The table above shows the marginal costs and marginal benefits of college education. If the market for college education is perfectly competitive and unregulated, at the equilibrium quantity, the marginal private cost is
A) zero.
B) 14,000.
C) 19,000.
D) 16,000.
Ques. 2The Public Service Company of Colorado is a natural monopoly in the transmission and distribution of electric power. As such, it will incur an economic loss if it
A) goes out of business.
B) prices its services at average total cost.
C) prices its services at marginal cost.
D) all of the above
Ques. 3Excess capacity refers to any unsold output due to insufficient demand.
Indicate whether the statement is true or false
Ques. 4Describe how economic losses are eliminated in a perfectly competitive industry.
What will be an ideal response?
Ques. 5In the long run, monopolistically competitive firms can make an economic profit because of product differentiation.
Indicate whether the statement is true or false
Ques. 6The figure above shows two Lorenz curves, one before income redistribution and one after income redistribution. The difference between the two curves equals
A) market income.
B) money income.
C) the redistribution of income.
D) the amount of taxes paid.
Ques. 7In November 2008, the air traffic controllers who work at Guam became unionized. What would NOT be a way for the union to influence labor demand?
A) Have monthly training which improves the marginal productivity of the air traffic controllers.
B) Support minimum wage laws.
C) Creating job certification which limits the number of newly certified air traffic controllers.
D) Lobby the government to limit who can apply to be an air traffic controller in Guam to those who are certified through the union.
Ques. 8The table above shows the marginal costs and marginal benefits of college education. If the market for college education is perfectly competitive and unregulated, at the equilibrium quantity, the marginal private benefit is
A) zero.
B) 14,000.
C) 19,000.
D) 16,000.
Ques. 9In the figure above, Sam originally selects his consumption bundle at point A with 3 pounds of olives and 4 pounds of pickles a year.
Then the price of pickles rises and the price of olives falls so that his budget line rotates but it still goes through point A. Sam's consumption of olives A) definitely will rise.
B) definitely will fall.
C) definitely will stay the same.
D) could rise, fall, or stay the same.
Ques. 10During the first half of the 2000s, the price of pork rose. After that, within a couple of years the price fell back to about the level before the initial increase. What might have led to these events?
What will be an ideal response?
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