Introduction to Economics 1 Final 5. Deneme Sınavı
Toplam 20 Soru1.Soru
Which of the following is true for a perfectly competitive market?
MR=P. |
MR>P. |
MR<P. |
TC=TFC. |
TC=AC. |
In a perfectly competitive market, marginal revenue equals price: P=MR.
2.Soru
.......... is an agreement among firms to charge the same price or decide on quantities in cooperation with each other. Which of the following completes the blank in the statement above?
Competition |
Collusion |
Profitability |
Revenue |
Output |
Collusion is an agreement among firms to charge the same price or decide on quantities in cooperation with each other. The Correct Answer is B.
3.Soru
I. The price of the good
II. The abundancy of the good
III. The income of the individual
IV. The tastes and preferences of the individual
Which of the above can be considered as the main determinants of demand?
I and II |
I and III |
I and IV |
I, III and IV |
II, III and IV |
The theory of demand indicates that an individual’s decision about what quantity of a specific good to demand is determined by factors such as the tastes and preferences of the individual, the price of the good, the income of the individual, the price of related goods and services, the individual’s expectations about the future income, wealth, prices, and etc. Abundancy of the product or the service is not one of them. The correct answer is D.
4.Soru
- Education services
- Health services
- Heating in the winter
Which of the above has inelastic demand?
I and II |
II and III |
I and III |
Only II |
I, II and III |
Education and health services (doctor visits), heating in the winter, gasoline for car owners are considered necessities for consumers and these items have inelastic demand since the case of price increases in these items gets small reactions from consumers to cut their quantity demanded
5.Soru
Which of the followings refers to the state in which a seller should increase production up to the point where marginal revenue is equal to marginal cost?
Total revenue. |
Profit maximization. |
Average revenue. |
Break-even point. |
Shut-down point. |
Profit Maximization: a seller should increase production up to the point where MR = MC. As MR = P under perfect competition, we can also define the profit maximizing solution by setting P = MC. Therefore, the correct option is B.
6.Soru
Which of the followings equals to the profit of a firm?
The total revenue plus total cost |
The total revenue minus total cost |
The total revenue divided by the total cost |
The total cost minus total revenue |
The total cost divided by total revenue |
Profit of a firm is equal to the total revenue minus total cost. Therefore, the correct option is B.
7.Soru
Which of the following refers to a monopsonist market?
SpaceX |
TCDDY |
The Türk Telekom |
The only shop in a small town |
A large milk and dairy product firm |
A monopoly is a market where there is only one seller of the product and this seller sets the price alone. The Türk Telekom, for example, is a monopoly in internet infrastructure. All the other internet providers have to use Telekom’s infrastructure. Likewise, TCDDY is a state owned monopoly in railway transportation. There are also local monopolies. Many cities in Turkey are served by a single airline (typically THY subsidiary Anadolu Jet). In smaller towns, many goods and services could be offered by a single seller. There are a few worldwide monopolies as well: SpaceX, for example, is the only company selling touristic trips to the space. The pricing behavior of a monopoly is totally different than the behavior of firms operating in a competitive market. Monopsonist markets are the ones in which there exist only one buyer and many sellers. The relatively high agricultural prices in Turkey might be attributed to near monopsonist local markets where there are only a few merchants buying the farmers’ products. For example, larger milk and dairy product firms generally act as monopsonist buying wholesale milk from cow owners in many towns around Turkey. The correct answer is Choice E.
8.Soru
What is the objective of a firm that produces a good or service in a market?
to maximize its profit, which is the difference between total revenue and total cost. |
to maximize its total revenue, which is the price times quantity. |
to maximize its profit, which is the difference between total revenue and average cost. |
to maximize its profit, which is the difference between average revenue and marginal cost. |
to maximize its profit, which is the difference between marginal revenue and marginal cost. |
PRODUCTION, COST AND PROFIT
The objective of a firm that produces a good or service is to maximize its profit, which is the difference between total revenue and total cost. For profit maximization, the firm has to decide how much output to produce or supply along with the amount of each input needed to produce that particular level of output. When producing a given level of output, the firm chooses the amount of different inputs in a way that minimizes the production cost of that particular level of output.
9.Soru
"When a monopoly increases production by one unit, it must reduce the price it charges for every unit it sells, and this cut in price reduces the revenue on the units it was already selling."
According to the information above, which of the following results is true?
A monopoly’s marginal revenue is less than its price. |
A monopoly’s marginal expense is less than its price. |
A monopoly’s marginal revenue is more than its price. |
A monopoly’s marginal expense is more than its price. |
A monopoly’s marginal revenue is less than its value. |
Since a competitive firm can sell all it wants at the market price, there is no price effect. When a monopoly increases production by one unit, it must reduce the price it charges for every unit it sells, and this cut in price reduces the revenue on the units it was already selling. As a result, a monopoly’s marginal revenue is less than its price.
10.Soru
On what condition is the difference between total revenues minus total costs maximized?
