Midterm 1

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Midterm Economics Quiz

Test your knowledge with our engaging Midterm Economics Quiz! This quiz covers a variety of topics essential for understanding economic principles, from utility maximization to market structures. Dive in to see how much you really know!

Challenging questions across multiple economics topics
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15 Questions4 MinutesCreated by ThinkingEconomist47

suppose price of Scottish haggis is $10 and price of Belgian mussel is $2, then to maximize total utility, a rational consumer should consume until:

The marginal utility of Scottish haggis divided by the marginal utility of Belgian mussel is 2

The marginal utility of Scottish haggis divided by the marginal utility of Belgian mussel is 1/5

The marginal utility of Scottish haggis divided by the marginal utility of Belgian mussel is 5

The marginal utility of Scottish haggis divided by the marginal utility of Belgian mussel is 10

In a long-run perfectly competitive equilibrium,

Economic profits are zero

Economic profits are less than zero

Economic profits are greater than zero

None of the above

If an industry that is currently perfectly competitive but it then becomes a monopoly, which of the following would occur?

Price would increase and output would decrease

Both price and output would increase

Price would decrease and output would increase

Both price and output would remain unchanged

The difference between the total cost of a given quantity of output and the fixed cost of that output is

The marginal product of labor

The marginal cost of that output

The total product of labor

The variable cost of that output

The average total cost is at its minimum when

Marginal cost is greater than the average total cost

Marginal cost is smaller than the average total cost

Marginal cost equals the average total cost

None of the above

According to class lecture notes by K.C. Fung, features of the French economy include:

The average French employee works substantially more hours over the course of a year than his/her American counterpart

Productivity per hour in France is similar to that in the United States

France has more income inequality after taxes and transfers compared with OECD average

All of the Above

Consider a standard monopolist and select the true statement/s:

There is no supply curve with a monopolist

Here will be no deadweight loss

The profit-maximizing point is where price equals to marginal cost

(a) and (b)

The World Trade Organization (WTO):

Provides the framework for the complex negotiations involved in a major international trade agreement

Does not resolve disputes between its members that typically arise when one country claims that another country’s policies violate its previous trade agreements

Never allows any trade protection even when the foreign competition is deemed “unfair” under certain technical criteria

(a) and (b)

Suppose Casey is a low-income immigrant and he is a perfectly discriminating monopolist. In general, a perfectly discriminating monopolist:

Is economically inefficient

Creates no deadweight loss

Leads to more consumer surplus than a comparable single-priced monopolist

None of the above

In 2020, Netflix released its hit streaming series “Love is Blind”. Suppose you consider Netflix a monopolist. In general, monopoly can be due to:

Establishing control over a scarce resource input

Increasing returns to scale

Technological superiority

All of the above

Suppose the founder of Amazon Jeff Bezos consumes two ordinary goods, curried burrito and Israeli chicken soup. To maximize his total utility, he should consume these two goods until:

Marginal utility of curried burrito divided by the price of curried burrito is larger than the marginal utility of Israeli chicken soup divided by the price of Israeli chicken soup

His budget line is steeper than his indifference curve at his optimal point of consumption

The slope of his budget line is the same as the slope of his indifference curve at his optimal point of consumption

None of the above

Suppose Chinese kung pao chicken and Peruvian tacu-tacu are ordinary goods. An indifference curve for ordinary goods:

Is typically downward sloping

Traces out all consumption bundles that yield the same amount of total utility

Never crosses another indifference curve

All of the above

According to K.C. Fung’s class lectures and Krugman and Wells, 5th edition, people can sometimes make decisions that deviate from maximizing their best outcomes. These can be due to :

Concern about fairness

Implicit biases and stereotyping others based on their gender, sexual orientation, disability and ethnicity/race

Intense desire to become the lead singer of K.C. And the Sunshine Band

(a) and (b)

Suppose on the y-axis we have quantity of Boba tea and on the x-axis we have the quantity of Jamaican patty. The slope of the budget line can be written as:

Minus price of Boba tea divided by price of Jamaican patty

Minus price of Jamaican patty divided by price of Boba tea

Income of the consumer divided by price of Boba tea

Income of the consumer divided by price of Jamaican patty

The Korean movie “Parasite” in 2020 became the first foreign film to win best picture in the Academy Awards. In the class-conscious film, a dish called Ram-Don is prominently featured. Ram-Don is a portmanteau of Ramen noodles and Udon. If the famous rapper Drake and the young teen sensational singer Billie Eilish consider Ramen and Udon as perfect complements, then

The indifference curves of Ramen and Udon are downward sloping straight lines

The indifference curves of Ramen and Udon can cross

Indifference curves of Ramen and Udon are L-shaped

None of the above

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