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26 Jan 2018

20) Childcare workers often get paid fairly low wages, yet it is said that they have "the most importa job in the world." This paradox can be resolved by A) distinguishing between price and value. B) distinguishing between marginal utility and total utility. C) noting that marginal utility does not diminish for childcare. D) noting that childcare yields no utility since it is a service. E) none of the above.

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Bunny Greenfelder
Bunny GreenfelderLv2
29 Jan 2018
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Related questions

3.

Which statement is true?

The minimum point on the firm's marginal cost curve is the shutdown point.

The minimum point on the firm's average variable cost curve is the shutdown point.

The minimum point on the firm's average total cost curve is the shutdown point.

The minimum point on the firm's marginal cost curve is the break-even point.

4.

As output expands beyond the break-even point, the vertical distance between the AVC and ATC will

remain constant.

get smaller.

get larger.

5.

Total revenue divided by output equals

average variable cost.

marginal cost.

price.

average total cost.

6.

A monopoly firm selling mustache wax to vain men in a small town is currently maximizing profits by charging a price of $5. It follows that the marginal cost of mustache wax

is equal to $5.

is greater than $5.

is less than $5.

None of these choices are true.

7.

A firm can sell 14 units at $18, but to sell 15 units, the firm must cut the price to $17. The marginal revenue derived from selling the 15th unit is

-$18

$3

$17

0

8.

If total revenue is increasing as output is rising, then

marginal revenue must be greater than zero.

marginal revenue must be less than zero.

marginal revenue must be equal to zero.

price must be increasing.

9.

Firms that had virtual monopolies, that is control over at least 80 percent of industry production, because of control over an essential resource include all of the following except

the DeBeers Diamond Company.

the Standard Oil Company.

the Ford Motor Company.

the International Nickel Company.

10.

Which statement is true?

None of these statements are true.

Most natural monopolies are government regulated or government owned.

All monopolies are bad.

All monopolies are good.

11.

Which is the most accurate statement?

There are virtually no oligopolies in the U.S.

The most important aspect of oligopoly is product differentiation.

There are a whole range of oligopolistic models, from a cartel to cutthroat competition.

An oligopolistic industry cannot have more than five firms

12.

Oligopolists have more control over prices than monopolistic competitors because

their prices are always set by the government.

since an oligopolist is the only competitor in the market, setting prices is no problem.

they can legally collude whereas monopolistic competitors may not.

with fewer competitors, they are able to monitor and determine their own prices much easier.

13.

The definition of monopolistic competition differs from that of perfect competition

in neither the number of firms nor the type of product.

in both the number of firms and the type of product.

with respect to the type of product.

with respect to the number of firms in the industry.

14.

The typical monopolistic competitor

may compete on the basis of physical differences, convenience, service, and ambience.

always competes on the basis of producing a product that is physically different from those of its competitors.

never uses price discrimination.

is a large firm.

15.

Which statement is true?

The monopolistic competitor may make a profit in the long run.

The monopolistic competitor has a perfectly elastic demand curve.

None of these statements are true.

The monopolistic competitor operates at the minimum point of her ATC curve.

16.

Which statement is true about the monopolistic competitor in the long run?

It will be breaking even.

It will be making a profit.

It may be making a profit or taking a loss.

It will be taking a loss.

17.

Which statement is true?

Most monopolistic competitors are large firms.

Monopolistic competitors produce goods or services for which there are no close substitutes.

None of these statements are true.

Monopolistic competitors usually operate at the minimum point of their average total cost curves.

18.

Which statement is false?

As the price of a good rises the consumer surplus decreases.

A person would maximize her total utility when she had no consumer surplus.

We will consume a service when its marginal utility is equal to its price.

A product's utility to a buyer is measured by how much the buyer is willing to pay for it.

1.

A consultant has advised Consolidated Fish, Inc., a perfectly competitive firm, that it should cut back its production in order to increase its profits. We can conclude from this that

CF's total costs must be greater than its total revenues.

CF's marginal cost must be greater than the price of its product.

CF's costs are increasing at a rate less than its revenues.

fixed costs are not being covered and CF should shut down.

2.

