Explore BrainMass
Share

Practice Problems Multiple Choice

This content was STOLEN from BrainMass.com - View the original, and get the already-completed solution here!

An increase in the Federal minimum wage to $7.25 per hour from $5.15 per hour, assuming that $7.25 is an effective price floor and that all other things remain constant, will:
a. reduce the number of unemployed.
b. increase the number of unemployed.
c. shift the supply of labor to the right.
d. shift the demand of labor to the right.

If a firm can produce 560 units of output with 5 workers, 600 units of output with 6 workers, then the:
a. marginal product of the 6th worker is 100 units.
b. marginal product of the 6th worker is 40 units.
c. average product of 6 workers is 70 units.
d. the average product of 5 workers is 100 units.

In principle, socialism is:
a. less concerned about fairness than capitalism.
b. just as concerned about fairness as capitalism.
c. more concerned about fairness than capitalism.
d. not concerned about fairness at all.

Market failures:
a. can always be corrected through government action.
b. can never be corrected through government action.
c. are sometimes made worse by government failures.
d. lead to a desired allocation of resources.

Suppose a perfectly competitive firm's marginal revenue is $10 while its marginal cost is $11. Under these circumstances the firm:
a. is maximizing profit and should not change output.
b. is not maximizing profit and should increase output.
c. is not maximizing profit and should reduce output.
d. needs to know the market price before it can determine whether it is maximizing profit.

Mexico has a comparative advantage in producing corn:
a. if its opportunity cost of producing corn is higher than the opportunity cost in other countries.
b. if its opportunity cost of producing corn is the same as the opportunity cost in other countries.
C. if its opportunity cost of producing corn is lower than the opportunity cost in other countries.
d. regardless of the opportunity cost in other countries.

Taxes:
a. cause market shortages.
b. cause the equilibrium quantity to increase.
c. create a wedge between the price consumers pay and the price suppliers receive.
d. cause the price consumers pay to equal the price suppliers receive.

The general term meaning the act of combining two firms is known as:
a. a merger.
b. an acquisition.
c. a takeover.
d. green mail.

A merger between a textile mill and a clothing manufacturing company would be considered a:
a. horizontal merger.
b. vertical merger.
c. conglomerate merger.
d. diagonal merger.

The price of gasoline is generally higher in Hawaii than in the continental United States. In 2002 the Hawaiian legislature passed a law forbidding gas stations from charging a price higher than the average price of gas in the West Coast of the United States. As time progresses, one would expect the resulting:
a. surplus of gas in Hawaii to rise.
b. surplus of gas in Hawaii to fall.
c. shortage of gas in Hawaii to rise.
d. shortage of gas in Hawaii to fall.

If a corrective tax on gasoline results in the efficient output of gasoline by internalizing negative externalities associated with pollution:
a. pollution from gasoline will increase because people are also harmed by the tax.
b. there will be no effect on pollution from gasoline because the tax is paid by the supplier.
c. pollution from gasoline will be zero because environmental cleanliness is priceless.
d. the tax will generate enough revenue to compensate society for the damages resulting from the pollution that still occurs.

Suppliers would be the most eager to organize to restrict output if they faced:
a. an inelastic demand.
b. an elastic demand.
c. a unit elastic demand.
d. a perfectly elastic demand.

Assuming government's goal is to benefit society as much as possible:
a. actions with negative and positive externalities should be encouraged.
b. actions with negative and positive externalities should be restricted.
c. actions with negative externalities should be encouraged and actions with positive externalities should be restricted.
d. actions with negative externalities should be restricted and actions with positive externalities should be encouraged.

A natural monopoly:
a. has an average total cost curve that reaches minimum possible average total cost at a low level of output.
b. is usually subject to antitrust suits.
c. is usually allowed to choose its price so as to maximize profits in the United States.
d. occurs when a single firm can supply the entire market demand for a product at a lower average total cost than would be possible if two or more firms supplied the market.

Under monopolistic competition, there are:
a. few barriers to entry.
b. only a small number of sellers in the market.
c. significant barriers to entry.
d. only a few buyers in the market.

