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Economics Chapter 01 1 Which of the following countries has recently emerged as one of the world’s top trading nations in terms of total trade volume
COI 01 – The United States and the Global Economy 1. The physical export of motorcycles from the United States to Mexico best illustrates a: A. trade flow. B. resource flow. C. financial flow. D. technology flow. AACSB: Reflective Thinking […]
Economics Chapter 01 2 Refer to the above table. Suppose that the United States imports more products from Lutel and than before. All else equal, the dollar price of luta will
COI 01 – The United States and the Global Economy 57. If incomes rise rapidly in the United States and U.S. preferences for foreign goods strengthen, we would expect: A. the dollar to appreciate in value. B. the dollar to […]
Economics Chapter 01 3 Specialized production and international trade increase a nation’s productivity and increase the availability of goods and services.
COI 01 – The United States and the Global Economy 97. A trade bloc is: A. a tariff or quota that impedes imports. B. a group of nations that allows free trade among member nations but restricts imports from nonmember […]
Economics Chapter 10 1 The initial values for expected returns, R&D and interest-rate cost for an energy company’s investment in developing alternative fuels are listed in the table below.
Chapter 10 – Pure Monopoly 10-1 CHAPTER 10 Pure Monopoly A. Short-Answer, Essays, and Problems 1. What are the major characteristics of pure monopoly? 2. What are the major barriers to entry that explain the existence of monopoly? 3. What […]
Economics Chapter 10 Homework Consider the following example. Suppose that a price‐discriminating monopolist has segregated its market into two groups of buyers
Chapter 10 – Pure Monopoly 10–12 Price (P) Quantity Demanded (Q) Marginal Revenue (MR) Marginal Cost (MC) $115 0 NA NA 100 1 $100 $45 83 2 66 40 71 3 47 35 63 4 39 30 55 5 23 […]
Economics Chapter 10 Homework Explain how each barrier can foster either monopoly or oligopoly. Which barriers, if any, do you feel give rise to monopoly that is socially justifiable
Chapter 10 – Pure Monopoly 10-1 Chapter 10 Pure Monopoly QUESTIONS 1. “No firm is completely sheltered from rivals; all firms compete for consumer dollars. If that is so, then pure monopoly does not exist.” Do you agree? Explain. How […]
Economics Chapter 10d 1 The non-discriminating pure monopolist must decrease price on all units of a product sold in order to sell more units.
Chapter 10 – Pure Monopoly 1. One feature of pure monopoly is that the monopolist is: A. A producer of products with close substitutes B. One of several producers of a product C. A price taker D. A price maker […]
Economics Chapter 10d 1 What do economies of scale, the ownership of essential raw materials, and patents have in common
Chapter 10 – Pure Monopoly 1. Pure monopoly refers to: A. any market in which the demand curve to the firm is downsloping. B. a standardized product being produced by many firms. C. a single firm producing a product for […]
Economics Chapter 10d 2 Many people believe that monopolies charge any price they want to without affecting sales. Instead, the output
Chapter 10 – Pure Monopoly 52. At the profit-maximizing level of output, a monopolist will always operate where: A. Price is greater than marginal cost B. Price is greater than average revenue C. Average total cost equals marginal cost D. […]
Economics Chapter 10d 2 Refer to the above table. The monopolist will select its profit-maximizing level of output somewhere within the
Chapter 10 – Pure Monopoly 53. The above diagram indicates that the marginal revenue of the sixth unit of output is: A. -$1. B. $1. C. $4. D. $24. AACSB: Analytic Bloom’s: Level 3 Apply Difficulty: 2 Medium Learning Objective: […]
Economics Chapter 10d 3 Any activity designed to transfer income or wealth to a particular individual or firm at society’s expense is called
Chapter 10 – Pure Monopoly 96. Network effects and simultaneous consumption tend to foster the development of: A. Pure competition B. Monopoly power C. Net social benefits D. Allocative efficiency AACSB: Reflective Thinking Bloom’s: Level 3 Apply Difficulty: 2 Medium […]
Economics Chapter 10d 3 Comparing a pure monopoly and a purely competitive firm with identical costs, we would find in long-run equilibrium that the pure
Chapter 10 – Pure Monopoly 103. Refer to the above diagrams. The demand for Firm B’s product is: A. perfectly elastic over all ranges of output. B. perfectly inelastic over all ranges of output. C. elastic for prices above $4 […]
Economics Chapter 10d 4 Refer to the above diagram for a pure monopolist. If the monopolist is unregulated, it will maximize profits by charging
Chapter 10 – Pure Monopoly 148. Assume the above figure applies to a pure monopolist, and that MC is the same for both graphs. If this firm is able to price discriminate between children and adults, its profit- maximizing level […]
Economics Chapter 11 1 As pizza topped with barbecue chicken became popular at specialty restaurants, Pizza Hut introduced a similar pizza
Chapter 11W – Technology, R&D, and Efficiency 1. Broadly defined, technological advance: A. can occur in the short run, long run, or very long run. B. comprises new and improved goods and services and new and improved ways of producing […]
Economics Chapter 11 1 Below are two average total cost schedules for a firm. The first schedule (ATC1) shows the cost of producing the product at five levels of output before a new innovation
Chapter 11 Web – Technology, R&D, and Efficiency 11W-1 CHAPTER 11 Web Technology, R&D, and Efficiency Note: This bonus web chapter is available at the textbook Web site: www.mcconnell19e.com. A. Short-Answer, Essays, and Problems 1. Give a definition of technological […]
Economics Chapter 11 1 How does economic rivalry take place in monopolistic competition? Describe the different aspects of product differentiation and price competition
Chapter 11 – Monopolistic Competition and Oligopoly (+ Appendix) 11-1 CHAPTER 11 Monopolistic Competition and Oligopoly (+ Appendix) A. Short-Answer, Essays, and Problems 1. What are the major features of monopolistic competition compared to pure competition and pure monopoly? 2. […]
Economics Chapter 11 1 In analyzing a market, the time horizon where technology can change and firms can offer new products is referred to as the
Chapter 11W – Technology, R&D, and Efficiency 1. Which term would be most closely associated with the idea of “new and better goods and services and new and better ways of producing and distributing them”? A. Invention B. Product innovation […]
Economics Chapter 11 2 Explain how monopolistically competitive producers try to improve on the condition of just breaking even in the long run
Chapter 11 – Monopolistic Competition and Oligopoly (+ Appendix) 20. Draw a graph of the cost curves for a monopolistically competitive firm that clearly illustrates the excess capacity that arises in the long run. Explain why this excess capacity arises. […]
Economics Chapter 11 2 how much will the consumer buy and what will be the total utility from spending the given budget
Chapter 11W – Technology, R&D, and Efficiency The table below shows the marginal utility schedules for old product X and new product Y for a hypothetical consumer. The price of X is $2 and the price of good Y is […]
Economics Chapter 11 2 Suppose that a firm introduces a highly profitable new product. If this new product is priced higher than existing substitute products
Chapter 11W – Technology, R&D, and Efficiency 57. Refer to the above data. Suppose the price of new product Z is $10 rather than $1. This consumer would purchase: A. some of Z but not as much as if the […]
Economics Chapter 11 3 An industry with which of the following four-firm concentration ratios would tend to have the greatest amount of R&D
Chapter 11W – Technology, R&D, and Efficiency 85. The inverted-U theory shows the relationship between: A. Marginal utility and total utility B. Process and product innovation C. Average total costs and total product curves D. R&D expenditures and the concentration […]
Economics Chapter 11 3 Which pair of market structures provides firms with the greatest ability to finance R&D out of retained earnings
Chapter 11W – Technology, R&D, and Efficiency 11W–32 87. Which pair of market structures provides firms with the greatest ability to finance R&D out of retained earnings? AACSB: Reflective Thinking Bloom’s: Level 2 Understand Difficulty: 2 Medium Learning Objective: 11W-05 […]
Economics Chapter 11 Homework Assuming identical long-run costs, compare graphically the prices and outputs that would result in the long run under pure competition and under monopolistic competition.
