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

Consumers of gadgets generate spillover benefits to their communities, and the gadget market does not account for these social benefits.Which of the following would be an appropriate government response to improve efficiency in the gadget market?(A) Impose a tax on each gadget produced.(B) Ban the
Suppose we observe a nation’s Gini ratio has fallen from .75 to .45 over 20 years. What might explain this change?(A) The nation’s level of human capital has fallen.(B) The nation has used more regressive taxes.(C) The nation’s markets have become less competitive.(D) The nation has used more
The two characteristics of a private good are(A) excludable and rival.(B) open-access and rival.(C) nonexcludable and nonrival.(D) excludable and nonrival.(E) nonexcludable and rival.
Which of the following tax systems is designed to redistribute income from the wealthy to the poor?(A) A progressive tax system(B) A regressive tax system(C) A proportional tax system(D) An excise tax system(E) A tariff system
A negative externality in the market for a good exists when(A) the market overallocates resources to the production of this good.(B) spillover benefits are received by society.(C) the marginal social benefit equals the marginal social cost.(D) total welfare is maximized.(E) the marginal private
Which of the following is the best example of a public good?(A) A visit to the orthodontist(B) A session at the tanning salon(C) A large pizza(D) A cup of coffee(E) The International Space Station
A firm hires labor and capital in competitive-factor markets. The price of labor is $6, and the price of capital is $12. Currently the marginal product of labor is 24 units, and the marginal product of capital is 36 units. Can the firm adjust the hiring of labor and capital to produce the same
If this firm hires the efficient quantity of labor in this market, employment would be ____ and the wage would be ____.(A) Q1; W3(B) Q1; W1(C) Q2; W2(D) Q1; W2(E) Q2; W1
If this firm is the sole employer in the labor market, how much labor would be employed and what is the wage that would be paid?(A) Q1; W3(B) Q1; W1(C) Q2; W2(D) Q1; W2(E) Q2; W1
Interstate trucking companies hire three factors of production in shipping goods from point A to point B: labor (drivers), capital (trucks and trailers), and diesel fuel. Which of the following would cause the demand for capital to increase?(A) A recession decreases the demand for goods.(B) Wages
If the above firm were a monopsonist, the wage would be _________ and employment would be _________ the competitive outcome.(A) greater than; less than(B) less than; greater than(C) greater than; greater than(D) less than; less than(E) less than; the same as
If a firm is hiring labor in the perfectly competitive labor market, the wage and employment will be(A) $4 and 0.(B) $5 and 10.(C) $6 and 20.(D) $7 and 30.(E) $8 and 40.
Which of the following statements is true about the demand for labor?(A) It rises if the price of a substitute resource falls and the output effect is greater than the substitution effect.(B) It falls if the price of the output produced rises.(C) It falls if the price of a complementary resource
Which of the following is most likely to decrease the demand for kindergarten teachers?(A) An increase in funding for education(B) Increased immigration of foreign citizens and their families(C) A decrease in the average number of children per household(D) Subsidies given to college students who
Two oligopolists must simultaneously decide upon a pricing strategy, either set a high price (Ph) or a low price (Pl). Once the price is set, it cannot be changed. If the firms can successfully collude, the outcome of the game will be:(A) both firms set a low price.(B) both Firm Y and Firm Z
Two oligopolists must simultaneously decide upon a pricing strategy, either set a high price (Ph) or a low price (Pl). Once the price is set, it cannot be changed. If the firms do not collude, the outcome of the game will be(A) both firms set a low price.(B) Firm Y sets a high price and Firm Z
If the government wishes to regulate a natural monopoly so that it produces an allocatively efficient level of output, it would be at an output(A) where price is equal to average total cost.(B) where marginal revenue equals marginal cost.(C) where normal profits are made.(D) where price is equal to
Monopolistic competition is often characterized by(A) strong barriers to entry.(B) a long-run price that exceeds average total cost.(C) a price that exceeds average variable cost, causing excess capacity.(D) a homogenous product.(E) many resources devoted to advertising.
