Eco 365 Final Exam Answers

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  Which of the following is the best explanation of why few economists agreed with Perot? Answer Although economics predicted that unemployment would rise, the increased profits of corporations would raise stock prices enough to compensate for the...

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  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...

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  If this is true, then on busy days when the effective hourly wage is higher, taxi drivers will A. He owns three vans that employees use to make deliveries, but he is considering hiring a fourth driver. If he hires a fourth driver, he can schedule breaks and lunch hours so all three vans are in constant use, allowing him to increase deliveries per day from 60 to The marginal cost per delivery of increasing output beyond 60 deliveries per day A. Members of the Kansas Sierra Club support the turbines as a way to reduce fossil fuel usage, while local chapters of the Nature Conservancy say they will befoul the landscape.

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  Which of the following is the best explanation of why few economists agreed with Perot? Economists did not believe any jobs would be lost in the United States. Economics believed that the U. Although economics predicted that unemployment would rise, the increased profits of corporations would raise stock prices enough to compensate for the lost jobs. Although economists believed that in some areas the United States would lose jobs, they expected the United States would gain jobs in other areas. Using supply and demand analysis to predict the effect of increased production on equilibrium price and quantity, the first step is to show the: demand curve shifting to the left. The industry tried to pass on the full 10 percent ticket tax to consumers but was able to boost fares by only 4 percent.

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  From this you can conclude that the: Supply of airline tickets is perfectly inelastic. Supply elasticity of airline tickets is less than infinity. Demand for airline tickets is perfectly inelastic. Demand elasticity for airline tickets is greater than zero in absolute value. Interrelated because both are often taught by the same instructors. Interrelated because what happens in the economy as a whole is based on individual decisions. Virtually identical, though one is much more difficult than the other.

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  What can be said about deadweight loss in each case? There is no difference between goods that are purchased in the market in either 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. 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 diminishing marginal utility The law of demand The law of diminishing marginal productivity The law of supply 21 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 both the marginal cost and the average total cost of diamonds.

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  Exceed the marginal cost of diamonds but equal to the average total cost of diamonds. Be equal to the average total cost of diamonds. Be equal to the marginal cost of diamonds 22 Oligopoly is probably the best market for technological change because: 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. 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. A monopolist can influence market price whereas a perfectly competitive firm cannot. A competitive firm has a u-shaped average cost curve whereas a monopolist does not.

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  Indian labor costs are equal to Chinese labor costs. Chinese labor lacks the specific language skills needed to make call centers profitable in China. China is at a more advanced stage of economic development than India. China lacks the political infrastructure to support call centers. Quantity of workers demanded will exceed the quantity of workers supplied. Government had guaranteed it exclusive control of cell phone service. 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 28 A reduction in the supply of labor will cause wages to: Decrease and employment to decrease. Decrease and employment to increase. Increase and employment to decrease. Increase and employment to increase. 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.

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  Next ECO Final Exam Very nicely presented course, not very deep into each and every part but nevertheless excellent. I would very much recommend this course to anyone with an interest in Uopehelp. The DeBeers company is a profit-maximizing monopolist that exercises monopoly power in the distribution 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. Using workers and 10 machines, a firm can produce 10, units of output; using workers and 25 machines, the firm produces 21, units of output. Suppose that college tuition is higher this year than last and that more students are enrolled in college this year than last year. Increase and employment to increase. Decrease and employment to increase. Increase and employment to decrease. Quantity of workers supplied will exceed the quantity of workers demanded.

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  Alex is playing his music at full volume in his dorm room. The content was clear, but never dumbed down. It has encouraged me to enroll in more uopehelp. I can not wait for the next installment. So hurry and get sign up and take benefits. In , 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. 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.

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  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. Suppose OPEC announces it will increase production. Many call centers that provide telephone customer services for U. 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.

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  So much more very useful detailed than I expected, I learn so much in such a short space of time. Thank you to all the Uopehelp team who put it together so well - a thorough success in my University Examination. What can be said about deadweight loss in each case? 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. 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. Monopolistically competitive. A pure monopoly.

