ECO 561 Final Exam

ECO 561 Final Exam
1) Suppose that in the clothing
market, production costs have fallen, but the equilibrium price and quantity
purchased have both increased. Based on this information you can conclude that
2) Camille’s Creations and Julia’s
Jewels both sell beads in a competitive market. If at the market price of $5,
both are running out of beads to sell (they can’t keep up with the quantity
demanded at that price), then we would expect both Camille’s and Julia’s to:
3) In which of the following
industries are economies of scale exhausted atrelatively low levels of output?
4) The average cost curves (AVC and
ATC) should be minimized
5) If the wage rate increases,
6) The real wage will rise if the
nominal wage
7) Construction workers frequently
sponsor political lobbying in support of greater public spending on highways
and public buildings. One reason they do this is to
8) Paying an above-equilibrium wage
rate might reduce unit labor costs by
9) A good real-world example of
monopolistic competition is
10) An industry comprising a small
number of firms, each of which considers the potential reactions of its rivals
in making price-output decisions, is called
11) Price is constant or given to
the individual firm selling in a purely competitive market because
12) The most important pricing
strategy for a perfectly competitive firm is
13) Which of the following is a non price
barrier of entry?
14) A third-degree price
discrimination can be applied to which of the following market structures?
15) Investing in R&D is more
likely to occur in markets where
16) All economies of scale are
achieved at the minimum of
17) Inflation is undesirable because
it
18) An economy’s aggregate demand
curve shifts leftward or rightward by more than changes in initial spending
because of the
19) Suppose productivity rises in a
particular economy, but wages stay the same. Other things equal,
20) If personal taxes were decreased
and resource productivity increased simultaneously, the equilibrium
21) Expansionary fiscal policy is so
named because it
22) Suppose the price level is
fixed, the MPC is .5, and the GDP gap is a negative$100 billion. To achieve
full-employment output (exactly), government should
23) GDP understates the value of
output produced by an economy because it
24) Other things equal, a decrease
in the real interest rate will
25) Other things equal, a decrease
in corporate income taxes will
26) Inflation in U.S. prices will
cause
27) The quantity theory of money
states that
28) Suppose that U.S. prices rise 4%
over the next year while prices in Mexico rise 6%. According to the purchasing
power parity theory of exchange rates, what should happen to the exchange rate
between the dollar and the peso?
29) A rise in the domestic interest
rate leads to capital
30) A firm under monopolistic
competition will earn