Economics Quiz

Assume labor and machines are substitute products. If the cost of inputs to make machines falls, what would you expect to happen in the labor market?

• Labor supply will rise

• Labor supply will fall

• Labor demand will rise

• Labor demand will fall

• Cannot determine

Accounting profit is less comprehensive than economic profit because accounting profit is calculated by looking at (a)   costs but does not consider implicit costs.

Assume that instant noodles are an inferior good. If a recession causes incomes to drop, what would you expect to happen in the instant noodle market?

• Instant noodle supply will rise

• Instant noodle supply will fall

• Instant noodle demand will rise

• Instant noodle demand will fall

• Cannot determine

Assume rubber is an important component of car tires. If the price of rubber falls, what would you expect to happen to the tire market?

• Tire supply will rise

• Tire supply will fall

• Tire demand will rise

• Tire supply will fall

• Cannot determine

In which market structure do producers have the least amount of market power?

• Perfect Competition

• Monopolistic Competition

• Oligopoly

• Monopoly

• All of these options

In which market structures do firms produce at MR=MC to maximize profits?

• Perfect Competition

• Monopolistic Competition

• Oligopoly

• Monopoly

• All of these options

In which market structure is collusion most likely to occur?

• Perfect Competition

• Monopolistic Competition

• Oligopoly

• Monopoly

• Cannot Determine

In which market structure do producers face a horizontal demand curve?

• Perfect Competition

• Monopolistic Competition

• Oligopoly

• Monopoly

• Cannot Determine

Monopolists that practice price discrimination will increase their total revenue when compared to a monopolist that does not use price discrimination. (T/F)

(a)  

An increase in supply with no change in demand will result in a ________ equilibrium price and a ______ equilibrium quantity in a competitive market.

• Higher ; higher

• Higher ; lower

• Lower; higher

• Lower; lower

• Cannot determine