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| 1 | |
Which of the following is only non-excludable, but tends to be rivalrous, in consumption? |
| | A) | Water at a public water fountain. |
| | B) | Air pollution abatement. |
| | C) | Public roads and highways. |
| | D) | Garbage collection by a local government. |
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| 2 | |
The primary goal and purpose of U.S. Antitrust Law is to |
| | A) | lessen the occurrence of activities leading to external costs. |
| | B) | eliminate the market failure stemming from the provisions of public goods. |
| | C) | eliminate the deadweight loss associated with collusive price and output agreements. |
| | D) | reduce the inefficiencies resulting from natural monopolies and large economies of scale. |
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| 3 | |
A "purely public good" is a good or service |
| | A) | for which it is relatively easy to exclude nonpaying customers. |
| | B) | available to non-paying and paying consumers alike. |
| | C) | for which there is lots of competition in the good’s consumption. |
| | D) | consumed by public sector employees and financed by private contributions. |
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| 4 | |
Suppose the firms in the paper manufacturing industry release various dyes, ink and bleach into water supplies and nearby land as part of the production process. If the paper manufacturing industry illustrates a competitive market, how will the price and output of the paper products compare to their values under conditions of ideal economic efficiency? |
| | A) | The price would be too low, and the output would be too small. |
| | B) | The price would be too high, and the output would be too large. |
| | C) | The price would be too low, and the output would be too large. |
| | D) | The price would be too high, and the output would be too small. |
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| 5 | |
Which of the following factors decreases the role for government involvement in the market place? |
| | A) | The presence of negative externalities. |
| | B) | The presence of industries with many competing firms. |
| | C) | Asymmetric information. |
| | D) | The need for public goods. |
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| 6 | |
Compared to an efficient, purely competitive industry result, a monopoly market results in |
| | A) | less producer surplus and more consumer surplus. |
| | B) | more producer and consumer surpluses. |
| | C) | more producer surplus and less consumer surplus. |
| | D) | less producer and consumer surpluses. |
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| 7 | |
The external marginal cost of producing coal is MCexternal = 25Q while the internal marginal cost is MCinternal = 20Q. The inverse demand is given by P = 500 - 5Q.
What is the socially efficient level of output? |
| | A) | 10. |
| | B) | 14.2. |
| | C) | 20. |
| | D) | 40. |
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| 8 | |
The external marginal cost of producing coal is MCexternal = 25Q while the internal marginal cost is MCinternal = 20Q. The inverse demand is given by P = 500 - 5Q.
How much output would a competitive industry produce? |
| | A) | 16.66. |
| | B) | 14.2. |
| | C) | 20. |
| | D) | 40. |
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| 9 | |
The external marginal cost of producing coal is MCexternal = 25Q while the internal marginal cost is MCinternal = 20Q. The inverse demand is given by P = 500 - 5Q.
If the government taxed output at $100 per unit, what would a competitive industry produce? |
| | A) | 16. |
| | B) | 14. |
| | C) | 10. |
| | D) | 20. |
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| 10 | |
If government relaxed its emissions standards for automobile manufactures - permitting them to increase air pollutants - the most likely direct impact of this regulation would be to |
| | A) | increase the supply of automobiles and lead to lower car prices. |
| | B) | increase the supply of automobiles and lead to higher car prices. |
| | C) | decrease the supply of automobiles and lead to lower car prices. |
| | D) | decrease the supply of automobiles and lead to higher car prices. |
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| 11 | |
What impact would the removal of U.S. import quotas placed on foreign produced sugar have on the U.S. sugar market? |
| | A) | Domestic sugar producers and domestic sugar consumers would be helped. |
| | B) | Domestic sugar consumers and foreign sugar producers would be helped. |
| | C) | Foreign sugar producers and domestic sugar producers would be helped. |
| | D) | Foreign sugar producers would be hurt, but domestic sugar consumers would be helped. |
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| 12 | |
The domestic demand and supply for sugar are Qd = 60,000 - 100P and QSD = 20,000 + 200P. The foreign supply is QSF = 10,000 + 300 P.
What is the domestic market price of sugar? |
| | A) | $20. |
| | B) | $50. |
| | C) | $67. |
| | D) | $70. |
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| 13 | |
The domestic demand and supply for sugar are Qd = 60,000 - 100P and QSD = 20,000 + 200P. The foreign supply is QSF = 10,000 + 300 P.
What is the domestic quantity supplied at the domestic market price? |
| | A) | 16,000. |
| | B) | 20,000. |
| | C) | 30,000. |
| | D) | 55,000. |
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| 14 | |
The domestic demand and supply for sugar are Qd = 60,000 - 100P and QSD = 20,000 + 200P. The foreign supply is QSF = 10,000 + 300 P.
Suppose an import quota of 10,000 is imposed in the domestic market. What will be the new market price of sugar? |
| | A) | $40. |
| | B) | $15. |
| | C) | $85. |
| | D) | $100. |
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| 15 | |
The domestic demand and supply for sugar are Qd = 60,000 - 100P and QSD = 20,000 + 200P. The foreign supply is QSF = 10,000 + 300 P.
How many units of sugar will domestic producers supply after the quota is imposed? |
| | A) | 20,000. |
| | B) | 25,000. |
| | C) | 40,000. |
| | D) | 30,000. |
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