Question 1

If a is 1/4 and b is 5/6 in Hotelling's Main Street model, the second firm's market segment is:

Accepted Answer

A) 1/2 
B) 13/24 
C) 11/24 
D) 5/6 
A) 1/2 
B) 13/24 
C) 11/24 
D) 5/6

Question 2

Institutions are considered important for economic analysis:

Accepted Answer

A) institutionalism is an important field in economics. 
B) because they govern the interaction of economic actors. 
C) laws and regulations explain all economic choices. 
D) government is paramount in a market economy. 
A) institutionalism is an important field in economics. 
B) because they govern the interaction of economic actors. 
C) laws and regulations explain all economic choices. 
D) government is paramount in a market economy.

Question 3

Locational models suggest that customers are better off if:

Accepted Answer

A) they are near a store since their travel time, and therefore the cost of travel, are reduced. 
B) there are many stores since price competition will lower the cost of goods. 
C) they are far from a store since noise, congestion, and garbage are reduced. 
D) stores are operated as communes since costs are reduced and profits are earned by the customers. 
A) they are near a store since their travel time, and therefore the cost of travel, are reduced. 
B) there are many stores since price competition will lower the cost of goods. 
C) they are far from a store since noise, congestion, and garbage are reduced. 
D) stores are operated as communes since costs are reduced and profits are earned by the customers.

Question 4

A perfectly competitive market has all of the following characteristics except:

Accepted Answer

A) Each buyer offers to buy a small part of the total quantity transacted. 
B) There are few sellers. 
C) There are many buyers. 
D) Each seller offers to sell a small part of the total quantity transacted. 
A) Each buyer offers to buy a small part of the total quantity transacted. 
B) There are few sellers. 
C) There are many buyers. 
D) Each seller offers to sell a small part of the total quantity transacted.

Question 5

Climate change related to carbon dioxide emissions is an example of:

Accepted Answer

A) the greed that is inherent in the market system. 
B) the unitization of common property. 
C) the common property problem 
D) a problem that cannot be explained by economics. 
A) the greed that is inherent in the market system. 
B) the unitization of common property. 
C) the common property problem 
D) a problem that cannot be explained by economics.

Question 6

The link between the assumption and the predictions of an economic model is:

Accepted Answer

A) obtained using the rules of logic. 
B) a function of the user's experience with economic theory. 
C) a function of the author's beliefs. 
D) revised in the light of new empirical evidence. 
A) obtained using the rules of logic. 
B) a function of the user's experience with economic theory. 
C) a function of the author's beliefs. 
D) revised in the light of new empirical evidence.

Question 7

A market is characterized by the demand and supply curves: XD = 40 - 4p and XS = 2 + p, respectively. Under a buy- and- store program with a support price of $9, the government will end up buying:

Accepted Answer

A) 11 units. 
B) 0 units. 
C) 2 units. 
D) 5 units. 
A) 11 units. 
B) 0 units. 
C) 2 units. 
D) 5 units.

Question 8

Suppose that a market for books is segmented at 1/2, has 100 customers who buy one book, charges
$7 per book, and pays $5 per book. What is the profit earned in the market?

Accepted Answer

A) 200 
B) 500 
C) 700 
D) 100 
A) 200 
B) 500 
C) 700 
D) 100

Question 9

A pure market economy:

Accepted Answer

A) offers no role for the government. 
B) consists only of supply and demand. 
C) allows for the existence of rent control. 
D) includes the institutions of private property. 
A) offers no role for the government. 
B) consists only of supply and demand. 
C) allows for the existence of rent control. 
D) includes the institutions of private property.

Question 10

What is the self- interest theory or assumption? What is the main argument for using this theory? Provide a real- life example illustrating the usefulness of self- interest in gaining economic insight.

