for gadgets.(A) Using the values in the graph, identify the following:i. The profit-maximizing quantity ii. The price of a gadget when the monopolist has maximized profit iii. The allocatively efficient output (B) Using the values in the
Because of the free-rider effect, the private marketplace tends to(A) provide the allocatively efficient amount of a public good.(B) produce too much of a public good, requiring the government to intervene and tax the production of it.(C) produce a public good in the amount where the marginal
Which of the following scenarios is the best example of a positive externality?(A) Your neighbor has a swimming pool and throws loud late-night parties.(B) Your neighbor has a swimming pool and allows you free access.(C) Your neighbor has a swimming pool and the powerful chlorine odor blows into
The U.S. government collects tax revenue, buys military equipment from many private firms, and uses this equipment to provide national defense to all Americans. This is a good example of(A) a natural monopoly.(B) an excise tax on military equipment.(C) a regressive tax.(D) a public good.(E)
The local market for bankers is currently in equilibrium. Which of the following increases the local wage paid to bankers?(A) Internet banking at home is becoming more popular.(B) More college students are majoring in finance and economics, majors that make them attractive as bank employees.(C) The
Suppose the state requires hairdressers and manicurists to pass a series of exams to be certified cosmetologists. How does this policy change the supply of cosmetologists, the equilibrium wage, and the price of a manicure? SUPPLY OF COSMETOLOGISTS WAGE PRICE OF MANICURES (A) Decrease Increase
A cartel is often the result of(A) perfectly competitive firms that agree to produce a homogenous product.(B) oligopoly competitors that agree to restrict output to maximize joint profits.(C) a monopoly that has been regulated by the government.(D) a natural monopoly that has evolved into a
The price of labor is $5 and the price of capital is $10 per unit. Using the table below, what is the least-cost combination of labor and capital that should be hired to produce 18 units of output?(A) 1 Labor and 2 Capital (B) 4 Labor and 8 Capital (C) 2 Labor and 1 Capital (D) 5 Labor and 5
A monopsony employer hires labor up to the point where(A) wage = marginal factor cost.(B) marginal factor cost = marginal product of labor.(C) marginal factor cost = marginal revenue product of labor.(D) wage = marginal revenue product of labor.(E) wage = price of the good produced by the labor.
Which of the following increases the demand for interstate truck drivers?(A) An increase in the wage of truck drivers(B) An increase in the supply of truck drivers(C) An increase in the price of diesel fuel, which is used to power semitrucks(D) A decrease in the demand for interstate shipping(E) A
Which of the following would improve the efficiency of a monopoly market?(A) The government regulates the monopolist to produce the output where marginal revenue equals marginal cost.(B) The government provides additional legal barriers to entry.(C) The government subsidizes the monopolist so that
If the government wishes to regulate a natural monopoly so that it earns a normal profit, it sets(A) Price = Marginal cost.(B) Marginal revenue = Marginal cost.(C) Price = Average total cost.(D) Price = Marginal revenue.(E) Marginal revenue = Average total cost.
Deadweight loss in industries with market power is a result of(A) profit-maximizing output occurs where price equals marginal revenue.(B) profit-maximizing output occurs where price exceeds marginal cost.(C) profit-maximizing output occurs where price equals marginal cost.(D) profit-maximizing
The monopolistically competitive price is above marginal revenue because(A) firms have differentiated products.(B) firms are price takers.(C) firms produce a homogenous product.(D) the market is allocatively efficient.(E) profits are normal in the long run.
Which of the following choices is true of both perfectly competitive firms and monopolistically competitive firms?(A) Barriers to entry(B) Homogenous products(C) Normal profits in the long run(D) Excess capacity(E) Price-setting behavior
The production of chicken often results in offending odors that are picked up by the wind and blown over rural communities. This is an example of a ______ externality, the result of which are spillover ______ and an _______ of resources to chicken production.(A) negative, costs, underallocation (B)
Oligopoly has at times been the subject of government antitrust regulation. Which of the following is a reason for this government regulation?(A) Price is approximately equal to marginal cost.(B) Price is approximately equal to average total cost.(C) Deadweight loss lessens over time.(D) Consumer
Which of the following statements is true of a consumer’s utilitymaximizing behavior?(A) As consumption of good X increases, total utility increases at an increasing rate.(B) The consumer should stop consuming good X when marginal utility is maximized.(C) The consumer has maximized utility
The top six firms in an oligopolistic industry have market shares of 25%, 25%, 15%, 10%, 6%, and 3%. Many smaller firms split the rest of the market. What is the value of the four-firm concentration ratio?(A) 65%(B) 54%(C) 75%(D) 34%(E) 50%
Consumer surplus in the monopolist market is equal to the area(A) abce.(B) abcf.(C) P5cd.(D) 0Q1aP1.(E) P1P5ca.
