Final Exam Review - Economics

Which of the following is an example of a firm with non-profit objectives?

• ExxonMobil

• McDonald's

• Amazon

• Patagonia

A firm is profit-maximizing when:

• TR = TC

• MR = MC

• MC = AR

• MR = TR

Which of the following is an example of third-degree price discrimination?

• Bulk discount

• Buy-one-get-one-free

• Student discount

• Fixed pricing

When price elasticity of demand is < 1, increasing price will:

• Increase total revenue

• Decrease total revenue

• Keep revenue constant

• Raise elasticity

A government subsidy for education corrects:

• Negative externality

• Positive externality

• Public good

• Market power

Which of the following is NOT a cause of government failure?

• Lack of information

• Positive externality

• High admin cost

• Misaligned incentives

What is an example of vertical equity in taxation?

• Everyone pays the same amount

• High earners pay a higher % of income

• Everyone gets the same service

• Government gives subsidies to all equally

Which of these is a cause of wage differentials?

• Equal productivity

• Differences in skill and risk

• Perfect labour markets

• Central wage setting

What does a monopsony do in a labour market?

• Pays above market wage

• Sets wage below equilibrium

• Hires at MR = MC

• Takes wage as given

Economic rent is greatest when:

• Labour supply is elastic

• Workers are underpaid

• Labour supply is perfectly inelastic

• Trade unions are banned