econ final elzenga section 7 Flashcards
The efficient markets hypothesis
teaches that publicly available information is reflected quickly in the price of a publicly traded stock
The EMH theory of investing would suggest
a. buy a stock that has been appreciating, a so-called “hot stock.”
b. buy a stock that has done poorly, to take advantage of its expected “correction.”
c. weigh carefully the information in “street sources” like Forbes, Business Week, the Financial Times and the Wall Street Journal.
d. all of the above are true.
e. none of the above is true.
e. none of the above is true.
In the post-World War II period, the U.S. brewing industry has undergone
an increase in market concentration (where market concentration is the share of sales held by the largest brewing companies) and an increase in the number of very small brewers (the “craft” segment).
If home renovations confer a positive externality on surrounding neighbors, then which of the following is true?
The marginal social benefit of home renovation exceeds the marginal private cost.
In a perfectly competitive market, the market demand curve has ______ slope, the demand curve faced by an individual firm has ______ slope, and the long run economic profit is ________.
negative; zero; zero
. The government raises the tax on cigarettes from $1 to $2 per pack. Which of the following is true?
The tax burden faced by cigarette companies will be relatively higher the more elastic is the demand for cigarettes.
The more ____________ a good has, the more ________________ its demand.
substitutes; elastic
Which of the following violates the Law of Diminishing Marginal Utility?
At first, I thought kale chips were gross, but after I tried my fifth one, I realized they are delicious
Price in a competitive market is $6. At a firm’s current output, its marginal cost is $4 and the marginal cost curve has the normal shape. What would you advise the firm do?
. Increase its output
If the government increases the amount of food stamps and housing assistance it gives out, the direct effect on U.S. poverty, as officially defined,
will remain unchanged
. In addressing pollution problems, economists would most likely prefer
a market incentive plan to internalize externalities.
Economics can best be defined as the study of
how individuals decide to use scarce resources in an attempt to satisfy unlimited wants.
Which of the following would an economist classify as capital?
A lawyer’s word processor
A residual claimant is someone who receives
whatever profit is generated by producing and selling goods
To say that people make decisions at the margin suggests that
they weigh the additional costs and benefits of various activities before they make a purchase
