Microeconomics: Principles and Policy 13th Edition

ISBN 13
978-1305280618
ISBN 10
130528061x
Authors
Alan S. Blinder, William J. Baumol
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275 documents found.
351613
Exam Prep
BUS 110
Table 11-2 In Table 11-2, the price at the profit-maximizing output is how much? a. $15 b. $7 c. $10 d. $11 Answer: d Answer: d Answer: d The income of Lebron James, for example, is determined by a. the position of the demand curve. b. the number of athletes in the NBA. c. his supply curve for labor services. d. marginal rent. Answer:
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BUS 120 Midterm 2
If marginal utility is a positive number: a. the more you purchase, the more total utility you get b. the more you purchase, the less total utility you get c. utility is not affected by more purchases d. none of these is correct Answer: a Answer: a Answer: a When other nations Orient "dump" products on the U.S.
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BUS 190 Midterm 2
The slope of a demand curve is almost always a. positive, because when people buy more of a good the cost of producing it will rise. b. positive, because the more money a person has, the more of a particular good will be bought. c. negative, because when people buy more of a
Microeconomics: Principles and Policy 13th Edition
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BUS 197 Quiz 2
Charging firms that emit pollutants is one way to deal with pollution. a. True b. False Answer: True Answer: True Answer: True The principle of comparative advantage helps explain trade between nations. a. True b. False Answer: True Answer: True Answer: True A common misconception about supply is that a. supply depends on many other variables. b. price is a major determinant of quantity. c.
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BUS 198 Quiz 1
Spending on R&D among a group of firms is equally likely to increase or to decrease. a. True b. False Answer: False Answer: False Answer: False A Detroit business advertises, "The more we sell, the lower the price, and the lower the price, the more we sell." This firm is experiencing a. decreasing returns to scale. b. constant
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BUS 233
The lowest-income fifth of the population ordinarily earns about 20 percent of the income in the United States. a. True b. False Answer: False Answer: False Answer: False After a $5 million ad campaign, Coca-Cola measured its effectiveness by calculating the cross elasticity of demand between Coke and Pepsi. A successful campaign would be indicated if
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BUS 248 If A Tax Is Proportional The
If a tax is proportional, the average tax rate a. remains the same as income rises. b. rises as income rises. c. falls as income rises. d. falls as income falls. Answer: a Answer: a Answer: a A market transaction causes an externality if someone a. directly involved in the transaction receives uncompensated benefits or costs from it. b. not
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BUS 342
The demand for capital is a. directly related to the interest rate. b. inversely related to the interest rate. c. unrelated to the interest rate. d. first falls, and then rises, in relation to the interest rate. Answer: b Answer: b Answer: b All large firms have monopoly power. a. True b. False Answer: False Answer: False Answer: False Tax loopholes are equally available
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BUS 367 Test 1
Statistical studies in the United States have reached the conclusion that for low-income workers a. the substitution effect is greater than the income effect. b. the income effect is greater than the substitution effect. c. the income effect is about equal to the substitution effect. d. the substitution effect is of the "wrong" sign. Answer:
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BUS 442 Quiz 3
A profit-maximizing monopolist will stop production while MR is still greater than MC. a. True b. False Answer: False Answer: False Answer: False In a free market, a given unit of an input will be used by the firm that a. earns the largest addition to total profit from the use of that unit of input. b. has
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BUS 456
In discussing trade, it is ____ that matters rather than ____. a. absolute advantage: elastic advantage b. comparative advantage; absolute advantage c. entire advantage; comparative advantage d. elastic advantage; entire advantage e. declarative advantage; absolute advantage Answer: b Answer: b Answer: b If the production possibilities curve is a straight line, a. opportunity costs rise as output of either commodity
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BUS 478
Which of the following could be called a virtue of raising prices of depletable resources? a. It would discourage consumption and waste. b. It would stimulate more efficient use of resources. c. It would encourage innovation and discovery of alternatives. d. All of the above are true. Answer: d Answer: d Answer: d Total fixed cost falls as
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BUS 479
A graph with a positive slope indicates that the variables depicted on the axes move in the same directions. a. True b. False Answer: True Answer: True Answer: True A tax is more likely to promote economic equality if it is a. regressive. b. proportional. c. indirect. d. progressive. Answer: d Answer: d Answer: d Since women earn less on average than men, we
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BUS 547 Quiz 3
Profits a. are what remains from the selling price after factors have been paid. b. accrue to entrepreneurs. c. are lower than most people think. d. All of the above are correct. Answer: d Answer: d Answer: d A lottery promises a $250,000 prize. But the prize money is paid out in $50,000 annual installments with the first
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BUS 637
Displayed below is the payoff matrix of firm A for four different strategies, A1, A2, A3, and A4, and the potential retaliatory responses of firm B (B1, B2, B3, B4). Table 12-1 If firm A uses the maximin criterion, which strategy will it choose? a. A1 b. A2 c. A3 d. A4 Answer: c Answer: c Answer: c Critics of
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BUS 651 Quiz 2
The slope of the budget line is determined only by the prices of the commodities purchased. a. True b. False Answer: True Answer: True Answer: True Sales maximization may be a goal of a firm if a. firms are managed by irrational persons. b. the firm has no way to measure profitability. c. the firm is privately held, and
Microeconomics: Principles and Policy 13th Edition
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BUS 669
Economists probably agree more often than they disagree. a. True b. False Answer: True Answer: True Answer: True A monopolist is best described as a price a. taker. b. searcher. c. maker. d. follower. Answer: c Answer: c Answer: c Colombia produces coffee with less labor and land than any other country; it therefore surely has a. an absolute advantage in coffee production. b. a comparative
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BUS 674 Homework
The demand for French Roast coffee is likely to be a. elastic. b. inelastic. c. unit elastic. d. perfectly inelastic. Answer: a Answer: a Answer: a Government action can usually perfectly correct the market's shortcomings. a. True b. False Answer: False Answer: False Answer: False "Rent seeking" describes the search and battle for opportunities to collect economic rents. a. True b. False Answer: Answer: Answer: True True True "Rate averaging"
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BUS 744
If the U.S. government decides to increase military spending, one opportunity cost will be lower spending on education. a. True b. False Answer: True Answer: True Answer: True If the equilibrium rate of interest would be 10 percent, but the usury law sets 8 percent, a. the quantity of funds supplied would be greater than the quantity
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BUS 756 Quiz 3
Many experts on the nursing shortage insist that, in addition to higher money wages, other ways will have to be found to make the nursing profession more attractive, including, for example, more respect from physicians and administrators, more flexible schedules, and more secure parking lots. These facts illustrate the concept
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BUS 765
Economists can evaluate the desirability of the distribution of income. a. True b. False Answer: False Answer: False Answer: False A concentration ratio provides a better assessment of market power than the Herfindahl-Hirschman index does. a. True b. False Answer: False Answer: False Answer: False In labor markets, risk taking accounts for some income differences. a. True b. False Answer: True Answer: True Answer: True A surplus occurs
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BUS 765 Midterm 1
The corporate income tax is the single largest source of revenue for the federal government. a. True b. False Answer: False Answer: False Answer: False A monopolistic competitor can expect to earn an economic profit in the long run. a. True b. False Answer: False Answer: False Answer: False Recently, Dow Chemical 8,5 percent bonds maturing in 2006 closed at $92 with
Microeconomics: Principles and Policy 13th Edition
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BUS 877
Examples of indirect taxes are a. income taxes levied by some states. b. sales taxes and property taxes. c. poll taxes. d. corporate profits taxes. Answer: b Answer: b Answer: b What is the present value of an infinite stream of annual payments of $10,000 per year if the first payment is received one year from today? Assume
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BUS 882 Quiz 3
In 2013 ____ of national factor income consisted of employee compensation. a. 90 percent b. 50 percent c. 60 percent d. 70 percent Answer: c Answer: c Answer: c What is a key criterion involved in deciding a natural monopoly? a. Size of the firm relative to its competitors. b. Size of the firm relative to the total market demand
Microeconomics: Principles and Policy 13th Edition
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BUS 885
Points along a budget line represent the maximum combinations of two commodities that a consumer can afford. a. True b. False Answer: True Answer: True Answer: True Employers can shift payroll taxes by substituting capital for labor. a. True b. False Answer: True Answer: True Answer: True Figure 7-14 Of the long-run AC curves in Figure 7-14, which displays increasing returns to scale
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Chapter 1 An Economic Model Is A Simplified, Small-scale
Part I/Lecture Notes PART I LECTURE NOTES 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 2016 Cengage Learning.
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Chapter 1 Relate The Process Of Abstraction To The Way You Take Notes In A Lecture
Chapter 1/What Is Economics? PART II SOLUTIONS 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 2016 Cengage Learning.
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Chapter 10 The Firm Will Lose Money, But The Price Is More Than
Chapter 10/The Firm and the Industry under Perfect Competition CHAPTER 10 THE FIRM AND THE INDUSTRY UNDER PERFECT COMPETITION TEST YOURSELF 1.Under what circumstances might you expect the demand curve of the firm to be a. Vertical? b. Horizontal? c. Negatively sloping? d. Positively sloping? (a) A demand curve might be vertical for a good that is absolutely necessary to
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Chapter 10 In That Case, It Should Plan To Shut Down
Chapter 10/The Firm and the Industry under Perfect Competition CHAPTER 10 THE FIRM AND THE INDUSTRY UNDER PERFECT COMPETITION Chapter 10 develops the model of the perfectly competitive firm and the perfectly competitive industry. It stresses the zero profit condition for long-run equilibrium. CHAPTER OUTLINE PERFECT COMPETITION DEFINED Perfect competition exists when: 1. There are numerous small firms
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Chapter 11 No, Sometimes Justice Appears To Demand Different Prices In
Chapter 11/Monopoly CHAPTER 11 MONOPOLY Chapter 11 presents the basic structure of a monopoly. Like perfect competition, monopoly is a polar case, of which real-world examples are difficult to find. It needs to be studied because it is a stepping stone toward the understanding of market types that are more common and becauseexploitation of monopoly
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Chapter 11 This Is An Unnecessary Payment Or Penalty That Consumers
Chapter 11/Monopoly CHAPTER 11 MONOPOLY TEST YOURSELF 1. Which of the following industries are pure monopolies? a. The only supplier of heating fuel in an isolated town b. The only supplier of IBM notebook computers in town c. The only supplier of digital cameras Explain your answers. (a) Pure monopolist. There is no good substitute for heat (bulky sweaters
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Chapter 12 Consider Some Of The Products That Are Widely Advertised
Chapter 12/Between Competition and Monopoly CHAPTER 12 BETWEEN COMPETITION AND MONOPOLY TEST YOURSELF 1. Using game theory, set up a payoff matrix similar to one that Volkswagens management might employ in analyzing the problem presented in Discussion Question 5. The payoff matrix for Ford might be Table 1: TABLE 1 Volkswagon FordCut PriceNew ProductIt is, of course,
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Chapter 12 The Demand Curve Is Kinked, And The Marginal Revenue
Chapter 12/Between Competition and Monopoly CHAPTER 12 BETWEEN COMPETITION AND MONOPOLY This chapter deals with monopolistic competition and oligopoly, the market forms that lie between the two polar cases of perfect competition and monopoly. It is here that the great majority of firms are found. Special emphasis is given to game theoretic techniques and analysis. CHAPTER
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Chapter 12 What Is The Average Cost Per Swimsuit Sold?
PROBLEMS 1. In the beach city of Santa Barbara, California, there are seven bathing suit stores, each with the same schedule of costs and each facing an identical demand curve. Swim N Style is a typical store: Suits sold (per hour) Price Total Cost 1 $68 $70 2 66 80 3 64 85 4 62 90 5 60 100 6 58
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Chapter 13 In Contrast, If The Firm With The Lower Price Is Incurring A
Chapter 13/Limiting Market Power: Regulation and Antitrust CHAPTER 13 LIMITING MARKET POWER: REGULATION AND ANTITRUST DISCUSSION QUESTIONS 1. Why is an electric company in a city often considered to be a natural monopoly? What would happen if two competing electric companies were established? How about telephone companies? How can changes in technology affect your answer? Electric companies and
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Chapter 13 If There Is Evidence That The Low Price Would Have Been Profitable
Chapter 13/Limiting Market Power: Regulation and Antitrust CHAPTER 13 LIMITING MARKET POWER: REGULATION AND ANTITRUST Part 1 of Chapter 13 deals with the regulation of firm and the other principal tool the government has to confront the problem of excessive market power, antitrust policy. Part 2 of Chapter 13 begins the microeconomics section on government
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Chapter 14 An Arrangement That Produces A Large Quantity Of
Chapter 14/The Case for Free Markets: The Price System CHAPTER 14 THE CASE FOR FREE MARKETS: THE PRICE SYSTEM TEST YOURSELF 1. What possible social advantages of price increases arise in the following cases? a. Charging higher prices for electrical power on very hot days when many people use air conditioners b. Raising water prices in
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Chapter 14 If A Trade-off Must Be Made Between Equity And
Chapter 14/The Case for Free Markets: The Price System CHAPTER 14 THE CASE FOR FREE MARKETS: THE PRICE SYSTEM Chapter 14 shows how the market system can solve the enormously complex coordination problems of an economy, and do so efficiently. The uncontrolled market system need not lead to economic efficiency under all circumstances, but it
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Chapter 15 Perfect Competition Eliminates Economic Profits
Chapter 15/The Shortcomings of Free Markets CHAPTER 15 THE SHORTCOMINGS OF FREE MARKETS TEST YOURSELF 1. What is the opportunity cost to society of a 100-mile truck trip? Why may the price of the gasoline used by the truck not adequately represent that opportunity cost? The opportunity cost to society of a trip by a
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Chapter 15 Therefore, High Interest Rates Tend To Increase The Use Of Resources
Chapter 15/The Shortcomings of Free Markets CHAPTER 15 THE SHORTCOMINGS OF FREE MARKETS Chapter 15 deals in a comprehensive way with a series of market failures. It is the complement to Chapter 14, which extolled the virtues of free markets; this chapter concentrates solely on their faults. CHAPTER OUTLINE WHAT DOES THE MARKET DO POORLY? 1. Market economies
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Chapter 16 An Emission Is So Dangerous That It Must Be Prohibited Altogether
Chapter 16/Externalities, the Environment, and Natural Resources CHAPTER 16 EXTERNALITIES, THE ENVIRONMENT, AND NATURAL RESOURCES The principal theme of Chapter 16 is that some simple economic principles can help us to understand the relationship between economic activity on the one hand and the preservation ofthe environment and natural resources on the other. understand the relationship
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Chapter 16 At This Level, Marginal Benefit To The Company Is Equal
Chapter 16/Externalities, the Environment, and Natural Resources PROBLEMS 1. Muddy Manufacturing finds it convenient to discharge some of its waste into nearby Crystal River, upstream from the town of Midville. Authorities in Midville estimate that each pound of waste costs the town $5.50 in terms of purification at the water plant, damage to fisheries, pollution
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Chapter 16 In An Indian City, The Most Pressing Pollution Problems
Chapter 16/Externalities, the Environment, and Natural Resources CHAPTER 16 EXTERNALITIES, THE ENVIRONMENT, AND NATURAL RESOURCES TEST YOURSELF 1. Production of Commodity X creates 10 pounds of emissions for every unit of X produced. The demand and supply curves for X are described by the following table: Price Quantity Demanded Quantity Supplied $10 80 100 9 85 95 8 90
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Chapter 17 In The Long Run, Some Combination Of Lower Social Security
Chapter 17/Taxation and Resource Allocation CHAPTER 17 TAXATION AND RESOURCE ALLOCATION Chapter 17 begins by describing the U.S. tax structure, and then analyzes it in terms of equity, efficiency, excess burden, and incidence. It deals with several current controversies in taxation, including the debate over repealing the Bush tax cuts. CHAPTER OUTLINE THE LEVEL AND TYPES OF
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Chapter 17 The Air Over Major American Cities Is Polluted Because
PROBLEMS 1. The gasoline excise tax is an example of a benefit tax: people who use the highways pay for their upkeep through the tax. In what ways does the gasoline tax meet or fail to meet the criteria of horizontal and vertical equity? Can you think of a way of improving the horizontal
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Chapter 17 The Gasoline Tax Is Consistent With The Benefit
Chapter 17/Taxation and Resource Allocation CHAPTER 17 TAXATION AND RESOURCE ALLOCATION TEST YOURSELF 1. Using the following hypothetical income-tax table, compute the marginal and average tax rates. Is the tax progressive, proportional, or regressive? Income Income Tax $20,000 $2,000 30,000 2,700 40,000 3,200 50,000 3,500 The tax is regressive, since the average tax rate falls as income rises: Tax Rate Income Tax
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Chapter 18 A Sum Of Money Received At A Future Date Is Worth Less
Chapter 18/Pricing the Factors of Production CHAPTER 18 PRICING THE FACTORS OF PRODUCTION The discussion of income distribution begins with this chapter. The chapter first outlines the general theory of factor pricing, that is to say, supply and demand, with demand determined by marginal productivity. It then turns to the particular considerations relevant to three
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Chapter 18 With Demand Unchanged, The Price Of The Land Will
Chapter 18/Pricing the Factors of Production CHAPTER 18 PRICING THE FACTORS OF PRODUCTION TEST YOURSELF 1. Which of the following inputs do you think include relatively large economic rents in their earnings? a. Nuts and bolts b. Petroleum c. A champion racehorse Use supply-demand analysis to explain your answer. (a) Nuts and bolts: no economic rent. Many manufacturers easily
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Chapter 19 Students May Get Non-financial Advantages From Being
Chapter 19/Labor and Entrepreneurship: The Human Inputs CHAPTER 19 LABOR AND ENTREPRENEURSHIP: THE HUMAN INPUTS TEST YOURSELF 1. The following table shows the number of pizzas that can be produced by a large pizza parlor employing various numbers of pizza chefs. Number of Chefs Number of Pizzas per Day 1 40 2 64 3 82 4 92 5 100 6 92 a. Find
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Chapter 19 Thus, It Is The Strong Income Effect Of Rising
Chapter 19/Labor and Entrepreneurship: The Human Inputs CHAPTER 19 LABOR AND ENTREPRENEURSHIP: THE HUMAN INPUTS Chapter 19 is an introduction to the principal issues in modern labor economics. It is divided into two main sections: the markets for labor and the entrepreneur. CHAPTER OUTLINE PART I: THE MARKETS FOR LABOR PUZZLE RESOLVED: WHY ARE ENTREPRENEURIAL EARNINGS SURPRISINGLY
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Chapter 2 The Government Levies Taxes To Finance Its Spending
Chapter 2/The Economy: Myth and Reality CHAPTER 2 THE ECONOMY: MYTH AND REALITY DISCUSSION QUESTIONS 1. Which is the biggest national economy on earth? Why has it remained bigger than other countries with much larger labor forces or those with higher per capita incomes? The United States is the country with the largest economy in
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Chapter 2 The Government Is A Business Regulator—it Imposes Restrictions
Chapter 2/The Economy: Myth and Reality CHAPTER 2 THE ECONOMY: MYTH AND REALITY Chapter 2 introduces students to some of the key characteristics of the U.S. economy. This chapter also defines the meaning of input and output, and how businesses, people, and the government interact in the economy. The chapter will help students refine some
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Chapter 20 May Not Be Copied, Scanned, Or Duplicated, In Whole
Chapter 20/Poverty, Inequality, and Discrimination CHAPTER 20 POVERTY, INEQUALITY, AND DISCRIMINATION Chapter 20 begins with a survey of the basic facts of poverty and income distribution in the United States. It then turns to explanations of differences in incomes and policy measures to change the distribution of income. Throughout, the chapter emphasizes the trade-off betweenequality
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Chapter 20 What Would Be Your Specific Definition Of Poverty?
Chapter 20/Poverty, Inequality, and Discrimination CHAPTER 20 POVERTY, INEQUALITY, AND DISCRIMINATION TEST QUESTIONS 1. Define the poverty rate. Does it rise or fall during recessions? The poverty rate is the percentage of families whose annual income falls below thepoverty line. The rate increases during recessions. The poverty rate is the percentage of families whose annual income
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Chapter 21 Although The United States May Temporarily Experience
Chapter 21/Is U.S. Economic Leadership Threatened? CHAPTER 21 IS U.S. ECONOMIC LEADERSHIP THREATENED? TEST YOURSELF 1. In what ways is the United States still an economic leader in the world? In what ways has it fallen behind other nations? The United States still leads the world in productivity but is slipping when compared to the growth
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Chapter 21 The Common Influence Underlying The Rising Costs
Chapter 21/Is U.S. Economic Leadership Threatened? CHAPTER 21 IS U.S. ECONOMIC LEADERSHIP THREATENED? Chapter 21 recognizes that is some respects, the United States has fallen significantly behind other nations. It analyzes key economic factors, like innovation, education, health care, and the budget deficit, identifying important areas in which the United States is still strong and
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Chapter 22 If Two Countries Voluntarily Trade Two Goods With One Another
Chapter 22/International Trade and Comparative Advantage CHAPTER 22 INTERNATIONAL TRADE AND COMPARATIVE ADVANTAGE This chapter introduces students to the principles of international trade. It outlines the Ricardian doctrine of comparative advantage, showing that trade is to the advantage of both partners, even if one is more efficient in the production of all goods. It also
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Chapter 22 Stated Another Way, In The United States 1 Bushel
Chapter 22/International Trade and Comparative Advantage CHAPTER 22 INTERNATIONAL TRADE AND COMPARATIVE ADVANTAGE TEST YOURSELF 1. The following table describes the number of yards of cloth and barrels of wine that can be produced with a weeks worth of labor in England and Portugal. Assume that no other inputs are needed. In England In Portugal Cloth
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Chapter 3 The Concept Of Efficiency Does Not Tell Us Which Point
Chapter 3/The Fundamental Economic Problem: Scarcity and Choice CHAPTER 3 THE FUNDAMENTAL ECONOMIC PROBLEM: SCARCITY AND CHOICE This chapter introduces some of the most central concepts in economics: scarcity, opportunity cost, efficiency, division of labor, and exchange. It deals with the ways in which markets coordinate the resolution of the three most basic economic problems:
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Chapter 3 The Poorest Person On Earth Has Access To So
Chapter 3/The Fundamental Economic Problem: Scarcity and Choice CHAPTER 3 THE FUNDAMENTAL ECONOMIC PROBLEM: SCARCITY AND CHOICE TEST YOURSELF 1. A person rents a house for $24,000 per year. The house can be purchased for $200,000, and the tenant has this much money in a bank account that pays 4 percent interest per year. Is buying
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Chapter 4 Explain Again Why Quantity Falls By Less Than 8
Chapter 4/Supply and Demand: An Initial Look CHAPTER 4 SUPPLY AND DEMAND: AN INITIAL LOOK TEST YOURSELF 1. What shapes would you expect for the following demand curves? a. A medicine that means life or death for a patient b. French fries in a food court with kiosks offering many types of food (a) The demand curve
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Chapter 4 If The Price Is Above This Equilibrium, A Surplus Will
Chapter 4/Supply and Demand: An Initial Look CHAPTER 4 SUPPLY AND DEMAND: AN INITIAL LOOK Chapter 4 introduces students to the basic analytical structure of markets, through the use of the supply-demand diagram. It then indicates what sorts of problems arise when the government interferes with freely functioning markets. CHAPTER OUTLINE THE INVISIBLE HAND When markets are interfered
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Chapter 5 The Net Gain From A Purchase Because Purchases Are Voluntary
Chapter 5/Consumer Choice: Individual and Market Demand CHAPTER 5 CONSUMER CHOICE: INDIVIDUAL AND MARKET DEMAND Chapter 5 goes behind the market demand curve of Chapter 4 to show how it is based on the preferences of individual consumers. The text develops the theory of marginal utility for a single good; the appendix considers indifference curves
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Chapter 5 Which Would You Give Up If The Price Of Water Were To Rise
Chapter 5/Consumer Choice: Individual and Market Demand CHAPTER 5 CONSUMER CHOICE: INDIVIDUAL AND MARKET DEMAND TEST YOURSELF 1. Which gives you greater total utility: 14 gallons of water per day or 22 gallons per day? Why? The total utility from 22 gallons is greater, since it is equal to the total utility (orusefulness) of the
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Chapter 6 Prices And Quantities Observed In The Real World, At Different Times
Chapter 6/Demand and Elasticity CHAPTER 6 DEMAND AND ELASTICITY The principal subject of the chapter is the price elasticity of demand, introduced first by considering a problem: Will taxing cigarettes make teenagers stop smoking? By the end of the chapter this problem turns out to be understandable. Elasticity is defined and calculated, and the determinants of
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Chapter 6 The Cross Elasticity Is Positive Because They
Chapter 6/Demand and Elasticity CHAPTER 6 DEMAND AND ELASTICITY TEST YOURSELF 1. What variables other than price and advertising are likely to affect the quantity demanded of a product? The answer depends upon the product, but general variables include tastes, prestige value of the product, income levels, population, prices of substitutes and complements, and newuses to which
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Chapter 7 Historical Costs Versus Analytical Cost Curves
CHAPTER 7 PRODUCTION, INPUTS, AND COST: BUILDING BLOCKS FOR SUPPLY ANALYSIS Chapter 7 introduces students to the various concepts of cost used in analyzing the behavior of firms. The chapter is divided into two principal sections: first, the case of one variable input, and second, the case of many variable inputs, including returns to
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Chapter 7 If A Firm’s Commitments In 2011 Include Machinery
Chapter 7/Production, Inputs, and Costs: Building Blocks for Supply Analysis CHAPTER 7 PRODUCTION, INPUTS, AND COSTS: BUILDING BLOCKS FOR SUPPLY ANALYSIS TEST YOURSELF 1. A firms total fixed cost is $360,000. Construct a table of its total and average fixed costs for output levels varying from zero to six units. Draw the corresponding TFC and AFC
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Chapter 7 There Will Be Few Firms In The Industry If There Are Increasing Economies Of Scale
PROBLEMS 1. Pohl Manufacturing Company finds that as it increases the number of workers it hires, the number of hockey pucks produced daily changes as follows: Workers Hockey Pucks 1 10 2 30 3 60 4 100 5 135 6 165 7 190 8 210 9 225 10 235 11 240 12 240 13 235 a) The price of hockey pucks can be $2, $3, or $4
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Chapter 8 A Marginal Profit Greater Than Zero Implies That
Chapter 8/Output, Price, and Prot: The Importance of Marginal Analysis CHAPTER 8 OUTPUT, PRICE, AND PROFIT: THE IMPORTANCE OF MARGINAL ANALYSIS TEST YOURSELF 1. Suppose that the firms demand curve indicates that at a price of $10 per unit, customers will demand 2 million units of its product. Suppose that management decides to pick both price
Microeconomics: Principles and Policy 13th Edition
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Chapter 8 Thus, Production Of These Calculators Improved Profitability
Chapter 8/Output, Price, and Prot: The Importance of Marginal Analysis CHAPTER 8 OUTPUT, PRICE, AND PROFIT: THE IMPORTANCE OF MARGINAL ANALYSIS This chapter analyzes the output and price decisions of firms, using the concepts of marginal cost and marginal revenue as well as marginal profit. It shows how general marginal analysis isthatit is applicable
Microeconomics: Principles and Policy 13th Edition
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Chapter 9 Firms Often Find This Preferable Because Of Lower Risk And
Chapter 9/Securities, Business Finance, and the Economy: The Tail that Wags the Dog? CHAPTER 9 SECURITIES, BUSINESS FINANCE, AND THE ECONOMY: THE TAIL THAT WAGS THE DOG? Until now, the firm has been treated as a profit-maximizing black box. Chapter 9 peers inside the box, to look at the ownership and financial structure of firms
Microeconomics: Principles and Policy 13th Edition
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Chapter 9 If You Hold Shares In A Corporation And Management Decides
Chapter 9/Securities, Business Finance, and the Economy: The Tail that Wags the Dog? CHAPTER 9 SECURITIES, BUSINESS FINANCE, AND THE ECONOMY: THE TAIL THAT WAGS THE DOG? TEST YOURSELF 1. Suppose that interest rates are 6 percent in the economy and a safe bond promises to pay $3 per year in interest forever. What do
Microeconomics: Principles and Policy 13th Edition
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ECB 104 Midterm 1
In the long run, a. both monopolists and perfectly competitive firms produce at minimum long-run average total cost. b. a monopolist will exit the industry if he is earning zero economic profit. c. a monopolist will always charge a higher price than he charges in the short run. d. consumer surplus is smaller if
Microeconomics: Principles and Policy 13th Edition
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ECB 115 Quiz 3
In early 1996, Congress proposed an agriculture bill that would gradually reduce price supports for many agricultural products. If the bill were to be approved, what would most likely happen to the number of families employed in agriculture? a. It would decrease, because agricultural prices would fall. b. It would decrease, because
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ECB 118 Midterm
Figure 21-1 In Figure 21-1, a reform in the distribution system that achieves the same distribution with less damage to work incentives is represented by a move from which points? a. A to B b. C to G c. C to F d. B to C Answer: c Answer: c Answer: c A portfolio of stocks, bonds, and other
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ECB 123
If the price falls below minimum SRAVC, the quantity supplied by the firm will be a. the quantity at minimum MC. b. zero. c. the quantity at the point where MC intersects AC. d. the quantity at minimum AC. Answer: b Answer: b Answer: b The relationship between professional basketball players and the owners' association is an example
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ECB 127 Midterm 2
When OPEC raises the price of petroleum, American expenditures on oil imports increase, suggesting that a. the United States' elasticity of demand for imported oil is greater than one. b. the United States' elasticity of demand for imported oil is less than one. c. imported oil and domestically produced oil are complementary goods. d.
Microeconomics: Principles and Policy 13th Edition
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ECB 141 Midterm 1
Figure 7-7 In Figure 7-7 at 100 units, AVC equals a. 8. b. 800. c. 100. d. 1,000. Answer: a Answer: a Answer: a The price of bonds is tied to the interest rate; when one goes up, the other must fall. a. True b. False Answer: True Answer: True Answer: True The marginal cost of an airline ticket is the total cost of flying
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ECB 149 Quiz 3
Capitalism is an economic system in which there is public ownership of the means of production and resource allocation is determined through markets. a. True b. False Answer: False Answer: False Answer: False Unrestrained monopolies are criticized because they restrict output and reduce innovation. a. True b. False Answer: True Answer: True Answer: True There are generally, in most areas, a large
Microeconomics: Principles and Policy 13th Edition
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ECB 167
The owner of a garage makes large contributions to a politician who is seeking the office of state governor. If his candidate wins, he will get the contract, which now resides with a competitor, to repair State Police vehicles. This is an example of a. moral hazard. b. externality. c. rent seeking. d. investment. Answer:
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ECB 328 Midterm 1
The price system rations goods among consumers in such a way that a. all are treated equally. b. all needs are satisfied. c. the rich are favored. d. important needs are satisfied first. Answer: c Answer: c Answer: c A production possibilities curve has a downward slope because a. increased production of one good always reduces the additional profit
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ECB 341 Quiz 3
Why does equilibrium in the market for a traded good not occur where that country's quantity demanded equals quantity supplied? a. Because equilibrium occurs where demand equals supply. b. Because markets are never in equilibrium. c. Because some of the good is imported or exported. d. Because there are several demand curves, and the
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ECB 358
Figure 20-4 In Figure 20-4, which panel depicts a union suffering unemployment during a recession rather than allowing the wage to fall? a. 1 b. 2 c. 3 d. 4 Answer: b Answer: b Answer: b In the typical AC curve, the downward-sloping part is attributable to a. spreading fixed costs over larger outputs and increasing returns to the variable
Microeconomics: Principles and Policy 13th Edition
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ECB 366 Quiz
Marginal physical product measures the increase in total output that results from a one-unit increase in an input. a. True b. False Answer: True Answer: True Answer: True Official data may overstate the extent of poverty because a. poverty is a relative as opposed to an absolute concept. b. it does not add "in-kind" transfers to the incomes
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ECB 369
Corporate taxes are a direct tax. a. True b. False Answer: True Answer: True Answer: True A firm's total revenue is simply the price of its product multiplied by the quantity sold. a. True b. False Answer: True Answer: True Answer: True An upward-sloping supply curve shows that a. buyers are willing to pay more for a scarce product. b. suppliers are willing to
Microeconomics: Principles and Policy 13th Edition
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ECB 381 Midterm 1
The maximin criterion can be defined as which of the following? a. One seeks the maximum of the minimum payoffs to the various available strategies. b. One seeks the minimum of the maximum losses among the various available strategies. c. One seeks the maximum of the minimum losses to the various available strategies. d.
Microeconomics: Principles and Policy 13th Edition
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ECB 394 Midterm 2
If demand is unit elastic, revenue a. and price rise and fall together. b. rises as price falls. c. falls as price rises. d. remains constant as price rises or falls. Answer: d Answer: d Answer: d The price of one good produced by a multiproduct industry rises. For another good produced by that industry a. the supply curve
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ECB 403 Midterm
The presence of large sunk costs often serves as a naturally imposed barrier to entry. a. True b. False Answer: True Answer: True Answer: True How the price of a depletable resource changes over time depends on a. how the technology of resource extraction changes. b. the interest rate. c. how the technologies of production change in firms that
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ECB 499 Midterm 1
Consumer income changes can shift market demand. a. True b. False Answer: True Answer: True Answer: True Payroll taxes are used to collect revenue for the Social Security program. a. True b. False Answer: True Answer: True Answer: True Which of the following is an advantage to the pollution-rights approach to environmental quality? a. Polluters are compelled to clean up completely. b. Polluters have
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ECB 499 Quiz
The factor that leads to underpricing and overuse of an economic resource is a. human greed and selfishness. b. capital markets. c. the lack of an enforceable property right. d. the lack of understanding of pollution and its effects. Answer: c Answer: c Answer: c Total utility a. diminishes as the quantity consumed of a good increases. b. increases as
Microeconomics: Principles and Policy 13th Edition
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ECB 501
The most basic investigative tool of economics is the a. concept of scarcity. b. mechanism of supply and demand. c. coordination and trade syndrome. d. inflation-unemployment trade-off. e. regulation of business. Answer: b Answer: b Answer: b For the typical student, taking an introductory course in economics should a. turn the student into an economist. b. teach the student solutions to
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ECB 501 Quiz 1
For a rational consumer, the consumer's surplus will never be a negative number. a. True b. False Answer: True Answer: True Answer: True Table 22-4 Table 22-4 presents the demand and supply schedules for television sets in Japan and the United States. If there is no trade between these countries, what are the equilibrium price and quantity
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ECB 536 Quiz
"Protection" is designed to help a. firms whose relative inefficiency does not permit successful competition with imports. b. workers who have very high productivity, and cannot survive against low-paid foreign workers. c. government that needs revenue from tariffs and quotas to cover government spending. d. firms that are highly efficient, and cannot survive against
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ECB 585
At an equilibrium price, quantity demanded a. exceeds quantity supplied. b. equals quantity supplied. c. is less than quantity supplied. d. Any of the above is possible. Answer: b Answer: b Answer: b Which of the following illustrates government acting as a referee? a. taxing high income persons b. enforcing contract provisions between buyer and seller c. buying new weapons for
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ECB 615 Midterm 1
If demand is elastic, an increase in price will increase total revenue. a. True b. False Answer: False Answer: False Answer: False Under a regressive tax, the fraction of income paid in taxes a. rises as income rises. b. is unchanged as income changes. c. falls as income rises. d. is proportional to the change in income. Answer: c Answer: c Answer: c Sugarcane
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ECB 652 If One Country Has An
If one country has an absolute advantage in every commodity, there is no reason for it to trade. a. True b. False Answer: False Answer: False Answer: False Which of the following attitudes will be held by a typical firm in a typical cartel? a. If I alone cheat, I'm better off; if everyone cheats, I'm worse
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ECB 662 Quiz 1
The law of diminishing marginal utility holds that at some point consumption of additional units of a commodity adds less to total utility. a. True b. False Answer: True Answer: True Answer: True Elasticity of demand is another way to measure slope. a. True b. False Answer: False Answer: False Answer: False Social Security payroll taxes are examples of a. progressive taxation. b. regressive
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ECB 676
Figure 3-2 In Figure 3-2, a point such as E a. is not obtainable. b. is an efficient use of resources. c. represents an inefficient allocation of resources. d. indicates that the society is a capitalist society. Answer: c Answer: c Answer: c A firm will shut down in the short run if a. TR TC > TFC. b. TR +
Microeconomics: Principles and Policy 13th Edition
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ECB 681 Test 1
The total amount of consumption of a society can be increased if a. firms allow each worker to perform multiple tasks. b. resources are allocated by a central planning group. c. individuals engage in specialization and voluntary trade. d. barter exchange is used in place of money. Answer: c Answer: c Answer: c In perfect competition, a firm's
Microeconomics: Principles and Policy 13th Edition
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ECB 690 Test 1
At an equilibrium price for gasoline, a. everyone with the desire and the income to buy gasoline at that price can do so. b. surpluses are inevitable. c. inherent market forces will eventually change the quantities demanded and supplied. d. suppliers must be using the most efficient oil-drilling equipment available. Answer: a Answer: a Answer: a Unequal distribution
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ECB 694 Homework
A corporate bond sold in 2000 with a face value of $10,000, a $100 coupon, and a maturity date in 2010 a. will pay the bondholder $100 a year every year from 2000 to 2010 and will also pay him $9,000 in 2010. b. will pay the bondholder $100 a year every
Microeconomics: Principles and Policy 13th Edition
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ECB 723
The United States is a fairly good example of a. a mixed economy. b. a pure market system. c. a government-dominated economy. d. a manufacturing economy. e. a transitioning economy. Answer: a Answer: a Answer: a The three major sources of economic profit are a. risk-bearing, innovation, and exercise of monopoly power. b. risk-bearing, rent seeking, and discounting. c. innovation, invention, and
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ECB 752
Taxes on polluting emissions are a. more efficient than direct controls. b. used by all economic societies. c. less effective than direct regulations. d. easily enforced through the criminal justice system. Answer: a Answer: a Answer: a Fixed cost increases when output rises. a. True b. False Answer: False Answer: False Answer: False Table 21-1 Consider the economy described by the income distribution in Table
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ECB 782 Quiz
Two goods are substitutes if a decrease in the price of one raises the quantity demanded of the other. a. True b. False Answer: False Answer: False Answer: False The concept of poverty is culturally determined, and hence people are defined as "poor" in relation to others. a. True b. False Answer: True Answer: True Answer: True Mercantilist policy is to do everything
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ECB 818
Comparative advantage is the rule that ordinarily prevents a nation from independently producing all of the goods it requires. a. True b. False Answer: True Answer: True Answer: True At least two demand curves are present in an international equilibrium model. a. True b. False Answer: True Answer: True Answer: True A diversified portfolio only makes sense for large institutional investors, not
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ECB 823 The Statement
The statement "Resources employed in producing X are better suited to making Y" is another way of saying a. the production possibilities frontier is "bowed out." b. the production possibilities frontier is a straight line. c. the production possibilities frontier is "bowed in." d. resources are unproductive. e. resources have no opportunity cost. Answer: a Answer: a Answer:
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ECB 828 Quiz 1
Individuals will have different value judgments about the appropriate rate of unemployment and the appropriate rate of inflation. a. True b. False Answer: True Answer: True Answer: True Figure 6-2 From Figure 6-2, we can infer that demand is ____ between P = 12 and P = 10 and ____ between P = 6 and P = 4. a.
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ECB 854 Quiz 2
Which of the following statements is equivalent to the law of diminishing marginal returns? a. A stitch in time saves nine. b. You can't make an omelet without breaking eggs. c. Too many cooks spoil the broth. d. If you can't stand the heat, get out of the kitchen. Answer: c Answer: c Answer: c When price is
Microeconomics: Principles and Policy 13th Edition
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ECB 857 Test
In the short run, a. all of the firm's input quantities, including plant size, become adjustable. b. firms are not constrained by past decisions. c. firms have relatively little opportunity to change production processes. d. all of the firm's current commitments come to an end. Answer: c Answer: c Answer: c The market system provides a way a. to
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ECON 104 Homework
If the price elasticity of demand for radios is 2,5 (dropping the minus sign), then a 50 percent reduction in the price of radios will lead to a. the sale of 200 additional radios. b. the sale of 125 percent more radios than before. c. the sale of 150 percent more radios than
Microeconomics: Principles and Policy 13th Edition
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ECON 121 Test 2
Population density varies little between the fifty states. a. True b. False Answer: False Answer: False Answer: False Which of the following quotations best captures the idea of opportunity cost? a. "Opportunity knocks but once." b. "Every choice involves a sacrifice." c. "Let's not ask for the moon; we have the stars." d. "Fools rush in where wise men fear
Microeconomics: Principles and Policy 13th Edition
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ECON 133 Final
Economic theory is a necessity, not a luxury. This statement is true because theory a. always leads to practical and useful policy. b. can prevent depressions in the economy. c. substitutes for vast amounts of data. d. provides a structure for organizing and analyzing data. e. always leads to accurate predictions. Answer: d Answer: d Answer: d Which of
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ECON 137 Test
Which of the following is likely to affect the position and shape of society's production possibilities frontier? a. volume of physical resources b. level of labor skills c. level of technology d. amount of factories on hand e. All of the above are correct. Answer: e Answer: e Answer: e If a detrimental externality is being produced in the
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ECON 171
An efficient distribution of goods requires that a. everyone gets an equal share of each good. b. marginal cost equal marginal utility for the last unit produced. c. each person derives the same total utility from the good. d. since tastes differ, every person pays a different price in accordance with different marginal utilities. Answer:
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ECON 272
Figure 5-5 In Figure 5-5, if the household is spending enough of its budget to purchase 4 orders of fries and the price of an order of fries is $2, the remainder of the budget available for hamburgers is a. $10. b. $12. c. $16. d. $20. Answer: b Answer: b Answer: b Suppose that because of climatic conditions,
