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ECO 365 Final exam (University of Phoenix) spring 2013

Question # 00001026
Subject: Economics
Due on: 09/25/2013
Posted On: 09/12/2013 09:45 PM

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ECO/365 Final Exam

1) An economist who is studying the relationship between the money supply, interest rates, and the rate of inflation is engaged in

A. microeconomic research

B. macroeconomic research

C. theoretical research, because there is no data on these variables

D. empirical research, because there is no economic theory related to these variables

2) A basic difference between microeconomics and macroeconomics is that microeconomics

A. focuses on the choices of individual consumers, while macroeconomics considers the behavior of large businesses

B. focuses on financial reporting by individuals, while macroeconomics focuses on financial reporting by large firms

C. examines the choices made by individual participants in an economy, while macroeconomics considers the economy's overall performance

D. focuses on national markets, while macroeconomics concentrates on international markets

3) The distinction between supply and the quantity supplied is best made by saying that

A. the quantity supplied is represented graphically by a curve and supply as a point on that curve associated with a particular price

B. supply is represented graphically by a curve and the quantity supplied as a point on that curve associated with a particular price

C. the quantity supplied is in direct relation with prices, whereas supply is in inverse relation

D. the quantity supplied is in inverse relation with prices, whereas supply is in direct relation

4) After several years of slow economic growth, world demand for petroleum began to rise rapidly in the 1990s. Much of the increase in demand was met by additional supplies from sources outside the Organization of Petroleum Exporting Countries (OPEC). OPEC, during this time, was unable to restrain output among members in its effort to lift oil prices. What best describes these events?

A. The rise in demand shifted the demand for oil to the right. OPEC actions shifted the demand for oil back to the left.

B. The rise in demand shifted the demand for oil to the right. As price rose, the supply of oil also rose.

C. The rise in demand shifted the demand for oil to the right. As price rose, the quantity of oil supplied rose.

D. The rise in demand reflects a movement down along the demand curve as supply shifted to the right when suppliers produced more oil.

5) Price elasticity of demand is the:

A. change in the quantity of a good demanded divided by the change in the price of that good

B. change in the price of a good divided by the change in the quantity of that good demanded

C. percentage change in price of that good divided by the percentage change in the quantity of that good demanded

D. percentage change in quantity demanded of a good divided by the percentage change in the price of that good

6) If average movie ticket prices rise by about 5 percent and attendance falls by about 2 percent, other things being equal, the elasticity of demand for movie tickets is about:

A. 0.0

B. 0.4

C. 0.6

D. 2.5

7) When labor is the variable input, the average product equals the

A. marginal product divided by the number of workers

B. marginal product multiplied by the number of workers

C. number of workers divided by the quantity of output

D. quantity of output divided by the number of workers

8) The increase in output obtained by hiring an additional worker is known as

A. the average product

B. the marginal product

C. the total product

D. value added

9) Which of the following is the best example of a long-run decision?

A. An automobile manufacturing company is considering whether or not to invest in robotic equipment to develop a more cost-effective production technique.

B. An automobile manufacturing company is considering whether or not to expand its existing workforce, while keeping the same factory and equipment.

C. A business consulting firm is considering whether or not to hire interns to assist with research and data processing.

D. A business consulting firm is considering whether or not to add new computers while maintaining the same number of employees.

10) Other things being equal, when average productivity falls,

A. average fixed cost must rise

B. marginal cost must rise

C. average total cost must rise

D. average variable cost must rise

11) According to economist Colin Camerer of the California Institute of Technology, many New York taxi drivers decide when to finish work by setting an income goal for themselves. If this is true, then on busy days when the effective hourly wage is higher, taxi drivers will

A. work the same number of hours as they will on slower days

B. work fewer hours than they will on slower days

C. work more hours than they will on slower days

D. not work any hours

12) A firm's demand for labor is derived from the

A. opportunity costs associated with labor and leisure

B. desires and needs of the entrepreneur

C. cost of labor inputs

D. demand for its output

13) Owen runs a delivery business and currently employs three drivers. He owns three vans that employees use to make deliveries, but he is considering hiring a fourth driver. If he hires a fourth driver, he can schedule breaks and lunch hours so all three vans are in constant use, allowing him to increase deliveries per day from 60 to 75. This will cost an additional $75 per day to hire the fourth driver. The marginal cost per delivery of increasing output beyond 60 deliveries per day

