A monopsony is a market structure in which there is a
A) single seller.
B) single buyer.
C) price floor set by a regulatory agency.
D) price ceiling set by a regulatory agency.
Ques. 2Explain the relationship between the incidence of a tax and elasticity.
What will be an ideal response?
Ques. 3Jake takes 40 minutes to fry a chicken and 10 minutes to toast a slice of bread. His brother Elwood takes 60 minutes to fry a chicken and 4 minutes to toast a slice of bread. Calculate each brother's opportunity cost.
Who has a comparative advantage in which activity? Explain. Will the brothers gain if they specialize?
Ques. 4Jenn is willing to pay 75 for a purse and the purse's price is 60. What is Jenn's consumer surplus?
What will be an ideal response?
Ques. 5Can electric utility companies always raise their total revenue by raising their rates?
What will be an ideal response?
Ques. 6The above figure shows a firm in monopolistic competition. At the profit maximizing level of output
A) the firm is making a positive economic profit.
B) the firm incurs an economic loss.
C) the firm is making zero economic profit.
D) this firm would choose to shut down in the short run.
Ques. 7Any attempt to capture a consumer surplus, a producer surplus, or an economic profit is called
A) profit-maximizing.
B) rent-seeking.
C) price discriminating.
D) efficiency gain.
Ques. 8In the long run, the economic profit of a firm in a perfectly competitive market
A) will be above zero.
B) will be below zero.
C) will equal zero.
D) can be above, below, or equal to zero.
Ques. 9If the Fed sells securities to commercial banks, there is no money multiplier effect.
Indicate whether the statement is true or false
Ques. 10A behavioral economist will explain Tom's donation to charity by saying that Tom is displaying ________.
A) the endowment effect
B) bounded rationality
C) bounded self-interest
D) bounded will power
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