If marginal cost is equal to marginal revenue

the firm should hold output constant.

the firm should expand output.

there is no way to determine if the firm should expand output, contract output, or hold output constant.

the firm should contract output.

3.

Which statement is true?

The minimum point on the firm's marginal cost curve is the shutdown point.

The minimum point on the firm's average variable cost curve is the shutdown point.

The minimum point on the firm's average total cost curve is the shutdown point.

The minimum point on the firm's marginal cost curve is the break-even point.

4.

As output expands beyond the break-even point, the vertical distance between the AVC and ATC will

remain constant.

get smaller.

get larger.

5.

Total revenue divided by output equals

average variable cost.

marginal cost.

price.

average total cost.

6.

A monopoly firm selling mustache wax to vain men in a small town is currently maximizing profits by charging a price of $5. It follows that the marginal cost of mustache wax

is equal to $5.

is greater than $5.

is less than $5.

None of these choices are true.

7.

A firm can sell 14 units at $18, but to sell 15 units, the firm must cut the price to $17. The marginal revenue derived from selling the 15th unit is

-$18

$3

$17

0

8.

If total revenue is increasing as output is rising, then

marginal revenue must be greater than zero.

marginal revenue must be less than zero.

marginal revenue must be equal to zero.

price must be increasing.

9.

Firms that had virtual monopolies, that is control over at least 80 percent of industry production, because of control over an essential resource include all of the following except

the DeBeers Diamond Company.

the Standard Oil Company.

the Ford Motor Company.

the International Nickel Company.

10.

Which statement is true?

None of these statements are true.

Most natural monopolies are government regulated or government owned.

All monopolies are bad.

All monopolies are good.

11.

Which is the most accurate statement?

There are virtually no oligopolies in the U.S.

The most important aspect of oligopoly is product differentiation.

There are a whole range of oligopolistic models, from a cartel to cutthroat competition.

An oligopolistic industry cannot have more than five firms

12.

Oligopolists have more control over prices than monopolistic competitors because

their prices are always set by the government.

since an oligopolist is the only competitor in the market, setting prices is no problem.

they can legally collude whereas monopolistic competitors may not.

with fewer competitors, they are able to monitor and determine their own prices much easier.

13.

The definition of monopolistic competition differs from that of perfect competition

in neither the number of firms nor the type of product.

in both the number of firms and the type of product.

with respect to the type of product.

with respect to the number of firms in the industry.

14.

The typical monopolistic competitor

may compete on the basis of physical differences, convenience, service, and ambience.

always competes on the basis of producing a product that is physically different from those of its competitors.

never uses price discrimination.

is a large firm.

15.

Which statement is true?

The monopolistic competitor may make a profit in the long run.

The monopolistic competitor has a perfectly elastic demand curve.

None of these statements are true.

The monopolistic competitor operates at the minimum point of her ATC curve.

16.

Which statement is true about the monopolistic competitor in the long run?

It will be breaking even.

It will be making a profit.

It may be making a profit or taking a loss.

It will be taking a loss.

17.

Which statement is true?

Most monopolistic competitors are large firms.

Monopolistic competitors produce goods or services for which there are no close substitutes.

None of these statements are true.

Monopolistic competitors usually operate at the minimum point of their average total cost curves.

18.

Which statement is false?

As the price of a good rises the consumer surplus decreases.

A person would maximize her total utility when she had no consumer surplus.

We will consume a service when its marginal utility is equal to its price.

A product's utility to a buyer is measured by how much the buyer is willing to pay for it.

1. “Total compensation” includes:

a. Wages and salaries and all fringe benefits

b. Wages and salaries and public (legally mandated) fringe benefits only

c. Wages and salaries and private (nonmandatory) fringe benefits only

d. Wages and salaries and all fringe benefits net of all personal taxes

2. Fringe benefits currently account for approximately what percentage of total compensation?

a. 5% – 10%

c. 25% – 30%

b. 15% – 20%

d. 35% – 40%

3. As a percentage of benefits, the largest share goes to:

a. retirement and savings

c. paid leave

b. insurance

d. legally required benefits

4. The proportion of total compensation paid out as fringe benefits tends to be larger in:

a. high-paid industries compared to low-paid industries

b. service industries compared to manufacturing industries

c. white-collar occupations compared to blue-collar occupations

d. retail trade compared to transportation and public utilities

5. The share of fringe benefits in total employee compensation:

a. grew steadily in the 1960s and 1970s but has fallen since 1980

b. was unchanged in the 1960s and 1970s and has fallen since 1980

c. shrank in the 1960s and 1970s and has remained constant since then

d. grew steadily from 1960 through the mid-1990s

6. Which one of the following is not a valid explanation for why workers may prefer an extra dollar’s worth of fringe benefits to an extra dollar’s worth of cash?

