Micro final

  1. The marginal revenue product of an input in a competitive market decreases as a firm increases the quantity of an input used because of the:
    A. Law of diminishing returns
    B. Law of diminishing marginal utility
    C. Homogeneity of the product
    D. Free mobility of resources
    Law of diminishing returns
  2. Marginal revenue product is the increase in:
    A. Total revenue from a decrease in the price of the product
    B. Marginal revenue from a decrease in the price of the product
    C. Marginal revenue from the use of an additional unit of a resource
    D. Total revenue from the use of an additional unit of a resource
    Total revenue from the use of an additional unit of a resource
  3. "Income receivers should be paid in accordance with the value of output each produces." This statement is consistent with the:
    A. monopoly theory of income distribution.
    B. marginal productivity theory of income distribution.
    C. least-cost, but not profit-maximizing, combination of inputs.
    D. concept of compensating wage differences
    marginal productivity theory of income distribution.
  4. The demand for a resource depends primarily on:
    A. the supply of that resource.
    B. the demand for the product or service that it helps produce.
    C. the price of that input.
    D. the elasticity of supply of substitute inputs.
    the demand for the product or service that it helps produce.
  5. If the wage rate increases:
    A. a purely competitive producer will hire less labor, but an imperfectly competitive producer will not.
    B. an imperfectly competitive producer will hire less labor, but a purely competitive producer will not.
    C. a purely competitive and an imperfectly competitive producer will both hire less labor.
    D. an imperfectly competitive producer may find it profitable to hire either more or less labor
    a purely competitive and an imperfectly competitive producer will both hire less labor.
  6. Which is an example of a change in product demand that increases labor demand?
    A. Access to computers increases the productivity of mail order businesses, thus increasing the demand for their workers
    B. Tourism increases in popularity, increasing the demand for workers at tourist resorts
    C. A decrease in the price of trucks decreases the cost of transporting goods, thus increasing the demand for truckers
    D. A change in work rules increases output per worker in the auto industry, thus increasing the demand for auto workers
    Tourism increases in popularity, increasing the demand for workers at tourist resorts
  7. The more inelastic the demand for a resource the:
    A. Less elastic its marginal revenue product curve
    B. More elastic its marginal revenue product curve
    C. Greater the potential for resource substitution
    D. Greater the productivity of the resource
    Less elastic its marginal revenue product curve
  8. A firm is both hiring labor and selling output in purely competitive markets and is maximizing profits. It is currently operating in the elastic range of its MRP curve. If the wage rate increases, its total spending on wages at the new equilibrium will:
    A. Be larger
    B. Be smaller
    C. Be unchanged
    D. Change in an undetermined direction
    Be smaller
  9. Suppose the demand for strawberries rises sharply, resulting in an increased price of strawberries. As it relates to strawberry pickers, we could expect the:
    A. MRP curve to shift to the right.
    B. MRP curve to shift to the left.
    C. MRC curve to shift downward.
    D. MP curve to shift downward.
    MRP curve to shift to the right
  10. Resource X has many close substitutes whereas resource Y has no close substitutes. Other things equal, we would expect:
    A. the demand for resource Y to be more elastic than the demand for resource X.
    B. resources X and Y to be close substitutes.
    C. resource X to be more expensive than resource Y.
    D. the demand for resource X to be more elastic than the demand for resource Y.
    the demand for resource X to be more elastic than the demand for resource Y.
  11. What is the relationship between living standards and birthrates?
    A. The relationship is negative at low levels of income, but becomes increasingly positive as incomes rise.
    B. They are unrelated.
    C. The relationship is positive (directly related).
    D. The relationship is negative (inversely related).
    The relationship is negative (inversely related).
  12. Alternative fuels become more economically viable as:
    A. the demand for oil decreases.
    B. subsidies for alternative fuels are removed.
    C. oil exploration and drilling technology improve.
    D. the price of oil rises.
    the price of oil rises
  13. In his Essay on the Principles of Population, Thomas Malthus argued that:
    A. Human living standards could permanently rise above subsistence levels, so that populations would grow exponentially
    B. Any temporary increase in living standards would cause people to have more children, and thus increase the population
    C. As the population increased, the standard of living would be maintained by greater productivity
    D. As economic efficiency declined, standards of living would first rise and then eventually decline
    Any temporary increase in living standards would cause people to have more children, and thus increase the population
  14. The replacement rate is the birthrate necessary to:
    A. Keep a population from decreasing
    B. Keep an able-bodied workforce
    C. Maintain the productivity level
    D. Maintain the standard of living
    Keep a population from decreasing
  15. The 1968 prediction of Paul Ehrlich proved to be wrong because population growth:
    A. Slowed dramatically as standards of living decreased
    B. Slowed dramatically as standards of living increased
    C. Rose dramatically as standards of living decreased
    D. Rose dramatically as standards of living increased
    Slowed dramatically as standards of living increased
  16. Which of the following is considered a renewable natural resource?
    A. Aquifers
    B. Coal
    C. Petroleum
    D. Iron
    Aquifers
  17. A profit-maximizing company should extract a non-renewable resource in the present up to the quantity where the:
    A. selling price of the resource equals the extraction cost plus the user cost of the resource.
    B. selling price of the resource equals the total cost plus the user cost of the resource.
    C. selling price of the resource equals the extraction cost of the resource.
    D. extraction cost of the resource equals the user cost of the resource.
    selling price of the resource equals the extraction cost plus the user cost of the resource.
  18. Mining of “conflict diamonds” tends to:
    A. be more profitable as warring factions are willing to pay more for the diamonds.
    B. occur at a slower pace than would maximize the long-term stream of profits because war increases extraction costs.
    C. occur at a pace slower than would maximize the long-term stream of profits since the war disrupts production.
    D. occur at a pace faster than would maximize the long-term stream of profits since warring factions extract diamonds as quickly as possible due to fears that they may soon lose control of the diamond mines.
    occur at a pace faster than would maximize the long-term stream of profits since warring factions extract diamonds as quickly as possible due to fears that they may soon lose control of the diamond mines.
  19. Property rights for fish from the open ocean: A. do not exist.
    B. are established by the United Nations.
    C. exist once the fish are sold at market.
    D. exist once the fish are caught.
    exist once the fish are caught.
  20. An increase in interest rates:
    A. Raises the present value of a future amount
    B. Lowers the present value of a future amount
    C. Lowers the future value of a present amount
    D. Has no effect on present or future amount
    Lowers the present value of a future amount
Author
jbz345
ID
331058
Card Set
Micro final
Description
final
Updated