The market structures of perfect competition and monopolistic competition share which of the following characteristics?(A) Ease of entry and exit in the long run(B) Homogenous products(C) Perfectly elastic demand for the firm’s product(D) Long-run positive profits(E) Rigid or “sticky” prices
Which of the following is necessarily a characteristic of oligopoly?(A) Free entry into and exit from the market(B) A few large producers(C) One producer of a good with no close substitutes(D) A homogenous product(E) No opportunities for collusion between firms
If this monopolist were regulated to produce a break-even level of output, output will be set at ____ and price will be set at ____.(A) Q2; P1(B) Q1; P1(C) Q1; P2(D) Q3; P3(E) Q2; P2
At the monopoly outcome, consumer surplus is equal to the following area:(A) (P2 – P1) × Q1(B) 1/2 × (P3 – P1) × Q2(C) 1/2 × (P2 – P1) × (Q2 – Q1)(D) 1/2 × P3 × Q3(E) 1/2 × (P3 – P2) × Q1
When the monopolist maximizes profit, output will be set at ____ and price will be set at ____.(A) Q2; P1(B) Q1; P1(C) Q1; P2(D) Q3; P3(E) Q2; P2
Assuming positive profits are possible, when a monopolist sets output to maximize profit, we know that(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.
When a monopolist has maximized profit,(A) price is set equal to marginal cost, creating zero economic profit.(B) output is set where price is equal to average total cost.(C) price is set above marginal cost, creating allocative inefficiency.(D) any short-run profit will be eliminated through the
Perfectly competitive markets are said to be allocatively efficient because output is where(A) P = ATC.(B) P = MC.(C) P = AVC.(D) economic profit is zero.(E) P= MR.
When a perfectly competitive market has come to long-run equilibrium, we know that(A) economic profit is zero and accounting profit is greater than zero.(B) economic profit and accounting profit are both zero.(C) price is greater than average total cost.(D) price is equal to average variable
Which of the following is a characteristic of perfectly competitive markets?(A) Product differentiation(B) Barriers to entry(C) Strategic behavior(D) Very few producers(E) Price-taking behavior
If a perfectly competitive firm is maximizing profit and short-run profits are positive, which of the following must be true?(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
If the perfectly competitive price is currently below minimum average total cost, we can expect which of the following events in the long run?(A) The price will rise and each firm’s output will fall as firms exit the industry.(B) Market equilibrium quantity will increase as firms exit the
If the market price of the output increases from P1 to P3, the profitmaximizing firm will(A) increase output from q1 to q4 and earn positive economic profits.(B) increase output from q1 to q4 and earn a normal profit.(C) increase output from q1 to q3 and earn positive economic profits.(D) increase
The shutdown point is seen at:(A) P0, q0(B) P1, q1(C) P2, q2(D) P3, q3(E) P3, q4
At a quantity of 4, what is the total cost of production?(A) $7.50(B) $2.50(C) $15 (D) $30 (E) $14.50
The first unit of output to exhibit diminishing marginal productivity is the _____ unit.(A) 1st(B) 2nd(C) 3rd(D) 4th(E) 5th
The total fixed cost of producing a quantity of 4 is(A) $5.(B) $7.50.(C) $7.(D) $2.50.(E) $10.
What is the average product of labor for the fifth unit of labor?(A) 5(B) 30(C) 6(D) 2(E) 25
What is the marginal product of labor for the third unit of labor?(A) 24(B) 6(C) 8(D) 3(E) 12
A pizza restaurant is operating in the short run and looking at expenses for next month. Which of the following is a variable cost for the owners of the restaurant?(A) Rent on the building(B) Cost of Wi-Fi in the building(C) Cost of deliveries of cheese and pepperoni(D) Insurance payments on pizza
In the short run, a firm employs labor and capital to produce gadgets.If the annual price of capital increases, what will happen to the shortrun cost curves?(A) The marginal cost and average variable cost curves will shift upward.(B) The average fixed cost and average total cost curves will shift
If a consumer is not required to pay a monetary price for each cookie she consumes, the consumer will stop eating cookies when(A) the total utility from eating cookies is equal to zero.(B) the substitution effect outweighs the income effect from eating cookies.(C) the ratio of marginal utility
Which of the following describes the theory behind the demand curve?(A) Decreasing marginal utility as consumption rises(B) Increasing marginal cost as consumption rises(C) Decreasing marginal cost as consumption rises(D) Increasing total utility at an increasing rate as consumption rises(E) The
Professor Peach spends her entire budget on tea and biscuits to maximize her utility. The price of tea is $2 per cup and the price of each biscuit is $3. At her current consumption levels, the marginal utility of tea is 22 utils and the marginal utility of biscuits is 33 utils, and she has used her
An excise tax of $T is imposed on the sellers of a product exchanged in a competitive market. Which of the following statements accurately describes the outcome?(A) If the supply curve is less elastic than the demand curve, consumers pay a higher share of the tax and there is deadweight loss.(B) If
