QUESTION 49 Which of the following is not a factor which will bring about a shift of the demand curve? O a. changes in income O b. a change in the size of the population O c. the increase or decrease of the price charged for the good or service d. changes in tastes and preferences QUESTION 50 If Marginal Profit is zero, the firm a. none of the above. O b. is earning no economic profits. c is earning the highest level of profits under the current revenue and cost conditions. @d. better shut down right away before it goes bankrupt.QUESTION 47 In the kinked demand curve model, O a. the firm will always receive greater total revenue whether it raises its price or lowers it. O b. we are able to see the point at which economic profits in the perfectly competitive industry are completed eroded away. Oc. The MR curve is discontinuous, represented by a gap and vertical segment at the profit-maximizing level of output Old. the AR curve is discontinuous, represented by a gap and a vertical segment at the profit-maximizing level of output QUESTION 48 Economic profits carned by any firm are O a. the same as accounting profits and ignore the firm's opportunity cost. b. are accounting profits but also take into account the firm's opportunity cost for not having chosen the next best alternative. care tabulated by the firm's bookkeeping department. O'd. taxed by the IRSQUESTION 45 The budget line of a particular household includes information about Ta. the household income and the price of two different goods, D b. the price of two goods but no information about the household income. c household income and the price of money. ()d. household income and the price of one good usually purchased by the household QUESTION 46 The kinked demand curve model a. illustrates how monopolies set price. (b. is another name for the budget line/indifference curve model Oc describes pricing behavior of perfectly competitive firms. @) d. is one way to describe oligopolistic pricing behavior.QUESTION 43 Imagine a curve that has a line which is tangent to it at point A and that the tangent has positive slope. Therefore, the curve has O a. negative slope at all other points, O b. positive slope at point A. O c. positive slope at all points along the curve. O d. negative slope at point A. QUESTION 44 Marginal cost O a is equal to the slope of the Total Cost curve. b. All of the above are true. 2 c. is calculated as the change in Total Cost divided by the change in Quantity of Output. d. in the change in Total Cost resulting from a one unit change in Output.QUESTION 41 In the perfectly competitive industry, influence over the price of the product is exerted by O a, the largest firms. Ob. the forces of supply and demand in the market. O c. individual producers in the market. d. individual buyers in the market. QUESTION 42 Which of the following is the correct way to describe equilibrium in a market? (D a. At equilibrium, quantity demanded equals quantity supplied. 5. At equilibrium, market forces are no longer at work. At equilibrium, everybody who wants the product gets the product. @ d. At equilibrium, the market is out of balance and an adjustment in the market will need to occur.QUESTION 39 A monopoly is a type of industry in which the firm O a. can build a hotel on Boardwalk. O b. is a price maker. O c. has a demand curve which is simultaneously also the AR curve and the MR curve, Od, is free from the profit maximization rule MR = MC. QUESTION 40 Shutdown analysis is used in order to D'a. show what happens in the long run in perfect competition when economic profits are eroded, @b. explains the options open to a perfectly competitive firm which is incurring a loss to determine if it should remain in business or not @ C. demonstrate that monopoly is always preferable to perfect competition. d. none of the above.QUESTION 37 For most goods and most people, marginal utility O a. declines as consumption increases. b. plummets after the first few units consumed but then soon rises again. Oc usually increases as larger and larger quantities of a good are consumed d. is positive and rising for most goods. QUESTION 38 Which of the following decisions is one which a perfectly competitive firm cannot make a. the decision to exit the industry. (b. the profit-maximizing level of output to produce. De. the market price of its product. (d. the decision to enter the market.QUESTION 35 If the output of a firm is increased by one unit, the resulting change in revenue is called a. economic profit. b. total revenue. c marginal revenue. O d. fixed cost. QUESTION 36 The formula for the price elasticity of demand Da. drops all minus signs (takes the absolute value). b. is calculated as the percentage change in price between two prices, Pl and P2. c. All the above are correct. ()d. usually has different values at different points of a demand curve.QUESTION 33 A decrease in supply will have what effect on equilibrium price and quantity? Qa. Price will rise and so will quantity. O b. Price will fall and quantity will increase. c. Price will rise and quantity will decrease. d. Nothing changes. QUESTION 34 The major drawback of a price ceiling is that @ a. it results in a surplus. @ b. There is no drawback--the market functions perfectly under this set-up. c. quantity demanded is far less than the quantity supplied in the market. d. it leads to a shortage because quantity demanded exceeds quantity supplied.QUESTION 31 OPEC (Organization of the Petroleum Exporting Countries) is an example of a. a monopolistically competitive industry. Ob. a monopoly. c. perfect competition. d. a cartel. QUESTION 32 Which of the following is an example of perfectly competition? O a. soybean growers in lowa and Nebraska. () b. shrimp fleet operators on the southeast Atlantic and Gulf coasts. O c. wheat growers in the Midwest and Far West. O d.all of the aboveQUESTION 29 In marginal analysis, marginal cost is (@)ja. the full cost of a particular product. b. the average cost of a particular product. Oc. the profit earned from the sale of the product. d. the additional cost associated with one additional unit produced of the good QUESTION 30 An increase in demand will result in what change in equilibrium price and quantity? Da. Price will decrease and quantity demanded will increase. b. Price and quantity demanded will both increase () c. Price and quantity demanded will both decrease. d. Price will increase and quantity demanded will decrease.QUESTION 27 Total fixed cost O a. has a downward sloping curve when plotted on a graph. O b. is constant at all levels of output, even when nothing is produced. Oc. varies with the amount of output. O d. has an upward sloping curve on a graph. QUESTION 28 In an oligopolistic industry, one would expect a. all of the above. b. aggressive advertising. @ c intense market research into the impact of price changes and of customers' acceptance of new product lines. Od. the frequent introduction of new and/or redesigned products.QUESTION 23 Total profit is equal to O a, average profit times total output. Ob. All of the abovehere correct. @ c. total sales revenue minus total cost. d. TR - TC. QUESTION 24 Monopolistic competition is characterized by a. many firms selling the exact same product. b. one firm selling one product. c. one firm selling several a diverse product line. (d. many firms selling slightly different products.QUESTION 25 The use of graphing in economics a. helps clarify the interpretation and analysis of economic concepts. O b. permits a person to easily visualize or understand key economic relationships. O c. All of the above are true. O d. facilitates the interpretation and analysis of data. QUESTION 26 The equality MR - MC a is a univeral equality that identifies the profict-maximizing level of output in every market model across the board. O b. is used to explain the relationship between price and quantity in the Demand and Supply model. O c is an equality that tells us the profit-maximizing level of output in perfect competition but in no other productive model. O'd. is an equation designed to baffle and confuse introductory economics students