Accepted Answer

The self- interest standard is based on

Question 11

In economics, self interest is a:

Accepted Answer

A) positive assumption. 
B) normative assumption. 
C) measure of value. 
D) measure of greed. 
A) positive assumption. 
B) normative assumption. 
C) measure of value. 
D) measure of greed.

Question 12

Suppose that you plan to enter a book market with one existing store located at 2/3. Where can you locate to maximize profit?

Accepted Answer

A) on the 0 (left)side of the existing store 
B) at a nearby mall 
C) on the 1 (right)side of the existing store 
D) at 1/2 
A) on the 0 (left)side of the existing store 
B) at a nearby mall 
C) on the 1 (right)side of the existing store 
D) at 1/2

Question 13

In a perfectly competitive market, each buyer can choose:

Accepted Answer

A) price only. 
B) quantity only. 
C) both quantity and price. 
D) neither quantity nor price. 
A) price only. 
B) quantity only. 
C) both quantity and price. 
D) neither quantity nor price.

Question 14

When a consumer's own actions cannot attain a more preferred situation, she faces a(n):

Accepted Answer

A) unfair system. 
B) equilibrium. 
C) coercive arrangement. 
D) unconstitutional rule. 
A) unfair system. 
B) equilibrium. 
C) coercive arrangement. 
D) unconstitutional rule.

Question 15

The price support program instituted by the government:

Accepted Answer

A) does not change the competitive equilibrium. 
B) will lead to a price below the competitive equilibrium. 
C) will result in a quantity supplied smaller than the equilibrium quantity. 
D) will result in a quantity supplied larger than the equilibrium quantity. 
A) does not change the competitive equilibrium. 
B) will lead to a price below the competitive equilibrium. 
C) will result in a quantity supplied smaller than the equilibrium quantity. 
D) will result in a quantity supplied larger than the equilibrium quantity.

Question 16

A perfectly competitive market has all of the following characteristics except:

Accepted Answer

A) There are many buyers. 
B) There are many sellers. 
C) Each buyer offers to buy a small part of the total quantity transacted. 
D) Each seller offers to sell a large part of the total quantity transacted. 
A) There are many buyers. 
B) There are many sellers. 
C) Each buyer offers to buy a small part of the total quantity transacted. 
D) Each seller offers to sell a large part of the total quantity transacted.

Question 17

The circular flow of economic activity reflects the:

Accepted Answer

A) conduct of commercial activities. 
B) interactions among firms and individuals. 
C) tedium of ordinary activities. 
D) flow of funds among banks and government agencies. 
A) conduct of commercial activities. 
B) interactions among firms and individuals. 
C) tedium of ordinary activities. 
D) flow of funds among banks and government agencies.

Question 18

In economics, institutions:

Accepted Answer

A) conduct research in medicine and engineering. 
B) slow the rate of change in society. 
C) control and direct private behaviour. 
D) provide grants to artists and writers. 
A) conduct research in medicine and engineering. 
B) slow the rate of change in society. 
C) control and direct private behaviour. 
D) provide grants to artists and writers.

Question 19

Which of the following statements is true when a common property problem exists?

Accepted Answer

A) resources are used too intensely. 
B) governments don't know who to tax. 
C) there is no incentive to utilize the resources. 
D) the resources must be used for the common good. 
A) resources are used too intensely. 
B) governments don't know who to tax. 
C) there is no incentive to utilize the resources. 
D) the resources must be used for the common good.

Question 20

An economy's technology is:

Accepted Answer

A) the unchanging part of manufacturing processes. 
B) its ways of using resources to produce goods. 
C) a machine used to produce a particular product. 
D) a process for discovering new goods and services. 
A) the unchanging part of manufacturing processes. 
B) its ways of using resources to produce goods. 
C) a machine used to produce a particular product. 
D) a process for discovering new goods and services.

