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Econ 2106 UGA McGahee Review of Test 1-3
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Econ 2106 UGA McGahee Review of Test 1-3
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Econ 2106 UGA McGahee Review of Test1-3
A cartel is a group of firms acting together to increase profit by ______ output and
______ price.
A) increasing; raising
B) limiting; raising
C) increasing; lowering
D) limiting; lowering - ANS-B
A chemical-producing factory is located upriver from a water ski club and dumps waste
in the river. According to the Coase theorem, the efficient quantity of waste will be
dumped in the river
A) only if the water ski club owns the river.
B) only if the factory owns the river. C) only if the government owns the river.
D) if either the water ski club or the chemical-producing factory owns the river. - ANS-D
A competitive market is a market that has _________, so ________ can influence the
price.
A) many buyers and sellers; no single buyer or seller
B) many buyers and one seller; no buyer
C) one buyer and many sellers; no seller
D) many buyers and sellers; any buyer or seller - ANS-A
A decrease in the price of leather jackets, a complement in production of beef, will
___________ the equilibrium price of beef and ___________ the equilibrium quantity of
beef.
A) decrease; increase
B) increase; increase
C) increase; decrease
D) decrease; decrease - ANS-C
A firmʹs minimum efficient scale is the:
A) smallest quantity of output at which long-run average cost reaches its lowest level
B) firmʹs profit-maximizing point
C) production point at which the firm produces just enough to break even D) smallest
quantity of output at which a firm maximizes producer surplus - ANS-A
, A natural monopoly is a market in which:
A) a significant portion of a natural resource is owned by one firm.
B) close substitutes exist but a natural barrier to entry protects the firm from potential
competition.
C) demand is perfectly elastic due to economies of scale.
D) economies of scale enable one firm to supply the entire market at the lowest possible
cost. - ANS-D
A public good is _________. A common resource is _________.
A) nonexcludable and rival; nonexcludable and nonrival.
B) nonexcludable and nonrival; nonexcludable and rival.
C) excludable and nonrival; nonexcludable and nonrival.
D) nonexcludable and nonrival; excludable and nonrival. - ANS-B
Absolute advantage is the ability of an individual, firm, or country to:
A) produce more of a good or service than competitors using the same amount of
resources
B) produce a good or service at a lower opportunity cost than other producers
C) reach a higher production possibilities frontier by adding additional resources
D) none of the above - ANS-A
An economy's PPF typically is bowed outward because of the principle of increasing
opportunity cost, which states that the more resources devoted to any activity, the
______________ the payoff to devoting additional resources to that activity.
A) smaller
B) greater
C) more proportional
D) none of the above - ANS-A
Because the marginal social benefit from healthcare _______ the marginal benefit
perceived by its consumers, an unregulated competitive market in healthcare would
________ it.
A) exceeds; underprovide
B) is less than; underprovide
C) exceeds; overprovide
D) is less than; overprovide - ANS-A
Between 2005 and 2015, the number of SUVs sold per year in the United States
increased, and average purchase prices increased. These changes could be the result
of
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