A. is $0 because Owen does not have to purchase another van

B. is $5

C. is $75

D. cannot be calculated without knowing Owen's total fixed costs

14) Expected economic profit per unit is equal to

A. expected price

B. expected average total cost

C. the difference between expected average price and expected average total cost

D. the difference between expected total revenue and expected total cost

15) If a firm in a perfectly competitive market experiences a technological breakthrough,

A. other firms would find out about it eventually

B. other firms would find out about it immediately

C. other firms would not find out about it

D. some firms would find out about it, but others would not

16) A significant difference between monopoly and perfect competition is that

A. free entry and exit is possible in a monopolized industry, but impossible in a competitive industry

B. competitive firms control market supply, but monopolies do not

C. the monopolist's demand curve is the industry demand curve, while the competitive firm's demand curve is perfectly elastic

D. profits are driven to zero in a monopolized industry, but may be positive in a competitive industry.

17) A monopoly firm is different from a competitive firm in that

A. there are many substitutes for a monopolist's product while there are no substitutes for a competitive firm's product

B. a monopolist's demand curve is perfectly inelastic while a competitive firm's demand curve is perfectly elastic

C. a monopolist can influence market price while a competitive firm cannot

D. a competitive firm has a U-shaped average cost curve while a monopolist does not

18) The difference between a perfectly competitive firm and a monopolistically competitive firm is that a monopolistically competitive firm faces a

A. horizontal demand curve and price equals marginal cost in equilibrium

B. horizontal demand curve and price exceeds marginal cost in equilibrium

C. downward-sloping demand curve and price equals marginal cost in equilibrium

D. downward-sloping demand curve and price exceeds marginal cost in equilibrium

19) As long as marginal cost is below marginal revenue, a perfectly competitive firm should

A. increase production

B. hold production constant

C. decrease production

D. reconsider past production decisions

20) Because a monopolistic competitor has some monopoly power, advertising to increase that monopoly power makes sense as long as the marginal

A. benefit of advertising is positive

B. cost of advertising is positive

C. benefit of advertising exceeds the marginal cost of advertising

D. cost of advertising exceeds the marginal benefit of advertising

21) In the Flint Hills area of Kansas, proposals to build wind turbines to generate electricity have pitted environmentalist against environmentalist. Members of the Kansas Sierra Club support the turbines as a way to reduce fossil fuel usage, while local chapters of the Nature Conservancy say they will befoul the landscape. The Sierra Club argues that wind turbines

A. are a source of negative externalities

B. reduce negative externalities elsewhere in the economy

C. create a free-rider problem

D. are a way of solving a free-rider problem

22) When negative externalities are present, market failure often occurs because

A the marginal external cost resulting from the activity is not reflected in the market price

B. the marginal external cost resulting from the activity is reflected in the market price

C. the existence of imports from foreign countries takes jobs and income away from U.S. citizen

D. consumers will consume the good at a level where their individual marginal benefits exceed the marginal costs borne by the firm producing the good

23) A merger between a textile mill and a clothing manufacturing company would be considered a

A. horizontal merger

B. vertical merger

C. conglomerate merger

D. diagonal merger

24) A merger between a baby food company and a life insurance company would be considered a

A. horizontal merger

B. vertical merger

C. conglomerate merger

D. diagonal merger

25) From the point of view of consumer and producer surplus, what problem may be created when a country subsidizes the cost of energy to consumers to help alleviate the burden of higher energy costs?

A. It hurts the poor and benefits the rich.

B. It leads to less fuel being used than the amount that maximizes consumer surplus.

C. It encourages the consumption of too much fuel at the expense of other goods.

D. It has no effect; consumers gain a surplus, but taxpayers lose the same amount because they must finance the subsidy.

26) Suppose people freely choose to spend 40 percent of their income on health care, but the government decides to tax 40 percent of a person's income to provide the same level of coverage as before. What can be said about deadweight loss in each case?

A. Taxing income results in deadweight loss, while purchasing health care on one's own does not result in deadweight loss.

B. Taxing income results in less deadweight loss, because government knows better what health care coverage is good for society.

C. There is no difference because the goods are purchased in the market in either case.

D. There is no difference because the total spending remains the same and the health care purchased remains the same.

27) The U.S. textile industry is relatively small because the US imports most of its clothing. A clear result of the importation of clothing is

A. there is less variety available than there would be without imports

B. the quality of clothing is lower than it would be without imports

C. the price of clothing is higher than it would be without imports

D. the price of clothing is lower than it would be without imports

28) Countries can expect to gain from international trade as long as they

A. keep production diversified

B. specialize according to their comparative advantage

C. produce only those goods for which they have a relatively high opportunity cost

D. use trade restrictions to reduce competition for domestic producers

29) Which of the following is an example of the law of one price?