a. workers may prefer to bind themselves against their own tendencies toward immediate gratification

b. certain fringe benefits effectively trade current taxes for future taxes

c. people generally prefer in-kind benefits to cash

d. certain fringe benefits are untaxed

7. Because there is a _______ marginal rate of substitution of fringe benefits for wages, a worker’s wage-fringe indifference curves are typically _______:

a. diminishing; convex to the origin

b. constant; straight lines

c. diminishing; concave to the origin

d. negative; straight lines

8. The slope of a wage-fringe indifference curve reflects:

a. the overall utility level of a person

b. a worker’s willingness to give up an extra dollar of wages in exchange for an extra dollar of fringe benefits

c. the firm’s cost of paying an extra dollar of compensation as wages rather than fringe benefits

d. an increasing marginal rate of substitution of fringe benefits for cash 2

9. An individual wage-fringe isoprofit line shows:

a. combinations of wages and fringe benefits that result in constant dollar values of total compensation

b. combinations of wages and fringe benefits that result in the same profit to the firm

c. the greatest possible profit attainable from a given level of fringe benefits

d. the greatest possible profit attainable from a given level of wages

10. The slope of a wage-fringe isoprofit curve reflects:

a. the overall profitability of the firm

b. a worker’s willingness to give up an extra dollar of wages in exchange for an extra dollar of fringe benefits

c. the relative “price” of fringe benefits compared to wages

d. an increasing marginal rate of substitution of fringe benefits for cash

11. The firm’s wage-fringe isoprofit curve typically has a slope less than 1 (absolute value) because:

a. fringe benefits confer tax advantages on workers

b. on average, it costs firms more to purchase fringe benefits than workers

c. the composition of fringe benefits may increase worker productivity

d. increasing the proportion of compensation received as fringe benefits reduces a firm’s profit level

12. If a firm can offer fringe benefits worth more than one dollar for a one dollar reduction in wages:

a. the wage-fringe isoprofit line will be upward-sloping

b. the wage-fringe isoprofit line will have a slope less than one in absolute value

c. the marginal rate of substitution between wages and fringe benefits will be greater than one at the wage-fringe optimum

d. as a proportion of total compensation, fringe benefits will likely exceed one half

13. The employer’s share of the Social Security and Medicare components of the payroll tax has increased, from 6.13% in 1980 to its current rate of 7.65%. Because employers pay no payroll tax on many fringe benefits, this change in tax rates has effectively:

a. reduced the “price” of fringe benefits, increasing the slope of the wage-fringe isoprofit line

b. increased the “price” of fringe benefits, increasing the slope of the wage-fringe isoprofit line

c. reduced the “price” of fringe benefits, reducing the slope of the wage-fringe isoprofit line

d. increased the “price” of fringe benefits, reducing the slope of the wage-fringe isoprofit line

14. The trend of fringe benefits as a percentage of total compensation can be partially explained by the fact that:

a. tax reform has rendered many types of fringe benefits fully taxable

b. “in-kind” benefits restrict workers’ consumption choices

c. the firm may be able to purchase fringe benefits more cheaply than workers

d. many types of fringe benefits are income inelastic

15. Fringe benefits will tend to be a greater proportion of total compensation, the:

a. more income elastic are fringe benefits

b. more they increase worker turnover

c. lower the employer’s share of the Social Security tax

d. less there are economies of scale in purchasing fringe benefits 3

16. Which of the following is not a cause of fringe benefit growth?

a. Tax advantages to the employer

b. Efficiency considerations

c. Economies of scale

d. Fringe benefits are income inelastic

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