FINAL EXAM ECON 402 || WITH ACCURATE ANSWERS 100%.
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ECON 402
Institution
ECON 402
characteristics of monopolistic competition include all of the following except correct answers identical products
As the manager of a waterpark, you want to increase the number of tickets sold by 6%. Your staff economist has determined that the price elasticity of demand for waterpark tickets i...
FINAL EXAM ECON 402 || WITH ACCURATE ANSWERS
100%.
characteristics of monopolistic competition include all of the following except correct answers
identical products
As the manager of a waterpark, you want to increase the number of tickets sold by 6%. Your
staff economist has determined that the price elasticity of demand for waterpark tickets is 2. To
increase sales by the desired amount, you should decrease price by correct answers 3%
A production possibilities frontier shows correct answers all of the possible combinations of
goods & services that an economy can produce if
it employs its resources efficiently.
Which of the following concepts best explains why certain businesses, such as Dunkin Donuts or
dry cleaners, are fairly small establishments?
a.) Law of diminishing marginal returns b.) Diseconomies of scale c.) Barriers to entry d.)
Negative externalities correct answers diseconomies of scale
The supply curve of a perfectly competitive firm is correct answers the portion of the marginal
cost curve above the average variable cost curve.
Which of the following is the best example of the law of diminishing marginal utility?
a.) Jim's second plate of mashed potatoes did not taste as good as the first. b.) Pam is lactose
intolerant, so she declined on the ice cream cake they were having for dessert. c.) Dwight doesn't
like turkey. d.) Andy ate so much garlic bread that his coworkers had difficulty working near
him. correct answers Jim's second plate of mashed potatoes did not taste as good as the first.
The fundamental problem that economics studies is correct answers scarcity
Total Cost: $60,000 $80,000 $110,000 $150,000 $210,000
Output: 0 1,000 2,000 3,000 4,000
Based on this cost information, the marginal cost the firm faces at 3000 units is correct answers
$40
Suppose that my company is currently producing 10,000 units of output and charging a price of
$10 a unit. At that level of output, my marginal revenue is $10 and my marginal cost is $8. I am
currently earning $20,000 in profits. What should I do? correct answers You should increase
production of your good.
Which of the following statements about monopolies is FALSE?
a.) A monopoly does not have a supply curve. b.) A natural monopoly is a firm that can produce
the entire market output at a lower cost than if it were produced by many firms. c.) A monopoly's
profits will be capitalized in the price of the firm should the firm eventually be sold. d.) A
monopoly will produce more output at a lower price than a perfectly competitive industry.
, correct answers A monopoly will produce more output at a lower price than a perfectly
competitive industry.
in the long run, correct answers -the firm can vary all inputs
-there are no fixed costs
-profits are zero if the firm decides to shut down
average variable cost is calculated as correct answers total variable cost divided by output
Marginal cost increases as output increases in the short run because of correct answers the law of
diminishing marginal returns
Which of the following is the best example of moral hazard?
a.) the tendency of individuals to see the doctor more often when they know that their insurance
company will pay for the visit. b.) the temptation to cheat on an exam because doing so will
likely lead to a better grade, regardless of what your classmates do. c.) pushing on the subway
which can lead to passengers getting injured. d.) the fact that students who are doing poorer in a
course are more likely to seek tutoring help. correct answers the tendency of individuals to see
the doctor more often when they know that their insurance
company will pay for the visit.
Which of the following is the best example of a public good?
a.) public tennis courts b.) national defense c.) a free concert at the Whittemore center d.) all of
the above correct answers national defense
The market tends to produce _____ of goods with positive externalities and _____ of public
goods. correct answers too little, too little
Given the market failure involved, which of the following government policies is corrective?
a.) subsidies to tobacco farmers b.) taxes on flu shots c.) "Lemon laws" that protect consumers
from buying defective used cars d.) all of the above correct answers "Lemon laws" that protect
consumers from buying defective used cars
Some life insurance companies require clients to have a complete physical by a doctor approved
by
the company before they will agree to offer them a policy. This practice is an attempt to avoid
the problem of correct answers adverse selection.
Which of the following is the best example of a prisoner's dilemma?
a.) the temptation by firms to 'cheat' on collusive agreements b.) steroid use by baseball players
c.) cities offering firms like Amazon big tax incentives to locate there. d.) all of the above are
good examples correct answers -the temptation by firms to 'cheat' on collusive agreementsb
-steroid use by baseball players
-cities offering firms like Amazon big tax incentives to locate there.
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