If this firm were a profit-maximizing monopolist, the price, output, and profit would be PRICE OUTPUT (A) P5 (B) P5 P4 (D) P1 (E) P3 57858 Q3 PROFIT Q1 x (c-b) Q1 x Pl Q2 x (P4-P1) Q1 x (P5-P1) Q3 P3
A monopolist may be able to maintain long-run positive profit due to(A) deadweight loss.(B) economies of scale in production.(C) a price that is set equal to average total cost.(D) perfectly elastic demand for the product.(E) entry of new firms that keep the price high.
Which of the following is a characteristic of a monopoly market?(A) Firms produce a homogeneous product.(B) Barriers to entry exist.(C) Firms are price-taking profit maximizers.(D) Deadweight loss is eliminated through entry of competing firms in the long run.(E) In the long run the firm earns
If a market for a good is producing a negative externality,(A) at the market output the marginal costs to society exceed the private marginal costs of production.(B) at the market output the marginal benefits to society exceed the private marginal costs of production.(C) at the market output the
Where is the shutdown point for this perfectly competitive firm?(A) Any price below curve 4(B) Any price below 0c(C) Any price below curve 3(D) Any price below curve 2(E) Any quantity less than Q
The curve labeled 4 represents which of the following?(A) Marginal cost(B) Marginal product of labor(C) Average total cost(D) Average fixed cost(E) Average variable cost
The demand for labor falls if(A) labor productivity falls.(B) the price of the good produced by labor rises.(C) the price of a complementary input falls.(D) demand for the good produced by labor rises.(E) a minimum wage is removed from the labor market.
At a quantity of 10, what is the value of $(Y - X)?(A) $100(B) $25(C) $10(D) $35(E) $350
If average variable cost at a quantity of 10 is $25, what is the value of$Y in the figure above?(A) $250(B) $25(C) $35(D) $1,000(E) $350
The market for good X is currently in equilibrium. Which of the following choices would not cause both a decrease in the equilibrium price of good X and a decrease in the equilibrium quantity of good X?(A) A decrease in consumer income and good X is a normal good.(B) An increase in consumer income
The figure above shows the long-run average cost curve of a competitive firm. Which of the following choices best describes Region B in the diagram?(A) Economies of scale(B) Diseconomies of scale(C) Constant returns to scale(D) Diminishing returns to scale(E) Increasing returns to scale
The table above shows how hiring increasing amounts of labor to a fixed amount of capital affects the hourly output of Eli’s lemonade stand. Based on this table of production data, which of the following can be said?(A) Diminishing marginal returns begins with the first worker hired.(B) Marginal
Which of the following is a characteristic of perfect competition?(A) Firms produce a homogeneous product.(B) Barriers to entry exist.(C) Firms are price-setting profit maximizers.(D) The government regulates the price so that deadweight loss is eliminated.(E) Long-run positive profits are
Diminishing marginal returns to short-run production begin when(A) the average product of labor begins to fall.(B) the total product of labor begins to fall.(C) marginal product of labor becomes negative.(D) average variable cost begins to rise.(E) marginal product of labor begins to fall.
A firm employs variable amounts of labor to a fixed amount of capital to produce output. If the daily wage paid to labor increases, how does this affect the firm’s costs?
