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What causes government to regulate market activity to improve economic efficiency?
Theory of Market Failure
Give an example of what the Outputs for a Bread company would be:
Which theory states that higher wages can raise productivity by enough to increase profit
Efficiency Wage Theory
The probability that your $200,000 house will burn down this next year is 0.0015. The expected loss from a fire during the next year is closest to _____.
$200,000x .0015= $300
If a labor union seeks to employ the greatest number of its workers, the negotiated wage in a competitive labor market will be _____.
The competitive equilibrium wage
What was the first antitrust law in the US?
When it comes to profit maximization, we can state this rule for every company as the following equation: MRC = MRP. What do the acronyms MRC & MRP stand for?
Marginal Resource Cost
Marginal Revenue Product
What term describes land differing in terms of its fertility, its climate, and its location advantages, so not all land earns the same rent in a competitive market.
Differential Rent
A driver buys auto insurance and immediately starts to drive wildly. Economists’ most specific description of this behavior is _____.
Moral Hazard
A union that is responsive to its workers’ wage demands will negotiate according to wage demands of _____.
the median union member, ranked by seniority
Which is true about Anti-Trust Laws??
a) They are a set of laws that regulate market structure and the competitive behavior of firms.
b) The aim of antitrust policy is to prevent one firm, or a few firms acting in concert, from gaining control of a market.
c) the enforcement of antitrust laws is one of the more important weapons…”
d) All of the above
D- all of the above
There is an increase in demand for labor of poultry workers because of a shift in consumer tastes from beef to chicken, which of the following explain this shift?
Change in Demand for Output
If you prefer a risk-free outcome with a certain value rather than a set of risky outcomes with the same expected value, you are said to display:
Risk Aversion
The ABC stock spot price is $10 today. You agree to buy 1,000 shares at a price of $12 three months from today. Ignoring contracting costs, at which price will you make a profit of $3,000?
1,000x$12= $12,000
$15 x 1,000= $15,000= (3,000 profit)
Ignore the spot price of $10, it does not concern you if you are purchasing for $12 and selling in the future!
The Norris La Guardia Act of 1932 allowed Labor Unions to do what?
Picket and Strike
A horizontal merger combines what?
Firms competing in the same market
When workers who were willing to work for $10 an hour but were paid $15.50 an hour this known as being paid _____.
Inframarginal Rent
A double-or-nothing game has a 0.5 probability of winning or losing equal amounts. A risk-neutral person would _____ the game.
Indifferent to playing the game
When speculators make mistakes and destabilize commodity-market prices, they are more likely to _____.
send false signals of scarcity
Think toilet paper incident!
When a strike threat is used for wage increase from $10 to $12 and hour, what happens to the supply curve?
Goes horizontal until a certain point
Give an example of what the Inputs for a Bread company could be
The key trade-off that shapes the labor supply decision is between in making the choice between work and_________
Leisure
Investing by buying shares in a mutual fund is NOT a successful approach to:
Eliminating all risks involved in investing
Which type of auction has the bidding starts low, and competing buyers successively call out higher bids until only one buyer is left. The object then goes to the highest bidder.
English Auction
Studies of earnings differences according to gender and ethnicity have found that certain factors that cause differences are NOT easily measured. Statisticians call this problem of the data _____.
heterogeneity