Ashford ECO204 All Quizzes Latest 2020 June

ECO204 Principles of Microeconomics

Week 1 Quiz

Question 1Which of the following is the study of “what is” rather than “what ought to be”?

  normative theory

  institutionalism

  subjectivism

  positive theory

Question 2Along with the other social sciences, economics is specifically and primarily concerned with __________.

  the behavior of human beings both as individuals and in groups

  the actions of international monetary agencies

  the laws of mathematics as they apply to decision making

  the economic practices of international agencies

Question 3Irene, who is an economist, tells Ronald, who is a business columnist, that if interest rates remain this low, she expects next year’s inflation rate to be 7%. This statement is a(n) __________.

  positive theory

  microeconomic calculation

  prediction that derives from a model

  economic forecast

Question 4In a market economy system, who most often enforces property rights?

  the government

  consumers

  central planners

  businesses

Question 5Which of the following is LEAST likely to be a public good?

  a park

  an army

  a party

  a sunset

 

Question 6Which of the following would be described as capital by an economist?

  a corporation’s petroleum reserves

  the power lift in a service station

  common stocks

  government bonds

Question 7The directing function of prices ensures that __________.

  consumers and businesses participate in proper markets

  production will increase for goods with more intense demands

  consumers know how to get correct market information

  prices will always move in the right direction

Question 8Best Western University wants to increase the size of its student body by shifting the demand curve for its educational services to the right. Which of the following will most likely NOT shift its demand curve to the right?

  a “best buy” rating in a national magazine

  an improved record in student job placements

  really popular, winning sports teams

  lower tuition and lower prices on textbooks

 Question 9Following the law of demand, if the U.S. Postal Service raises the price of first-class mail, ceteris paribus, what will happen to the demand for postage stamps?

  Demand will increase.

  Demand will be unchanged, but quantity demanded will fall.

  Demand will decrease.

  Demand will be unchanged, but quantity demanded will rise.

Question 10What does an economist suggest that efficient allocation of resources by the market means?

  Producers determine what to produce, and consumers buy it.

  Adam Smith’s “invisible hand” has been circumvented.

  Every individual who wants a product gets it.

  The products desired by a society are produced.

 

 

ECO204 Principles of Microeconomics

Week 2 Quiz

Question 1A tax on the purchase of a particular good, such as liquor, cigarettes, or electricity, or a broad class of goods, such as food, is called __________.

  an excise tax

  a luxury tax

  a property tax

  an income tax

Question 2Using Table 4.1, the demand curve schedule for a straight-line demand curve, what is the percentage change in quantity demanded from 10 units to 25 units?

Table 4.1: Demand curve schedule for straight-line demand curve in Figure 4.5

Price      Quantity demanded

$0.50     25

1.00        20

1.20        18

1.40        16

1.60        14

1.80        12

2.00        10

2.20        8

2.40        6

2.60        4

2.80        2

3.00        0

  250%

  25%

  15%

  150%

 

Question 3Any movement along a demand curve occurs in response to a change in price and is referred to as a change in __________.

  quantity demanded

  quantity needed

  supply demanded

  supply needed

 Question 4Westhill is a town where people typically buy more ground beef than steak. One month, Westhill’s EatWell grocery store raised its price on ground beef. Consequently, the substitution effect dictates that more consumers will switch __________.

  from steak to ground beef

  to a ground beef substitute

  to another grocery store

  from ground beef to steak

 Question 5If the government were to provide free health care, people would most likely consume this service until the marginal utility of the last unit was __________.

  = 1

d. > 1

  = 0

a. < 1

 Question 6When the fourth cup of coffee is expected to provide less additional pleasure than the third cup of coffee, this is called the principle of __________.

  diminishing returns

  diminishing marginal utility

  total utility

  long-acting utility

 Question 7What are the two characteristics of public goods?

  nonexclusivity and nonrivalry

  exclusivity and nonrivalry

  productivity and rivalry

  exclusivity and rivalry

 Question 8Free riding is a market concern because free riders __________.

  do not pay federal taxes

 make it difficult for the market to measure actual demand

  might consume all of a public good

  make it difficult for others to enjoy a public good

 Question 9What is the most frequently cited example of an externality?

  service charges

  public protest

  sales taxes

  pollution

 Question 10What happened when—regardless of the market demand—the United Kingdom made laws to ban smoking in enclosed workplaces?

  Respiratory illness declined sharply among workers.

  Restaurant and pub owners sued the UK’s Parliament.

  Restaurant and pub owners generally disregarded the law.

  Respiratory illness was monitored for the first time.