If it is true that bacon and eggs are complementary goods, then(A) the income elasticity of bacon is positive and the income elasticity for eggs is negative.(B) the price elasticity for eggs is greater than the price elasticity for bacon.(C) the cross-price elasticity between bacon and eggs is
The figure above best represents which of the following functions?(A) Total product of labor(B) Total revenue(C) Total cost(D) Total utility(E) Total short-run economic profits
You are told that the Gini coefficient of income inequality has risen from .35 to .85. Which of the following is a likely cause of this change?(A) Market power in the factor and output markets has increased.(B) Labor market discrimination has been eliminated.(C) The distribution of wealth and
Dorothy has daily income of $20, each cup of coffee costs Pc = $1, and each scone costs Ps = $4. The table below provides us with Dorothy’s marginal utility (MU) received in the consumption of each good. As a utility-maximizing consumer, which combination of coffee and scones should Dorothy
The downward-sloping demand curve is partially explained by which of the following?(A) Substitution effects and income effects(B) The law of increasing marginal costs(C) The principle of comparative advantage(D) The law of diminishing marginal returns to production(E) The least-cost principle
If the market is in equilibrium, which of the following areas corresponds to producer surplus?(A) BGD(B) 0AHJ(C) 0DGK(D) 0BG(E) 0BGK
If the price were to fall from 0C to 0A, which of the following would be true?(A) Dollars spent on this good would increase if demand for the good were price inelastic.(B) Dollars spent on this good would decrease if demand for the good were price elastic.(C) Dollars spent on this good would
If the current price is 0B, we would expect(A) a surplus in the market to be eliminated by rising prices.(B) a shortage in the market to be eliminated by falling prices.(C) a surplus in the market to be eliminated by falling prices.(D) quantity demanded to be equal to quantity supplied as the
Which of the following is true of the perfectly competitive firm in the short run?(A) The firm earns a normal profit.(B) The firm shuts down if the price falls below average total cost.(C) The firm earns positive economic profit.(D) The firm maximizes profit by producing where the price equals
If the wage paid to all units of labor is $4.50, how many units of labor are hired?(A) 1(B) 2(C) 3(D) 4(E) 5
Which unit of labor has marginal revenue product equal to $1.50?(A) 1st(B) 2nd(C) 3rd(D) 4th(E) 5th
Suppose a price floor is installed in the market for coffee. One result of this policy would be(A) a decrease in the demand for coffee-brewing machines.(B) a persistent shortage of coffee in the market.(C) an increase in consumer surplus due to lower coffee prices.(D) an increase in the demand for
Which of the following is an implicit cost for the owner of a small store in your hometown?(A) The wage that is paid to the assistant manager(B) The cost of purchasing canned goods from a wholesale food distributor(C) The value placed on the owner’s skills in an alternative career(D) The cost of
Good X is exchanged in a competitive market. Which of the following is true if an excise tax is now imposed on the production of good X?(A) If the demand curve is perfectly elastic, the price rises by the amount of the tax.(B) The consumer’s burden of the tax rises as the demand curve is more
The elasticity of supply is typically greater when(A) producers have fewer alternative goods to produce.(B) producers have less time to respond to price changes.(C) producers are operating near the limits of their production.(D) producers have less access to raw materials necessary for
Which of the following is a fundamental aspect of the free market system?(A) A high degree of government involvement.(B) Public ownership of resources.(C) Private property.(D) Central planners set wages and prices.(E) Employers consult government agencies for guidance in hiring workers with
Which of the following goods is likely to have the most elastic demand curve?(A) Demand for white Ford minivans(B) Demand for automobiles(C) Demand for Ford automobiles(D) Demand for American-made automobiles(E) Demand for a Ford minivan
An effective price ceiling in the market for good X likely results in(A) a persistent surplus of good X.(B) a persistent shortage of good X.(C) an increase in the demand for good Y, a substitute for good X.(D) a decrease in the demand for good Z, a complement with good X.(E) a rightward shift in
Which of the following certainly lowers the equilibrium price of a good exchanged in a competitive market?(A) The demand curve shifts to the right.(B) The supply curve shifts to the left.(C) The demand curve shifts to the left, and the supply curve shifts to the right.(D) The demand curve shifts to
A competitive market for coffee, a normal good, is currently in equilibrium. Which of the following would most likely result in an increase in the demand for coffee?(A) Consumer income falls.(B) The price of tea rises.(C) The wage of coffee plantation workers falls.(D) Technology in the harvesting
A rational consumer who is eating Girl Scout cookies stops eating when(A) the total benefit equals the total cost of eating cookies.(B) the marginal benefit equals the marginal cost of the next cookie.(C) the marginal cost of eating cookies is maximized.(D) the marginal benefit of eating cookies is
Which of the following scenarios would increase a nation’s production possibility frontier (PPF)?(A) The nation’s system of higher education slowly declines in quality.(B) The nation invests in research and development of new technology.(C) The nation’s infant mortality rate increases.(D)
The figure above shows the production possibility frontiers (PPFs) for two nations that produce crabs and cakes. If these nations specialize and trade based on the principle of comparative advantage, which of the following trade agreements benefit both nations?(A) Nation A trades three crabs to
Which of the following is likely to have a demand curve that is the least elastic?(A) Demand for the perfectly competitive firm’s output(B) Demand for the oligopoly firm’s output with a homogenous product(C) Demand for the oligopoly firm’s output with a differentiated product(D) Demand for
The law of increasing costs is useful in describing(A) a demand curve.(B) a marginal benefit curve.(C) a linear production possibility frontier.(D) a concave production possibility frontier.(E) a total fixed costs curve.