In monopolistic competition, there is much nonprice competition, such as advertising, trademarks, and brand names. In pure competition, there is no nonprice competition. In pure monopoly there is only one firm. Its product is unique and there are no close […]
Economics Chapter 11 Homework Assuming this is a sequential game with no collusion, what is the outcome if Firm A moves first to build a new type of commercial aircraft
the $40 pricing strategy. This threat is likely to be credible since both firms benefit from the $40 pricing strategy. In a repeated game setting this threat may not be necessary since the present value of cooperation may exceed the […]
Economics Chapter 11 Homework What is meant by technological advance, as broadly defined? How does technological advance enter into the definition of the very long run
(b) INN: A new way of using existing technology (c) INV: A new product (d) INN: A new way of using existing technology (e) DIF: Another firm was already producing a doll using a given technology Chapter 11W – Technology, […]
Economics Chapter 11d 1 The following are the respective numbers for the four-firm concentration ratio and Herfindahl index in an industry
Chapter 11 – Monopolistic Competition and Oligopoly (+ Appendix) 1. Which of the following is a characteristic of monopolistic competition? A. Standardized product B. A relatively small number of firms C. Absence of nonprice competition D. Relatively easy entry AACSB: […]
Economics Chapter 11d 1 If the number of firms in a monopolistically competitive industry increases and the degree of product differentiation diminishes
Chapter 11 – Monopolistic Competition and Oligopoly (+ Appendix) 1. Monopolistic competition means: A. a market situation where competition is based entirely on product differentiation and advertising. B. a large number of firms producing a standardized or homogeneous product. C. […]
Economics Chapter 11d 2 An important similarity between a monopolistically competitive firm and a purely competitive firm is that
Chapter 11 – Monopolistic Competition and Oligopoly (+ Appendix) 53. Which of the following statements is correct? A. Purely competitive firms, monopolistically competitive firms, and pure monopolies all earn zero economic profits in the long run. B. Purely competitive firms, […]
Economics Chapter 11d 2 In long-run equilibrium, a profit-maximizing firm in a monopolistically competitive industry will produce the quantity of output where
Chapter 11 – Monopolistic Competition and Oligopoly (+ Appendix) 51. Refer to the above graph for a representative firm in monopolistic competition in a constant-cost industry. This firm: A. Is not going to earn positive economic profits in the short […]
Economics Chapter 11d 3 If a product such as cement or bricks is costly to ship and, therefore, markets are very localized, the national concentration ratio for that industry
Chapter 11 – Monopolistic Competition and Oligopoly (+ Appendix) 111. If a product such as cement or bricks is costly to ship and, therefore, markets are very localized, the national concentration ratio for that industry: A. will be greater than […]
Economics Chapter 11d 3 Under oligopoly, if one firm in an industry significantly increases advertising expenditures in order to capture a greater market share
Chapter 11 – Monopolistic Competition and Oligopoly (+ Appendix) 109. In a duopoly, if one firm increases its price, then the other firm can: A. Keep its price constant and thus increase its market share B. Keep its price constant […]
Economics Chapter 11d 4 One would expect that collusion among oligopolistic producers would be easiest to achieve in which of the following cases
Chapter 11 – Monopolistic Competition and Oligopoly (+ Appendix) 156. The above diagram portrays: A. pure competition. B. collusive oligopoly. C. noncollusive oligopoly. D. pure monopoly. AACSB: Reflective Thinking Bloom’s: Level 2 Understand Difficulty: 2 Medium Learning Objective: 11-05 Relate […]
Economics Chapter 11d 4 The larger the number of firms in an industry and the less the extent of product differentiation, the greater will be the elasticity of the individual seller’s demand curve
Chapter 11 – Monopolistic Competition and Oligopoly (+ Appendix) 153. In which set of market models are there the most significant barriers to entry? A. Monopolistic competition and pure competition B. Monopolistic competition and pure monopoly C. Oligopoly and monopolistic […]
Economics Chapter 11d 5 Both collusive and non collusive oligopoly models suggest that price changes will be relatively infrequent in these types of industries
Chapter 11 – Monopolistic Competition and Oligopoly (+ Appendix) 211. As it relates to oligopoly, game theory focuses on the strategic behavior of rival firms. TRUE AACSB: Reflective Thinking Bloom’s: Level 2 Understand Difficulty: 2 Medium Learning Objective: 11-04 Discuss […]
Economics Chapter 12 1 The theory of resource pricing is sometimes referred to by economists as the theory of income distribution. Why
Chapter 12 – The Demand for Resources 12-1 CHAPTER 12 The Demand for Resources A. Short-Answer, Essays, and Problems 1. What are four significant reasons for studying resource pricing? 2. The theory of resource pricing is sometimes referred to by […]
Economics Chapter 12 2 What is the difference between a change in resource demand and a change in the quantity of a resource demanded
Chapter 12 – The Demand for Resources 20 _____ 10 _____ 1 _____ 12–14 Quantity of resource Y employed Marginal product of Y Total product Product price Total revenue Marginal revenue product of Y 0 – 0 – – 1 […]
Economics Chapter 12 Homework What effect will each of the following have on the elasticity or the location of the demand for resource C, which is being used to produce commodity X
Chapter 12 – The Demand for Resources 12-1 Chapter 12 The Demand for Resources QUESTIONS 1. What is the significance of resource pricing? Explain how the factors determining resource demand differ from those determining product demand. Explain the meaning and […]
Economics Chapter 12d 1 In the United States professional football players earn much higher incomes than professional soccer players
Chapter 12 – The Demand for Resources 1. Resource pricing is important because: A. resource prices are a major determinant of money incomes. B. resource prices allocate scarce resources among alternative uses. C. resource prices, along with resource productivity, are […]
Economics Chapter 12d 1 The marginal revenue product of an input in a competitive market decreases as a firm increases the quantity of the input employed because of the
Chapter 12 – The Demand for Resources 1. Which of the following is equivalent to the expenditures that firms incur in acquiring economic resources? A. Revenues of the resources B. Income of the resources C. Money of the resources D. […]
Economics Chapter 12d 2 Gambling increases in popularity, thus increasing the demand for card dealers at casinos. This would be an example of which determinant of labor demand
Chapter 12 – The Demand for Resources 48. Refer to the above table. The price of the product being produced by this resource: A. Is a constant $3 B. Is a constant $4 C. Varies from $2 to $6 D. […]
Economics Chapter 12d 2 Suppose the demand for strawberries rises sharply, resulting in an increased price of strawberries. As it relates to strawberry pickers
Chapter 12 – The Demand for Resources 55. Refer to the above graph. Each of the three labor demand curves shown slopes downward because of the: A. law of diminishing marginal utility. B. law of increasing opportunity costs. C. principal-agent […]
Economics Chapter 12d 3 What happens when technological advance makes available a new highly productive capital good for which MP/P is greater than for the labor for which it is a substitute resource
Chapter 12 – The Demand for Resources 95. In which case below will the elasticity of demand for laborers who produce yo-yos be most inelastic? The price elasticity of demand for yo-yos is: A. 5, and labor’s share of total […]
Economics Chapter 12d 3 Which of the following must pertain if the firm is to minimize the cost of producing any output
Chapter 12 – The Demand for Resources 107. Refer to the above data. Assuming the prices of resources a and b are $5 and $8 respectively, what is the profit-maximizing combination of resources? A. 7 of a and 7 of […]
Economics Chapter 13 1 Why does the marginal resource cost exceed the wage rate in the case of a monopsonistic firm? Explain and illustrate with an example
