Eco 561

ECO 561  
1) Suppose that in the clothing market, production costs have fallen, but the equilibrium priceand quantity purchased have both increased. Based on this information you can concludethat
A. the supply of clothing has grown faster than the demand for clothing[
B. demand for clothing has grown faster than the supply of clothing]
C. the supply of and demand for clothing have grown by the same proportion
D. there is no way to determine what has happened to supply and demand with thisinformation

2) Camille's Creations and Julia's Jewels both sell beads in a competitive market.If at the market price of $5, both are running out of beads to sell (they can'tkeep up with the quantity demanded at that price), then we would expect bothCamille's and Julia's to:
A. raise their price and reduce their quantity supplied[
B. raise their price and increase their quantity supplied]
C. lower their price and reduce their quantity supplied
D. lower their price and increase their quantity supplied

3) In which of the following industries are economies of scale exhausted at relatively low levels of output?
A. Aircraft production[  
B. Automobile manufacturing]
C. Concrete mixing
D. Newspaper printing

4) The average cost curves (AVC and ATC) should be minimized
[
A. where MC = ATC and MC = AVC]
B. where FC = ATC and FC = AVCC. where T
C starts to increase at a faster rate
D. where ATC = AVC

5) If the wage rate increases,
A. a purely competitive producer will hire less labor, but an imperfectly competitive producerwill not
B. an imperfectly competitive producer will hire less labor, but a purely competitive producerwill not[
C. a purely competitive and an imperfectly competitive producer will both hire less labor]
D. an imperfectly competitive producer may find it profitable to hire either more or less labor

6) The real wage will rise if the nominal wage
A. falls more rapidly than the general price level
B. increases at the same rate as labor...