Land, labor, capital, and entrepreneurial talent are often referred to as(A) production possibilities.(B) goods and services.(C) unlimited human wants.(D) opportunity costs.(E) scarce economic resources.
If the market for this good was in equilibrium at Q2 but the socially optimal output was Q1, the government could best remedy this —— of resources by legislating a —— on —— of the good.(A) underallocation, per-unit tax, consumers(B) overallocation, per-unit subsidy, consumers(C)
Which of the following is the best example of the free-rider effect?(A) You and a friend take a road trip to Florida in your friend’s car.You pay for the gas.(B) In exchange for tutoring your friend in economics, she helps you with your geometry assignment.(C) You have ordered a big college
The sales tax that you pay at the grocery store is commonly labeled a(A) progressive tax.(B) regressive tax.(C) proportional tax.(D) excise tax.(E) tax bracket.
A perfectly competitive employer hires labor up to the point where(A) wage = marginal factor cost.(B) wage = marginal product of labor.(C) wage = marginal revenue.(D) wage = marginal revenue product of labor.(E) wage = price of the good produced by the labor.
Which of the following is the best example of a negative externality and the appropriate plan for eliminating it?(A) Air pollution from a factory blows downwind and harms children in a small community. Tax the citizens of the community.(B) Your neighbor plants a fragrant blooming cherry tree in her
More college students are graduating with BA degrees in economics.Given this trend, we would expect the wage of economists, the employment of economists, and the demand for economics textbooks to change in which of the following ways? DEMAND ECONOMIST EMPLOYMENT OF FOR ECONOMICS WAGES ECONOMISTS
In order to hire the least-cost combination of labor and capital, the firm must do which of the following?(A) Find the combination of labor and capital where the marginal product of labor is equal to the marginal product of capital.(B) Find the combination of labor and capital where the ratio of
An effective minimum wage in the market for fast-food workers is likely to produce(A) an increase in the demand for fast-food workers.(B) a decrease in the supply of fast-food workers.(C) a shortage of fast-food workers.(D) a lower price of fast-food products.(E) a surplus of fast-food workers.
An industry described as an oligopoly would most likely have(A) normal profits in the long run.(B) no opportunities for collusive behavior.(C) significant barriers to entry.(D) price-taking behavior.(E) one firm with no close rivals.
If the wage paid to all units of labor is $20, how many units of labor are employed?(A) 1(B) 2(C) 3(D) 4 (E) 5
The marginal revenue product of the fourth unit of labor is equal to(A) $19.(B) $16.(C) $8.(D) $20.(E) $2.
Which of the following is most likely to be true in the long run for a monopoly firm?(A) P = MR = MC = ATC(B) P = MR = MC > ATC(C) P > MR = MC = ATC(D) P = MR > MC = ATC(E) P > ATC > MR = MC
If a monopsony labor market suddenly were transformed into a perfectly competitive labor market, how would the wage and employment change?(A) Both would increase.(B) Both would decrease.(C) The wage would remain constant, but employment would increase.(D) The wage would fall, but employment would
In a competitive labor market for housepainters, which of the following would increase the demand for housepainters?(A) An effective minimum wage imposed on this labor market.(B) An increase in the price of gallons of paint.(C) An increase in the construction of new houses.(D) An increase in the
What is one reason why the government discourages collusion between large firms in the same industry?(A) Collusive output levels tend to increase, driving the price above competitive levels.(B) Consumer surplus falls as the price is driven downward.(C) Collusive output levels tend to decrease,
One of the reasons that the government discourages and regulates monopolies is that(A) producer surplus is lost and consumer surplus is gained.(B) monopoly prices ensure productive efficiency but cost society allocative efficiency.(C) monopoly firms do not engage in significant research and
Monopolistic competition is said to be productively inefficient because(A) the long-run price is above minimum average total cost.(B) long-run profits are positive.(C) firms engage in collusive behavior.(D) there exist no barriers to entry.(E) there exist diseconomies of scale.
