Principles of Microeconomics 2e OpenStax
Final Exam Review Questions And Answers.
Verified and Updated.
A price cut increases total revenue a firm receives if the demand is - answer✔✔elastic
a union is economically beneficial if - answer✔✔it helps workers get pension benefits so they
are less dependent on government social assistance after retirement
affirmative action - answer✔✔efforts to improve outcomes of minority groups or women
an increase in labor productivity - answer✔✔will not cause a rightward shift in the market
supply curve for labor
an increase in wage rate - answer✔✔will not result in leftward shift of market demand curve for
labor
any given supply or demand curve is based on the ceteris paribus assumption that - answer✔✔all
else is held equal
applied research - answer✔✔research that is focused on a product that offers commercial
applications in the short-term
as the price of a good increases - answer✔✔buyers desire to purchase less of it
average cost - answer✔✔determined by dividing the firm's total costs by the quantity of its
output
average variable cost - answer✔✔firm's variable costs divided by the quantity of output
basic research - answer✔✔esearch pertaining to fundamental scientific breakthroughs that may
offer commercial applications in the distant future
because of worker's ability to sell through a union, profit-making firms must pay wages -
answer✔✔that exceed the equilibrium wage the firms would have otherwise selected
biodiversity - answer✔✔the full spectrum of animal and plant genetic material
black markets - answer✔✔caused by government laws and rules
EXAM STUDY MATERIALS July 24, 2024 1:33:58 PM
,buyers and sellers - answer✔✔in a market-oriented economy, the amount of a good that is
produced is primarily decided by their interaction
cartel - answer✔✔a group of firms colluding with each other to produce the monopoly output
and sell at the monopoly price
collective bargaining - answer✔✔negotiations between unions and firm(s)
collusion - answer✔✔when firms act together to reduce output and keep prices high
command economy - answer✔✔government either makes economic decisons themself or
strongly influences them
command-and-control regulation - answer✔✔body of law that is used for specific allowable
quanitites of pollution and what pollution-control technologies can be used
competitive firms desire that higher wages paid to union workers - answer✔✔result in higher
productivity
constant returns to scale - answer✔✔expanding all inputs does not change the average cost of
production
copyright law - answer✔✔legal protection to prevent reproduction of original works
decisions in monopolistic competition will resemble - answer✔✔a monopoly sometimes and
perfect competition other times
decreasing returns to scale - answer✔✔as quantity of output rises, the average cost of production
rises
demand curve - answer✔✔shows relationship between price and quantity demanded on a graph
the demand curve for a typical good is - answer✔✔negative slope because some consumers
switch to other goods as price rises
demand for a good - answer✔✔the amount that people will buy at alternative income levels
deregulation - answer✔✔is unlikely to present a barrier to entry in a market
deregulation is where - answer✔✔a government cuts back rules relating to prices, conditions,
and quantities except in a natural monopoly
diminishing marginal utility - answer✔✔pattern where each marginal unit of a consumed good
provides less utility than the previous unit
division of labor idea - answer✔✔the way in which work required to produce a good or service
is divided into tasks done by different workers
EXAM STUDY MATERIALS July 24, 2024 1:33:58 PM
, downward sloping demand curve - answer✔✔as price rises, demand decreases
economic profit calculation - answer✔✔subtract the firm's costs from its total revenues
excluding opportunity cost
economic theory offers - answer✔✔a systematic way of thinking about the full range of possible
events and responses which can prevent misguided conclusions about how households will
respond to changes in price or incomes
economies of scale - answer✔✔the quantity of output rises but the average cost of production
falls
elastic demand - answer✔✔when the quantity demanded is very responsive to changes in price
environmental pollution - answer✔✔this is a valid criticism of the production of useful goods
and services
estate tax - answer✔✔where the government collects wealth for redistribution based on the
amount of stored wealth that is being passed on in an inheritance
fixed costs - answer✔✔expenditures that must be made before production starts that typically,
over the short run, do not change regardless of the level of production
free rider - answer✔✔someone who wants others to pay for public goods but uses them for
themselves
game theory - answer✔✔mathematics that analyzes situations where players make decisions and
receive payoffs, used by economists
goods and services market - answer✔✔households receive goods and services and pay firms for
them
government patent regulations - answer✔✔inventors maintain exclusive legal rights to their
inventions for a limited time
highly innovative firms - answer✔✔usually have sometime before competitors catch up to its
innovation
if demand for a good is perfectly inelastic, then reduced supply causes - answer✔✔equilibrium
price to rise and equilibrium quantity to stay the same
if demand increases slower than supply - answer✔✔then wages will rise
if many people are free riders - answer✔✔the public good may never be provided
if monopolistic competitors have entry and exit like perfectly competitive firms - answer✔✔they
will not be able to earn higher-than-normal profits in the long run
EXAM STUDY MATERIALS July 24, 2024 1:33:58 PM
Final Exam Review Questions And Answers.
