Question # 1

Suppose that the price elasticity of demand for maple syrup has been estimated at-2 if quantity demanded increased by 10 precent, price must have changed by.

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5 percent lower

5 percent higher

10 percent lower

10 percent higher

Oligopoly is a market structure in which

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Many firms each produce a slightly differentiated product

One firm produces as unique product

A small number of firms compete

Many firms produce an identical product

If the price of product X falls and this change increases the demand for product Y then.

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X and Y are complements

X and Y are substitutes

X is an inferior good

Y is an inferior good

BATA's marginal utility per dollars is .8 for both shorts and running shoes,. To attain her consumer equilibrium BATA should.

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Buy an additional pair of shorts

Buy an additional pair of both items

Possibly not make any adjustment in her behavior

Sell her shorts and keep her shoes

In monopoly the firm can

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Price

Output

Either price or output

Both a and b

A negatively sloped isoquant implies

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Products with negative marginal utilities

Products with positive marginal utilities

Inputs with negative marginal products

Inputs with positive marginal products

If a firm which polluted the water of area had to pay all social cost would have

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Small output

Large output

Heavy output

B and C

When economists say that a per son is economizing they mean that the person is.

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making choices to gain benefits at lowest possible cost

Making a lot of money

Purchasing goods that are generic cheap or of low quality

Learning how to run a business more effecitively

A monolithically competitive market is characterized by all of the following except.

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Easy entry

Differentiated product

Excess capacity

Economic profit in the long run

In perfect competition the industry will be in equilibrium.

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when all the firms earning abnormal profit

When all the firms earning normal profit

All firms having loss

All firms having proft

"Treating an individual as typical of a group" in the definition of.

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Pure discrimination human capital

Statistical discrimination

Human capital

Specific skills

Skills that can be transferred to other employers are called.

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General skills

Specific skills

Non pecuniary skills

All of the above

A price decrease and an increase in income are similar in that

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Both force the consumer to achieve a lower level of well being

Both force the consumer to reach a lower indifference curve

Both move the budget line outward

^{They are not similar at all}

In the short run the competitive firm will produce if.

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Price is equal to marginal cost

Price is equal to marginal revenue

Price is equal to total cost

Price is equal to are greater than average variable cost.

When the price of an inferior goods falls ceteris paribus the substitution effect leads to ________ in the quantity purchased and the income effect leads to _______ in the quantity purchased.

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An increase an increase

An increase, a decrease

A decrease, an increase

A decrease, a decrease

If leisure is an inferior good the individuals supply curve for labor is.

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Back ward bending

Completely inelastic

Upward sloping

Perfectly elastic

A linear homogenous production function would reveal.

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Constant returns to scale

Increasing returns to scale

Decreasing return to scale

Doubling all inputs would more than double output

If a good is normal then the demand curve for that good must be.

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Downward sloping

Upward sloping

Perfectly elastic

Completely inelastic

The "Law of demand" most directly means that consumers buy

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More of a good the higher their incomes, ceteris paribus.

Less of good the higher its price ceteris paribus

Buy more of a good the less is its supply ceteris paribus

Buy less of a good the greater is its supply ceteris paribus

If both supply and demand for a good increase at the same time which of the following must also increase

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The equilibrium price

The use of substitutes

The equilibrium quantity

All of the above

The demand curve for labor for a monopolist when other inputs are fixed is equal to its

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Marginal value product curve

Marginal revenue product curve

Horizontal summation of the firms demand curve at different output prices

Marginal physical product curve

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