1) Suppose that recycling rubber for sneakers create an external benefits of $2.0 per ton of rubber . There are no external costs. The efficient amount of rubber will be recycled when the government create a :
A) subsidy of more than $2.00 per ton of rubber(B) subsidy of $2.00 per ton of rubber(C) Tax of more than $2.00 per ton of rubber.(D) tax of $2.00 per ton of rubber.
2) Of those listed below , the best example of a pure public good is
A) State lottery(B)A book (C)A rock concert held in a small auditorium (D) A radio broadcast
3) A free rider problem with a public goods leads to:
A) Inefficiency if good is provided by only private markets with no government action(B)Overproduction if the good is provided private market(C) Underproduction if the good is provided by the government(D) None of the above answer is corrected
4) The problem of the commons arises because _____ exceeds _____ when the resource is used
A)Marginal social benefit; marginal private benefit(B) Marginal private benefit; marginal social benefit
5) A decrease in the supply of a factor normally
A) Decrease both its equilibrium price and its equilibrium quaintly (B) ) Increase both its equilibrium price and its equilibrium quaintly(C) Lower its equilibrium price and Increase its equilibrium quantity (D) Raise its equilibrium price and decrease its equilibrium quantity.
6) If the marginal revenue product of a factor of production exceeds the price of the factor the
A)Firm should hire more then that factor(B) Firm should hire less of that factor(C) Firms is maximizing profit (D) Firm should shut down
7)If the elasticity of demand for labor is 1.5, a10% increase in wage rate will result in
A) 15% decrease in the quantity of labor demanded(B) ) 15% increase in the quantity of labor demanded(C) 6.7% increase in the quantity of labor demanded(D) 6.7% decrease in the quantity of labor demanded
7) Lifetime income is distributed
A) Less equally than annual income and less equally than the measure wealth (B) Less equally than annual income and more equally than the measure wealth(C) More equally than annual income and less equally than measure weight(D) More equally than annual income and more equally than measure weight
8) High skilled worker earn more than low skill worker in part because
A) High skilled worker have higher marginal revenue product(B) of government legislation (C) the supply of a high skilled worker is more elastic (D) the demand for high skilled worker is more elastic
9)The poor receive:
A) Less in benefits than they pay in taxes and so do the rich (B)More in benefits than they pay in taxes and so do the rich (C) Less in benefits than they pay in taxes, the rich receive more in benefits than they pay in taxes . (D) More in benefits than they pay in taxes and the rich receive less in benefits than they pay in taxes
10)Jessica must chose option A or option B. Option A gives her $10,000 for sure Option B gives her $5,000 if a fair coin toss shows heads and $15,000 IF ITS SHOW TAILS. If Jessica is a risk averse her utility of wealth curves becomes
A) Flatter as her wealth increase and she will choose Option A (B) Flatter as her wealth increase and she will choose Option B (C) Steeper as her wealth increase and she will chose option A (D) Steeper as her wealth increase and she will chose option B
11) Once Akira has found a VCR priced at his reservation price, marginal benefit of further search.
A) Is Zero(B) Equal his reservation price (C) Equal his marginal cost of further search (D) equal his elasticity of demand
12) You have invested $100,000 in each of two independent project. Your total investment is $200,000. Eavh project has a 50% change of losing $25,000 and a 50% change of making $50,000 .You chance of having a negative return on $200,000 you have invested is
A)1/8 (B) ¼ (C) ½ (D) 1
Multiple choice questions on minimum wage, cost curve, marginal revenue, labor demand curve, monopolistic seller, lobbying, maximizing profits
2. Critics of the minimum wage argue that as an antipoverty device it is "poorly targeted." By this they mean that:
a. the minimum wage only applies to a small percentage of the labor force.
b. many who benefit from the minimum wage are not poor.
c. the government has been unable to enforce the minimum wage.
d. the average level of wages in the economy is considerably higher than the minimum wage.
7. A change in the price of an input will usually:
a. shift a firm's cost curves.
b. cause the firm to alter the combination of inputs it employs.
c. induce the firm to change its level of output.
d. do all of the above.
8. If one worker can pick $30 worth of grapes and two workers together can pick $50 worth of grapes, the:
a. marginal revenue product of each worker is $25.
b. marginal revenue product of the first worker is $20.
c. marginal revenue product of the second worker is $20.
d. data given do not permit the determination of the marginal revenue product of either worker.
e. lower wage rate but hire a larger number of workers than will a purely competitive employer.
f. higher wage rate and hire a larger number of workers than will a purely competitive employer
14. Other things equal, we would expect the labor demand curve of a monopolistic seller to:
a. decline more rapidly than that of a purely competitive seller.
b. decline less rapidly than that of a purely competitive seller.
c. decline at the same rate as that of a purely competitive seller.
d. be more elastic than that of a purely competitive seller.
18. more units of a resource if:
a. the price of the resource increases.
b. the productivity of the resource increases.
c. the price of the good being produced declines.
d. the price of a complementary resource rises.
19. Construction workers frequently sponsor political lobbying in support of greater public spending on highways and public buildings. One reason they do this is to:
a. restrict the supply of construction workers.
b. increase the elasticity of demand for construction workers.
c. increase the demand for construction workers.
d. increase the price of substitute inputs.
27. If MPa/Pa = MPb/Pb and MRPa/Pa = MRPb/Pb>1, this firm is:
a. producing its output with the least costly combination of resources, but is not producing the profit-maximizing output.
b. maximizing profits, but failing to minimize costs.
c. neither maximizing profits nor minimizing costs.
d. combining resources a and b so as to minimize costs and maximize profits.