ECO561 Final Exam
1) Suppose that in the clothing market, production costs have fallen, but the equilibrium price and quantity purchased have both increased. Based on this information you can conclude that [ B. demand for clothing has grown faster than the supply of clothing ]
2) Camille's Creations and Julia's Jewels both sell beads in a competitive market. If at the market price of $5, both are running out of beads to sell (they can't keep up with the quantity demanded at that price), then we would expect both Camille's and Julia's to: [ B. raise their price and increase their quantity supplied ]
3) In which of the following industries are economies of scale exhausted at relatively low levels of output? [ B. Automobile manufacturing ]
4) The average cost curves (AVC and ATC) should be minimized
[ A. where MC = ATC and MC = AVC ]
5) If the wage rate increases, [ C. a purely competitive and an imperfectly competitive producer will both hire less labor ]
6) The real wage will rise if the nominal wage [ C. increases more rapidly than the general price level ]
7) Construction workers frequently sponsor political lobbying in support of greater public spending on highways and public buildings. One reason they do this is to [ C. increase the demand for construction workers ]
8) Paying an above-equilibrium wage rate might reduce unit labor costs by [ B. increasing the cost to workers of being fired for shirking ]
9) A good real-world example of monopolistic competition is
[ A. lawyers ]
10) An industry comprising a small number of firms, each of which considers the potential reactions of its rivals in making price-output decisions, is called [ B. oligopoly ]
11) Price is constant or given to the individual firm selling in a purely competitive market because [ C. each seller supplies a negligible fraction of total supply ]
12) The most important pricing strategy for a perfectly competitive firm is
[ A. minimizing cost ]
13) Which of the
2) Camille's Creations and Julia's Jewels both sell beads in a competitive market. If at the market price of $5, both are running out of beads to sell (they can't keep up with the quantity demanded at that price), then we would expect both Camille's and Julia's to: [ B. raise their price and increase their quantity supplied ]
3) In which of the following industries are economies of scale exhausted at relatively low levels of output? [ B. Automobile manufacturing ]
4) The average cost curves (AVC and ATC) should be minimized
[ A. where MC = ATC and MC = AVC ]
5) If the wage rate increases, [ C. a purely competitive and an imperfectly competitive producer will both hire less labor ]
6) The real wage will rise if the nominal wage [ C. increases more rapidly than the general price level ]
7) Construction workers frequently sponsor political lobbying in support of greater public spending on highways and public buildings. One reason they do this is to [ C. increase the demand for construction workers ]
8) Paying an above-equilibrium wage rate might reduce unit labor costs by [ B. increasing the cost to workers of being fired for shirking ]
9) A good real-world example of monopolistic competition is
[ A. lawyers ]
10) An industry comprising a small number of firms, each of which considers the potential reactions of its rivals in making price-output decisions, is called [ B. oligopoly ]
11) Price is constant or given to the individual firm selling in a purely competitive market because [ C. each seller supplies a negligible fraction of total supply ]
12) The most important pricing strategy for a perfectly competitive firm is
[ A. minimizing cost ]
13) Which of the