A. Exchange rates tend to have equivalent values. For example, one Italian lire equals one U.S. dollar.

B. Because people have essentially the same basic needs wherever they live, they tend to buy the same bundle of goods.

C. Because wages are so much lower in China, eventually all U.S. jobs will be outsourced to China, leaving the US to import all goods at one price.

D. Because their countries have similar institutions, the price paid for a computer in Germany and the United States are about the same when converted into the same currency.

30) The fact that U.S. managers' salaries are substantially greater than those of comparable managers in Japan may be related to

A. an increase in the demand for CEOs

B. an increase in the supply of CEOs

C. the comparatively greater competitive markets in Japan

D. the greater number of public goods provided in the United States

Tags spring 0 phoenix university exam final demand cost curve price marginal firm competitive quantity average total firms difference divided good rise supplied supply perfectly clothing income number advertising market company considering increase goods industry expected change

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ECO 365 Final exam (University of Phoenix) spring 2013

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Preview: drivers xxxxxx when xx finish work xx setting an xxxxxx goal xxx xxxxxxxxxx If xxxx is true, xxxx on busy xxxx when xxx xxxxxxxxx hourly xxxx is higher, xxxx drivers willA xxxx the xxxx xxxxxx of xxxxx as they xxxx on slower xxxxx work xxxxx xxxxx than xxxx will on xxxxxx daysC work xxxx hours xxxx xxxx will xx slower daysD xxx work any xxxxxxxx A xxxxxx xxxxxx for xxxxx is derived xxxx theA opportunity xxxxx associated xxxx xxxxx and xxxxxxxx desires and xxxxx of the xxxxxxxxxxxxx cost xx xxxxx inputsD xxxxxx for its xxxxxxxxx Owen runs x delivery xxxxxxxx xxx currently xxxxxxx three drivers xx owns three xxxx that xxxxxxxxx xxx to xxxx deliveries, but xx is considering xxxxxx a xxxxxx xxxxxx If xx hires a xxxxxx driver, he xxx schedule xxxxxx xxx lunch xxxxx so all xxxxx vans are xx constant xxxx xxxxxxxx him xx increase deliveries xxx day from xx to xx xxxx will xxxx an additional xxx per day xx hire xxx xxxxxx driver xxx marginal cost xxx delivery of xxxxxxxxxx output xxxxxx xx deliveries xxx dayA is xx because Owen xxxx not xxxx xx purchase xxxxxxx vanB is xxx is $75D xxxxxx be xxxxxxxxxx xxxxxxx knowing xxxxxx total fixed xxxxxxxx Expected economic xxxxxx per xxxx xx equal xxx expected priceB xxxxxxxx average total xxxxx the xxxxxxxxxx xxxxxxx expected xxxxxxx price and xxxxxxxx average total xxxxx the xxxxxxxxxx xxxxxxx expected xxxxx revenue and xxxxxxxx total cost15) xx a xxxx xx a xxxxxxxxx competitive market xxxxxxxxxxx a technological xxxxxxxxxxxxxx other xxxxx xxxxx find xxx about it xxxxxxxxxxx other firms xxxxx find xxx xxxxx it xxxxxxxxxxxx other firms xxxxx not find xxx about xxx xxxx firms xxxxx find out xxxxx it, but xxxxxx would xxxxxx x significant xxxxxxxxxx between monopoly xxx perfect competition xx thatA xxxx xxxxx and xxxx is possible xx a monopolized xxxxxxxxx but xxxxxxxxxx xx a xxxxxxxxxxx industryB competitive xxxxx control market xxxxxxx but xxxxxxxxxx xx notC xxx monopolist's demand xxxxx is the xxxxxxxx demand xxxxxx xxxxx the xxxxxxxxxxx firm's demand xxxxx is perfectly xxxxxxxx profits xxx xxxxxx to xxxx in a xxxxxxxxxxx industry, but xxx be xxxxxxxx xx a xxxxxxxxxxx industry 17) x monopoly firm xx different xxxx x competitive xxxx in thatA xxxxx are many xxxxxxxxxxx for x xxxxxxxxxxxx product xxxxx there are xx substitutes for x.....
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