1) Suppose that in the clothing market, production costs have fallen, but the equilibrium priceand quantity purchased have both increased. Based on this information you can concludethat


2) Camille s Creations and Julia s Jewels both sell beads in a competitive market.If at the market price of $5, both are running out of beads to sell (they can tkeep up with the quantity demanded at that price), then we would expect bothCamille s and Julia s to:


3) In which of the following industries are economies of scale exhausted atrelatively low levels of output?


4) The average cost curves (AVC and ATC) should be minimized


5) If the wage rate increases


6) The real wage will rise if the nominal wage


7) Construction workers frequently sponsor political lobbying in support of greater public spending on highways and public buildings. One reason they dothis is to


8) Paying an above equilibrium wage rate might reduce unit labor costs by


9) A good real world example of monopolistic competition is


10) An industry comprising a small number of firms, each of which considers thepotential reactions of its rivals in making price output decisions, is called



11) Price is constant or given to the individual firm selling in a purelycompetitive market because


12) The most important pricing strategy for a perfectly competitive firm is


13) Which of the following is a nonprice barrier of entry?


14) A third degree price discrimination can be applied to which of the followingmarket structures?


15) Investing in R&D is more likely to occur in markets where


16) All economies of scale are achieved at the minimum of


17) Inflation is undesirable because it


18) An economy s aggregate demand curve shifts leftward or rightward by more than changes in initial spending because of the


19) Suppose productivity rises in a particular economy, but wages stay thesame. Other things equal, 

20) If personal taxes were decreased and resource productivity increasedsimultaneously, the equilibrium


21) Expansionary fiscal policy is so named because it


22) Suppose the price level is fixed, the MPC is .5, and the GDP gap is a negative$100 billion. To achieve full employment output (exactly), government should


23) GDP understates the value of output produced by an economy because it


24) Other things equal, a decrease in the real interest rate will


25) Other things equal, a decrease in corporate income taxes will


26) Inflation in U.S. prices will cause


27) The quantity theory of money states that


28) Suppose that U.S. prices rise 4% over the next year while prices in Mexicorise 6%. According to the purchasing power parity theory of exchange rates,what should happen to the exchange rate between the dollar and the peso?


29) A rise in the domestic interest rate leads to capital


30) A firm under monopolistic competition will earn

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