Chapter 13 – Wage Determination (+ Appendix) 13-1 CHAPTER 13 Wage Determination (+ Appendix) A. Short-Answer, Essays, and Problems 1. When economists refer to labor, what type of workers are they referring to? 2. What do “wages” and “wage rates” […]
Economics Chapter 13 2 What is the difference between an exclusive union and an inclusive union? What are the economic effects of each type
Chapter 13 – Wage Determination (+ Appendix) job. Given a stable demand for an occupation, the reduction in supply will tend to increase the equilibrium wage in the labor market. The typical reason that is given for licensing requirements is […]
Economics Chapter 13 Homework Which industries and occupations have the highest rates of unionization? Which the lowest? Speculate on the reasons for such large differences
Potential answers: structural changes in economy (movement away from manufacturing in the U.S.), Consumer demand for foreign goods, and an increase in managerial opposition to unionization. 2. Regulations governing hours of work which ensure employees are entitled to paid vacation […]
Economics Chapter 13 Homework Why is a firm in a purely competitive labor market a wage taker? What would happen if it decided to pay less than the going market wage rate
large number of firms wanting to buy the labor services of the workers in that market and a large number of workers with identical skills wanting to sell their labor services. As a result, the individual firm has no control […]
Economics Chapter 13d 1 Over the long run, real earnings per worker can increase only at about the same rate as the economy’s rate of growth of
Chapter 13 – Wage Determination (+ Appendix) 1. Real wages in the United States in the long run: A. show no discernible relationship to output per worker. B. have increased at about the same rate as increases in output per […]
Economics Chapter 13d 1 Which one of the following research findings is most consistent with the hypothesis that unions increase productivity
Chapter 13 – Wage Determination (+ Appendix) 1. The concept of “wages” includes the following items, except: A. Direct money payments like salaries and commissions B. Bonuses and royalties C. Amounts spent by workers D. Fringe benefits like health insurance […]
Economics Chapter 13d 2 A firm faces the labor productivity and cost schedule in the table above. What is the marginal resource cost of the seventh worker
Chapter 13 – Wage Determination (+ Appendix) 45. For a monopsonist in the labor market, the marginal resource cost of labor is: A. Higher than the wage rate or price of labor B. Less than the wage rate or price […]
Economics Chapter 13d 2 In a mon opsonistic labor market the employer will maximize profits by employing workers up to that point at which
Chapter 13 – Wage Determination (+ Appendix) 54. The economic term for a firm that is the sole buyer in a market is: A. monopsonist. B. monopolist. C. bilateral competitor. D. bilateral monopolist. AACSB: Analytic Bloom’s: Level 1 Remember Difficulty: […]
Economics Chapter 13d 3 According to some supporters of the minimum wage, it has very small or even nonexistent negative employment effects because
Chapter 13 – Wage Determination (+ Appendix) 107. Refer to the above labor market diagrams. The case of bilateral monopoly is represented by Figure: A. 5. B. 4. C. 2. D. 1. AACSB: Reflective Thinking Bloom’s: Level 3 Apply Difficulty: […]
Economics Chapter 13d 3 Critics of the minimum wage argue that an increase in the minimum wage rate above the equilibrium rate of a purely competitive labor market would
Chapter 13 – Wage Determination (+ Appendix) 93. Refer to the above graph. If a monopsonist bargains with an inclusive union, as shown, the wage rate will be: A. Wc B. Wu C. Wm D. Indeterminate in the graph AACSB: […]
Economics Chapter 13d 4 A wage payment system in a firm incorporates a guaranteed wage with an incentive element, provided that a certain minimum level
Chapter 13 – Wage Determination (+ Appendix) 121. Incentive pay plans that seek to tie worker compensation more closely to worker performance includes the following, except: A. Commissions or royalties B. Seniority-based pay scale C. Stock options and profit-sharing D. […]
Economics Chapter 13d 4 Inclusive unions restrict the number of jobs directly by shifting the labor supply curve to the left; exclusive unions restrict the number
Chapter 13 – Wage Determination (+ Appendix) 163. The monopsonist in a nonunionized labor market pays a wage rate below the MRP of labor. TRUE AACSB: Reflective Thinking Bloom’s: Level 2 Understand Difficulty: 2 Medium Learning Objective: 13-03 Demonstrate how […]
Economics Chapter 13d 5 Critics of the minimum wage contend that higher minimums cause employers to move up their labor demand curves, reducing employment of low-wage workers
Chapter 13 – Wage Determination (+ Appendix) 201. In a labor dispute in which the existing contract has expired, a: A. firm can legally lock up unruly workers. B. firm can legally lock out union workers. C. union can legally […]
Economics Chapter 14 1 if the productivity of the land decreases such that 200,000 less acres are demanded at each price, what will the economic rent be and how much land will be supplied
Chapter 14 – Rent, Interest, and Profit 14-1 CHAPTER 14 Rent, Interest, and Profit A. Short-Answer, Essays, and Problems 1. What determines the economic rent for land? Explain from a supply and demand perspective. 2. How does the supply of […]
Economics Chapter 14 Homework Explain why economic rent is a surplus payment when viewed by the economy as a whole but a cost of production from the standpoint of individual firms and industries
economy as a whole. If rent declined or disappeared, the same amount of land would be available. If it increased, no more land would be forthcoming. Thus, rent does not function as an incentive for adding land to the economy. […]
Economics Chapter 14d 1 If landowners were taxed at a rate of $150 per acre for their land, what would be the economic rent on this land after taxes and how many acres would be rented
Chapter 14 – Rent, Interest, and Profit 1. If a factor of production has a fixed total supply, then payments to that factor constitute: A. Wages B. Economic rent C. Normal profits D. Interest payments AACSB: Analytic Bloom’s: Level 1 […]
Economics Chapter 14d 1 Suppose that the demand for loanable funds is D0 and the supply of loanable funds initially is S0
Chapter 14 – Rent, Interest, and Profit 1. Economic or pure rent is: A. a payment made for the use of housing, factory buildings, or capital goods. B. a payment for resources used in the production of “free goods.” C. […]
Economics Chapter 14d 2 A major purpose of usury laws is to make more funds available to low-income borrowers. Economic analysis suggests that usury laws
Chapter 14 – Rent, Interest, and Profit 53. Refer to the above table representing Kara’s bank account. Assuming that $2000 was deposited into her account at the beginning of year 1, and no further deposits or withdrawals were made, the […]
Economics Chapter 14d 2 If an economic expansion in the economy caused an increase in the demand for loanable funds, what would be the effect on the interest rate and the quantity
Chapter 14 – Rent, Interest, and Profit 54. A decrease in the supply of loanable funds and an increase in the demand for loanable funds will: A. Increase the interest rate and the quantity of funds loaned B. Decrease the […]
Economics Chapter 14d 3 Currently capitalist income, that is, corporate profits, interest, and rent, accounts for about what percentage of the income paid to American resource suppliers
Chapter 14 – Rent, Interest, and Profit 84. Economic profit is most closely associated with: A. the process of saving and investing. B. monopoly, innovation, and uninsurable risks. C. long-run competitive equilibrium. D. a static economy. AACSB: Reflective Thinking Bloom’s: […]
Economics Chapter 14d 3 The equilibrium interest rate and quantity of loanable funds demanded and supplied in this market will bedemanded and supplied in this market will be
Chapter 14 – Rent, Interest, and Profit 92. Refer to the above table. The equilibrium interest rate and quantity of loanable funds demanded and supplied in this market will be: A. 8 percent and $140 billion B. 10 percent and […]
Economics Chapter 15 1 Define total fertility rate and replacement rate. Use them to describe the population prospects for many developed countries