If firms are entering an industry that is monopolistically competitive, we would expect(A) the demand for existing firms to shift rightward.(B) the market price of the product to increase.(C) the demand for existing firms to become more inelastic.(D) economic profits to rise for all firms.(E) the
Which is true of monopolistic competition?(A) Firms earn long-run economic profits.(B) P = MR = MC = ATC.(C) Firms spend money to differentiate and advertise their products.(D) In the long run the market is allocatively efficient.(E) Excess capacity is eliminated in the long run.
If this firm was operating in a perfectly competitive market, and the price was equal to 0g, economic profit would be equal to which of the following areas?(A) abcd(B) cdgh (C) cdef (D) eghf (E) abgh
The curve labeled 1 represents which of the following?(A) Marginal cost(B) Marginal product of labor(C) Average total cost(D) Average variable cost(E) Average fixed cost
The area 0abQ is equal to(A) total cost.(B) total variable cost.(C) total fixed cost.(D) marginal cost.(E) average product of labor.
When the marginal product of labor is equal to the average product of labor,(A) marginal product of labor is at its maximum.(B) marginal cost of production is at its minimum.(C) marginal cost is equal to minimum average variable cost.(D) average total cost is at its minimum.(E) total product of
If these firms do not collude, the outcome will be(A) both firms maintain the status quo.(B) both firms enter the market.(C) Firm X enters the market and Firm Y maintains the status quo.(D) Firm Y enters the market and Firm X maintains the status quo.(E) both firms alternate between entering the
Deadweight loss is equal to which of the following areas?(A) abcd(B) cdfg(C) 0abQ1(D) Q1Q2gh(E) bdgh
If this firm were a profit-maximizing monopolist, the price and output would be which of the following?(A) 0a and Q1(B) 0c and Q1(C) 0e and Q1(D) 0e and Q2(E) 0f and Q1
Which of the following is true of monopoly markets?(A) Deadweight loss exists in the short run, but not in the long run.(B) A homogenous product allows for long-run entry of competing firms.(C) Collusion between close rivals creates pricing above marginal cost.(D) Barriers to entry allow for the
Declining populations of tuna in the Atlantic Ocean have likely had which of the following impacts on the wages of tuna fishermen, the employment of tuna fishermen, and real estate prices in New England fishing towns?
For the perfectly competitive firm, the profit- maximizing decision to shut down is made when the price(A) falls below minimum average total cost.(B) is greater than minimum average variable cost, but lower than minimum average total cost.(C) falls below minimum average variable cost.(D) is equal
Which of the following might explain how a price decrease might cause a decrease in quantity demanded and an upward-sloping demand curve?(A) The good is inferior and the income effect is stronger than the substitution effect.(B) The good is normal and the income effect is stronger than the
Jason cleans swimming pools in a perfectly competitive local market.A profit maximizer, he can charge $10 per pool to clean 9 pools per day, incurring total variable costs of $80 and total fixed costs of $20.Which of the following is true?(A) Jason should shut down in the short run, with economic
If a market is organized by a cartel, we can expect(A) normal profits for all cartel firms.(B) an incentive for cartel firms to cheat on the cartel agreement.(C) profit maximization by individual firms in the cartel.(D) allocative efficiency.(E) perfectly competitive prices.
If the market price is above the perfectly competitive firm’s average total cost curve, we expect that in the long run,(A) the industry contracts as firms exit the market.(B) the industry expands as firms exit the market.(C) the industry contracts as firms enter the market.(D) the industry
Which of the following is true in the long run in perfect competition?(A) P = MR = MC = ATC(B) P = MR = MC > ATC(C) P > MR = MC = ATC(D) P = MR > MC = ATC(E) P > MR = MC > ATC
The demand curve for a perfectly competitive firm’s product is(A) downward sloping and equal to the market demand curve.(B) perfectly elastic.(C) perfectly inelastic.(D) “kinked” at the going market price.(E) the same as the firm’s marginal cost curve.
If total product of labor is rising at an increasing rate,(A) marginal product of labor is rising.(B) marginal product of labor is at its minimum.(C) marginal product of labor is at its maximum.(D) marginal cost is rising.(E) average product of labor is at its minimum.
Which of the following is an example of a long-run adjustment for the owners of a small café?(A) The owners switch from whole wheat to sourdough bread.(B) The owners hire several part-time workers to cover the dinner shifts.(C) The owners work overtime on a busy weekend.(D) The owners install more

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5 Steps To A 5 AP Microeconomics 2022 1st Edition Eric Dodge - Solutions

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