ECON 200 EXAM 2 PRACTICE QUESTIONS
You download "Scary Movie 7" for $2.99 but decide 30 mins into the film that you would
be better off doing something else than watching the rest of the movie. What concept
from economics are you using to make your decision? - Answers :sunk costs
Should you always return the cereal box to the pantry after your breakfast? - Answers
:No, that is inefficient
Which most accurately describes patent? - Answers :an incentive to innovate
What are solutions for a monopoly? - Answers :restructure industry, reduce trade
barriers, regulate producers, do nothing
We watches Pixar's One Man Band in class. At one point in the short film, the kid was
the only buyer. What is this known as? - Answers :A monopsony
Name four defects of monopoly - Answers :price is too high
Output is too low
Lack of choice
Rent seeking occurs
What most accurately describes a patent? - Answers :an incentive to innovate
We watched a video where there were 5 men standing on a steel beam in order to drive
it into the ground. Suppose that the construction company decides to invest in a pile
driver instead. What impact would this decision have on the optimal labor-capital ratio? -
Answers :it increases the amount of capital in the production function
A farmer's market is a good example of - Answers :perfect competition
What is the best example of diseconomies of scale? - Answers :a parking garage
The income of a new business owner forgoes when they start their own business is part
of its - Answers :implicit costs
Which of these characteristics is NOT part of oligopoly? - Answers :efficient production
In price discrimination, the firm charges the ___ group a ____ price. - Answers :elastic,
lower
The main reason why you only have a handful of workers inside a Starbucks is because
of - Answers :the law of diminishing returns
, To explain the diamond-water paradox economist argue that - Answers :the MU of a
diamong is high compared to the MU of water but the TU from diamonds is low
compares to the TU of water
When michael scott starts his own paper businesss and seeks advice from his financial
planner he fails to take into account one very important cost calculation. What does he
forget? - Answers :variable cost
Which of the following trade agreements helped to limit monopoly power? - Answers :All
of the above
Is the following an example of price discrimination or not? Fred is a US student. He
pays $40 for his tickets in section K. Sheila is a UA alum and she pays $80 for her ticket
in the same section. - Answers :yes
We watched part of an episode of Golden Balls. Both contestants... - Answers :had a
weakly dominant strategy to steal the jackpot
An Economist thinks about ____, but an accountant does not - Answers :implicit costs
What is the most important of all cost curves - Answers :marginal cost
What is forgetting about the past an example of? - Answers :sunk costs
Adding inputs, firms experience this in the short run - Answers :diminishing returns
What happens if double inputs and output triples in the long run - Answers :economies
of scale
What does too much of a good thing lead to? - Answers :diminishing marginal utility
Saying "I drink more soda because it gives me more utility per dollar spent than milk" is
an example of.. - Answers :equal marginal utility per dollar spent rule
You pawn your grandmas gold necklace that she gave you before she passed is an
example of - Answers :assumption that goods are not priceless
What happens when marginal revenue=marginal cost - Answers :profits are maximized
In the long run, these are zero - Answers :profits
What happens when AVC > price? - Answers :firm shuts down
What is a firm that operates at lowest point on the ATC curve? - Answers :an efficient
curve
You download "Scary Movie 7" for $2.99 but decide 30 mins into the film that you would
be better off doing something else than watching the rest of the movie. What concept
from economics are you using to make your decision? - Answers :sunk costs
Should you always return the cereal box to the pantry after your breakfast? - Answers
:No, that is inefficient
Which most accurately describes patent? - Answers :an incentive to innovate
What are solutions for a monopoly? - Answers :restructure industry, reduce trade
barriers, regulate producers, do nothing
We watches Pixar's One Man Band in class. At one point in the short film, the kid was
the only buyer. What is this known as? - Answers :A monopsony
Name four defects of monopoly - Answers :price is too high
Output is too low
Lack of choice
Rent seeking occurs
What most accurately describes a patent? - Answers :an incentive to innovate
We watched a video where there were 5 men standing on a steel beam in order to drive
it into the ground. Suppose that the construction company decides to invest in a pile
driver instead. What impact would this decision have on the optimal labor-capital ratio? -
Answers :it increases the amount of capital in the production function
A farmer's market is a good example of - Answers :perfect competition
What is the best example of diseconomies of scale? - Answers :a parking garage
The income of a new business owner forgoes when they start their own business is part
of its - Answers :implicit costs
Which of these characteristics is NOT part of oligopoly? - Answers :efficient production
In price discrimination, the firm charges the ___ group a ____ price. - Answers :elastic,
lower
The main reason why you only have a handful of workers inside a Starbucks is because
of - Answers :the law of diminishing returns
, To explain the diamond-water paradox economist argue that - Answers :the MU of a
diamong is high compared to the MU of water but the TU from diamonds is low
compares to the TU of water
When michael scott starts his own paper businesss and seeks advice from his financial
planner he fails to take into account one very important cost calculation. What does he
forget? - Answers :variable cost
Which of the following trade agreements helped to limit monopoly power? - Answers :All
of the above
Is the following an example of price discrimination or not? Fred is a US student. He
pays $40 for his tickets in section K. Sheila is a UA alum and she pays $80 for her ticket
in the same section. - Answers :yes
We watched part of an episode of Golden Balls. Both contestants... - Answers :had a
weakly dominant strategy to steal the jackpot
An Economist thinks about ____, but an accountant does not - Answers :implicit costs
What is the most important of all cost curves - Answers :marginal cost
What is forgetting about the past an example of? - Answers :sunk costs
Adding inputs, firms experience this in the short run - Answers :diminishing returns
What happens if double inputs and output triples in the long run - Answers :economies
of scale
What does too much of a good thing lead to? - Answers :diminishing marginal utility
Saying "I drink more soda because it gives me more utility per dollar spent than milk" is
an example of.. - Answers :equal marginal utility per dollar spent rule
You pawn your grandmas gold necklace that she gave you before she passed is an
example of - Answers :assumption that goods are not priceless
What happens when marginal revenue=marginal cost - Answers :profits are maximized
In the long run, these are zero - Answers :profits
What happens when AVC > price? - Answers :firm shuts down
What is a firm that operates at lowest point on the ATC curve? - Answers :an efficient
curve
