1.If a market has unclear property rights, high transaction costs and a cost or benefit not internalized then this would be a :

a.a natural monopoly

b.monopolistic competition

c.an oligopoly

d.an externality

e.a monopsony

f. A and B

2.From the following statements, which one is true of a perfectly competitive market in the long run?

a.CS [consumer surplus] will always be equal to PS [producer surplus]

b.Individual firms produce where the AVC [average variable cost] essentially equals MC [marginal cost] and MR [marginal revenue]

c.There is both allocative and productive efficiency, and all firms earn normal profits.

d. No firms can enter or exit.

e. It may be said to be allocatively efficient yet, it may or may not be productively efficient.

3.From the following options select the option that describes the result of whenever the government intervenes in an efficient market and it essentially creates DWL [deadweight loss]?

a.Allocative inefficiency

b. Productive inefficiency

c.Unemployment

d.Shortages

e.Tax revenue

f. Indeterminate

4.The data table shown below represents the total utility that Mike enjoys all based on the quantity of Latin bread slices he consumes.

Bread Slices Consumed Total Utility(utils)

1 4

2 7

3 9

4 11

5 12

All based on the information above, which slice of bread gives Mike the highest marginal utility?

Slices :

a. 1

b. 2

c. 3

d. 4

e. 5

f.Indeterminate

5.Use the information below to answer the question that follows. Under this means, assume constant opportunity costs for Manuel and Ricardo.

Units of Blue Cheese in a Day Tuna in a Day

Manuel 10 25

Ricardo 30 10

Which of the following choices is correct regarding Manuel and Ricardo's trade advantages?

a.Manuel has an absolute advantage in blue cheese and Tuna.

b.Ricardo has a comparative advantage in Tuna.

c.Manuel has an absolute and comparative advantage in Tuna.

d.Manuel has absolute and comparative advantages in blue cheese.

e. Ricardo has an absolute advantage in Tuna.

f.Indeterminate

6.From the following options, what would be the intended effect of a country X placing / imposing an import tariff on a good?

a. Higher trade as a whole

b. A decrease within domestic production

c. Less costs for transport

d. Better quality of the foreign trade

e. An increase in domestic production

7.Noticing that every choice needs and requires a forgone or sacrificed best alternative; this is called :

a.A normative cost

b.An opportunity cost

c. A fixed cost

d.Apositive cost

e. Anaccounting cost

8.What would be the explicit costs, if a firm is earning negative economic profit of $5,000, its implicit costs are $3,000 and its TR [total revenue] is $7,000 ?

a.$8,000

b.$9,000

c.$10,000

d.$11,000

e.12,000

f. 13,000

g.Indeterminate

9.From the following options,ceteris paribus, which would essentially lead to a decrease in price and an increase in the quantity consumed ?

a.Per unit tax

b.A lump sum tax

c.A per unit subsidy

d.Decrease in income tax

e. Binding price floor

f.None of the above.

10.A firm in a perfectly competitive market produces and sells hand moisturizers.

Under this means, the following information is concordant for the company:

Current output 5000 units

Current market price $5

TC [total cost] $27,000

Marginal cost $5

Total variable cost $20,000

Based on this information, what would be said to be the best action for this firm?

a.Increase its output in the long run and reduce output in the short run.

b.Exit in the long run and shut down in the short run

c.Exiting in the long run and operating in the short run

d.Operating in the long run, as well as in the short run

e. Produce in the long run and shut down in the short run

f.Indeterminate

g.All of the above.