The figure above shows a labor market. If there is a monopsony in this labor market, the monopsony pays a wage rate
A) greater than the value of marginal product of labor.
B) equal to the value of marginal product of labor.
C) less than the value of marginal product of labor.
D) equal to the average revenue product of labor.
Ques. 2When the price of a normal good decreases, the ________ can be divided between the ________, which keeps the best affordable point on the same indifference curve and the ________, which moves the best affordable point farther away from the origin.
A) substitution effect; price effect; income effect
B) price effect; income effect; substitution effect
C) income effect; substitution effect; price effect
D) price effect; substitution effect; income effect
Ques. 3Lee, J Brand, Joe's Jeans, Paper Denim & Cloth, Levi's, Wrangler, and many others are all producers of jeans. J Brand jeans sell for about 200 a pair. What would happen if J Brand priced their jeans at 220 per pair?
A) They would sell fewer jeans because demand is elastic.
B) They would not sell any jeans.
C) They would sell more jeans.
D) They would sell fewer jeans because demand is perfectly elastic.
Ques. 4The above figure shows the marginal private cost curve, marginal social cost curve, and marginal social benefit curve for raising goats on a common pasture. The efficient outcome is raising ________.
A) 0 goats
B) 40 goats
C) 50 goats
D) 55 goats
Ques. 5The Clayton Act of 1914 was passed to prohibit, in part, price discrimination if the effect is to substantially lessen competition or create monopoly.
Indicate whether the statement is true or false
Ques. 6If Ben becomes less likely to buy smoke detectors after he has fire insurance, he is illustrating
A) moral hazard.
B) adverse selection.
C) the lemon problem.
D) the free rider problem.
Ques. 7If a hot dog vendor on a street corner experiences an increase in total revenue after lowering the price of a hot dog, then the demand for the hot dogs must be elastic.
Indicate whether the statement is true or false
Ques. 8The figure above shows a labor market. If there is a monopsony in this labor market, employment is
A) 0 hours per week.
B) 50 hours per week.
C) 100 hours per week.
D) 150 hours per week.
Ques. 9The figure above shows the marginal revenue and long-run cost curves for a perfectly competitive firm. All other firms in the industry have identical curves. Which of the following statements is TRUE?
A) The firm's average cost exceeds the price.
B) Over time, firms will enter this industry.
C) The firm is earning economic profit.
D) None of the above is true.