Economics Quiz

Assume labor and machines are substitute products. If the cost of inputs to make machines falls, what would you expect to happen in the labor market?

• Labor supply will rise

• Labor supply will fall

• Labor demand will rise

• Labor demand will fall

• Cannot determine

Accounting profit is less comprehensive than economic profit because accounting profit is calculated by looking at ______ costs but does not consider implicit costs.

Assume that instant noodles are an inferior good. If a recession causes incomes to drop, what would you expect to happen in the instant noodle market?

• Instant noodle supply will rise

• Instant noodle supply will fall

• Instant noodle demand will rise

• Instant noodle demand will fall

• Cannot determine

Assume rubber is an important component of car tires. If the price of rubber falls, what would you expect to happen to the tire market?

• Tire supply will rise

• Tire supply will fall

• Tire demand will rise

• Tire supply will fall

• Cannot determine

In which market structure do producers have the least amount of market power?

• Perfect Competition

• Monopolistic Competition

• Oligopoly

• Monopoly

• All of these options

In which market structures do firms produce at MR=MC to maximize profits?

• Perfect Competition

• Monopolistic Competition

• Oligopoly

• Monopoly

• All of these options

In which market structure is collusion most likely to occur?

• Perfect Competition

• Monopolistic Competition

• Oligopoly

• Monopoly

• Cannot Determine

In which market structure do producers face a horizontal demand curve?

• Perfect Competition

• Monopolistic Competition

• Oligopoly

• Monopoly

• Cannot Determine

Monopolists that practice price discrimination will increase their total revenue when compared to a monopolist that does not use price discrimination. (T/F)

An increase in supply with no change in demand will result in a ________ equilibrium price and a ______ equilibrium quantity in a competitive market.

• Higher ; higher

• Higher ; lower

• Lower; higher

• Lower; lower

• Cannot determine