Eco 365 Week 5 Final Exam Essay

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Which of the following statements is true about a downward-sloping demand curve that is a straight line? The slope remains the same, but elasticity falls as you move down the demand curve. The slope and the elasticity fall as you move down the demand curve. The slope remains the same, but elasticity rises as you move down the demand curve. The slope and elasticity are the same at all points.

The best example of positive externality is: Roller coaster rides Pollution Education Alcoholic beverages

Suppose that college tuition is higher this year than last and that more
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The mold can be reused to make additional whales, and so additional whales cost $5,000 each. Based on these numbers, the production of fake killer whales exhibits: Increasing returns to scale Decreasing returns to scale Diminishing marginal product Constant returns to scale

Using 100 workers and 10 machines, a firm can produce 10,000 units of output; using 250 workers and 25 machines, the firm produces 21,000 units of output. These facts are best explained by: Economies of scale Diseconomies of scale Diminishing marginal productivity Economies of scope

Cartels are organizations that: Coordinate the output and pricing decisions of a group of firms. Use predatory pricing to monopolize industries. Keep markets contestable. Encourage price wars.

Price elasticity of demand is the: Percentage change in quantity of a good demanded divided by the percentage change in the price of that good. Change in the quantity of a good demanded divided by the change in the price of that good. Percentage change in price of that good divided by the percentage change in the quantity of that good demanded. Change in the price of a good divided by the change in the quantity of that good demanded.

For a monopolist, the price of a product: Equals the marginal revenue. Equals the marginal cost. Is less than the marginal revenue. Exceeds the marginal revenue.
A perfectly competitive firm

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