A binding price floor is imposed in a competitive market. How will this change consumer surplus and producer surplus, and will there be a shortage or surplus of the product exchanged? CONSUMER PRODUCER SHORTAGE SURPLUS SURPLUS OR SURPLUS? (A) Decreases Increases Surplus (B) Decreases Increases
If the price of firm A’s cell phone service rises by 5 percent and the quantity demanded for firm B’s cell phone service increases by 10 percent, we can say that(A) demand for firm B is price elastic.(B) supply for firm B is price elastic.(C) firms A and B are substitutes because the
Suppose the price of beef rises by 10 percent and the quantity of beef demanded falls by 20 percent. We can conclude that(A) demand for beef is price elastic and consumer spending on beef is falling.(B) demand for beef is price elastic and consumer spending on beef is rising.(C) demand for beef is
In Figure D.2, identify the area of consumer surplus.(A) 0ACB(B) 0FCB(C) AFC(D) ACE(E) FCE
In Figure D.2, identify the area that corresponds to total dollars spent on this product.(A) 0ACB(B) 0FCB(C) AFC(D) ACE(E) FCE E Price C LL F A S D 0 B Quantity
In the competitive market for cherry pie, we observe the equilibrium price has risen and the equilibrium quantity has fallen. Which of the following could explain this?(A) Income has increased, and cherry pie is a normal good.(B) The price of raw cherries has increased.(C) The technology used to
If the demand for grapes increases simultaneously with an increase in the supply of grapes, we can say that(A) equilibrium quantity rises, but the price change is ambiguous.(B) equilibrium quantity falls, but the price change is ambiguous.(C) equilibrium quantity rises, and the price rises.(D)
The competitive market for gasoline, a normal good, is currently in a state of equilibrium. Which of the following would most likely increase the price of gasoline?(A) Household income falls.(B) Technology used to produce gasoline improves.(C) The price of subway tickets and other public
Which of the following is true of equilibrium in a purely (or perfectly)competitive market for good X?(A) A shortage of good X exists.(B) The quantity demanded equals the quantity supplied of good X.(C) A surplus of good X exists.(D) The government regulates the quantity of good X produced at the
Theo and Eliza can both paint the fence and wax the car after school.For every hour of waxing the car, Theo can paint eight sections of fence and Eliza can paint two sections of fence. Based on this information, the most efficient division of labor would be(A) Theo should paint the fence because he
Felipe wants to go see a concert next month. He knows that the concert, including his drive to and from the arena, will take five hours.Which of the following is the best example of an implicit cost that Felipe should consider before deciding whether to attend the concert?(A) The price of the
A small bakery has been so busy that they have hired two part-time employees. This is an example of a business changing its _____ resource.(A) capital(B) profit(C) land(D) entrepreneurial(E) labor
Jess likes to purchase $1 tacos from the taco truck near her school. If Jess uses marginal analysis, how many tacos will she consume on a given day?(A) Jess will stop consuming tacos when the marginal benefit of the next taco is equal to zero.(B) Jess will stop consuming tacos when the marginal
The graph in Figure D.1 shows a nation’s production possibilities curve (PPC) to produce bread and butter. Suppose that production technology in butter production improves. All else being equal, how will this affect the PPC and the opportunity cost of producing bread?(A) The vertical intercept of
The graph in Figure D.1 shows a nation’s production possibilities curve (PPC) for the production of bread and butter. Which of the following is true?(A) The opportunity cost of producing more butter is a decreasing amount of bread.(B) Point X represents unemployed economic resources.(C) The
Which of the following statements is most consistent with a capitalist market economy?(A) Economic resources are allocated according to the decisions of the central bank.(B) Private property is fundamental to innovation, growth, and trade.(C) A central government plans the production and
Scarcity is best defined as(A) the difference between limited wants and limited economic resources.(B) the difference between the total benefit of an action and the total cost of that action.(C) the difference between unlimited wants and limited economic resources.(D) the opportunity cost of
Consumers of gadgets generate spillover benefits to their communities, and the gadget market does not account for these social benefits.Which of the following would be an appropriate government response to improve efficiency in the gadget market?(A) Impose a tax on each gadget produced.(B) Ban the
Suppose we observe a nation’s Gini ratio has fallen from .75 to .45 over 20 years. What might explain this change?(A) The nation’s level of human capital has fallen.(B) The nation has used more regressive taxes.(C) The nation’s markets have become less competitive.(D) The nation has used more
The two characteristics of a private good are(A) excludable and rival.(B) open-access and rival.(C) nonexcludable and nonrival.(D) excludable and nonrival.(E) nonexcludable and rival.
