ECON 2102- FINAL EXAM REVIEW QUESTIONS
WITH ANSWERS 100% PASS
A consequence of the economic problem of scarcity is that - ANSWER Choices
have to be made about how resources are used
The correct ranking of degree of market power (from highest to lowest) is -
ANSWER monopoly, oligopoly, monopolistic competition, perfect competition
When an economist talks about utility, he is talking about - ANSWER the
satisfaction that results from the consumption of a good
In economics, the long run is considered to be: - ANSWER The time period when
all costs are variable.
As Mary acquires more shoes, we would expect that: - ANSWER Mary's total
utility will increase but marginal utility of shoes will decrease
In the long run, total fixed cost will - ANSWER not exist
When firms are interdependent - ANSWER The profit of one firm depends on how
its rivals respond to its strategic decisions.
Indicate if the following is true or false:
The $100,000 used to start a business is a capital resource - ANSWER FALSE
Because resources are scarce society must make decisions about all of the
following except: - ANSWER Whether scarcity exists or not
Ben is exhausting his money income downloading 4 movies and 3 apps per
week. Suppose the price is $5 per movie and $3 per app, and the marginal utility
at this consumption level is 12 for a movie and $10 for an app. Ben should -
ANSWER Increase the consumption of apps and decrease the consumption of
movies
True or False: 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 decreasing returns to scale. -
ANSWER TRUE
The only market structure in which there is significant interdependence among
firms with regard to their pricing and output decisions is - ANSWER Oligopoly
, The opportunity cost to a city for using local tax revenue to construct a new park
is the - ANSWER best alternative foregone by building the park
True or False: If the percentage change in the quanity demanded of a good is
greater than the percentage change in the price, the price elasticity of demand
is elastic. - ANSWER TRUE
Economies of scale are present if an increase in the firm's output causes -
ANSWER ATC to decrease
Which of the following may not characterize an oligopoly
A few firms
substantial market power
high barriers to entry
many firms - ANSWER Many Firms
The concentation ratio measures the - ANSWER Proportion of total output
produced by the largest firms in a specific market
The alternative combinations of goods and services that can be produced in a
given time period with all available resources and technology is referred to as: -
ANSWER Production Possibilities
Which of the following is not a determinant of market power? - ANSWER Age of
the industry
Suppose the Pleasant Corporation cuts the price of its American Girl dolls by 25
percent, and as a result, the quantity of the dolls sold increases by 10 percent.
This indicates that the price elasticity of demand for the dolls over this range is -
ANSWER 0.4
According to the law on increasing opportunity costs, - ANSWER in order to
produce additional units of a particular good, it is necessary for society to
sacrifice increasingly larger amounts of alternative goods
A health club sells 50 memberships when the monthly price is $60 and 70
memberships when the monthly price is $40. The price elasticity of demand for
memberships at this health club is (using the average values method) - ANSWER
0.83
For a market to be characterized by perfect competition, there must be -
ANSWER A large number of firms with no one able to influence price, freedom of
entry and exit, and homogenous products being sold
WITH ANSWERS 100% PASS
A consequence of the economic problem of scarcity is that - ANSWER Choices
have to be made about how resources are used
The correct ranking of degree of market power (from highest to lowest) is -
ANSWER monopoly, oligopoly, monopolistic competition, perfect competition
When an economist talks about utility, he is talking about - ANSWER the
satisfaction that results from the consumption of a good
In economics, the long run is considered to be: - ANSWER The time period when
all costs are variable.
As Mary acquires more shoes, we would expect that: - ANSWER Mary's total
utility will increase but marginal utility of shoes will decrease
In the long run, total fixed cost will - ANSWER not exist
When firms are interdependent - ANSWER The profit of one firm depends on how
its rivals respond to its strategic decisions.
Indicate if the following is true or false:
The $100,000 used to start a business is a capital resource - ANSWER FALSE
Because resources are scarce society must make decisions about all of the
following except: - ANSWER Whether scarcity exists or not
Ben is exhausting his money income downloading 4 movies and 3 apps per
week. Suppose the price is $5 per movie and $3 per app, and the marginal utility
at this consumption level is 12 for a movie and $10 for an app. Ben should -
ANSWER Increase the consumption of apps and decrease the consumption of
movies
True or False: 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 decreasing returns to scale. -
ANSWER TRUE
The only market structure in which there is significant interdependence among
firms with regard to their pricing and output decisions is - ANSWER Oligopoly
, The opportunity cost to a city for using local tax revenue to construct a new park
is the - ANSWER best alternative foregone by building the park
True or False: If the percentage change in the quanity demanded of a good is
greater than the percentage change in the price, the price elasticity of demand
is elastic. - ANSWER TRUE
Economies of scale are present if an increase in the firm's output causes -
ANSWER ATC to decrease
Which of the following may not characterize an oligopoly
A few firms
substantial market power
high barriers to entry
many firms - ANSWER Many Firms
The concentation ratio measures the - ANSWER Proportion of total output
produced by the largest firms in a specific market
The alternative combinations of goods and services that can be produced in a
given time period with all available resources and technology is referred to as: -
ANSWER Production Possibilities
Which of the following is not a determinant of market power? - ANSWER Age of
the industry
Suppose the Pleasant Corporation cuts the price of its American Girl dolls by 25
percent, and as a result, the quantity of the dolls sold increases by 10 percent.
This indicates that the price elasticity of demand for the dolls over this range is -
ANSWER 0.4
According to the law on increasing opportunity costs, - ANSWER in order to
produce additional units of a particular good, it is necessary for society to
sacrifice increasingly larger amounts of alternative goods
A health club sells 50 memberships when the monthly price is $60 and 70
memberships when the monthly price is $40. The price elasticity of demand for
memberships at this health club is (using the average values method) - ANSWER
0.83
For a market to be characterized by perfect competition, there must be -
ANSWER A large number of firms with no one able to influence price, freedom of
entry and exit, and homogenous products being sold
