esolutions· The test statistic used to test the hypothesis of whether a single regression coefficient is significantly different from zero, holding all other independent variables constant, is called a(n):
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A.
F-test.
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B.
autocorrelation test.
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C.
multicollinearity test.
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D.
t-test
· Assume a firm is currently employing 20 units of capital and 100 units of labor in its production process. Assume also that the marginal product of the 20th unit of capital is 40 units of output, the marginal product of the 100th unit of labor is 10 units of output and the per unit prices of capital and labor are $20 and $10, respectively. In this case, in order to minimize its costs of production the firm should:
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A.
hire more capital and less labor.
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B.
hire more labor and less capital.
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C.
hire less capital and less labor.
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D.
hire more capital and more labor.
· Greater consumer confidence, wealth, available consumer credit, and disposable income ________ personal consumption expenditures.
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A.
increase
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B.
decrease
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C.
have no effect on
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D.
none of the above
· Which of the following is not a characteristic of perfect competition?
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A.
Large number of firms in the industry.
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B.
Outputs of the firms are perfect substitutes for one another.
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C.
Firms face downward-sloping demand functions.
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D.
No barriers to entry or exit.
· Suppose a sole proprietorship is earning total revenues of $100,000 and is incurring explicit costs of $75,000. If the owner could work for another company for $30,000 a year, we would conclude that:
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A.
the firm is incurring an economic loss.
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B.
implicit costs are $25,000.
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C.
the total economic costs are $100,000.
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D.
the individual is earning an economic profit of $25,000.
· 6. For the firm in Figure 8.1, the profit-maximizing (loss-minimizing) price and level of output are:
· 7 The firm depicted in Figure 8.1 is:
·
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A.
earning a positive economic profit.
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B.
incurring an economic loss and should shut down.
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C.
incurring an economic loss but it should continue to operate in the short run so long as price exceeds average variable costs.
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D.
earning a zero economic profit.
· 8 Which of the following is not considered a factor that influences supply?
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A.
Technology.
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B.
Production taxes and subsidies.
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C.
The number of buyers.
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D.
Resource prices.
· 9 Suppose the firms in a monopolistically competitive market are earning positive economic profits. What will happen to move the market to its long-run equilibrium?
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A.
The firms' demand curves will become less elastic.
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B.
The demand curves faced by firms in the market will shift to the right.
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C.
More close substitutes will appear in the market.
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D.
Some firms will exit the market if they can't cover all of their fixed and variable costs.
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A.
P2 and Q2.
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B.
P1 and Q1.
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C.
P4 and Q1.
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D.
P3 and Q1.
· 10 It is frequently observed that when a city is located next to a major highway, gas stations located close to the highway charge higher prices than gas stations located farther away. This is an example of:
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A.
first-degree price discrimination.
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B.
second-degree price discrimination.
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C.
third-degree price discrimination.
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D.
illegal price discrimination.
· 11 You have the following demand equation for a pack of cigarettes: Q = 200 - 0.30P with the average quantity 3 packs and average price $3.00 per pack. What is the price elasticity?
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A.
0.30
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B.
-0.30
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C.
1.0
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D.
-1.0
· 12 Which of the following is an example of price discrimination?
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A.
Increasing the price of a product when demand for the product increases.
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B.
Charging different prices for a product in different regions of the country due to differences in transportation costs.
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C.
Bundling complementary products to attract additional sales.
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D.
Reducing the price of a product to reduce excess inventory.
· 13 The situation in which a firm is able to charge the maximum price consumers are willing to pay for each unit of output the firm sells is referred to as:
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A.
first-degree price discrimination.
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B.
second-degree price discrimination.
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C.
third-degree price discrimination.
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D.
fourth-degree price discrimination
· 14 Which of the following would make it easier to maintain an effective collusive agreement in a cartel?
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A.
An increase in the number of potential entrants into the industry.
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B.
A decrease in the elasticity of demand for the cartel's product.
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C.
An increase in the number of substitutes for the product produced by the cartel.
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D.
A new method of pricing that makes it more difficult for each firm to monitor the prices that the other firms in the cartel are charging.
10 years ago
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