ECO 365 Final Exam Assignment UOP Complete Course

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ECO 365 Final Exam Assignment

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• 1). The DeBeers company is a profit-maximizing
  monopolist that exercises monopoly power in the
  distribution of diamonds. If the company earns
  positive economic profits this year, the price of
  diamonds will
• Exceed the marginal cost of diamonds but equal to
  the average total cost of diamonds.
• Exceed both the marginal cost and the average
  total cost of diamonds.
• Be equal to the marginal cost of diamonds.
• Be equal to the average total cost of diamonds.
•  2). Using 100 workers and 10 machines, a firm
  can produce 10,000 units of output using 250
  workers and 25 machines, the firm produces 21,000
  units of output. These facts are best explained
  by
• Economies of scope
• Diseconomies of scale
• Diminishing marginal productivity
• Economies of scale
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• 3). Suppose that college tuition is higher this
  year than last and that more students are
  enrolled in college this year than last year.
  Based on this information, we can best conclude
  that
• despite the increase in price, quantity demanded
  rose due to some other factors changing.
• the demand for a college education is positively
  sloped.
• the law of demand is invalid.
• this situation has nothing to do with the law of
  demand.
•  
• 4). A monopoly firm is different from a perfectly
  competitive firm in that
• A monopolists demand curve is perfectly
  inelastic whereas a perfectly competitive firms
  demand curve is perfectly elastic.
• A competitive firm has a u-shaped average cost
  curve whereas a monopolist does not.
• A monopolist can influence market price whereas a
  perfectly competitive firm cannot.
• There are many substitutes for a monopolists
  product whereas there are no substitutes for a
  competitive firms product.
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• 5). The best example of positive externality
  is
• Alcoholic beverages
• Pollution
• Education
• Roller coaster rides
•  
• 6). The theory that quantity supplied and price
  are positively related, other things constant, is
  referred to as the law of
• supply
• profit maximization
• opportunity cost
• demand
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• 7). A reduction in the supply of labor will
  cause wages to
• Decrease and employment to decrease.
• Increase and employment to increase.
• Decrease and employment to increase.
• Increase and employment to decrease.
•  
• 8). Other things held constant in a competitive
  labor market, if workers negotiate a contract in
  which the employer agrees to pay an hourly of
  17.85 while the market equilibrium hour rate is
  16.50, the
• Quantity of workers demanded will exceed the
  quantity of workers supplied.
• Quantity of workers supplied will exceed the
  quantity of workers demanded.
• Supply of labor will decrease until the
  equilibrium wage rate is 17.85.
• Demand for labor will increase until the
  equilibrium wage rate is 17.85.
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• 9). Alex is playing his music at full volume in
  his dorm room. The other people living on his
  floor found this to be a nuisance, but Alex
  doesnt care. Alexs music playing is an example
  of
• Pareto externality
• Positive externality
• Negative externality
• Normative externality
• 10). Oligopoly is probably the best market for
  technological change because
• The typical oligopoly has the funds to carry out
  research and development and believe that its
  competitors are innovating, which motivates it to
  conduct research and development.
• The typical oligopoly lacks the funds to carry
  out research and development and therefore will
  use basic research from universities.
• Research and development occurs only if
  government subsidizes such activity, and
  government tends to subsidize oligopolies.
• The typical oligopoly keeps price very close to
  average total cost because it fears the entry of
  new rivals if its profits are excessively high.
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• 11). A perfectly competitive firm facing a price
  of 50 decides to produce 500 widgets. Its
  marginal cost of producing the last widget is
  50. If the firms goal is to maximize profit, it
  should
• Produce more widgets
• Produce fewer widgets
• Continue producing 500 widgets
• Shut down
•  
• 12). Graphically, a change in price causes
• the demand curve to shift.
• both supply and demand to shift.
• a movement along a given supply curve, not a
  shift.
• the supply curve to shift.
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• 13). In 1997, the federal government reinstated
  a 10 percent excise tax on airline tickets. The
  industry tried to pass on the full 10 percent
  ticket tax to consumers but was able to boost
  fares by only 4 percent. From this you can
  conclude that the
• Supply of airline tickets is perfectly inelastic.
  
