The income effect for an inferior good
A) is negative.
B) is zero.
C) is positive.
D) could be negative, zero, or positive.
Ques. 2A situation where a union bargains with a monopsony employer is termed a
A) bilateral monopsony.
B) bilateral monopoly.
C) bilateral agreement.
D) unilateral agreement.
Ques. 3In the figure above, what is the loss of consumer surplus if the firm is a perfectly price-discriminating monopoly instead of a perfectly competitive industry?
A) 0
B) 22.50
C) 45.00
D) 90.00
Ques. 4When Tom's income increases, his demand curve for Mountain Dew shifts rightward because the higher income increases his marginal utility of Mountain Dew.
Indicate whether the statement is true or false
Ques. 5The average total cost curves for plants A, B, C, and D are shown in the above figure. The plant size that is the most economically efficient
A) is plant A.
B) is plant B.
C) is plant C.
D) depends on the desired level of output.
Ques. 6La Super Rica is a taco stand in Santa Barbara, California. It is popular with the locals and even the late Julia Child found the food delicious. If La Super Rica is making an economic profit, what is the probable outcome in the taco market?
A) The number of firms will increase, decreasing La Super Rica's demand.
B) The number of firms will decrease, decreasing La Super Rica's demand.
C) The number of firms will increase, increasing La Super Rica's demand.
D) The number of firms will decrease, increasing La Super Rica's demand.
Ques. 7The cab fare in Horseville is regulated. Recently, the government decided to raise it from 2.00 to 2.50 per ride. After this rise in fare, cab ridership decreased by 10 percent.
a) What is the price elasticity of demand for cab rides in Horseville? (Use the midpoint formula to calculate the percentage change in the price.) Is the demand for rides elastic or inelastic? b) According to your estimate, what happened to the cab drivers' revenue after the fare rose? Explain. c) Why might your estimate of elasticity be inaccurate?
Ques. 8Individuals making decisions about how much to purchase of a product with an external benefit base their decisions on which of the following?
A) the price and marginal private benefit
B) the economically efficient output
C) the price and the marginal social benefit
D) the size of the deadweight loss
Ques. 9Suppose Nara could invest her 1000 in a savings account or she could invest in the stock market.
After one year, the savings account has a guaranteed 5 percent interest rate and the stock market has a 10 percent chance of tripling her money, and 90 percent chance of losing it all. What is the difference in Nara's expected wealth between these two options? A) 1050
B) 300
C) 750
D) 50
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