Chapter 15 – Natural Resource and Energy Economics 15-1 CHAPTER 15 Natural Resource and Energy Economics A. Short-Answer, Essays, and Problems 1. Describe the changes in population and living standards since 1800. What implications do these changes raise about standards […]
Economics Chapter 15 Homework Yet living standards are rising due to improvements in technology that allow more output to be produced for every unit of input used in production
participation by women in the paid labor force, the transformation of children from an economic asset (e.g. on the farm) to a liability, higher divorce rates, and changed attitudes and access to birth control. resources reduces the likelihood that we […]
Economics Chapter 15d 1 The fertility rates for major industrialized countries in recent years show that Malthus’s theory regarding population is
Chapter 15 – Natural Resource and Energy Economics 1. The key demand-side factors that affect the depletion of finite natural resources are: A. Population and productivity B. Productivity and per capita consumption C. Per capita consumption and efficiency D. Population […]
Economics Chapter 15d 1 Whose An Essay on the Principle of Population argued that human living standards could only temporarily rise above subsistence
Chapter 15 – Natural Resource and Energy Economics 1. As of 2010, the world’s population is approximately: A. 6.8 billion. B. 5.2 billion. C. 10.8 billion. D. 1.2 trillion. AACSB: Reflective Thinking Bloom’s: Level 1 Remember Difficulty: 1 Easy Learning […]
Economics Chapter 15d 2 A profit-maximizing company should extract a non-renewable resource in the present up to the quantity where the
Chapter 15 – Natural Resource and Energy Economics 58. Refer to the data above. Suppose that a new government regulation is going to shut down OZ’s mining operation 1 year from now. Assuming that all gold extracted is sold in […]
Economics Chapter 15d 2 What will be the quantity extracted if user costs are considered compared to the case where they are not considered
Chapter 15 – Natural Resource and Energy Economics 58. Refer to the above graph. If the current market price rises from $60 to $70 and user costs are not considered, the extraction quantity: A. Rises by 10 units to 20 […]
Economics Chapter 15d Modernizing economies that have declining birthrates may still experience population growth because of rapidly declining death rates
Chapter 15 – Natural Resource and Energy Economics Melanie and Oli are competing Pacific Halibut fishers. Both have been allocated ITQs that limit their catch to 1,000 tons of Pacific Halibut each. Melanie‘s cost per ton is $20; Oli’s cost […]
Economics Chapter 16 1 Given the following information on the tax paid for different levels of taxable income, fill in the average and the marginal tax rates for each income level
Chapter 16 – Public Finance: Expenditures and Taxes 16-1 CHAPTER 16 Public Finance: Expenditures and Taxes A. Short-Answer, Essays, and Problems 1. Briefly describe the role of government in the economy. How are these government activities financed? 2. The circular […]
Economics Chapter 16 2 The next four questions refer to the below supply and demand graph for a product on which the government imposes an excise tax
Chapter 16 – Public Finance: Expenditures and Taxes 347 18. Why are payroll taxes regressive? Payroll taxes refer to Social Security and Medicare taxes. In 2008, the Social Security tax rate was 6.2%, but that tax rate only applied to […]
Economics Chapter 16 Homework Distinguish between the benefits‐received and the ability‐to‐pay principles of taxation. Which philosophy is more evident in our present tax structure?
Chapter 16 – Public Finance: Expenditures and Taxes 16-1 Chapter 16 Public Finance: Expenditures and Taxes QUESTIONS 1. Use a circular flow diagram to show how the allocation of resources and the distribution of income are affected by each of […]
Economics Chapter 16d 1 If government levies a tax or fee on hunting licenses and uses the resulting revenue for wildlife stocking programs
Chapter 16 – Public Finance: Expenditures and Taxes 1. Public finance is the sub-discipline of economics that studies the various ways in which: A. The general public acquire financing for their purchases B. Governments raise and expend money C. Firms […]
Economics Chapter 16d 1 Revenues flowing to the government from government-run or government-sponsored businesses, such as public utilities and state lotteries, are known as
Chapter 16 – Public Finance: Expenditures and Taxes 1. Proprietary income refers to: A. revenue flowing to the government from taxes. B. money borrowed by the government to finance its operations. C. revenue generated by government-run businesses. D. transfer payments […]
Economics Chapter 16d 2 The rationale for ability-to-pay taxation and the contention that those with large incomes should pay more taxes both absolutely and relatively is that
Chapter 16 – Public Finance: Expenditures and Taxes 55. In 2008, U.S. governments (local, state, and Federal) employed approximately how many million workers? A. 9.2 B. 13.0 C. 19.4 D. 22.5 AACSB: Analytic Bloom’s: Level 1 Remember Difficulty: 1 Easy […]
Economics Chapter 16d 2 The relationship between the average tax rate and the tax base in a proportional tax would be represented by
Chapter 16 – Public Finance: Expenditures and Taxes 58. A person whose income has increased from $10,000 to $20,000 finds that her Federal marginal tax rate has increased from 18 percent to 22 percent. This is an example of a: […]
Economics Chapter 16d 3 If the demand for a product is perfectly inelastic and the supply curve is upsloping, a $1 excise tax per unit of output will
Chapter 16 – Public Finance: Expenditures and Taxes 99. Assume the supply curve for product X is perfectly elastic and that government imposes a $2 per unit excise tax. We can conclude that the resulting: A. increase in output will […]
Economics Chapter 16d 3 Refer to the above graph for the labor market. The government decides to impose a wage tax as shown on the graph
Chapter 16 – Public Finance: Expenditures and Taxes 91. In the diagram above: S0 = supply curve for bourbon (seller’s supply) D = demand curve for bourbon St= supply for bourbon plus excise tax on bourbon (effective supply as seen […]
Economics Chapter 17 1 what will be the choice between more police protection and more fire protection? what will be the choice between more schools and more police protection
Chapter 17 – Asymmetric Information, Voting, and Public Choice 17-1 CHAPTER 17 Asymmetric Information, Voting, and Public Choice A. Short-Answer, Essays, and Problems 1. What are information problems affecting sellers? Give an example that illustrates how these types of problems […]
Economics Chapter 17 Homework Because medical records are private, an individual applying for health insurance will know more about his own health conditions than will the insurance companies
make sure that a new building conforms to adequate safety and construction standards, building codes have been created. The government inspectors provide impartial third-party expertise to assure the buyer that the codes have been met. Such inspections also provide information […]
Economics Chapter 17d 1 Suppose a firm offers its workers a cafeteria plan in which it allows workers to allocate a set amount of fringe benefit money toward specific insurance
Chapter 17 – Asymmetric Information, Voting, and Public Choice 1. Where there is asymmetric information between buyers and sellers. A. product shortages will occur at the equilibrium price. B. product surpluses will occur at the equilibrium price. C. markets can […]
Economics Chapter 17d 1 Which would be an example of where the government has intervened to correct a market failure caused by inadequate information about sellers
Chapter 17 – Asymmetric Information, Voting, and Public Choice 1. Asymmetric information in a market transaction occurs when there is unequal knowledge possessed by the: A. Buyer and the government B. Seller and the government C. Taxpayer and the government […]
Economics Chapter 17d 2 Domino argues for a medium pizza, Godfather contends a large pizza will be needed, and Little Caesar wants a super-large pizza
Chapter 17 – Asymmetric Information, Voting, and Public Choice 46. Suppose three roommates cannot agree on the size of a pizza to order. Domino argues for a medium pizza, Godfather contends a large pizza will be needed, and Little Caesar […]
Economics Chapter 17d 2 Voters are making a choice to spend money on three projects: a dam, a school, or a road. In the choice between the dam and the school
