The average product of labour is maximised where...

a.

Total product is maximised.

b.

The marginal product of labour is increasing.

c.

The marginal product of labour is maximised.

d.

It equals the marginal product of labour.

_____ is the study of how individuals, firms and governments deal with scarcity.

a.

Industrial organisation.

b.

International trade.

c.

Microeconomics.

d.

Macroeconomics.

Rent control creates all of these problems except...

a.

An excess supply of affordable housing.

b.

A set of consumers that are prepared to pay above the rent control price.

c.

A fall in the quality of existing housing.

d.

A shorting of housing.

If quantity of pizza is measured on the horizontal axis and quantity of hamburgers is measured on the vertical axis, then the horizontal intercept equals...

a.

The relative price ratio.

b.

Total income divided by the price of pizza.

c.

Total income.

d.

The price of pizza times that quantity of pizza.

Senior citizens pay less for public transportation. This is _____-degree price discrimination.

a.

Fourth.

b.

Second.

c.

Third.

d.

First.

Perfectly competitive firms that make profits in the short run...

a.

Can sustain them in the long run because of barriers to entry.

b.

Cannot sustain them in the long run because of free entry.

c.

Can occur in theory but cannot occur in reality.

d.

Indicate that too many firms are currently in the market.

If free trade generates a net benefit for an economy, why are countries so hesitant to promote it?

a.

Gains accrue to a few powerful firms at the expense of the overall economy.

b.

Individual sectors lose out and are very vocal about it.

c.

Countries can only gain from exporting and not from importing, so no trade is better than having to accept imports.

d.

Governments do not understand the gains from trade.

Michelle imports and sells rare Tootie birds and stores them in her home, rather than pay rent for a storage facility. She also does all the work herself and does not take a salary, rather than pay an employee to do it. She made an accounting profit of $1 million in 2019. Michelle's economic profit is...

a.

Less than $1 million because there are implicit costs relating to her implied salary and her implied rent.

b.

Exactly $1 million because she avoided expensive rent and salary expenses by doing everything herself.

c.

We cannot say what economic profit would be without more information.

d.

More than $1 million because she needs to add what she would have paid a landlord for storage space and an employee to do her work for her.

A single-price monopolist faces a linear demand curve and no marginal costs. It maximises profits where...

a.

All of the other options are correct.

b.

Revenue is maximised.

c.

Price elasticity of demand = -1.

d.

MR = MC.