In 2004, Wendy's began to offer fruit or salad as a substitute for French fries in its value meals. It made sense for Wendy's to advertise this fact as long as doing so:
a. raised revenue by more than it raises cost of advertising.
b. raised any revenue at all.
c. did raise costs.
d. raised revenue by less than the cost of advertising.

Monopolistically competitive firms:
a. can earn economic profits or losses in both the short-run and the long-run.
b. can earn either profits or losses in the short-run, but earn zero economic profits in the long-run.
c. earn economic profits in the short-run but zero economic profits in the long-run.
d. earn zero economic profits in both the short-run and the long-run.

The more inelastic is demand the:
a. more sellers have to gain by restricting supply to raise price and total revenue.
b. less sellers have to gain by restricting supply to raise price and total revenue.
c. more sellers have to gain by raising supply to lower price and raise total revenue.
d. smaller will be the effect on total revenue of a change in price.

A cartel:
a. lets individual member firms determine prices and output.
b. often acts like a monopolist.
c. is combination of firms in which the firms have merged.
d. produces at the competitive market output level.

Which of the following methods of reducing the amount of trash society generates is most likely to be efficient?
a. A mandatory recycling program
b. A completely voluntary recycling program
c. A "trash tax"
d. Landfills and incinerators

© BrainMass Inc. brainmass.com October 25, 2018, 2:15 am ad1c9bdddf
https://brainmass.com/economics/comparative-advantage/practice-problems-multiple-choice-292359

Solution Preview

The correct answer has ***** before it. Hope this helps, Cecilia

An increase in the Federal minimum wage to $7.25 per hour from $5.15 per hour, assuming that $7.25 is an effective price floor and that all other things remain constant, will:
a. reduce the number of unemployed.
******b. increase the number of unemployed. (The marginal cost of labour went up)
c. shift the supply of labor to the right.
d. shift the demand of labor to the right.

If a firm can produce 560 units of output with 5 workers, 600 units of output with 6 workers, then the:
a. marginal product of the 6th worker is 100 units.
***** b. marginal product of the 6th worker is 40 units. (the production that the 6th worker adds)
c. average product of 6 workers is 70 units.
d. the average product of 5 workers is 100 units.

In principle, socialism is:
a. less concerned about fairness than capitalism.
b. just as concerned about fairness as capitalism.
***** c. more concerned about fairness than capitalism. (but to be fair, this is a tricky question because of how fairness is defined. For example, someone might say that getting the market price for your product and lower taxes is fair while others might think it unfair - it would depend on what your professor thinks... it is certainly not a and it is certainly not d, but depending on what your professor´s ideology is, it might be b).
d. not concerned about fairness at all.

Market failures:
a. can always be corrected through government action.
b. can never be corrected through government action.
******c. are sometimes made worse by government failures.
d. lead to a desired allocation of resources.

Suppose a perfectly competitive firm's marginal revenue is $10 while its marginal cost is $11. Under these circumstances the firm:
a. ...

Solution Summary

Practice Problems

An increase in the Federal minimum wage to $7.25 per hour from $5.15 per hour, assuming that $7.25 is an effective price floor and that all other things remain constant, will:
a. reduce the number of unemployed.
b. increase the number of unemployed.
c. shift the supply of labor to the right.
d. shift the demand of labor to the right.

If a firm can produce 560 units of output with 5 workers, 600 units of output with 6 workers, then the:
a. marginal product of the 6th worker is 100 units.
b. marginal product of the 6th worker is 40 units.
c. average product of 6 workers is 70 units.
d. the average product of 5 workers is 100 units.

In principle, socialism is:
a. less concerned about fairness than capitalism.
b. just as concerned about fairness as capitalism.
c. more concerned about fairness than capitalism.
d. not concerned about fairness at all.

Market failures:
a. can always be corrected through government action.
b. can never be corrected through government action.
c. are sometimes made worse by government failures.
d. lead to a desired allocation of resources.

Suppose a perfectly competitive firm's marginal revenue is $10 while its marginal cost is $11. Under these circumstances the firm:
a. is maximizing profit and should not change output.
b. is not maximizing profit and should increase output.
c. is not maximizing profit and should reduce output.
d. needs to know the market price before it can determine whether it is maximizing profit.