Chapter 17 – Asymmetric Information, Voting, and Public Choice 50. Refer to the above table, which shows the ranked preferences of voters for three alternative projects, with “1” being the top preference. In a paired-choice vote between a jail and […]
Economics Chapter 18 1 What were the two basic means of control by government as substitute for, or to supplements to, market forces in monopolized industries
Chapter 18 – Antitrust Policy and Regulation 18-1 CHAPTER 18 Antitrust Policy and Regulation A. Short-Answer, Essays, and Problems 1. What are the basic purposes of antitrust policy? 2. Briefly describe the historical background that gave rise to antitrust and […]
Economics Chapter 18 Homework Describe the major provisions of the Sherman and Clayton acts. What government entities are responsible for enforcing those laws
Section 2 outlaws price discrimination; Section 3 forbids tying contracts; Section 7 prohibits mergers which substantially lessen competition; Section 8 prohibits interlocking directorates. The acts are enforced by the Department of Justice, Federal Trade Commission, and state attorneys general. Private […]
Economics Chapter 18d 1 Suppose Slow Ketchup requires that, as a condition of purchase, all restaurants using its product must buy and make available its new sales product
Chapter 18 – Antitrust Policy and Regulation 1. All of the following can file antitrust charges under the Sherman Act except: A. the U.S. Justice Department. B. state attorney generals. C. injured private parties. D. the Federal Energy Regulatory Commission. […]
Economics Chapter 18d 1 Which antitrust act provided that injured parties could file suit and, if successful, collect triple damages from monopolistic violators
Chapter 18 – Antitrust Policy and Regulation 1. Laws and government actions designed to prevent monopoly and to promote competition are the focus of: A. Social regulation B. Industrial regulation C. Antitrust policy D. Incomes policy AACSB: Analytical Bloom’s: Level […]
Economics Chapter 18d 2 If there was a conspiracy to fix prices, but the conspiracy did not succeed, the government can still take the conspiring firm to court for improper conduct
Chapter 18 – Antitrust Policy and Regulation 60. Which of the following is a per se violation? A. Price discrimination B. Price-fixing C. Extremely high Herfindahl index D. Horizontal merger AACSB: Analytical Bloom’s: Level 1 Remember Difficulty: 1 Easy Learning […]
Economics Chapter 18d 2 The view that the antitrust laws should be enforced relatively leniently because of the tendency for monopoly power to erode over time is known as the
Chapter 18 – Antitrust Policy and Regulation 18–20 57. Which one of the following is not correct? AACSB: Reflective Thinking Bloom’s: Level 1 Remember Difficulty: 1 Easy Learning Objective: 18-02 Describe some of the key issues relating to the interpretation […]
Economics Chapter 19 1 What is the difference between farm commodities and food products? How does the number of competing firms change as farm commodities are processed into food
Chapter 19 – Agriculture: Economics and Policy 19-1 CHAPTER 19 Agriculture: Economics and Policy A. Short-Answer, Essays, and Problems 1. Describe the diversity in the agriculture industry as it relates to farm commodities. 2. What is the difference between farm […]
Economics Chapter 19 Homework In view of the high and expanding physical productivity of agricultural resources, explain why many economists want to divert additional resources away
costs for agricultural producers will tend to be small, and shut-down points will occur only at relatively low prices. As long as prevailing prices exceed these levels, farmers will produce close to capacity to recoup as much of their fixed […]
Economics Chapter 19d 1 The inelastic demand for agricultural products means that relatively small increases in supply will result in a relatively
Chapter 19 – Agriculture: Economics and Policy 1. Farm commodities are usually sold in: A. Monopolistically competitive or oligopolistic markets, while food-product markets are highly competitive B. Highly competitive markets, while food-product markets are monopolistically competitive or oligopolistic C. Monopolistically […]
Economics Chapter 19d 1 Which of the following statements about U.S. agriculture is true as it relates to the past several decades
Chapter 19 – Agriculture: Economics and Policy 1. The demand for agricultural products is: A. relatively elastic with respect to price. B. relatively inelastic with respect to price. C. relatively elastic with respect to income. D. downsloping to the individual […]
Economics Chapter 19d 2 Farm groups spend considerable amounts of money to maintain and enlarge political support for farm subsidies. This illustrates
Chapter 19 – Agriculture: Economics and Policy 43. The parity ratio: A. compares worker productivity in the farm and nonfarm sectors. B. is the ratio of per capita farm income to per capita nonfarm income. C. is the ratio of […]
Economics Chapter 19d 2 If price supports are established, and producers are producing more than consumers want to buy at that price, to maintain producers’ income the government will have to
Chapter 19 – Agriculture: Economics and Policy 54. The concept of parity implies that: A. Farm incomes should remain stable over the business cycle B. A given output should always provide the farmer with the same real income C. The […]
Economics Chapter 19d 3 Public choice theory would suggest that the lobbying of Congress by farm organizations for legislation that would increase the appropriations
Chapter 19 – Agriculture: Economics and Policy 87. A major criticism of the parity concept is that: A. It is based on relative prices from a long time ago B. It is not easily and objectively measured C. The index […]
Economics Chapter 2 1 What is money and what important function does it perform? Explain how it overcomes the disadvantages associated with barter
Chapter 02 – The Market System and the Circular Flow 2-1 CHAPTER 2 The Market System and the Circular Flow A. Short-Answer, Essays, and Problems 1. Explain the term “laissez faire capitalism.” 2. Explain what is meant by a command […]
Economics Chapter 20 1 What is the difference between social insurance and public assistance in income maintenance programs? What are examples of each type of government program?
Chapter 20 – Income Inequality and Poverty 20-1 CHAPTER 20 Income Inequality and Poverty A. Short-Answer, Essays, and Problems 1. How equal is the distribution of personal income by households in the United States? 2. Complete the following table of […]
Economics Chapter 20 Homework Should a nation’s income be distributed to its members according to their contributions to the production of that total income or according to the members’ needs
receives 50 percent of total income; the poorest quintile (Ed) receives 5 percent. This follows from the calculations below. Total Income equals $1000 (= $500 + $250 + $125 + $75 + $50). The lowest quintile (Ed) is 5% of […]
Economics Chapter 20d 1 People’s incomes are relatively low when they are young, reach a peak in middle age, and then decline. This fact helps explain
Chapter 20 – Income Inequality and Poverty 1. In 2008, the average income for households in the United States was about: A. $68,424. B. $42,820. C. $19,610. D. $62,725. AACSB: Reflective Thinking Bloom’s: Level 1 Remember Difficulty: 1 Easy Learning […]
Economics Chapter 20d 1 The greater the degree of inequality in the distribution of income, the more bowed will be the Lorenz curve toward the
Chapter 20 – Income Inequality and Poverty 1. The average household income in the United States in 2008 was: A. $34,231 B. $51,999 C. $68,424 D. $80,250 AACSB: Analytic Bloom’s: Level 1 Remember Difficulty: 1 Easy Learning Objective: 20-01 Explain […]
Economics Chapter 20d 2 Refer to the above diagrams that show identical marginal utility from income curves for Singer and Catalano
Chapter 20 – Income Inequality and Poverty 56. The entrance of large numbers of “baby boomers” into the labor force in the 1970s and 1980s: A. caused substantial reductions in permanent unemployment. B. lessened income inequality. C. increased income inequality. […]
Economics Chapter 20d 2 Which of the following would be evidence of an increase in income inequality over time in the United States
Chapter 20 – Income Inequality and Poverty 20–21 56. Which of the following is a major reason for the growing income inequality in the United States since 1970? AACSB: Analytic Bloom’s: Level 1 Remember Difficulty: 2 Medium Learning Objective: 20-03 […]