Verified and Updated.
A price cut increases total revenue a firm receives if the demand is - answer✔✔elastic
a union is economically beneficial if - answer✔✔it helps workers get pension benefits so they
are less dependent on government social assistance after retirement
affirmative action - answer✔✔efforts to improve outcomes of minority groups or women
an increase in labor productivity - answer✔✔will not cause a rightward shift in the market
supply curve for labor
an increase in wage rate - answer✔✔will not result in leftward shift of market demand curve for
labor
any given supply or demand curve is based on the ceteris paribus assumption that - answer✔✔all
else is held equal
applied research - answer✔✔research that is focused on a product that offers commercial
applications in the short-term
as the price of a good increases - answer✔✔buyers desire to purchase less of it
average cost - answer✔✔determined by dividing the firm's total costs by the quantity of its
output
average variable cost - answer✔✔firm's variable costs divided by the quantity of output
basic research - answer✔✔esearch pertaining to fundamental scientific breakthroughs that may
offer commercial applications in the distant future
because of worker's ability to sell through a union, profit-making firms must pay wages -
answer✔✔that exceed the equilibrium wage the firms would have otherwise selected
biodiversity - answer✔✔the full spectrum of animal and plant genetic material
black markets - answer✔✔caused by government laws and rules
EXAM STUDY MATERIALS July 24, 2024 1:33:58 PM
,buyers and sellers - answer✔✔in a market-oriented economy, the amount of a good that is
produced is primarily decided by their interaction
cartel - answer✔✔a group of firms colluding with each other to produce the monopoly output
and sell at the monopoly price
collective bargaining - answer✔✔negotiations between unions and firm(s)
collusion - answer✔✔when firms act together to reduce output and keep prices high
command economy - answer✔✔government either makes economic decisons themself or
strongly influences them
command-and-control regulation - answer✔✔body of law that is used for specific allowable
quanitites of pollution and what pollution-control technologies can be used
competitive firms desire that higher wages paid to union workers - answer✔✔result in higher
productivity
constant returns to scale - answer✔✔expanding all inputs does not change the average cost of
production
copyright law - answer✔✔legal protection to prevent reproduction of original works
decisions in monopolistic competition will resemble - answer✔✔a monopoly sometimes and
perfect competition other times
decreasing returns to scale - answer✔✔as quantity of output rises, the average cost of production
rises
demand curve - answer✔✔shows relationship between price and quantity demanded on a graph
the demand curve for a typical good is - answer✔✔negative slope because some consumers
switch to other goods as price rises
demand for a good - answer✔✔the amount that people will buy at alternative income levels
deregulation - answer✔✔is unlikely to present a barrier to entry in a market
deregulation is where - answer✔✔a government cuts back rules relating to prices, conditions,
and quantities except in a natural monopoly
diminishing marginal utility - answer✔✔pattern where each marginal unit of a consumed good
provides less utility than the previous unit
division of labor idea - answer✔✔the way in which work required to produce a good or service
is divided into tasks done by different workers
EXAM STUDY MATERIALS July 24, 2024 1:33:58 PM
, downward sloping demand curve - answer✔✔as price rises, demand decreases
economic profit calculation - answer✔✔subtract the firm's costs from its total revenues
excluding opportunity cost
economic theory offers - answer✔✔a systematic way of thinking about the full range of possible
events and responses which can prevent misguided conclusions about how households will
respond to changes in price or incomes
economies of scale - answer✔✔the quantity of output rises but the average cost of production
falls
elastic demand - answer✔✔when the quantity demanded is very responsive to changes in price
environmental pollution - answer✔✔this is a valid criticism of the production of useful goods
and services
estate tax - answer✔✔where the government collects wealth for redistribution based on the
amount of stored wealth that is being passed on in an inheritance
fixed costs - answer✔✔expenditures that must be made before production starts that typically,
over the short run, do not change regardless of the level of production
free rider - answer✔✔someone who wants others to pay for public goods but uses them for
themselves
game theory - answer✔✔mathematics that analyzes situations where players make decisions and
receive payoffs, used by economists
goods and services market - answer✔✔households receive goods and services and pay firms for
them
government patent regulations - answer✔✔inventors maintain exclusive legal rights to their
inventions for a limited time
highly innovative firms - answer✔✔usually have sometime before competitors catch up to its
innovation
if demand for a good is perfectly inelastic, then reduced supply causes - answer✔✔equilibrium
price to rise and equilibrium quantity to stay the same
if demand increases slower than supply - answer✔✔then wages will rise
if many people are free riders - answer✔✔the public good may never be provided
if monopolistic competitors have entry and exit like perfectly competitive firms - answer✔✔they
will not be able to earn higher-than-normal profits in the long run
EXAM STUDY MATERIALS July 24, 2024 1:33:58 PM