Which of the following tax systems is designed to redistribute income from the wealthy to the poor?(A) A progressive tax system(B) A regressive tax system(C) A proportional tax system(D) An excise tax system(E) A tariff system
A negative externality in the market for a good exists when(A) the market overallocates resources to the production of this good.(B) spillover benefits are received by society.(C) the marginal social benefit equals the marginal social cost.(D) total welfare is maximized.(E) the marginal private
Which of the following is the best example of a public good?(A) A visit to the orthodontist(B) A session at the tanning salon(C) A large pizza(D) A cup of coffee(E) The International Space Station
A firm hires labor and capital in competitive-factor markets. The price of labor is $6, and the price of capital is $12. Currently the marginal product of labor is 24 units, and the marginal product of capital is 36 units. Can the firm adjust the hiring of labor and capital to produce the same
If this firm hires the efficient quantity of labor in this market, employment would be ____ and the wage would be ____.(A) Q1; W3(B) Q1; W1(C) Q2; W2(D) Q1; W2(E) Q2; W1
If this firm is the sole employer in the labor market, how much labor would be employed and what is the wage that would be paid?(A) Q1; W3(B) Q1; W1(C) Q2; W2(D) Q1; W2(E) Q2; W1
Interstate trucking companies hire three factors of production in shipping goods from point A to point B: labor (drivers), capital (trucks and trailers), and diesel fuel. Which of the following would cause the demand for capital to increase?(A) A recession decreases the demand for goods.(B) Wages
If the above firm were a monopsonist, the wage would be _________ and employment would be _________ the competitive outcome.(A) greater than; less than(B) less than; greater than(C) greater than; greater than(D) less than; less than(E) less than; the same as
If a firm is hiring labor in the perfectly competitive labor market, the wage and employment will be(A) $4 and 0.(B) $5 and 10.(C) $6 and 20.(D) $7 and 30.(E) $8 and 40. WAGE (W) $4 QUANTITY OF LABOR SUPPLIED 0 MARGINAL REVENUE PRODUCT OF LABOR (MRPL) $5 10 $7 $6 20 $6 $7 30 $5 $8 40 $4
Which of the following statements is true about the demand for labor?(A) It rises if the price of a substitute resource falls and the output effect is greater than the substitution effect.(B) It falls if the price of the output produced rises.(C) It falls if the price of a complementary resource
Which of the following is most likely to decrease the demand for kindergarten teachers?(A) An increase in funding for education(B) Increased immigration of foreign citizens and their families(C) A decrease in the average number of children per household(D) Subsidies given to college students who
Two oligopolists must simultaneously decide upon a pricing strategy, either set a high price (Ph) or a low price (Pl). Once the price is set, it cannot be changed. If the firms can successfully collude, the outcome of the game will be:(A) both firms set a low price.(B) both Firm Y and Firm Z
Two oligopolists must simultaneously decide upon a pricing strategy, either set a high price (Ph) or a low price (Pl). Once the price is set, it cannot be changed. If the firms do not collude, the outcome of the game will be(A) both firms set a low price.(B) Firm Y sets a high price and Firm Z
If the government wishes to regulate a natural monopoly so that it produces an allocatively efficient level of output, it would be at an output(A) where price is equal to average total cost.(B) where marginal revenue equals marginal cost.(C) where normal profits are made.(D) where price is equal to
Monopolistic competition is often characterized by(A) strong barriers to entry.(B) a long-run price that exceeds average total cost.(C) a price that exceeds average variable cost, causing excess capacity.(D) a homogenous product.(E) many resources devoted to advertising.
The market structures of perfect competition and monopolistic competition share which of the following characteristics?(A) Ease of entry and exit in the long run(B) Homogenous products(C) Perfectly elastic demand for the firm’s product(D) Long-run positive profits(E) Rigid or “sticky” prices
Which of the following is necessarily a characteristic of oligopoly?(A) Free entry into and exit from the market(B) A few large producers(C) One producer of a good with no close substitutes(D) A homogenous product(E) No opportunities for collusion between firms
If this monopolist were regulated to produce a break-even level of output, output will be set at ____ and price will be set at ____.(A) Q2; P1(B) Q1; P1(C) Q1; P2(D) Q3; P3(E) Q2; P2 Price P3 20 P2 P1 ATC=MC MR D Q1 Q2 Q3 Quantity Figure D.4
At the monopoly outcome, consumer surplus is equal to the following area:(A) (P2 – P1) × Q1(B) 1/2 × (P3 – P1) × Q2(C) 1/2 × (P2 – P1) × (Q2 – Q1)(D) 1/2 × P3 × Q3(E) 1/2 × (P3 – P2) × Q1 Price P3 20 P2 P1 ATC=MC MR D Q1 Q2 Q3 Quantity Figure D.4
When the monopolist maximizes profit, output will be set at ____ and price will be set at ____.(A) Q2; P1(B) Q1; P1(C) Q1; P2(D) Q3; P3(E) Q2; P2 Price P3 20 P2 P1 ATC=MC MR D Q1 Q2 Q3 Quantity Figure D.4
Assuming positive profits are possible, when a monopolist sets output to maximize profit, we know that(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.
