ECO 561 Final Exam Solutions
1). If a firm in a purely competitive industry is confronted with an equilibrium price of $5, its marginal revenue:-
2). A firm that is motivated by self interest should:-
3). If price is above the equilibrium level, competition among sellers to reduce the resulting:-
4). Camille’s Creations and Julia’s Jewels both sell beads in a competitive market. If at the market price of $5, both are running out of beads to sell (they can’t keep up with the quantity demanded at that price), then we would expect both Camille’s and Julia’s to:-
5). Since their introduction, prices of DVD players have fallen and the quantity purchased has increased. This statement:-
6). In a market economy the distribution of output will be determined primarily by:-
7). In a competitive market economy firms will select the least-cost production technique because:-
8). Suppose that the price of peanuts falls from $3 to $2 per bushel and that, as a result, the total revenue received by peanut farmers changes from $16 to $14 billion. Thus:-
9). If technology dictates that labor and capital must be used in fixed proportions, an increase in the price of capital will cause a firm to use:-
10). In which of the following industries are economies of scale exhausted at relatively low levels of output??
11). If a firm decides to produce no output in the short run, its costs will be:-
12). Which of the following represents a long-run adjustment?
13). Paying an above-equilibrium wage rate might reduce unit labor costs by:
14). A firm can hire six workers at a wage rate of $8 per hour but must pay $9 per hour to all of its employees to attract a seventh worker. The marginal wage cost of the seventh worker is:
15). Price exceeds marginal revenue for the pure monopolist because the:
16). Oligopoly is difficult to analyze primarily because:
17). A competitive firm will maximize profits at that output at...