When the marginal revenue of the last unit produced is close to its marginal cost |
When the marginal revenue of the last unit produced is more than its marginal cost |
When the marginal revenue of the last unit produced is lower than its marginal cost |
When the marginal revenue of the last unit produced is equal to its marginal cost |
When the marginal revenue of the last unit produced is half its marginal cost |
The difference between total revenues minus total costs is maximized when for the last unit produced, the marginal revenue of this last unit is exactly equal to its marginal cost. The Correct Answer is D.
11.Soru
Which of the following statements is not correct regarding the determinants of labor demand?
Technology always requires new labor with a specific set of skills. |
More consumer demand for a good increases the labor demand. |
Lower market price for a good decreases the demand for labor. |
Cheaper capital may be reason for firms to have less demand for labor. |
New competitors in a market increase demand for labor. |
Not all technological change favors labor. Sometimes technological change means that workers are replaced by machines (capital) and as a result of this, labor is demanded less. Therefore, the correct option is A.
12.Soru
I. Labor - Wage
II. Capital - Rent
III. Land - Interest
In which of the options the correct pairing for the factor of production and its compansation for using it is given?
Only I |
Only II |
I and II |
I and III |
II and III |
The Labor includes human resources that contribute to production. Firms pay wage to the labor they use in 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. The price of using land is called rent. The answer is A.
13.Soru
Which of the following would possibly be a monopolistic market?
A large coffee firm in the country |
A bakery in a large city |
One of the kiosks in the city center |
The only shop in a small town |
An international software company |
A monopoly is a market where there is only one seller of the product and this seller sets the price alone. The Türk Telekom, for example, is a monopoly in internet infrastructure. All the other internet providers have to use Telekom’s infrastructure. Likewise, TCDDY is a state owned monopoly in railway transportation. There are also local monopolies. Many cities in Turkey are served by a single airline (typically THY subsidiary Anadolu Jet). In smaller towns, many goods and services could be offered by a single seller. There are a few worldwide monopolies as well: SpaceX, for example, is the only company selling touristic trips to the space. The correct answer is D.
14.Soru
- The production cost of land
- The price of the good produced on the land
- The quantity and quality of the resources land is combined with
- The prices of the other resources that are combined with land
Which of the above are among the factors that determine the demand for land?
I and II |
III and IV |
I, II, III |
I, III and IV |
II, III and IV |
The factors that determine the demand for land are: the price of the good produced on the land, the productivity of land which depends in part on the quantity and quality of the resources with which land is combined, and the prices of the other resources that are combined with land. The production cost of land is zero. It is a “free and non-reproducible gift of nature”. The correct answer is E.
15.Soru
Which of the following is true regarding the price elasticity of supply?
Supply is more elastic in the short-run than in the long-run. |
The higher the availability of inputs for production, the higher the elasticity of supply. |
The price elasticity of supply is smaller in the long-run than in the short-run |
The more easily sellers can change the quantity they produce due to availability of inputs, the smaller the price elasticity of supply. |
The supply of beachfront property in Istanbul Bosporus or Mediterranean coasts is |
The higher the availability of inputs for production, the higher the elasticity of supply.
For example, the supply of beachfront property in Istanbul Bosporus or Mediterranean coasts is harder to vary and thus less elastic than the supply of new cars or computers.
Supply is more elastic in the long-run than in the short-run.
The more easily sellers can change the quantity they produce due to availability of inputs, the greater the price elasticity of supply. Also, the price elasticity of supply is greater in the
long-run than in the short-run, because firms can build new factories to extend their plant size, or new firms may be able to enter the market.
Answer is B.
16.Soru
Suppose a certain firm is able to produce 9834567 units of output per day when 157 workers are hired. The firm is able to produce 100928374 units of output per day when 158 workers are hired (holding other inputs fixed). What is the marginal product of the 158th worker?
91093087 |
91097807 |
91093807 |
91693807 |
91093805 |
(100928374-9834567)/(158-157)=91093807
17.Soru
What is the motivation of labor to devote work time and physical and mental effort to producing goods and services?
Wage |
Rent |
Interest |
Profit |
Output |
Labor is the work time and physical and mental effort devoted to producing goods and services in exchange for a wage.
18.Soru
When does competition occur?
Competition occurs when each producer maximizes its profits by choosing its own price or quantity without consulting other firms. |
Competition occurs when firms charge the same price or decide on quantities |
Competition occurs when people/firms/countries make decisions in situations in which attaining their goals depends on their interactions with others. |
Competition occurs when a firm chooses their best strategy given the strategies that all the other firms have already been chosen. |
Competition occurs when the monopolist’s average revenue from sales equals to the price. |
Competition occurs when each producer maximizes its profits by choosing its own price or quantity without consulting other firms. The correct answer is A.
19.Soru
When MPL curve is above the APL curve, which of the following is true?
AVC curve stays above the MC curve |
AVC curve stays below the MC curve |
AVC curve equals to the MC curve |
TVC curve is a vertical line |
TVC curve is a horizontal line |
When MPL curve is above the APL curve, AVC curve stays above the MC curve.
20.Soru
Which one of the followings is defined as the best alternative that consumers give up when they make a choice or a decision?
Total revenue |
Opportunity cost |
Explicit costs |
Marginal revenue |
Implicit costs |
Opportunity Cost: The best alternative that we give up when we make a choice or a decision. Therefore, the correct option is B.
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