Mexico has a comparative advantage in producing corn:
a. if its opportunity cost of producing corn is higher than the opportunity cost in other countries.
b. if its opportunity cost of producing corn is the same as the opportunity cost in other countries.
C. if its opportunity cost of producing corn is lower than the opportunity cost in other countries.
d. regardless of the opportunity cost in other countries.

Taxes:
a. cause market shortages.
b. cause the equilibrium quantity to increase.
c. create a wedge between the price consumers pay and the price suppliers receive.
d. cause the price consumers pay to equal the price suppliers receive.

The general term meaning the act of combining two firms is known as:
a. a merger.
b. an acquisition.
c. a takeover.
d. green mail.

A merger between a textile mill and a clothing manufacturing company would be considered a:
a. horizontal merger.
b. vertical merger.
c. conglomerate merger.
d. diagonal merger.

The price of gasoline is generally higher in Hawaii than in the continental United States. In 2002 the Hawaiian legislature passed a law forbidding gas stations from charging a price higher than the average price of gas in the West Coast of the United States. As time progresses, one would expect the resulting:
a. surplus of gas in Hawaii to rise.
b. surplus of gas in Hawaii to fall.
c. shortage of gas in Hawaii to rise.
d. shortage of gas in Hawaii to fall.

If a corrective tax on gasoline results in the efficient output of gasoline by internalizing negative externalities associated with pollution:
a. pollution from gasoline will increase because people are also harmed by the tax.
b. there will be no effect on pollution from gasoline because the tax is paid by the supplier.
c. pollution from gasoline will be zero because environmental cleanliness is priceless.
d. the tax will generate enough revenue to compensate society for the damages resulting from the pollution that still occurs.

Suppliers would be the most eager to organize to restrict output if they faced:
a. an inelastic demand.
b. an elastic demand.
c. a unit elastic demand.
d. a perfectly elastic demand.

Assuming government's goal is to benefit society as much as possible:
a. actions with negative and positive externalities should be encouraged.
b. actions with negative and positive externalities should be restricted.
c. actions with negative externalities should be encouraged and actions with positive externalities should be restricted.
d. actions with negative externalities should be restricted and actions with positive externalities should be encouraged.

A natural monopoly:
a. has an average total cost curve that reaches minimum possible average total cost at a low level of output.
b. is usually subject to antitrust suits.
c. is usually allowed to choose its price so as to maximize profits in the United States.
d. occurs when a single firm can supply the entire market demand for a product at a lower average total cost than would be possible if two or more firms supplied the market.

Under monopolistic competition, there are:
a. few barriers to entry.
b. only a small number of sellers in the market.
c. significant barriers to entry.
d. only a few buyers in the market.

In 2004, Wendy's began to offer fruit or salad as a substitute for French fries in its value meals. It made sense for Wendy's to advertise this fact as long as doing so:
a. raised revenue by more than it raises cost of advertising.
b. raised any revenue at all.
c. did raise costs.
d. raised revenue by less than the cost of advertising.

Monopolistically competitive firms:
a. can earn economic profits or losses in both the short-run and the long-run.
b. can earn either profits or losses in the short-run, but earn zero economic profits in the long-run.
c. earn economic profits in the short-run but zero economic profits in the long-run.
d. earn zero economic profits in both the short-run and the long-run.

The more inelastic is demand the:
a. more sellers have to gain by restricting supply to raise price and total revenue.
b. less sellers have to gain by restricting supply to raise price and total revenue.
c. more sellers have to gain by raising supply to lower price and raise total revenue.
d. smaller will be the effect on total revenue of a change in price.

A cartel:
a. lets individual member firms determine prices and output.
b. often acts like a monopolist.
c. is combination of firms in which the firms have merged.
d. produces at the competitive market output level.

Which of the following methods of reducing the amount of trash society generates is most likely to be efficient?
a. A mandatory recycling program
b. A completely voluntary recycling program
c. A "trash tax"
d. Landfills and incinerators

$2.19
See Also This Related BrainMass Solution

Multiple choice questions on Test of hypothesis

1) If a test of a hypothesis has a Type 1 error probability (a) of 0.01, we mean:
A) if the null hypothesis is true, we don't reject it 1% of 0.01 of the time(B) if the null hypothesis is true, we reject it 1% of the time (C) if the null hypothesis is false, we don't reject it 1% of the time (D) if the null hypothesis is false, we reject it 1% of the time.

