Homework Set #5 must be submitted online no later thanThursday, October 20, 2016 at 8:59 p.m. This hard copy is for your convenience.
Homework Set #5 – ECN 212 – Fall 2016 – Dr. Roberts
Homework Set #5 must be submitted online no later thanThursday, October 20, 2016 at 8:59 p.m. This hard copy is for your convenience.
1. Refer to the figure above. Which of the following is true?
a. If this is a monopolistically competitive firm, it will exit in the short run.
b. The price this firm will charge is P1 and the output it will produce is Q2.
c. This firm is making positive economic profit equal to (P1-P2)(Q2).
d. If this firm is in a monopolistically completive industry, firms will exit in
the long run.
e. At a price of P6, this firm will supply Q1 units.
2. Using the graph above, which of the following statements is true about this monopolistically competitive firm?
- This firm can expect to earn zero economic profit in the long run.
- The positive economic profits this firm is experiencing will attract entry.
- Entry into this industry will make this firm’s demand curve more elastic.
- All of the above are true.
- None of the above is true.
3. Most cartels do not last very long because
a. the firms merge into a monopoly.
b. they are illegal in the United States.
c. cartel members cheat on agreed upon production limits.
d. OPEC discovers their existence.
e. cartels are not profitable.
4. In the figure above, a shift from S1 to S2 might be caused by
a. an increase in the demand for labor.
b. a minimum wage set at W4.
c. a decrease in the non monetary benefits.
d. an increase in the wage rate.
e. a decrease in the wage rate.
Number of Workers Output per Hour Price of the Product
0 0 $3
1 7 3
2 12 3
3 15 3
4 17 3
5 18 3
5. According to the table above, if the wage rate is $9 per hour, what is the total revenue generated when firm hires the optimal number of workers?
a. $3
b. $9
c. $15
d. $45
e. $51
Number of Workers Output per Hour Price of the Product
0 0 $3
1 7 3
2 12 3
3 15 3
4 17 3
5 18 3
6. According to the table above, the marginal revenue product of the
a. fourth worker is $68.
b. third worker is $3.
c. fifth worker is $3.
d. second worker is $12.
e. first worker is $3.
7. In the graph above, if comparable worth doctrine sets the wage rate in market A and market B at $18, then
a. both markets would be in equilibrium.
b. there would be a surplus of workers in both markets.
c. there would be a shortage of workers in market A and a surplus of workers in market B.
d. there would be a shortage of workers in market B and a surplus of workers in market A.
e. there would be a surplus of workers in market B and equilibrium in market A.
8. Suppose two types of students, those from rural areas and those from urban areas, apply to college. There are only two types of performances, excellent and poor. It has been found that a higher percentage of urban students perform poorly than rural students. The colleges decide to admit only students applying from rural areas. This policy could be referred to as
a. employer discrimination.
b. statistical discrimination.
c. employee discrimination.
d. consumer prejudice.
e. productivity bias.
9. Which of the following statements proves the existence of wage discrimination?
a. Male prison guards earn more on average than female prison guards.
b. Professors of economics earn more on average than professors of women’s studies.
c. Men earn more on average than women.
d. All of the above prove the existence of wage discrimination.
e. None of the above prove the existence of wage discrimination.
10. Consider the table above. Assume that the resource and output markets are both perfectly competitive. The equilibrium price of the resource is $25 and the equilibrium price of the product is $1.00. How many units of the resource will be hired by a profit maximizing firm?
- 2 units
- 3 units
- 4 units
- More than 4 units
- 1 unit.
11. Assume that the labor market is defined as follows : QD = 40 – 2P and QS = 4P – 20. Where Q = quantity of labor and P = wage rate. What is the equilibrium wage and number of workers hired?
a. $20,40
b. $40, 20
c. $10, 20
d. $20, 10
e. $6, 60
12. Assume that the labor market is defined as follows : QD = 40 – 2P and QS = 4P – 20. Where Q = quantity of labor and P = wage rate. What will be the result of a government imposed minimum wage at $15?
a. Ten workers will lose their jobs.
b. Unemployment will be equal to 30 workers
c. The number of workers willing to work at $15 will be 40.
d. All of the above are true.
e. None of the above are true.
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