1. Which of the following could decrease labor demand? A. an increase in migrant workers. B. a decrease in demand for the final product produced by labor. C. a decrease in labor supply. D. an increase in the marginal productivity of workers.
2. Markets that are characterized by a few sellers who sell similar or identical products are typically referred to as A. aggressive markets B. oligopoly markets C. monopoly markets D. competitive markets
3. For a perfectly competitive firm to maximize profit, any rise in the market wage must be A. offset by a decrease in the value of marginal product. B. followed by a increase in employment. C. followed by a decrease in the marginal product of labor. D. followed by an increase in the marginal product of labor.
4.When a profit maximizing firm makes a decision to employ a worker, that decision is based on A. the individual contribution thet the worker makes to the profit of the firm. B. how much output the worker can produce. C. the familial relationship between the employer and the employee. D. the total output produced by the firm.
5. When the number of firms in a market is small, firms A. generally organize as a cartel. B. are less concerned about competitor's behavior, since there's always sufficient demand to keep all firms happy. C. are guaranteed an economic profit. D. must generally consider how competing firms respond to their decisions.
6. Which of the following statements is correct? A. over time, government has been less lenient toward advertising in order to enhance the ability of markets to allocateenuerev resources efficiently. B. over time, government has been more lenient toward advertising in order to enhance competiton in markets. C. over time, government has benn more lenient toward advertising in order to enhance brand loyalty. D. over time, government has been less lenient toward advertising in order to decrease elasticity of demand for specific products.
7. The profit maximizing employment rule for a competitive firm ensures that A. output price will equal marginal cost. B. revenue will be maximized. C. total cost will be minimized. D. price will always exceed cost of production.
8. When advertising fosters brand loyalty, critics claim that it A. impedes competition. B. lowers the quality of goods in the market. C. alters a firm's supply curve. D. increases competition in the market.
9. The practice of selling a product to retailers and requiring the retailers to charge a specific price for the product is called A. fixed retail pricing. B. unfair trade. C. resale price maintenance. D. cost plus pricing.
10. The deadweight loss that's associated with monopolistically competitive markets is a result of A. operating in a constant cost industry. B. advertising cost. C. pricing below marginal cost in order to increase market share. D. pricing above marginal cost.
11. A key determinant of recent labor productivity has been A. family size. B. equilibrium wages. C. information technology. D. an increase in product demand.
12. Which of the following statements is correct? A. as the numbers of firms in an oligopoly increases, the oligopoly becomes more like a duopoly. B. as the numbers of firms in an oligopoly increases, the oligopoly becomes more like a monoploy. C. as the number of firms in an oligopoly increases, the oligopoly becomes more competitive. D. as the number of firms in an oligopoly decrease, theoligopoly becomes more competitive,
13. The market for wine is likely to be characterized by which form of market structure? A. Monoploy. B. Oligopoly. C. perfect competition. D. monopolistic competition.
14. Which of the following statements is correct? A. if wages fall, profit maximizing firms in competitive markets will increase empolyment and the marginal product of labor will fall. B. if wages fall, profit maximizing firms in competitive markets will increase employment and the marginal product of labor will rise. C. if wages fall, profit maximizing firms in competitive markets will decrease employment and the marginal product of labor will rise. D. if wages fall, profit maximizing firms in competitive markets will decrease employment and the marginal product of labor will fall.
15. The business stealing externality associated with monopolistic cpmpetition arises because in monopolistically competitive markets, firms A. always charge a price higher than marginal cost. B. produce differentiated products. C. are few barriers to entry. D. produce at less than efficient scale.
16. Government laws that restrict cooperative agreements are called A. cartel laws. B. antitrust laws. C. tort laws. D. corporate laws.
17. Assuming competitive markets, a worker's contribution to revenue is given by the A. production function. B. marginal product minus the marginal cost. C. value of the marginal cost of labor. D. value of the marginal product of labor.
18. Cooperation between the two prisoners in the prisoners dilemma game is difficult to maintain, because A. the prisoners are questioned separtely. B. criminals know they can't trust each other. C. choosing the dominant strategy is individually rational. D. cooperation is individually rational.
19. A monopolistically competitive firm chooses the A. price, but output is determined by cartel production quato. B. quantity of output to produce and the price at which it will sell its output. C. quantity of output to produce, but the market determines price. D. price, but competition in the market determines the quantity.
20. Technology is an important factor in explaining the high incomes of superstars because A. technology is available that can limit access to the superstars. B. only technologically literate superstars can earn super incomes. C. technology accounts for differences in incomes within all occupations. D. technology makes it possible for the best producer to supply every customer at low cost.
21. The amount of a commodity that a person is consuming A. is affected only by prices. B. affects the rate at which the person is willing to trade. C. is affected only by income. D. won't affect the marginal rate of substitution.
22. As a result of the tradeoff between income equality and incentives to work, an optimal redistribution policy A. will rarely fall short of a full egalitarian society. B. is consistent only with transfers to the middle class. C. always falls short of a full egalitarian society. D. can never be funded through taxes on wage income.