2) A "robust" test procedure is one which:
A) requires a sophisticated level of measurement (B) requires a semi-circular shaped population (C) is sensitive to sight violations in its assumption (D) is sensitive to slight violations in its assumption

3) The operation manager at a light bulb factory wants to determine whether there is any difference in average life expectancy of bulbs manufactured on two different types of machines. The process standard deviation of Machine I is 110 hours and of Machine II is 125 hours. A random sample of 25 light bulbs obtain from Machine I indicates a sample means 375 hours ands a similar sample of 25 from Machine II indicates a sample of 362 hours. Using the 0.05 level of significance, which of the following statements offers the most accurate and appropriate measure that there is not enough evidence to conclude that there is a difference in the average life of bulbs produced by two types of machines.
+
A) Z=0.3904 and is between the critical bounds of _ 1.96 (B) t=0.0117 and is between the
+ +
critical bounds of _ 2.01 ( C ) t= 1.3829 and between the critical bounds of _2.01 (D)
+
Z=0.424 and between the critical bounds of _ 1.96

4) Which of the following would be an appropriate null hypothesis
A) The mean of population is equal to 55 (B) the mean of a sample is equal to 55 (C) the mean of a population is greater than 55 (D) only a and c are true

5) A consumer magazine sample the random arrival time for two major airline. The data on how many minute each plane was early (negative value) or late (positive values is shown below
Air Tran 5 -1 39 9 12 21 15 52 18 23
Delta 8 4 10 4 12 5 4 9 15 33 14
The correct test statistic for testing the hypothesis that there is no difference in the arrival times of planes from the two airlines is:
A) t=1.7983 (B) Z =1.2185 (C) t= 1.5240 (D) Z=2.4397

6) Are Japanese manager more motivated than American manager? A randomly selected group of each were administered the Sarnoff Survey of Attitude Toward Life (SSATL), which measure motivation for pward mobility. The score are summarized below.

American Japanese
SAMPLE SIZE 211 100
Mean SSATL Score 65.75 79.83
Population STD Dev. 11.07 6.41

Referring to the table above, suppose that the test statistic is Z= 2.45. Find the p value if we assume that the alternative hypothesis was two-tailed test(H1:A-J0).
A) 0.0071 (B) 0.0142 (C) 0.4929 (D) 0.9858

7) It is possible to directly compare the results of a confidence in interval estimate to the results obtained by testing a null hypothesis if :
A) a two tailed test for u is used (B) a one tailed test for u is used (C) both of the previous statement is true (D) none of the previous statement are true.

8) If we are performing a two-tailed test of whether u=100, the probability of detecting a shift of the mean to 105 will be ______ the probability of detecting a shift of the mean to 100.
A) less than (B) greater than (C) equal to (D) not comparable to

9) The t test for the mean difference between two related population assume that the respective
A) sample size are equal (B) sample variance are equal (C) population are approximately normal or sample size are large enough (D) all of the above

10) The use of preservative by food processors has become a controversial issue. Suppose two preservatives are extensively tested and determined safe for use in meat. A processor wants to compare the preservatives for their effects on retarding spoilage. Suppose 15 cuts of fresh meat are treated with preservatives A and 15 are treated with preservation B, and the number of hours until spoilage begin is recorded for each of the 30 cuts of meat. The results are summarized in the table below.
Preservative A Preservative B
A=106.4 hours B=96.54 hours
SA =10.3 SB =13.4 hours
Referring to the table above , which of the following is correct test statistic for determining if the population variance differ for preservation A and B?
A) F=-3.10 (B) F=0.5908(C) F=0.7687 (D) F=0.8250
11) In testing for the differences between the means of 2 independent population where the variances in each population are unknown but assumed equal, the degree of freedom are:
A) n-1 (B) n1+ n2-1 (C) n1+n2-2. (D) n-2

View Full Posting Details