ECO 365 Final Exam Answer UOP Latest Tutorial

1). is a profit-maximizing monopolist that exercises in the distribution of . If the company earns positive economic profits this year, the price of diamonds will:

· Exceed the marginal cost of diamonds but equal to the average total cost of diamonds.

· Exceed both the marginal cost and the average total cost of diamonds.

· Be equal to the marginal cost of diamonds.

· Be equal to the average total cost of diamonds.

2). Using 100 workers and 10 machines, a firm can produce 10,000 units of output; using 250 workers and 25 machines, the firm produces 21,000 units of output. These facts are best explained by:

· Diseconomies of scale

· Diminishing marginal productivity

· Economies of scale

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3). Suppose that college tuition is higher this year than last and that more students are enrolled in college this year than last year. Based on this information, we can that:

· despite the increase in price, quantity demanded rose due to some other factors changing.

· the demand for a college education is positively sloped.

· the law of demand is invalid.

· this situation has nothing to do with the law of demand.

4). A monopoly firm is different from a in that:

· A monopolist's demand curve is perfectly inelastic whereas a perfectly competitive firm's demand curve is perfectly elastic.

· A competitive firm has a u-shaped average cost curve whereas a monopolist does not.

· A monopolist can influence market price whereas a perfectly competitive firm cannot.

· There are many substitutes for a monopolist's product whereas there are no substitutes for a competitive firm's product.

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5). The best example of is:

· Alcoholic beverages

· Pollution

· Education

6). The theory that quantity supplied and price are positively related, other things constant, is referred to as the law of:

· supply

· profit maximization

· demand

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7). A reduction in the supply of labor will cause wages to:

· Decrease and employment to decrease.

· Increase and employment to increase.

· Decrease and employment to increase.

· Increase and employment to decrease.

8). Other things held constant in a competitive labor market, if workers negotiate a contract in which the employer agrees to pay an hourly of $17.85 while the market equilibrium hour rate is $16.50, the: