Questions:
1. Question: As a student of economics, when you speak of scarcity, you are referring to the ability of society to
2. Question: The idea in economics that "there is no free lunch" means that
3. Question: The law of increasing opportunity costs indicates that
4. Question: A tradeoff exists between two economic goals, X and Y. This tradeoff means that
5. Question: Which would not be considered as a capital resource of a business by an economist?
6. Question: The economy of Germany would best be classified as:
7. Question: Markets in which firms sell their output of goods and services are called
8. Question: Laissez-faire capitalism is characterized by
9. Question: Which is not one of the five fundamental questions that an economy must deal with?
10. Question: The major "success indicator" for business managers in command economies like the Soviet Union and China in the past was
11. Question: An increase in demand means that
12. Question: At the point where the demand and supply curves intersect
13. Question: Black markets are associated with
14. Question: A headline reads "Lumber Prices Up Sharply." In a competitive market, this situation would lead to a(n)
15. Question: For most products, purchases tend to fall with decreases in buyers' incomes. Such products are known as
16. Question: When the price of a product is increased 10 percent, the quantity demanded decreases 15 percent. In this range of prices, demand for this product is
17. Question: Total revenue falls as the price of a good is raised, if the demand for the good is
18. Question: The demand for Cheerios cereal is more price-elastic than the demand for cereals as a whole. This is best explained by the fact that
19. Question: To economists the main differences between "the short run" and "the long run" are that
20. Question: Airlines charge business travelers more than leisure travelers because there is a more
21. Question: Suppose that you could prepare your own tax return in 15 hours, or you could hire a tax specialist to prepare it for you in two hours. You value your time at $11 an hour. The tax specialist will charge you $55 an hour. The opportunity cost of preparing your own tax return is
22. Question: Economic profits are equal to
23. Question: The main difference between the short run and the long run is that
24. Question: Fixed costs are those costs which are
25. Question: At an output of 20,000 units per year, a firm's variable costs are $80,000 and its average fixed costs are $3. The total costs per year for the firm are:
26. Question: If the price of a fixed factor of production increases by 50 percent, what effect would this have on the marginal-cost schedule facing a firm?
Part 2
1. Question: Which market model assumes the least number of firms in an industry?
2. Question: Local electric or gas utility companies mostly operate in which market model?
3. Question: The fast-food restaurants would be an example of which market model?
4. Question: Sam owns a firm that produces tomatoes in a purely competitive market. The firm's demand curve is
5. Question: T-Shirt Enterprises is selling in a purely competitive market. It is producing 3,000 units, selling them for $2 each. At this level of output, the average total cost is $2.50 and the average variable cost is $2.20. Based on these data, the firm should
6. Question: A firm should always continue to operate at a loss in the short run if
7. Question: The short-run supply curve for a competitive firm is the
8. Question: One feature of pure monopoly is that the monopolist is
9. Question: Barriers to entry
10. Question: The demand curve confronting a nondiscriminating, pure monopolist is
11. Question: Which is the best example of price discrimination?
12. Question: Monopolistic competition is characterized by firms
13. Question: Assume that in a monopolistically competitive industry, firms are earning economic profit. This situation will
14. Question: A unique feature of an oligopolistic industry is
15. Question: You are told that the four-firm concentration ratio in an industry is 20. Based on this information you can conclude that
16. Question: A major reason that firms form a cartel is to
17. Question: Money is not an economic resource because
18. Question: Refer to the diagram which is based on the Circular Flow Model in Chapter 2. Arrows (3) and (4) represent
19. Question: Refer to the diagram. A decrease in demand is depicted by a
20. Question: Refer to the information and assume the stadium capacity is 5,000. If the Mudhens' management charges $7 per ticket
21. Question: Which type of goods is most adversely affected by recessions?
22. Question: The following cost data are for a firm in the short run:.....What is the .....?
23. Question: Refer to the diagram. Points A, B, C, D, and E show
24. Question: Any activity designed to transfer income or wealth to a particular individual or firm at society's expense is called
25. Question: a.) Do you agree or disagree with the statement that: "A monopolist always charges the highest possible price."? Explain. b.) Why can't an individual firm raise its price by reducing output or lower its price to increase sales volume in a purely competitive market?
26. Question: What effect should each of the following have on the demand for gasoline in a competitive market? State what happens to demand. Explain your reasoning in each case and relate it to a demand determinant.