Asalam Brothers and sisters,I want the answers for the prep.of mid term exam
Select correct option:
The profit maximizing output will always generate positive economic profit.
The profit maximizing output is found where MC=MR and MC is decreasing.
The profit maximizing output is found where MC=MR and MC is constant.
The profit maximizing output is found where MC=MR and MC is increasing.
The "perfect information" assumption of perfect competition includes all of the following except one. Which one?
Select correct option:
Consumers know their preferences.
Consumers know their income levels.
Consumers know the prices available.
Consumers can anticipate price changes.
Select correct option:
Will be risk averse.
Will be risk neutral.
Will be risk loving.
Cannot decide without more information.
The amount of output that a firm decides to sell has no effect on the market price in a competitive industry because:
Select correct option:
The market price is determined (through regulation) by the government.
The firm supplies a different good than its rivals.
The firm's output is a small fraction of the entire industry's output.
The short run market price is determined solely by the firm's technology.
Cost-output elasticity can be written and calculated as:
Select correct option:
MC/AC.
AC/MC
(AC)(MC)
(AC)2(MC)
Which of the following is NOT true for monopoly?
Select correct option:
The profit maximizing output is the one at which marginal revenue and marginal cost are equal.
The profit maximizing output is the one at which the difference between total revenue and total cost is largest.
The monopolist's demand curve is the same as the market demand curve.
At the profit maximizing output, price equals marginal cost.
Which of the following is true at the output level where P=MC?
Select correct option:
The monopolist is maximizing profit.
The monopolist is not maximizing profit and should increase output.
The monopolist is not maximizing profit and should decrease output.
The monopolist is earning a positive profit.
An individual with a constant marginal utility of income will be:
Select correct option:
Risk averse.
Risk neutral.
Risk loving.
Insufficient information for a decision.
The Clinton administration has recommended an increase in the tax on yachts to help pay for government programs. Which of the following is true?
Select correct option:
The burden of this tax will fall entirely on yacht manufacturers.
The sales of yachts will decrease.
The profit of yacht manufacturers will increase.
Employment of workers in the yacht industry will increase.
If indifference curves cross, then: Figure Based on figure given above, it can be inferred that:
Select correct option:
The assumption of a diminishing marginal rate of substitution is violated.
The assumption of transitivity is violated.
The assumption of completeness is violated.
Consumers minimize their satisfaction.
A straight-line isoquant:
Select correct option:
Is impossible.
Would indicate that the firm could not switch from one output to another.
Would indicate that capital and labor cannot be substituted for each other in production.
Would indicate that capital and labor are perfect substitutes in production.
A monopolist will buy _____ units of input than a competitor, and will pay _____ per unit.
Select correct option:
Fewer; less
More; less
Fewer; more
More; more
Which would not increase the productivity of labor?
Select correct option:
An increase in the size of the labor force.
An increase in the quality of capital.
An increase in the quantity of capital.
An increase in technology.
Which of the following is true concerning the income effect of a decrease in price?
Select correct option:
It will lead to an increase in consumption only for a normal good.
It always will lead to an increase in consumption.
It will lead to an increase in consumption only for an inferior good.
It will lead to an increase in consumption only for a Giffen good.
Regards
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