ECO 561 Final

ECO 561 Final
 
 
1). If a firm in a purely competitive industry is confronted with an equilibrium price of $5, its marginal revenue:-
 
2). A firm that is motivated by self interest should:-
 
3). If price is above the equilibrium level, competition among sellers to reduce the resulting:-
 
4). 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:-
 
5). Since their introduction, prices of DVD players have fallen and the quantity purchased has increased. This statement:-
 
6). In a market economy the distribution of output will be determined primarily by:-
 
7). In a competitive market economy firms will select the least-cost production technique because:-
 
8). Suppose that the price of peanuts falls from $3 to $2 per bushel and that, as a result, the total revenue received by peanut farmers changes from $16 to $14 billion. Thus:-
 
9). If technology dictates that labor and capital must be used in fixed proportions, an increase in the price of capital will cause a firm to use:-
 
10). In which of the following industries are economies of scale exhausted at relatively low levels of output??
 
11). If a firm decides to produce no output in the short run, its costs will be:-
 
12). Which of the following represents a long-run adjustment?
 
13). Paying an above-equilibrium wage rate might reduce unit labor costs by:
 
14). A firm can hire six workers at a wage rate of $8 per hour but must pay $9 per hour to all of its employees to attract a seventh worker. The marginal wage cost of the seventh worker is:
 
15). Price exceeds marginal revenue for the pure monopolist because the:
 
16). Oligopoly is difficult to analyze primarily because:
 
17). A competitive firm will maximize profits at that output at which:
 
18). Nonprice competition refers to:
 
19). competition between aluminum and steel in the manufacture of automobile parts.
Advertising can impede economic efficiency when it:
 
20). Which of the following is not a possible source of natural monopoly?
 
21). Suppose that an industry is characterized by a few firms and price leadership. We would expect that:
 
22). When economists view technological change as internal to the economy, they mean that it:
 
23). Firm X develops a new product and gets a head start in its production. Other firms try to produce a similar product but discover they have higher average total costs than the existing firm. This situation illustrates:
 
24). In the long run a pure monopolist will maximize profits by producing that output at which marginal cost is equal to:
 
25). If personal taxes were decreased and resource productivity increased simultaneously, the equilibrium:-
 
26). Suppose that nominal wages fall and productivity rises in a particular economy. Other things equal, the aggregate:
 
27). Suppose the price level is fixed, the MPC is .5, and the GDP gap is a negative $100 billion. To achieve full-employment output (exactly), government should:
 
28). Expansionary fiscal policy is so named because it:-
 
29). Stabilizing a nation’s price level and the purchasing power of its money can be achieved:
 
30). Suppose that US prices rise 4 percent over the next year while prices in Mexico rise 6%. According to the purchasing power parity theory of exchange rates, what should happen to the exchange rate between the dollar and the peso?