Final Sınavı - Introduction to Economics 1

Soru 1:

The profit maximizing output level for a perfectly competitive firm is the output level for which:

A) Total revenue (TR) = Total cost (TC). B) Total revenue (TR) > Total cost (TC). C) Average profit = 0. D) Marginal profit = 0. E) Marginal revenue > Marginal cost.

Soru 2:

Which of the following is not correct about perfect competition?

A) In perfect competition, a firm`s average revenue (AR) and marginal revenue (MR) equals the market price. B) In a perfectly competitive market, firms, consumers and producers can be price takers. C) Perfect competition is a market for the exchange of identical products in which there are many sellers and buyers. D) A single consumer's decision can influence the market price. E) A competitive firm’s AR and MR curves are horizontal since P=AR=MR.

Soru 3:

What does the term ' market power' mean?

A) The one that often has unintended impact that an economic actor’s actions onthe well-being of another actor who stands by B) The inability of a market if it falls short of allocating resources efficiently C) The ability of a single actor (or a few actors) to control or substantiallyinfluence market prices D) The ability of a market if it falls short of allocating resources efficiently E) The allocation of resources through the decentralized decisions of manyproducers and households that interact in various markets

Soru 4:

Suppose that there are only three airline companies in Turkey and this industry is characterized with large economies of scale due to fixed costs and small and constant marginal costs. What kind of market structure is given above?

A) Monopolistic competition B) Dominant strategy C) Monopoly D) Oligopoly E) Duopoly

Soru 5:

What does diminishing return marginal mean?

A) Using more labor while other inputs are fixed, the marginal product will eventually become less and then this is known as diminishing marginal returns. B) Increase in the marginal product of a variable input. C) If a firm keeps increasing the amount of labor it uses, ceteris paribus, the total output will decrease. D) The marginal product of variable input firstly decreases and then finally decreases again. E) The cost advantage usually diminishes for each additional unit of output.

Soru 6:

I. Characteristics of the market II. The number of the firms in the market III. The degree of consumer differentiation IV. The ease of entry and exit of firms into and out of the market Which ones of the criteria listed above are among those that are used to categorize market structures?

A) I, II, III B) I, II, IV C) I, III, IV D) II, III, IV E) I, II, III, IV

Soru 7:

What does it mean to have constant returns to scale?

A) All resources used in production can change. B) Economies of scale is the competitive advantage. C) Economies of scale are cost advantages companies experience when production becomes efficient. D) If a firm grows larger, its costs drop, making it more profitable than smaller firms. E) Constant returns to scale. When an increase in inputs (capital and labor) cause the same proportional increase in output.

Soru 8:

Which of the following terms define the costs that are direct expenditures or the price paid plainly for a project?

A) Implicit costs B) Marginal costs C) Average total costs D) Average fixed costs E) Explicit costs

Soru 9:

Which of the following statements is false regarding ‘the shapes of typical cost curves’?

A) The behavior of TC and TVC depends on MC. B) A higher APL implies a higher AVC and vice versa. C) The lower the MC is, the flatter the TC and TVC curves become. D) Once APL starts to fall, AVC begins to rise and generate a U shape. E) When AVC and AC are above MC, additional units of production continue to decrease both averages.

Soru 10:

Which of the followings can be one of the factors causing the market supply shift rightward in the short run?

A) An increase in production costs B) A decrease in production costs C) An increase in marginal costs D) A decrease in marginal costs E) An increase in total cost

Soru 11:

Which of the following statement is correct when there is an increase in money income?

A) Increases in money income increases both the intercept of the budget line and its slope. B) Increases in money income increase the intercept of the budget line, but do not affect its slope. C) Increases in money income decreases both the intercept of the budget line and its slope. D) Increases in money income increase the intercept of the budget line, but decrease its slope. E) Increases in money income do not affect the intercept of the budget line and its slope.

Soru 12:

Which of the following is the definition of game theory?

A) Game theory is an agreement among the firms of a market about the prices to charge or output supplied. B) Game theory represents a situation among the interacting firms, each ofwhich chooses their best strategy given the strategies that all the other firms have already been chosen. C) Game theory is the study of how people/firms/countries make decisions in situations in which attaining their goals depends on their interactions with others. D) Game theory is the best response strategy for a firm, no matter what strategies other firms use. E) Game theory 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.

Soru 13:

Which of the following statements is not true related to monopoly?

A) It faces a downward-sloping demand curve for its product. B) When a monopoly increases production by one unit, it causes the price of its good to fall lover than the previously produced units. C) A monopolist maximizes profits by producing the quantity at which the marginal revenue of the last unit is equal to its marginal cost. D) The monopoly chooses the maximum price that consumers are willing to pay for the last unit produced, and this price is on the demand curve and greater than the marginal cost. E) A monopolist would like to form cartels, self-interests and the difficulty to enforce cartel agreements drive them toward competition.

Soru 14:

Which of the following defines the equation for the marginal revenue?

A) MR=ΔTC/ΔQ B) MR=ΔTR/ΔQ C) MR=ΔTR/ΔP D) MR=ΔQ/ΔP E) MR=ΔTC/ΔP

Soru 15:

A firm buys five automobiles for operational purposes and uses them over a period of three years. At the end of this period, they realize that the market value of these cars have decreased. What is this decrease called?

A) Opportunity cost B) Explicit cost C) Economic depreciation D) Economic cost E) Interest forgone

Soru 16:

''When the wage is high enough, some of the workers may decide that they can afford to work less and spend more leisure time''. How is this situation shown in the labor supply/demand curves?

A) The labor demand curve shifts left. B) The labor supply curve shifts right. C) The labor supply curve shifts left. D) A backward-bending labor supply curve is created. E) A backward-bending labor demand curve is created.

Soru 17:

If the quantity that a firm produces is 0, and there are two rents that the firm has to pay even when there is no production: a rent of 250 for the offices and a rent of 1300 for the factory where production will happen, the profit of the firm is:

A) 0 B) 1550 C) 1050 D) -250 E) -1550

Soru 18:

Which of the following is not the correct definition of economics?

A) Economicsis the study of how individuals and societies choose to use scarce resources at their disposal, B) Economicsas a discipline studying human behavior as a relationship between ends and scarce means with alternative uses, C) Economicsis the study of how society sets priorities in managing its scarce resources, D) Economicsis the study of how society sets its priorities in managing its scarce resources, E) Economicsis the study of how society sets its priorities in terms of managing its savings.

Soru 19:

What of the followings refers to the shape of an individual worker's labor supply curve?

A) Downward sloping B) Horizontal C) Upward sloping D) Vertical E) Steep

Soru 20:

In a perfectly competitive market, which of the followings equals to marginal revenue?

A) price B) total cost C) total revenue D) average cost E) quantity