• Supply elasticity of airline tickets is less than
  infinity.
• Demand elasticity for airline tickets is greater
  than zero in absolute value.
• Demand for airline tickets is perfectly
  inelastic.
•  
• 14). In 2011, the Department of Justice sued ATT
  to block its merger with the cell phone service
  provider T-Mobile. To defend itself against the
  charge, ATT argued that the
• Combined company could raise prices, allowing it
  to survive in a rapidly changing market.
• Government had no authority to block mergers in
  the telephone industry.
• Government had guaranteed it exclusive control of
  cell phone service.
• Merger would improve and expand cellular service
  to consumers.
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• 15). The law of diminishing marginal
  productivity implies that the marginal product of
  a variable input
• Never declines
• Always declines
• Is constant
• Eventually declines
•  
• 16). Suppose OPEC announces it will increase
  production. Using supply and demand analysis to
  predict the effect of increased production on
  equilibrium price and quantity, the first step is
  to show the
• supply curve shifting to the right.
• demand curve shifting to the left.
• demand curve shifting to the right.
• supply curve shifting to the left.
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• 17). Many call centers that provide telephone
  customer services for U.S. companies have been
  established in India, but few or none have been
  established in China. Why?
• China is at a more advanced stage of economic
  development than India.
• China lacks the political infrastructure to
  support call centers.
• Indian labor costs are equal to Chinese labor
  costs.
• Chinese labor lacks the specific language skills
  needed to make call centers profitable in China.
•  
• 18). Suppose people freely choose to spend 40
  percent of their income on health care, but then
  the government decides to tax 40 percent of that
  persons income to provide the same level of
  coverage as before. What can be said about
  deadweight loss in each case?
• There is no difference because the total spending
  remains the same and the health care purchased
  remains the same.
• Taxing income results in less deadweight loss
  because government knows better what health care
  coverage is good for society.
• Taxing income results in deadweight loss, and
  purchasing health care on ones own doesnt
  result in deadweight loss.
• There is no difference between goods that are
  purchased in the market in either case.
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• 19). At one time, sea lions were depleting the
  stock of steelhead trout. One idea to scare sea
  lions away from the Washington coast was to
  launch fake killer whales, which are predators of
  sea lions. The cost of making the first whale is
  16,000 (5,000 for materials and 11,000 for the
  mold). The mold can be reused to make additional
  whales, and so additional whales cost 5,000
  each. Based on these numbers, the production of
  fake killer whales exhibits
• Diminishing marginal product
• Decreasing returns to scale
• Constant returns to scale
• Increasing returns to scale
•  
• 20). There are many restaurants in the city of
  Raleigh, each one offering food and services that
  differ from those of its competitors. There is
  also free entry of sellers into the market, and
  each seller serves a very small fraction of the
  total number of meals served each day. The
  restaurant industry in Raleigh is best
  characterized as
• Perfectly competitive.
• Monopolistically competitive.
• A pure monopoly.
• An oligopoly.
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• 21). Suppose foreign shrimp prices drop by 32
  percent and importers gain a 90 percent market
  share. From this information, what would
  economists strongly suspect about this industry?
• Foreigners have a comparative advantage in
  shrimping.
• The large sales of foreigners indicate they are
  better strategic business bargainers than
  Americans are.
• Americans have a comparative advantage in
  shrimping.
• Foreign sellers probably are colluding on price
  to maximize profits.
•  
• 22). For a monopolist, the price of a product
• Is less than the marginal revenue.
• Exceeds the marginal revenue.
• Equals the marginal cost.
• Equals the marginal revenue.
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• 23). When Ross Perot ran for president as a
  third party candidate in 1992, he argued that
  free trade with Mexico would result in massive
  job losses in the United States because Mexican
  wages were so low. Which of the following is the
  best explanation of why few economists agreed
  with Perot?
• Although economics predicted that unemployment
  would rise, the increased profits of corporations
  would raise stock prices enough to compensate for
  the lost jobs.
• Economists did not believe any jobs would be lost
  in the United States.
• Although economists believed that in some areas
  the United States would lose jobs, they expected
  the United States would gain jobs in other areas.
• Economics believed that the U.S. unemployment
  would rise.
•  24). Mr. Woodwards cabinet shop is experiencing
  rapid growth in sales. As sales have increased,
  Mr. Woodward has found it necessary to hire more
  workers. However, he has observed that doubling
  the number of workers has less than doubled his
  output. What is the likely explanation?
• The law of demand
• The law of diminishing marginal productivity
• The law of supply
• The law of diminishing marginal utility
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• 25). Price elasticity of demand is the
• Change in the quantity of a good demanded divided
  by the change in the price of that good.
• Percentage change in price of that good divided
  by the percentage change in the quantity of that
  good demanded.
• Percentage change in quantity of a good demanded
  divided by the percentage change in the price of
  that good.
• Change in the price of a good divided by the
  change in the quantity of that good demanded.
•  
• 26). Which of the following statements is true
  about a downward-sloping demand curve that is a
  straight line?
• The slope remains the same, but elasticity falls
  as you move down the demand curve.
• The slope remains the same, but elasticity rises
  as you move down the demand curve.
• The slope and the elasticity fall as you move
  down the demand curve.
• The slope and elasticity are the same at all
  points.
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• 27). Strategic decision making is most important
  in
• Monopolistically competitive markets.
• Monopolistic markets.
• Oligopolistic markets.
• Competitive markets.
•  
• 28). Cartels are organizations that
• Encourage price wars.
• Keep markets contestable.
• Use predatory pricing to monopolize industries.
• Coordinate the output and pricing decisions of a
  group of firms.
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• 29). Microeconomics and macroeconomics are
• Interrelated because what happens in the economy
  as a whole is based on individual decisions.
• Interrelated because both are often taught by the
  same instructors.
• Not related because they are taught separately.
• Virtually identical, though one is much more
  difficult than the other.
•  
• 30). Microeconomics is the study of
• a firm's pricing policies
• inflation
• unemployment
• business cycles
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• About Author
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• This article covers the topic for the University
  Of Phoenix ECO 365 Final Exam . The author is
  working in the field of education from last 5
  years. This article covers the basic of ECO 365
  Final Exam Assignment from UOP. Other topics in
  the class are as follows
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• ECO 365 Week 1 Knowledge Check
• ECO 365 Week 2 Knowledge Check
• ECO 365 Week 3 Knowledge Check
• ECO 365 Week 4 Knowledge Check
• ECO 365 Week 5 Knowledge Check
• ECO 365 Week 5 Final Exam
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