Economics Chapter 20d 3 Assume that there is a supply and demand market for non-preferred workers. If prejudice against these workers among employers increases
Chapter 20 – Income Inequality and Poverty 102. Assume that there is a supply and demand market for non-preferred workers. If prejudice against these workers among employers increases, then there will be a(n): A. Increased supply of these workers, a […]
Economics Chapter 20d 3 Which of the following would be consistent with an increase in racial prejudice against African-Americans and thus an increase
Chapter 20 – Income Inequality and Poverty 108. Refer to the above diagram. Which of the following would be consistent with an increase in racial prejudice against African-Americans and thus an increase in the discrimination coefficients of employers, taken as […]
Economics Chapter 21 1 In most industries increased spending is a sign of prosperity. Why is increased spending a cause for alarm in the health care industry
Chapter 21 – Health Care 21-1 CHAPTER 21 Health Care A. Short-Answer, Essays, and Problems 1. Describe the health care industry. 2. What are the two major problems facing the health care system? 3. Describe the major spending categories and […]
Economics Chapter 21 Homework One group of uninsured is the working poor, who make too much to qualify for Medicaid but not enough to afford health insurance
insurance) for about 16 percent of the population (46 million). The problems are related since rising costs make insurance unaffordable for many individuals and families, and make it difficult for some businesses to insure their workers. certain other coverage for […]
Economics Chapter 21d 1 approximately what percentage of people in the U.S. with private health insurance received it as an employer-provided benefit
Chapter 21 – Health Care 1. Approximately how many workers are employed in the U.S. health care industry? A. 820,000 B. 1 million C. 5.8 million D. 16 million AACSB: Analytic Bloom’s: Level 1 Remember Difficulty: 1 Easy Learning Objective: […]
Economics Chapter 21d 1 Approximately what portion of health care spending in the U.S. is paid by the consumer and not by private or public insurance
Chapter 21 – Health Care 1. The health care industry encompasses the following sectors, except: A. Medical laboratories B. Nursing homes C. Nonprescription drugs D. Health clubs AACSB: Analytic Bloom’s: Level 1 Remember Difficulty: 1 Easy Learning Objective: 21-01 Convey […]
Economics Chapter 21d 2 Assume that health insurance pays four-fifths the cost of health care. For the consumer, the price and the quantity of health care consumed would be
Chapter 21 – Health Care Use the table below to answer the question. The table shows the hypothetical demand and supply schedule for health care 60. Refer to the above table. If there was no health insurance, the equilibrium price […]
Economics Chapter 21d 2 If an individual is less careful about avoiding accidents or illness because she has health insurance, this is an example of
Chapter 21 – Health Care 56. Refer to the above figure that shows the market for U.S. health care. Other things equal, which of the following would shift the supply curve for medical care from S1 to S2? A. greater […]
Economics Chapter 21d 3 In order to help pay for the costs of extending health insurance to previously uninsured people, the PPACA imposes new taxes including the following
Chapter 21 – Health Care 90. The Patient Protection and Affordable Care Act (PPACA) includes the following elements, except: A. Insurance companies cannot anymore deny coverage to anyone on the basis of a preexisting condition B. To contain costs, insurance […]
Economics Chapter 21d 3 Which of the following provisions of the PPACA do proponents expect to reduce the growth of health care spending
Chapter 21 – Health Care 87. Which of the following is a law passed in the last 10 years relating to health care? A. establishment of health maintenance organizations to reduce health care costs B. establishment of deductibles and copayments […]
Economics Chapter 22 1 The decision to legally or illegally emigrate from a foreign country to the United States is mainly driven by the potential earning opportunities available in the U.S. economy
Chapter 22 – Immigration 22-1 CHAPTER 22 Immigration A. Short-Answer, Essays, and Problems 1. What is the difference between legal and illegal immigration? 2. What are the two types of legal immigration in the United States? 3. Describe the number […]
Economics Chapter 22 Homework Use the accompanying tables for Neon and Zeon to answer the questions that follow. Assume that the wage rate shown equals hourly output and income
and implicit costs of moving. Typically individuals migrate to countries with the highest wage differential (Home and Foreign country). It doesn’t make sense to move to a country with the same wage rate given the cost of moving is positive. […]
Economics Chapter 22d 1 Kara is considering migrating to another country. Which of the following represents a cost she will face if she decides to move
Chapter 22 – Immigration 1. Economic immigrants: A. are defined as any international migrants that have an impact on the economy. B. are defined as international migrants motivated by economic gain. C. only impact the economy if they enter the […]
Economics Chapter 22d 1 Of all of the people who became permanent legal residents of the U.S. in 2009, about how many were sponsored by employers
Chapter 22 – Immigration 1. Between 2000 and 2009, legal immigration averaged about: A. 500,000 per year B. 1 million per year C. 1.5 million per year D. 2.5 million per year AACSB: Analytic Bloom’s: Level 1 Remember Difficulty: 1 […]
Economics Chapter 22d 2 If the government effectively prevents illegal immigrants from working in this labor market, the equilibrium wage and level of employment are, respectively
Chapter 22 – Immigration 57. According to estimates, what percentage of agricultural workers in the United States are illegal immigrants? A. 12 B. 17 C. 24 D. 43 AACSB: Analytic Bloom’s: Level 1 Remember Difficulty: 1 Easy Learning Objective: 22-04 […]
Economics Chapter 22d 2 Studies indicate that a lack of skill transferability in the U.S. has a particularly large effect on the earnings of
Chapter 22 – Immigration 55. Refer to the above graphs. (Assume that the pre-migration labor force in Country A is 100 and that it is 150 in country B.) In country A, total business income after immigration occurs is: A. […]
Economics Chapter 22d 3 87 The average fiscal burden on state and local government for each low-skilled immigrant household may be as high as
Chapter 22 – Immigration 87. Economists point out that the strong inflow of undocumented workers to some extent reflects the: A. Increasing return to capital in the United States B. Increasing scarcity of unskilled labor in other countries C. More […]
Economics Chapter 22d 3 Other things equal, the greater the degree of complementarity between potential immigrants and native-born workers
Chapter 22 – Immigration 81. Refer to the above figure. The optimal level of immigration in this country: A. is Q1. B. is Q2. C. is Q3. D. cannot be determined with the information given 22–33 AACSB: Reflective Thinking Bloom’s: […]
Economics Chapter 23 1 Think of a personal example similar to the one in the text where someone you know can perform many tasks better than others
Chapter 23 – International Trade 23-1 CHAPTER 23 International Trade A. Short-Answer, Essays, and Problems 1. What are the major imports and exports of the United States? 2. Cite three important reasons why nations trade. 3. “The international flow of […]
Economics Chapter 23 2 How can supply and demand analysis be used to explain the equilibrium price and quantity of exports and imports for aluminum when there is trade between two nations
Chapter 23 – International Trade 23–14 FRANCIA PRODUCTION POSSIBILITIES: A B C D E Soup 60 45 30 15 0 Nuts 0 15 30 45 60 GALACIA PRODUCTION POSSIBILITIES: A B C D E Soup 20 15 10 5 0 […]
Economics Chapter 23 Homework Quantitatively, how important is international trade to the United States relative to the importance of trade to other nations
transistor radios and clothing. Capital-intensive products are produced with a large amount of capital equipment and include manufactured items such as aircraft and automobiles. These distinctions are important because if a nation has an abundant supply of particular type of […]
Economics Chapter 24 1 What are the major components of the current account in the balance of payments? How is the current account balance determined?