 

ECO204 Principles of Microeconomics

Week 3 Quiz

Question 1The addition to total product resulting from employing one more unit of a productive resource is the __________.

  marginal input

  marginal product

  average product

  total product

 Question 2An example of a horizontally integrated firm is one that __________.

  owns several plants, each manufacturing the same product

  owns several plants, each handling a different stage of production

  has several factories making different products within the same region

  produces a variety of goods and sells them in widely disparate markets

 Question 3A description of the amounts of output expected from various combinations of inputs is called __________.

  technical efficiency

  a production function

  economic efficiency

  an economic forecast

 Question 4In a production function, in the short run, some inputs are fixed. In the long run, all inputs are __________.

  fixed

  variable

  increasing

  decreasing

Question 5If Geeta buys wood and piano wire every month to manufacture pianos in the plant she has leased for 4 years, she is operating __________.

  without a production function

  in the short run

  in the long run

  a vertically integrated firm

 Question 6A firm should leave production unchanged when __________.

  marginal cost ≥ marginal revenue

  marginal cost > marginal revenue

  marginal cost = marginal revenue

  marginal cost < marginal revenue

 Question 7A company’s profits are greatest when __________ by the largest possible amount.

  marginal revenue exceeds total revenue

  explicit costs exceed opportunity costs

  short-run profits exceed long-run profits

  total revenue exceeds total cost

 Question 8Economic profit is calculated as __________.

  total revenue – opportunity costs

  total revenue – implicit costs

  total revenue – (explicit costs + implicit costs)

  total revenue – explicit costs

 Question 9The rate of return that is necessary to keep capital and enterprise in an industry is known as __________ profit.

  accounting

  opportunity

  economic

  normal

 Question 10The long-run decision regarding the size of a firm’s physical operations is determined by the selection of the desired __________.

  short-run AC curve

  long-run AC curve

  plant size that matches the fixed quantity of labor

  quantity of labor supported by the fixed capital

 

ECO204 Principles of Microeconomics

Week 4 Quiz

Question 1All of the following are among the six basic assumptions about perfect competition EXCEPT __________.

  many buyers

  many sellers

  mobile resources

  differentiated products

 Question 2If a firm is making an economic profit, then productive resources are earning __________.

  their opportunity costs in the long run

  more than their opportunity costs

  their opportunity costs in the short run

  less than their opportunity costs

 Question 3In a perfectly competitive industry, if TR > TC, then in the long run, __________.

  there will be no change in the number of firms

  firms will attempt to expand into monopolies

  new firms will enter the industry

  firms will exit the industry

 Question 4Imagine that Congress has put high tariffs on how much wool can be imported into this country. What type of barrier to entry is this?

  corporate

  legal

  artificial

  natural

Question 5Which 1917 legislation prohibited a company from acquiring stock of a competing company if such an acquisition would substantially lessen competition?

  the Sherman Antitrust Act, Section 1

  the Sherman Antitrust Act, Section 2

  the Clayton Act

  the New York State Antitrust Statute

 Question 6Which of the following is an example of a monopoly that loses money?

  the U.S. Postal Service

  Apple

  the Olympic Games

  Microsoft

 Question 7All of the following are characteristics of a cartel EXCEPT that they __________.

  pursue a moderate pricing policy

  have effective sanctions on sellers who cheat the cartel

  have many members for more income

  have buoyant world demand (high income elasticity)

 Question 8The greater the price elasticity of the demand curve that a firm faces in monopolistic competition, the __________.

  more sales the firm will gain from a price increase

  higher the degree of competition in the industry

  fewer substitutes for the good produced

  lower the degree of competition in the industry

 Question 9For what purpose do economists use a concentration

ratio?

  to compare the percentage of an industry’s total sales to another industry’s total sales

  to compare, in fraction form, the smallest firm’s size to the largest firm’s size

  to measure the average economic success of all the firms in a market

  to measure the distribution of economic power among the top firms in a market

 Question 10What is a group of firms producing the same, or at least similar, products called?

  a monopoly

  a corporation

  an oligarchy

  an industry

ECO204 Principles of Microeconomics

Week 5 Quiz

Question 1The profit-maximizing firm equates the marginal benefit of labor to the marginal __________.

  cost of labor

  profit

  units of labor

  production

 Question 2Salaries for professions (such as architect or medical doctor) that require a long period of study are typically higher than those for other jobs. The reasons for this are all of the following EXCEPT __________.

  future income is worth less than present income

  long periods of schooling incur greater current costs

  status deserves more reward in the form of wages

  students sacrifice a good deal of present income

 Question 3In a perfectly competitive labor market, if a firm’s unit of labor adds more to revenue than to cost, it would be profitable for the firm to __________.

  lower the price on each unit of product

  add more buildings to the firm’s plant

  add more capital to the firm

  purchase more units of labor

 Question 4Which of the following is NOT an example of an in-kind transfer?

  unemployment compensation

  food stamps

  Medicaid

  rent subsidies

 Question 5The typical American worker tends to have the highest personal income in __________.

  youth

  the 20s to 30s

  retirement years

  middle age

The answer can be found in Chapter 13, Section 13.1, Personal Distribution of Income.

Question 6The poverty measure used in the United States includes all but which of the following as income?

  Social Security payments

  Temporary Assistance for Needy Families

  food stamps

  unemployment compensation

 Question 7In many industrialized areas of the world, privatization has been the norm for about 30 years. In which of the following areas is this NOT the case?

  China

  France

  Latin America

  the United Kingdom

 Question 8Monopoly rent seeking is a(n) __________.

  efficient allocation of resources

  extra cost of monopoly

  benefit to society

  advantage for large corporations

The answer can be found in Chapter 14, Section 14.2, Rent Seeking.

Question 9The “rent” involved in rent seeking __________.

  represents a transfer from producer to government

  is artificially created by a government or quasigovernment unit

  represents a transfer from producer to consumer

  is artificially created by a monopoly or oligopoly

Question 10The commitment of scarce resources to capture returns created politically is called __________.

  rent seeking

  cost minimizing

  profit maximizing

  logrolling