Pennsylvania's largest grower of fresh-to-market tomatoes announced in March 2009 he will no longer produce the crop because he can't find enough workers to harvest it. Though his tomato pickers made an average of 16.
59 per hour last year, he said the relatively high wage is not enough to attract local labor to work the fields. In the market for tomato workers, what is TRUE? A) 16.59 is above the equilibrium wage rate
B) 16.59 is the equilibrium wage rate
C) 16.59 is below the equilibrium wage rate
D) Cannot determine where the equilibrium wage rate is in comparison to 16.59 without more information.
Ques. 2In the above figure, between 20 and 25 units per hour, the firm experiences
A) economies of scale.
B) diseconomies of scale.
C) constant returns to scale.
D) increasing total fixed costs.
Ques. 3What is the drawback of forcing a natural monopolist to use a marginal cost pricing rule?
A) No deadweight loss is eliminated.
B) The firm will incur an economic loss.
C) The gain in consumer surplus will be less than the loss in producer surplus, thus creating additional deadweight loss.
D) None of the above answers is correct.
Ques. 4The 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 social benefit is
A) zero.
B) 14,000.
C) 19,000.
D) 16,000.
Ques. 5In the figure above, the marginal rate of substitution (MRS) at point A is equal to ________ pounds of pickles per pound of olives.
A) 8
B) 6
C) 1 1/3
D) 2
Ques. 6Under monopolistic competition, firms make zero economic profit in the long run and produce at the minimum ATC.
Indicate whether the statement is true or false
Ques. 7The table above shows the distribution of income in Swacko. The government of Swacko imposes a 20 percent tax on people with the highest 40 percent of income.
The government then distributes 40 percent of the tax collected to the lowest 20 percent and 30 percent to the second 20 percent and the middle 20 percent. After the redistribution, the Lorenz curve for income ________. A) is equal to the line of equality
B) equals the Lorenz curve for wealth
C) is closer to the line of equality
D) is above the line of equality
Ques. 8Linda Evangelista, a supermodel, once said that she won't get out of bed for less than 10,000 a day. This fee is an example of
A) a reservation wage.
B) the demand for Linda's labor.
C) a competitive labor market.
D) the substitution effect.
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