If a is 1/4 and b is 5/6 in Hotelling's Main Street model, the second firm's market segment is:

Institutions are considered important for economic analysis:

Locational models suggest that customers are better off if:

A perfectly competitive market has all of the following characteristics except:

Climate change related to carbon dioxide emissions is an example of:

The link between the assumption and the predictions of an economic model is:

A market is characterized by the demand and supply curves: X_D= 40 - 4p and X_S= 2 + p, respectively. Under a buy- and- store program with a support price of $9, the government will end up buying:

Suppose that a market for books is segmented at 1/2, has 100 customers who buy one book, charges $7 per book, and pays $5 per book. What is the profit earned in the market?

A pure market economy:

What is the self- interest theory or assumption? What is the main argument for using this theory? Provide a real- life example illustrating the usefulness of self- interest in gaining economic insight.

In economics, self interest is a:

Suppose that you plan to enter a book market with one existing store located at 2/3. Where can you locate to maximize profit?

In a perfectly competitive market, each buyer can choose:

When a consumer's own actions cannot attain a more preferred situation, she faces a(n):

The price support program instituted by the government:

A perfectly competitive market has all of the following characteristics except:

The circular flow of economic activity reflects the:

In economics, institutions:

Which of the following statements is true when a common property problem exists?

An economy's technology is:

A Theory of Preferences

Demand Theory

More Demand Theory

Intertemporal Decision Making and Capital Values

Production Cost: One Variable Input

Production Cost: Many Variable Inputs

The Theory of Perfect Competition

Applications of the Competitive Model

Monopoly

Input Markets and the Allocation of Resources

Labour Market Applications

Competitive General Equilibrium

Price Discrimination Monopoly Practices

Introduction to Game Theory

Game Theory and Oligopoly

Choice Making Under Uncertainty

Assymmetric Information, the Rules of the Game, and Externalities

The Theory of the Firm

Assymetric Information and Market Behaviour

Filters

Exam 1: Microeconomics: a Working Methodology

If a is 1/4 and b is 5/6 in Hotelling's Main Street model, the second firm's market segment is:

Institutions are considered important for economic analysis:

Locational models suggest that customers are better off if:

A perfectly competitive market has all of the following characteristics except:

Climate change related to carbon dioxide emissions is an example of:

The link between the assumption and the predictions of an economic model is:

A market is characterized by the demand and supply curves: XD = 40 - 4p and XS = 2 + p, respectively. Under a buy- and- store program with a support price of $9, the government will end up buying:

Suppose that a market for books is segmented at 1/2, has 100 customers who buy one book, charges $7 per book, and pays $5 per book. What is the profit earned in the market?

A pure market economy:

What is the self- interest theory or assumption? What is the main argument for using this theory? Provide a real- life example illustrating the usefulness of self- interest in gaining economic insight.

In economics, self interest is a:

Suppose that you plan to enter a book market with one existing store located at 2/3. Where can you locate to maximize profit?

In a perfectly competitive market, each buyer can choose:

When a consumer's own actions cannot attain a more preferred situation, she faces a(n):

The price support program instituted by the government:

A perfectly competitive market has all of the following characteristics except:

The circular flow of economic activity reflects the:

In economics, institutions:

Which of the following statements is true when a common property problem exists?

An economy's technology is:

A Theory of Preferences

Demand Theory

More Demand Theory

Intertemporal Decision Making and Capital Values

Production Cost: One Variable Input

Production Cost: Many Variable Inputs

The Theory of Perfect Competition

Applications of the Competitive Model

Monopoly

Input Markets and the Allocation of Resources

Labour Market Applications

Competitive General Equilibrium

Price Discrimination Monopoly Practices

Introduction to Game Theory

Game Theory and Oligopoly

Choice Making Under Uncertainty

Assymmetric Information, the Rules of the Game, and Externalities

The Theory of the Firm

Assymetric Information and Market Behaviour

Filters

A market is characterized by the demand and supply curves: X_D= 40 - 4p and X_S= 2 + p, respectively. Under a buy- and- store program with a support price of $9, the government will end up buying: