Introduction to Economics 1 Final 10. Deneme Sınavı
Toplam 20 Soru1.Soru
Which of the followings refers to the type of market in which the economic profit of each individual seller is zero, and there is no incentive for entry or exit?
Short-run market supply curve. |
Normal economic profit. |
Break-even point. |
Perfectly competitive market equilibrium. |
Long-run market supply curve. |
Perfectly competitive market equilibrium: the market equilibrium in a perfectly competitive market in which the economic profit of each individual seller is zero, and there is no incentive for entry or exit. Therefore, the correct option is D.
2.Soru
I. Consumer’s preferences are transitive.II. Consumer’s preferences are incomplete.III. Consumers always prefer more of a commodity to less.Which of the statements given about consumer preferences are true?
Only I |
Only II |
I and II |
I and III |
II and III |
The basic assumptions of consumer's preferences are preferences are complete: this means that
the consumer is able to compare and rank all possible baskets, consumers always prefer more of a commodity to less, diminishing marginal rate of substitution, consumer’s preferences are transitive. The true answer is D.
3.Soru
The market structure with only one producer/seller which acts as a price setter of a good with no close substitutes is called:
The market structure with only one producer/seller which acts as a price setter of a good with no close substitutes is called:
Perfect competition. |
Monopolistic competition. |
Monopoly. |
Natural competition. |
Oligopoly. |
Monopoly is a market structure with only one producer/seller of a good and it does not act as a price taker but as a price setter. A firm is a monopoly if it is the only producer of a good or service and this good or service does not have close substitutes.
4.Soru
If the consumer is able to compare and rank all possible baskets, which consumer assumption is processed?
Marginal rate of substitution increases. |
Consumers reveal a diminishing marginal rate of substitution. |
Consumers always prefer more of a commodity to less |
Preferences are transitive |
Preferences are complete. |
Preferences are complete: this means that the consumer is able to compare and rank all possible baskets. Suppose the consumer confronts with any two market baskets, each containing various quantities of commodities or goods.
5.Soru
Which of the followings refers to a market structure in which a few large firms compete?
Oligopoly. |
Monopoly. |
Perfect competition. |
Monopolistic competition. |
Market power. |
Oligopoly is a market structure in which a few large firms compete. Computers, aircraft manufacturing, the automobile industry and agro-businesses are examples of oligopolistic markets. Therefore, the correct option is A.
6.Soru
______ can be defined as the additional revenue that a firm earns when it increases production by one more unit.
Which of the following completes the statement above?
Marginal cost |
Marginal revenue |
Total revenue |
Total cost |
Opportunity cost |
Marginal Revenue is the additional revenue that a firm earns when it increases production by one more unit. In other words, it is the ratio of change in total revenue to a small change in quantity (MR = ΔTR / ΔQ). The correct answer is B.
7.Soru
Why each input is subject to the Law of Diminishing Returns?
Since the technology always improves, |
Because of incresing returns to scale |
Because of scope economies |
Because of long run |
The reason is we are in the short run |
Marginal Product of Labor
If a firm keeps increasing the amount of labor it uses, ceteris paribus, the total output will increase, as mentioned above. However, if the additional labor is more productive than the previous one, the total output will increase more; if not, it will increase less. Suppose that two workers can work effectively with one machine. If you employ only one worker, she can still produce some output, but because she is the only worker, she has to divide her time in between using the machine and doing other work necessary for production. So, employing another worker can increase production greatly. If the firm employs more labor, the output would still increase, but, given the single machine to work with, the higher the number of workers, the more difficult it will be for all of them to use the same machine effectively.
Hence, as more and more labor is used, given that everything else is the same, the increase in the total output for each additional unit of labor input, i.e. marginal product, might at first increase. We will call this increasing marginal returns. However, as we continue to use more and more labor while other inputs are fixed, the marginal product will eventually become less and less. This is known as diminishing marginal returns.
8.Soru
I. Rules that determine which actions are allowable II. Strategies that players employ to attain their objectives in the game III. The interactions among the players aren't crucial in determining the outcome IV. Payoffs that are the results of the interaction among the players’ strategies Which of the given are the characteristics of games?
I, II, III |
I, II, IV |
I, III, IV |
II, III, IV |
I, II, III, IV |
- In all games, chess, poker, or Monopoly, the interactions among the players are crucial
in determining the outcome. - Rules that determine which actions are allowable
- Strategies that players employ to attain their objectives in the game
- Payoffs that are the results of the interaction among the players’ strategies
The payoffs in an oligopoly context are the profits earned as a result of a firm’s strategies interacting with the strategies of other firms. The Correct Answer is B.
9.Soru
Which of the following is a natural resource?
Land |
Building |
Equipment |
Entrepreneur |
Labor |
Natural resources are resources such as land, metals, coal, oil, gas, etc. provided by nature.
10.Soru
A consumer consumes the goods X and Y, for this information which of the following statements is true?
If the price of one good decreases, the budget line shifts inward. |
If the price of one good increases, the budget line shifts outward. |
The satisfaction is maximized when the marginal rate of substitution is equal to the ratio of the prices. |
The indifference curves are downward sloping and can intersect one another. |
An increase in the price of one good causes that good’s quantity consumed to increase. |
For a consumer consumes the goods X and Y, the satisfaction is maximized when the marginal rate of substitution is equal to the ratio of the prices. an increase in the price of one good causes that good’s quantity consumed to decrease and another goods’ consumption to increase. The indifference curves are downward sloping and cannot intersect one another. If the price of one good increases, the budget line shifts inward. If the price of one good decreases, the budget line shifts outward. The true answer is C.
11.Soru
I. Externalities
II. Path dependence
III. Existence of public goods
Which of the above is among the reasons for inefficiencies in perfect competitive markets?
Only III |
I, II |
I, III |
II, III |
I, II, III |
In the real world, inefficiencies are common, even in markets that approach the conditions of perfect competition. These inefficiencies may arise because of externalities, path dependence, and existence of public goods. Therefore, the correct option is E.
12.Soru
I. Marginal Benefit
II. Marginal Cost
III. Positive incentives
IV. Negative incentives
Suppose that a person needs to make a decision to buy a new car. Which of the parameter(s) in economics above would affect the person’s decision making in economics?
I and II |
I and III |
II and III |
I, II and IV |
I, II, III and IV |
In economics, decision makers make decisions by thinking at the margin. Thinking at the margin requires recognizing the need to make decisions by evaluating the costs and benefits of marginal changes. It means that a decision maker should compare his/her action’ marginal benefit and marginal cost. Any action should be undertaken only if the benefit is greater than the cost. If people make choices by comparing cost and benefits, then their decisions may be altered by altering the cost or benefits of their actions. People do respond to positive and negative incentives. When there is a significant increase in the price of gasoline, for instance, demand for public transportation and the demand for smaller, more fuel-efficient cars increase.
As it can be understood from the information given, the correct answer is “E”.
13.Soru
I. Market Price
II. Technology
III. Changes in Population
Which of the givens are considered a determinant of labor supply?
Only I |
Only II |
I and II |
I and III |
II and III |
There is obviously an inverse relationship between the wage and the quantity of labor demanded. Market Price, Technology, Prices of other Factors of Production, Number of Firms in the Market are determinants of labor demand. The answer is C
14.Soru
Which of the followings is compensation for the use of capital by firms called?
Surplus |
Demand |
Credit |
Interest |
Rent |
Although money is not a factor of production, firms often use credits to buy or hire the capital they use for production, and pay interest in return. Even if they use their own funds, the opportunity cost of using them is the interest foregone. So, the compensation for the use of capital is interest. Therefore, the correct option is D.
15.Soru
What is the difference between economic costs and the accounting costs in economics?
the explicit expenses you must pay, |
the explicit expenses you must pay for hiring labor, |
the explicit expenses you must pay for leasing capital, |
the monetary value of time, effort and other resources you have to give up, |
Nothing, they are equl to each other. |
What is Cost?
Cost is ordinarily understood to be the amount we pay or the price we are charged for a good or service we get. However, economists’ definition of cost is different than what the meaning of cost in daily use. When economists think of cost, they add the opportunity cost, which is the next best alternative given up, to the out-of-pocket costs or explicit expenses. For example, to attend college, you have to pay tuition and fees. These are explicit expenses you have to incur. However, you also give up a substantial amount of time to become a fulltime student. How much would your time be worth in monetary value? Well, it is the sum of wages you would have received if you worked full time instead of attending college. So, the overall or total cost of you attending college is the sum of the explicit expenses you pay, such as tuition and fees, plus the wages you would have earned if you had chosen to work during the time you devote to being a student. Hence, from an economist’s point of view, the cost includes not only the explicit expenses you must pay, but also the monetary value of time, effort and other resources you have to give up. The sum of all these costs is called the economic cost.
16.Soru
If there are four projects and each has the Net Present Value (NPV) of $-1800, $0, $500 and $1500 respectively, which project should the investor choose?
The first project because is has the highest absolute value of NPV. |
The second project because NPV=0 means that project yields maximum orıfits. |
Any of the projects which has a positive NPV; the value of NPV does not matter as long as it is positive. |
The fourth project as it has the highest NPV. |
NPV is not important when making investment decisions, so the investor can choose any of the four projects. |
When an investor has to make a decision about which investment project to choose the investor will calculate the NPV of these projects. Then, s/he will pick the project that yields the highest NPV.
17.Soru
The price paid for the use of land and other natural resources is called:
Wage |
Salary |
Interest |
Profit |
Economic Rent |
The income that resource owners earn in return for land resources is called rent. Economic rent is the price paid for the use of land and other natural resources which are completely fixed in total supply.
18.Soru
Which of the following refers to work time and physical and mental effort devoted to producing goods and services?
Land |
Labor |
Capital |
Entrepreneurship |
Natural resources |
Labor is the work time and physical and mental effort devoted to producing goods and services in exchange for a wage.
19.Soru
.......... occurs when economies of scale are so large that one firm can supply the entire market at a lower average cost than two or more firms.
Competition |
Government regulation |
Ownership |
Collusion |
A natural monopoly |
A natural monopoly occurs when economies of scale are so large that one firm can supply the entire market at a lower average cost than two or more firms. The correct answer is E.
20.Soru
.......... is a cost that has already been incurred and thus cannot be recovered. Which of the followings completes the gap in the sentence above?
A marginal cost |
An average cost |
A total cost |
A sunk cost |
A fixed cost |
A sunk cost is a cost that has already been incurred and thus cannot be recovered. The correct answer is D.
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