Chapter 24 – The Balance of Payments, Exchange Rates, and Trade Deficits 24-1 CHAPTER 24 The Balance of Payments, Exchange Rates, and Trade Deficits A. Short-Answer, Essays, and Problems 1. Define international trade and international financial transactions. Give an example […]
Economics Chapter 24 Homework Generally speaking, how is the dollar price of euros determined? Cite a factor that might increase the dollar price of euros
(b) A supply of euros: The German automobile firm must purchase U.S. dollars, or supply euros, before building the plant. (c) A demand for euros: The U.S. college student must purchase euros before studying in France. (d) A supply of […]
Economics Chapter 3 1 What effect should each of the following have upon the demand for portable music players in a competitive market? Explain your reasoning in each case
Chapter 03 – Demand, Supply, and Market Equilibrium (+ Appendix) 3-1 CHAPTER 3 Demand, Supply, and Market Equilibrium (+ Appendix) A. Short-Answer, Essays, and Problems 1. Explain what is meant by a competitive market. 2. Define “demand.” 3. State the […]
Economics Chapter 3 2 Given the products below and the events that affect them, indicate what happens to demand or supply, and the equilibrium price and quantity in a competitive market
Chapter 03 – Demand, Supply, and Market Equilibrium (+ Appendix) (d) Demonstrate your answer to part (c) on your graph being sure to label the quantity you designated as the shortage or surplus. (a) The equilibrium price and quantity for […]
Economics Chapter 3 Homework As prices change because of a change in supply for a commodity, buyers will change the quantity they demand of that item. If the price drops
Chapter 03 – Demand, Supply, and Market Equilibrium 3-1 Chapter 03 Demand, Supply, and Market Equilibrium Questions 1. Explain the law of demand. Why does a demand curve slope downward? How is a market demand curve derived from individual demand […]
Economics Chapter 3 Homework How will each of the following changes in demand and/or supply affect equilibrium price and equilibrium quantity in a competitive market; that is, do price and quantity rise
Chapter 03 – Demand, Supply, and Market Equilibrium 3-12 Answers: (a) Equilibrium price = $4.00. There is neither a shortage nor a surplus at $4.00. Quantity Feedback: Consider the following data. (a) Pe = $4.00. Equilibrium occurs where there is […]
Economics Chapter 3 Homework Preset prices, rather than responding to demand conditions, attempt to predict the level of demand that will produce an equilibrium quantity
incorrect, there will be an imbalance between the quantity supplied and the quantity demanded. Preset prices often apply to one-time-only events, versus something like gasoline that is sold regularly and repeatedly. Sellers can learn from experience how to adjust prices […]
Economics Chapter 4 1 The president of a toy company asks you for advice about whether the company should cut the price of its best-selling doll this year based on the following information
Chapter 04 – Elasticity 4-1 CHAPTER 4 Elasticity A. Short-Answer, Essays, and Problems 1. What is the main difference between the law of demand and the price elasticity of demand? 2. The following data shows the relationship between price and […]
Economics Chapter 5 1 At the beginning of the school year, used couches are in high demand among state university freshman living on the sixth floor of beta dormitory.
Chapter 05 – Market Failures: Public Goods and Externalities 5-1 CHAPTER 5 Market Failures: Public Goods and Externalities A. Short-Answer, Essays, and Problems 1. Explain the two types of market failure and given an example of each one. 2. Define […]
Economics Chapter 5 2 What is the perceived marginal benefit and perceived marginal cost when 3 units of the public good are supplied? What does this indicate about the allocation of resources to this public good
Chapter 05 – Market Failures: Public Goods and Externalities 5-12 18. Data on two individuals’ preferences for a public good are reflected in the table below. PA and PB represent the prices individuals A and B, the only two people […]
Economics Chapter 5 Homework A public good is one where consumption in non-rival and non-excludable. Private goods are not profitable because of the free rider problem
Chapter 05 – Market Failures: Public Goods and Externalities 5-1 Chapter 05 Market Failures: Public Goods and Externalities QUESTIONS 1. Explain the two causes of market failures. Given their definitions, could a market be affected by both types of market […]
Economics Chapter 6 1 when the price of the candy bars falls to $3.00 a bag, the family buys seven bags of candy bars a month
Chapter 06 – Consumer Behavior (+ Appendix) 6-1 CHAPTER 6 Consumer Behavior (+ Appendix) A. Short-Answer, Essays, and Problems 1. Describe the law of diminishing marginal utility. On what assumptions is this law based? 2. What is the difference between […]
Economics Chapter 6 2 What are two related effects that combine to make a consumer able and willing to buy more of a specific product at a lower price than a higher price? Explain the logic of both effects
Chapter 06 – Consumer Behavior (+ Appendix) 6-16 16. A consumer has an income of $24 to spend each day. The only two goods the consumer is interested in purchasing are goods A and B. The marginal-utility schedules for these […]
Economics Chapter 6 Homework A budget line shows all the combinations of any two products that a consumer can purchase, given the prices of the products and the consumer’s income
(a) Downsloping because both products yield utility to the consumer. Going down the curve means more of one commodity is being consumed, thus increasing the consumer’s total utility. To keep total utility constant, some amount of the other commodity must […]
Economics Chapter 6 Homework Many apartment-complex owners are installing water meters for each apartment and billing the occupants according to the amount of water they use.
Chapter 06 – Consumer Behavior 6-1 Chapter 06 Consumer Behavior QUESTIONS 1. Complete the following table and answer the questions below: LO1 a. At which rate is total utility increasing: a constant rate, a decreasing rate, or an increasing rate? […]
Economics Chapter 6d 1 After eating four slices of pizza, you are offered a fifth slice. You turn down the slice. Your refusal indicates that the
Chapter 06 – Consumer Behavior (+ Appendix) 1. The satisfaction or pleasure one gets from consuming a good or service is: A. Price B. Utility C. Income D. Profits AACSB: Analytic Bloom’s: Level 1 Remember Difficulty: 1 Easy Learning Objective: […]
Economics Chapter 6d 2 A down sloping demand curve can be derived for a normal product by increasing its price in the consumer-behavior model and noting
Chapter 06 – Consumer Behavior (+ Appendix) 6-21 51. Mr. Samuelson’s current rates of purchase are such that the marginal utility of slacks is 18 and the marginal utility of ties for him is 5. If slacks and ties are […]
Economics Chapter 6d 3 A leftward shift of a consumer’s budget line to a position parallel with the original one could indicate that the
Chapter 06 – Consumer Behavior (+ Appendix) 108. A leftward shift of a consumer’s budget line to a position parallel with the original one could indicate that the: A. Price of one product has decreased in relation to the other […]
Economics Chapter 6d 4 In the diagram above, suppose the consumer is currently exhausting his or her income at a point where the marginal rate of substitution
Chapter 06 – Consumer Behavior (+ Appendix) 6-55 135. In the diagram above, suppose the consumer is currently exhausting his or her income at a point where the marginal rate of substitution of apples for oranges is greater than 5/4. […]
Economics Chapter 7 1 The table below shows the total production of a firm as the quantity of labor employed increases. The quantities of all other resources employed are constant
Chapter 07 – Businesses and the Costs of Production 7-1 CHAPTER 7 Businesses and the Costs of Production A. Short-Answer, Essays, and Problems 1. Why are costs important in economics? 2. Why don’t economists use the same cost data as […]
Economics Chapter 7 2 Explain the circumstances under which a firm might encounter a rather extended range of output over which long-run average costs are relatively constant
Chapter 07 – Businesses and the Costs of Production 7-16 (c) If labor is the only variable input, the total labor cost and total variable cost are equal. Find the average variable cost of the firm’s product. Enter these figures […]
Economics Chapter 7 Homework Does accounting profit or economic profit determine how entrepreneurs allocate resources between different business ventures
Normal profit equals the accounting profit you could have potentially earned in a different (or alternative) business venture. This gives us a true measure of the opportunity cost of the current business venture. Economists classify normal profits as costs, since […]
Economics Chapter 7d 1 Suppose a firm sells its product at a price lower than the opportunity cost of the inputs used to produce it
