For Greg:


11) According to economist Colin Camerer of the California Institute of Technology, many New York taxi drivers decide when to finish work by setting an income goal for themselves. If this is true, then on busy days when the effective hourly wage is higher, taxi drivers will
A. work the same number of hours as they will on slower days
B. work fewer hours than they will on slower days
C. work more hours than they will on slower days
D. not work any hours

12) A firm's demand for labor is derived from the
A. opportunity costs associated with labor and leisure
B. desires and needs of the entrepreneur
C. cost of labor inputs
D. demand for its output

13) Owen runs a delivery business and currently employs three drivers. He owns three vans that employees use to make deliveries, but he is considering hiring a fourth driver. If he hires a fourth driver, he can schedule breaks and lunch hours so all three vans are in constant use, allowing him to increase deliveries per day from 60 to 75. This will cost an additional $75 per day to hire the fourth driver. The marginal cost per delivery of increasing output beyond 60 deliveries per day
A. is $0 because Owen does not have to purchase another van
B. is $5
C. is $75
D. cannot be calculated without knowing Owen's total fixed costs

14) Expected economic profit per unit is equal to
A. expected price
B. expected average total cost
C. the difference between expected average price and expected average total cost
D. the difference between expected total revenue and expected total cost

15) If a firm in a perfectly competitive market experiences a technological breakthrough,
A. other firms would find out about it eventually
B. other firms would find out about it immediately
C. other firms would not find out about it
D. some firms would find out about it, but others would not

16) A significant difference between monopoly and perfect competition is that
A. free entry and exit is possible in a monopolized industry, but impossible in a competitive industry
B. competitive firms control market supply, but monopolies do not
C. the monopolist's demand curve is the industry demand curve, while the competitive firm's demand curve is perfectly elastic
D. profits are driven to zero in a monopolized industry, but may be positive in a competitive industry.

17) A monopoly firm is different from a competitive firm in that
A. there are many substitutes for a monopolist's product while there are no substitutes for a competitive firm's product
B. a monopolist's demand curve is perfectly inelastic while a competitive firm's demand curve is perfectly elastic
C. a monopolist can influence market price while a competitive firm cannot
D. a competitive firm has a U-shaped average cost curve while a monopolist does not

18) The difference between a perfectly competitive firm and a monopolistically competitive firm is that a monopolistically competitive firm faces a
A. horizontal demand curve and price equals marginal cost in equilibrium
B. horizontal demand curve and price exceeds marginal cost in equilibrium
C. downward-sloping demand curve and price equals marginal cost in equilibrium
D. downward-sloping demand curve and price exceeds marginal cost in equilibrium

19) As long as marginal cost is below marginal revenue, a perfectly competitive firm should
A. increase production
B. hold production constant
C. decrease production
D. reconsider past production decisions

20) Because a monopolistic competitor has some monopoly power, advertising to increase that monopoly power makes sense as long as the marginal
A. benefit of advertising is positive
B. cost of advertising is positive
C. benefit of advertising exceeds the marginal cost of advertising
D. cost of advertising exceeds the marginal benefit of advertising