Consider the following supply schedules for Shelby, Pat, and Lanelle, who are the only producers of widgets:

	Shelby	Pat	Lanelle
Price per Widget	Widgets Produced
$500	120	80	40
$400	110	60	30
$300	90	40	20
$200	50	20	10
$100	20	10	0

If the equilibrium quantity is 150 widgets, what is the equilibrium price?

$100 $200 $300 $400 $500

Question 2

(04.05 MC) Assume that there are two major telecommunications companies in a country. Firm A controls 45%, and Firm B controls 37% of the telecommunications market. Firm C controls the remaining portion of the total sales. For the market structure to be an oligopoly, what must be true?

All firms sell the same exact product. One firm must control the entire market. There is a dominant strategy for all firms. The is no price discrimination of consumers. There are high barriers to entry into the market.

Question 3

(01.04 MC) Country A and Country B are debating who has a comparative advantage and who has an absolute advantage. Country A has an opportunity cost ofcar for every plane produced. Country B has an opportunity cost ofcar for every plane produced. Given the information above, which of the following must be true?

Country A has an absolute advantage in plane production. Country B has an absolute advantage in plane production. Country B has a comparative advantage in plane production. Country A has a comparative advantage in plane production. Country A and Country B have a comparative advantage in plane production.

Question 4

(03.02 HC) If marginal product increased from 50 to 60 when the quantity of labor increased from 200 to 205, then what must be true of costs over this range of output?

Marginal costs are decreasing. Marginal costs are increasing. Average total costs are increasing. Average fixed costs are increasing. Average variable costs are decreasing.

Question 7

(03.07 MC) Jasmine owns a farm and sells produce to local restaurants and grocery stores. If her farm is perfectly competitive, what profits and losses can she expect to make in the short and in the long run?

Jasmine may earn economic profits or losses in the short run and in the long run. Jasmine may earn zero economic profit in the short run and profits in the long run. Jasmine may earn zero economic profit in the short run and losses in the long run. Jasmine may earn economic profits or losses in the long run but not in the short run. Jasmine may earn economic profits or losses in the short run but not in the long run.

Question 8

(01.04 MC) Use the production possibilities table below to answer the following question. Assume constant opportunity costs for Tommy and Gina.

	Pillows per Day	Rugs per Day
Tommy	5	10
Gina	15	15

In the above situation, why might Gina be interested in trading with Tommy?

Since Gina can specialize in both products, there is no benefit for her to trade with Tommy. Since Tommy has an absolute advantage in both products, it would be beneficial for Gina to trade for either product. Since Tommy has a comparative advantage in rugs, Gina could specialize in pillows and trade pillows to Tommy for rugs. Since Gina has an absolute advantage in both products, it would make sense for Tommy to specialize in pillows and trade with Gina for rugs. Since Tommy has a comparative advantage in both products, it does not make sense for Gina to trade with Tommy.

Question 10

(02.04 MC) If a good's price elasticity of supply is inelastic and its quantity supplied decreased by 20%, which of the following must be true?

Price must have decreased by exactly 20%. Price must have decreased by more than 20%. Price must have decreased by less than 20%. Quantity supplied must have decreased by 20 units. Quantity supplied must have increased by 10 units.

Question 11

(03.05 MC) Top Limited is currently maximizing its profits and earning only normal economic profits. Which of the following describes Top's situation?

Marginal revenue = marginal cost; total cost = zero Marginal revenue < marginal cost; total revenue = total cost Marginal revenue = marginal cost; total revenue > total cost Marginal revenue < marginal cost; total revenue < total cost Marginal revenue = marginal cost; total revenue = total cost

Question 12

(06.03 MC) The residents in a countryside go fishing at will in the only river that flows through their town. What type of good best describes this river?

Public good Private good Survival good Artificially scarce good Common pool resource

Question 13

(03.01 MC) Which of the following is an expression of the production function?

As inputs increase, total output increases until minimum efficient scale is reached, then declines. As inputs increase, total output increases but at a slowing rate when diminishing returns sets in. As inputs increase, total output decreases because of the inverse relationship between input and output. As marginal costs increase, total output will increase in order to gain higher total revenue and profits. As marginal costs increase, total output decreases until maximum efficient scale is restored.

Question 14

(02.09 MC) Domestic rice farmers are demanding that the government set an import tariff. From an economic perspective, which of the following statements could explain why?

The rice farmers want to reduce demand in the domestic market to ease the burden they experience in production. The rice farmers want to increase demand in the domestic market to increase their revenues. The rice farmers expect that helping generate government revenue will lead to more favorable trade deals in the long run. The rice farmers expect the intervention to reduce foreign rice in the market, which will increase their production, price, and surplus. The rice farmers assume that the intervention will increase the foreign rice brought into the market and reduce both price and consumer surplus.

Question 16

(02.05 MC) The students in an economics class calculated cross-price elasticity to be zero. Which of the following could be the two goods considered?

The price of cars increases by 5 percent, and the quantity of butter remains constant. The price of bread remains constant, and the quantity of butter decreases by 2 percent. The price of cars increases by 5 percent, and the quantity of bikes increases by 5 percent. The price of cars decreases by 2 percent, and the quantity of petrol increases by 2 percent. The price of butter decreases by 7 percent, and the quantity of margarine decreases by 7 percent.

Question 17

(05.03 HC) Use the data in the tables to answer the question that follows.

Market
Price of Output	Quantity Supplied of Output	Quantity Demanded of Output
$5	25,000	60,000
$10	50,000	50,000
$15	75,000	40,000
$20	100,000	30,000
$25	125,000	20,000

Firm
Quantity of Labor	Total Product
0	0
15	100
30	190
45	265
60	325

What is the marginal revenue product of the 30th unit of labor, assuming this market is perfectly competitive in both the factor and output markets?

$30 $60 $63 $90 $1,190