Chapter 07 – Businesses and the Costs of Production 1. Jon Brooks quit his job in a bicycle shop, where he earned $15,000 per year, to become a graduate student in economics. At the university he attended, he spent $2,000 […]
Economics Chapter 7d 1 What do wages paid to factory workers, interest paid on a bank loan, forgone interest, and the purchase of component parts have in common
Chapter 07 – Businesses and the Costs of Production 1. Economic cost can best be defined as: A. any contractual obligation that results in a flow of money expenditures from an enterprise to resource suppliers. B. any contractual obligation to […]
Economics Chapter 7d 2 Other things equal, if the fixed costs of a firm were to increase by $100,000 per year, which of the following would happen
Chapter 07 – Businesses and the Costs of Production 54. Refer to the above data. The average product (AP) when two units of labor are hired is: A. 8. B. 9. C. 10. D. 18. AACSB: Analytic Bloom’s: Level 3 […]
Economics Chapter 7d 2 With diminishing marginal returns, if the firm hires seven units of labor, which of the following numbers would most probably be the total product
Chapter 07 – Businesses and the Costs of Production 53. Refer to the above table. Diminishing marginal returns set in with the addition of the: A. First unit of labor B. Second unit of labor C. Third unit of labor […]
Economics Chapter 7d 3 A firm with fixed costs produces at the lowest point on its U-shaped average variable cost curve. If it raises output by 1 unit, then average
Chapter 07 – Businesses and the Costs of Production 102. Over the range of output where the slope of the short-run total cost curve becomes steeper: A. Fixed costs are increasing B. Marginal cost is increasing C. Marginal cost is […]
Economics Chapter 7d 3 Because the marginal product of a variable resource at first increases and then decreases as the output of the firm is increased
Chapter 07 – Businesses and the Costs of Production 105. Refer to the above short-run production and cost data. In Figure A curve (1) is: A. total product and curve (2) is average product. B. total product and curve (2) […]
Economics Chapter 7d 4 For which graph would a firm experience first economies and then diseconomies of scale over its range of output
Chapter 07 – Businesses and the Costs of Production Plant sizes get larger as you move from ATC-1 to ATC-4. 142. Refer to the above table. Which plant size would produce at least cost for the 3000-4000 level of output? […]
Economics Chapter 7d 4 The above diagram shows the short-run average total cost curves for five different plant sizes of a firm
Chapter 07 – Businesses and the Costs of Production 149. The above diagram shows the short-run average total cost curves for five different plant sizes of a firm. If in the long run the firm should produce output 0x, it […]
Economics Chapter 8 1 What is the difference between average, total, and marginal revenue? What is the shape of the total and marginal revenue curves for the individual competitive firm
Chapter 08 – Pure Competition in the Short Run 8-1 CHAPTER 8 Pure Competition in the Short Run A. Short-Answer, Essays, and Problems 1. How does pure competition differ from other basic market models? 2. What are some examples of […]
Economics Chapter 8 2 Complete the table below to show the total revenue and total profit of the firm at each level of output the firm might produce. Assume market prices of $50, $150, and $250.
Chapter 08 – Pure Competition in the Short Run 8-21 Chapter 08 – Pure Competition in the Short Run 8-22 Chapter 08 – Pure Competition in the Short Run 8-23 29. Assume that a purely competitive firm has the schedule […]
Economics Chapter 8 3 If a firm finds that the revenue it earns from the output it produces and sells does not even cover its fixed costs, then the firm will shut down
Chapter 08 – Pure Competition in the Short Run 8-32 Chapter 08 – Pure Competition in the Short Run 8-33 Chapter 08 – Pure Competition in the Short Run 8-34 Chapter 08 – Pure Competition in the Short Run 8-35 […]
Economics Chapter 8 Homework Briefly state the basic characteristics of pure competition, pure monopoly, monopolistic competition, and oligopoly. Under which of these market classifications
Chapter 08 – Pure Competition in the Short Run 8-1 Chapter 08 Pure Competition in the Short Run QUESTIONS 1. Briefly state the basic characteristics of pure competition, pure monopoly, monopolistic competition, and oligopoly. Under which of these market classifications […]
Economics Chapter 8d 1 The production of agricultural products such as wheat or corn would best be described by which market model
Chapter 08 – Pure Competition in the Short Run 1. Which market model assumes the least number of firms in an industry? A. Monopolistic competition B. Pure competition C. Pure monopoly D. Oligopoly AACSB: Analytic Bloom’s: Level 1 Remember Difficulty: […]
Economics Chapter 8d 1 Which of the following is not a valid generalization concerning the relationship between price and costs for a purely competitive seller in the short run
Chapter 08 – Pure Competition in the Short Run 1. Economists would describe the U.S. automobile industry as: A. purely competitive. B. an oligopoly. C. monopolistically competitive. D. a pure monopoly. AACSB: Reflective Thinking Bloom’s: Level 3 Apply Difficulty: 2 […]
Economics Chapter 8d 2 A purely competitive firm’s output is currently such that its marginal cost is $4 and marginal revenue is $5
Chapter 08 – Pure Competition in the Short Run 52. Farmer Jones is producing wheat, and must accept the market price of $6.00 per bushel. At this time, her average total costs and her marginal costs both equal $8.00 per […]
Economics Chapter 8d 2 If a firm is confronted with economic losses in the short run, it will decide whether or not to produce by comparing
Chapter 08 – Pure Competition in the Short Run 55. Refer to the above data. If the firm’s minimum average variable cost is $10, the firm’s profit-maximizing level of output would be: A. 2. B. 3. C. 4. D. 5. […]
Economics Chapter 8d 3 If a purely competitive firm is producing at an output where marginal revenue exceeds marginal cost, the firm will increase its profit by
Chapter 08 – Pure Competition in the Short Run 95. Given the diagram above, which level of output should the entrepreneur choose? A. Either X1 or X3 since the profit level will be the same B. X3 since any increase […]
Economics Chapter 8d 3 If each of the 100 firms in the industry is maximizing its profit and earning only a normal profit, each must have an average total cost of
Chapter 08 – Pure Competition in the Short Run Answer the question on the basis of the following cost data for a purely competitive seller: 100. Refer to the above data. If product price is $60, the firm will: A. […]
Economics Chapter 9 1 What is the basic conclusion that is to be drawn from the chapter? On what two facts is this conclusion based? What are the implications
Chapter 09 – Pure Competition in the Long Run 9-1 CHAPTER 9 Pure Competition in the Long Run A. Short-Answer, Essays, and Problems 1. What is the major difference between the long run and the short run in pure competition? […]
Economics Chapter 9 Homework Relate opportunity costs to why profits encourage entry into purely competitive industries and how losses encourage exit from purely competitive industries
firms earning a normal profit, there will be no incentive to either enter or exit the industry. This situation constitutes long-run equilibrium in a purely competitive industry. Remember that normal profit is our measure of opportunity cost. Firms that enter […]
Economics Chapter 9d 1 Now assume that a decrease in consumer demand occurs. After all resulting adjustments have been completed, the new equilibrium price
Chapter 09 – Pure Competition in the Long Run 1. Which of the following distinguishes the short run from the long run in pure competition? A. Firms can enter and exit the market in the long run, but not in […]
Economics Chapter 9d 1 Which of the following is not an assumption that we make in analyzing pure competition in the long run
Chapter 09 – Pure Competition in the Long Run 1. All of the following are long-run changes, except: A. A purely competitive industry expands as more firms enter it B. A purely competitive firm moves into larger production facilities to […]
Economics Chapter 9d 2 A firm is producing an output such that the benefit from one more unit is more than the cost of producing that additional unit
Chapter 09 – Pure Competition in the Long Run 44. Refer to the above diagram. Line (2) reflects a situation where resource prices A. decline as industry output expands. B. increase as industry output expands. C. rise and then decline […]
Economics Chapter 9d 2 In the context of analyzing economic efficiency, we can interpret the market demand curve to be showing
Chapter 09 – Pure Competition in the Long Run 51. In the context of analyzing economic efficiency, we can interpret the market demand curve to be showing: A. The average cost of producing the product at each output level B. […]