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  An oligopoly. 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? Exceeds the marginal revenue. Equals the marginal cost. Equals the marginal revenue. When Ross Perot ran for president as a third party candidate in , he argued that free trade with Mexico would result in massive job losses in the United States because Mexican wages were so low.

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  Which of the following is the best explanation of why few economists agreed with Perot? 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? A wide variety of documents, presentation, videos and lecturers kept things moving and the topics covered were diverse.

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  The workload was not that high - appropriate for an enthusiast such as me, but probably too basic for those versed in the field at here to get increase your skills. 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 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. Monopolistic markets. Oligopolistic markets. Competitive markets. Keep markets contestable. Use predatory pricing to monopolize industries.

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  Coordinate the output and pricing decisions of a group of firms. 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.

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  An automobile manufacturing company is considering whether or not to invest in robotic equipment to develop a more cost-effective production technique. An automobile manufacturing company is considering whether or not to expand its existing workforce, while keeping the same factory and equipment. A business consulting firm is considering whether or not to hire interns to assist with research and data processing. A business consulting firm is considering whether or not to add new computers while maintaining the same number of employees. If this is true, then on busy days when the effective hourly wage is higher, taxi drivers will A. He owns three vans that employees use to make deliveries, but he is considering hiring a fourth driver.

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  If he hires a fourth driver, he can schedule breaks and lunch hours so all three vans are in constant use, allowing him to increase deliveries per day from 60 to The marginal cost per delivery of increasing output beyond 60 deliveries per day A. Members of the Kansas Sierra Club support the turbines as a way to reduce fossil fuel usage, while local chapters of the Nature Conservancy say they will befoul the landscape. The Sierra Club argues that wind turbines A. It hurts the poor and benefits the rich. It leads to less fuel being used than the amount that maximizes consumer surplus. It encourages the consumption of too much fuel at the expense of other goods. It has no effect; consumers gain a surplus, but taxpayers lose the same amount because they must finance the subsidy. What can be said about deadweight loss in each case? Taxing income results in less deadweight loss, because government knows better what health care coverage is good for society.

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  There is no difference because the goods are purchased in the market in either case. There is no difference because the total spending remains the same and the health care purchased remains the same. A clear result of the importation of clothing is A. Exchange rates tend to have equivalent values. For example, one Italian lire equals one U. Because people have essentially the same basic needs wherever they live, they tend to buy the same bundle of goods. Because wages are so much lower in China, eventually all U. Because their countries have similar institutions, the price paid for a computer in Germany and the United States are about the same when converted into the same currency.

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  All the tickets for the concert sell out 1 hour after they go on sale and there are still 1, fans who want to buy tickets. Many different production processes can be economically efficient, but only the method that involves the lowest possible cost is technically efficient. Many different production processes can be technically efficient, but only the method that involves the lowest possible cost is economically efficient.

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  There are many production processes that are both technically and economically efficient, but only one of these involves the lowest possible cost. There is only one production process that is technically efficient, and this process is also economically efficient. Joint venture Vertical merger Horizontal merger 10 Suppose a firm finds that an additional dollar spent on labor increases output more than does an additional dollar spent on machines. Under these conditions, the firm should substitute machines for labor if it wants to increase economic efficiency is economically efficient is technically efficient should substitute labor for machines if it wants to increase economic efficiency 11 Economists and laypeople see the pros and cons of international trade in different ways.

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  Which of the following is one of those ways? Laypeople enjoy the benefits of trade in terms of lower consumer prices. Laypeople recognize that the United States has a comparative advantage in services. Laypeople tend to think of foreign trade only in terms of manufactured goods. Laypeople believe in the law of one price and economists do not. Suppose two companies are buying morels from workers willing to find them. Economists would say that the lower-paying company will attract the more creative and innovative pickers and the higher-paying company will attract the others.

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