When a monopolist has maximized profit,(A) price is set equal to marginal cost, creating zero economic profit.(B) output is set where price is equal to average total cost.(C) price is set above marginal cost, creating allocative inefficiency.(D) any short-run profit will be eliminated through the
Perfectly competitive markets are said to be allocatively efficient because output is where(A) P = ATC.(B) P = MC.(C) P = AVC.(D) economic profit is zero.(E) P= MR.
When a perfectly competitive market has come to long-run equilibrium, we know that(A) economic profit is zero and accounting profit is greater than zero.(B) economic profit and accounting profit are both zero.(C) price is greater than average total cost.(D) price is equal to average variable
Which of the following is a characteristic of perfectly competitive markets?(A) Product differentiation(B) Barriers to entry(C) Strategic behavior(D) Very few producers(E) Price-taking behavior
If a perfectly competitive firm is maximizing profit and short-run profits are positive, which of the following must be true?(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
If the perfectly competitive price is currently below minimum average total cost, we can expect which of the following events in the long run?(A) The price will rise and each firm’s output will fall as firms exit the industry.(B) Market equilibrium quantity will increase as firms exit the
If the market price of the output increases from P1 to P3, the profitmaximizing firm will(A) increase output from q1 to q4 and earn positive economic profits.(B) increase output from q1 to q4 and earn a normal profit.(C) increase output from q1 to q3 and earn positive economic profits.(D) increase
The shutdown point is seen at:(A) P0, q0(B) P1, q1(C) P2, q2(D) P3, q3(E) P3, q4 Price $ P3 24 P2 P1 PO ATC MC AVC q0q1q2 q3 q4 Output Figure D.3
At a quantity of 4, what is the total cost of production?(A) $7.50(B) $2.50(C) $15(D) $30(E) $14.50
The first unit of output to exhibit diminishing marginal productivity is the _____ unit.(A) 1st(B) 2nd(C) 3rd(D) 4th(E) 5th AVERAGE AVERAGE FIXED OUTPUT COST COST VARIABLE MARGINAL COST 0 1 $10 $5 $5 2 $5 $3.50 $2 3 $3.33 $4.33 $6 4 $2.50 $5 $7 5 $2 $5.60 $8
The total fixed cost of producing a quantity of 4 is(A) $5.(B) $7.50.(C) $7.(D) $2.50.(E) $10. AVERAGE AVERAGE FIXED OUTPUT COST COST VARIABLE MARGINAL COST 0 1 $10 $5 $5 2 $5 $3.50 $2 3 $3.33 $4.33 $6 4 $2.50 $5 $7 5 $2 $5.60 $8
What is the average product of labor for the fifth unit of labor?(A) 5(B) 30(C) 6(D) 2(E) 25 QUANTITY OF LABOR TOTAL PRODUCT EMPLOYED (L) OF LABOR (Q) 0 0 1 10 2 18 3 24 4 28 5 30 6 31 7 30
What is the marginal product of labor for the third unit of labor?(A) 24(B) 6(C) 8(D) 3(E) 12 QUANTITY OF LABOR TOTAL PRODUCT EMPLOYED (L) OF LABOR (Q) 0 0 1 10 2 18 3 24 4 28 5 30 6 31 7 30
A pizza restaurant is operating in the short run and looking at expenses for next month. Which of the following is a variable cost for the owners of the restaurant?(A) Rent on the building(B) Cost of Wi-Fi in the building(C) Cost of deliveries of cheese and pepperoni(D) Insurance payments on pizza
In the short run, a firm employs labor and capital to produce gadgets.If the annual price of capital increases, what will happen to the shortrun cost curves?(A) The marginal cost and average variable cost curves will shift upward.(B) The average fixed cost and average total cost curves will shift
If a consumer is not required to pay a monetary price for each cookie she consumes, the consumer will stop eating cookies when(A) the total utility from eating cookies is equal to zero.(B) the substitution effect outweighs the income effect from eating cookies.(C) the ratio of marginal utility

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

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