Principles of Microeconomics Essay Example for Free

Principles of Microeconomics Essay1) If average movie ticket prices rise by ab erupt 5 percent and attendance falls by about 2 percent, other things being equal, the elasticity of solicit for movie tickets is aboutB. 0.42) A basic difference amid microeconomics and macroeconomics is that microeconomicsC. examines the choices made by individual participants in an economy, bit macroeconomics considers the economys overall performance3) An economist who is studying the relationship between the money supply, interest rates, and the rate of inflation is engaged in B. macroeconomic research4) afterward several years of slow economic growth, world demand for petroleum began to rise rapidly in the 1990s. Much of the profit in demand was met by excess 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?C. The ris e in demand shifted the demand for oil to the right. As price rose, the quantity of oil supplied rose.5) Price elasticity of demand is theD. percentage change in quantity demanded of a good divided by the percentage change in the price of that good6) The distinction between supply and the quantity supplied is best made by saying thatB. supply is represented graphically by a curve and the quantity supplied as a point on that curve associated with a particular proposition price7) When labor is the variable input, the average product equals theD. quantity of output divided by the number of workers8) The increase in output obtained by hiring an additional worker is known asB. the fringy product9) Which of the pursuance 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.10) Other things being equal, when average productivity falls,D. average variable cost must rise11) 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, therefore on busy days when the effective hourly wage is higher, taxi drivers willB. work fewer hours than they will on slower days12) A firms demand for labor is derived from theD. demand for its output13) 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 continuous 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 dayB. is $514) Expected economic profit per unit is equal toC. the difference betwe en evaluate average price and expected average total cost15) If a firm in a perfectly competitive commercialize experiences a technological breakthrough,B. other firms would find out about it immediately16) A significant difference between monopoly and perfect competition is thatC. the monopolists demand curve is the industry demand curve, while the competitive firms demand curve is perfectly elastic17) A monopoly firm is different from a competitive firm in thatC. a monopolist can influence market price while a competitive firm cannot18) The difference between a perfectly competitive firm and a monopolistically competitive firm is that a monopolistically competitive firm faces aD. downward-sloping demand curve and price exceeds marginal cost in equilibrium19) As long as marginal cost is below marginal revenue, a perfectly competitive firm shouldA. increase production20) Because a monopolistic competitor has some monopoly power, advertising to increase that monopoly power makes se nse as long as the marginalC. benefit of advertising exceeds the marginal cost of advertising21) In the Flint Hills area of Kansas, proposals to variant 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 provoke usage, while local chapters of the Nature Conservancy say they will befoul the landscape. The Sierra Club argues that wind turbinesB. reduce disconfirming externalities elsewhere in the economy22) When negative externalities are present, market failure often occurs becauseA. the marginal external cost resulting from the activity is not reflected in the market price23) A merger between a textile mill and a attire manufacturing company would be considered aB. vertical merger24) A merger between a spoil food company and a life insurance company would be considered aC. conglomerate merger25) The fact that U.S. managers salaries are substantially greater than those of like managers in Japan may be related toA. an increase in the demand for CEOs26) Suppose people freely choose to spend 40 percent of their income on health care, but the government decides to tax 40 percent of a persons income to provide the corresponding 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 ones own does not result in deadweight loss.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 isD. the price of clothing is lower than it would be without imports28) Countries can expect to gain from international trade as long as theyB. specialize according to their comparative advantage29) Which of the following is an example of the law of 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) 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 shipment of higher energy costs?C. It encourages the consumption of too much fuel at the expense of othergoods.