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ECON 275 Quiz
As the term "opportunity cost" is defined in the text, the opportunity cost of going to college includes a. both tuition and the value of the student's time. b. tuition but not the value of the student's time, which is a cash cost. c. the value of the student's time but not tuition,
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ECON 327 Midterm 1
Figure 22-9 In Figure 22-9, at price OC total quantity demanded exceeds quantity supplied and price will rise to a. OJ in Pastaland. b. OA in Pestoland. c. OA in both countries. d. OJ in both countries. Answer: c Answer: c Answer: c Increasing productivity in a society a. always results in a better quality of life as society views
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ECON 331 Quiz 1
The major coordination tasks can be summarized with the questions a. who, what, when, where? b. how, what, for whom? c. how, what, why? d. how, why, for whom? e. who, how, what? Answer: b Answer: b Answer: b Low interest rates will persuade corporations to invest more right now. a. True b. False Answer: True Answer: True Answer: True Who of the following has
Microeconomics: Principles and Policy 13th Edition
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ECON 342 Midterm 2
The invention of machinery that can double the amount of gold extracted from raw ore will likely lead mining companies to a. raise the world price of gold to pay for the new machinery. b. lower the world price of gold because any amount can now be produced more cheaply. c. raise the
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ECON 352
The market demand curve shows how the quantity demanded of a product, during a specified time period, changes as the price of that product changes. a. True b. False Answer: True Answer: True Answer: True A bond's price is sensitive to changes in a. the interest rate. b. the accepted rate of return on investment. c. investor confidence in
Microeconomics: Principles and Policy 13th Edition
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ECON 382 Quiz
Perfect central planning is nearly impossible for all of these reasons except: a. production processes between industries are often interdependent. b. some processes must be decided together, and not individually, because of their interdependence. c. if the output target for one industry is adjusted, many others must also be adjusted. d. all of these
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ECON 392 Midterm 1
Fixed prices in a free-market economy can increase efficiency. a. True b. False Answer: False Answer: False Answer: False Figure 18-1 According to the graph in Figure 18-1, tax collections will be which of the following? a. 14 million b. 1,4 million c. 12 million d. 1 million Answer: d Answer: d Answer: d Due to Pigou's "defective telescopic faculty," a market economy is inefficient
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ECON 402 Quiz
High interest rates make a firm's long-term investment in new capital a. riskless. b. less attractive. c. more attractive. d. no more attractive than short-term investment. Answer: b Answer: b Answer: b Any change in a firm's fixed costs will change its profit-maximizing level of output. a. True b. False Answer: False Answer: False Answer: False Which of the following observations is true? a. A
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ECON 417 Quiz 1
Externalities affect only the buyer and seller involved in an exchange. a. True b. False Answer: False Answer: False Answer: False Rising prices help control the process of resource depletion by a. discouraging consumption and waste. b. stimulating more efficient use of the depletable resource. c. encouraging resource-saving innovation. d. doing all of the above. Answer: d Answer: d Answer: d If a firm's
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ECON 422 Test 1
Recycling rates for aluminum, paper, and glass have been increasing in the United States. a. True b. False Answer: True Answer: True Answer: True Annual incomes of James, Jack, and Stanley are $30,000, $50,000, and $80,000 and their tax rates are 10%, 20%, and 30% respectively. Which tax structure is this an example of? a. Proportional tax b.
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ECON 586 Midterm 2
The use of pollution charges to reduce pollution confronts the problem of a. free riders who avoid revealing benefits from abatement. b. determining specific individual damages and appropriate charges associated with pollutants. c. necessarily lowering the price of the products. d. requiring no agency to administer the tax. Answer: a Answer: a Answer: a The term 'satisficing" for
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ECON 605 Quiz 2
How does the U.S. economy rank in size? a. first in economic output b. second in economic output c. third in economic output d. fourth in economic output e. fifth in economic output Answer: a Answer: a Answer: a One of the following is not a characteristic of perfect competition. Which is it? a. Firms advertise to increase their market
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ECON 630 Quiz 2
Which of the following is true for a profit-maximizing competitive firm in the long run but not a monopolist? a. MC = MR b. MC = P c. AR = P d. Q > 0 Answer: b Answer: b Answer: b A rise in price will always result in an increase in the total amount consumers spend on
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ECON 631 Quiz 2
Price discrimination is always illegal. a. True b. False Answer: False Answer: False Answer: False The external costs of cigarettes are related to the health problem smoking produces for both smokers and nonsmokers. One estimate places these costs at 29 cents per pack. Presently, sales and excise taxes on cigarettes average about 37 cents per pack.
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ECON 643
Figure 11-9 In Figure 11-9, which of the following is true? a. MC = P b. MC = MR c. MU > MR d. MU < MC Answer: c Answer: c Answer: c Zero economic profits for a perfectly competitive firm in the long run means a. the firm must exit the industry. b. the firm is in equilibrium. c. the firm
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ECON 662 Homework
Dividend refers to a. a corporation's regular payments to lenders. b. part of the revenue given to stockholders of a corporation. c. a lender's legal claim on the assets of a bankrupt corporation. d. a prepayment of a corporation's legal obligation. Answer: b Answer: b Answer: b It is not true in the long run of monopolies that a.
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ECON 691 Test 2
Piketty's analysis concludes that unequal ownership of capital, rather than unequal pay, is responsible for notably high levels of inequality in the decades since the 1980s. a. True b. False Answer: True Answer: True Answer: True A firm will tend to select the least costly input combination to produce its output. a. True b. False Answer: True Answer: True Answer: True A
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ECON 694 Midterm
Is the monopolist supply decision more complicated than that of competitive supply? a. Yes, because the monopolist can choose its price, and the perfect competitor cannot. b. No, because they are both price takers. c. No, because the market determines the quantity for the monopolist. d. No, because the market determines the price for
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ECON 698
In a market economy, goods are allocated to a. all potential uses. b. all citizens on an equal basis. c. citizens with political power. d. citizens with both the desire and the willingness to pay for the goods. Answer: d Answer: d Answer: d If the U.S. government starts to sell off its stockpile of cheese, a. consumers will
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ECON 736
An unregulated market economy provides material wealth, but does not generate effective control of environmental damage. a. True b. False Answer: True Answer: True Answer: True If marginal profit is zero, then average profit is at a maximum. a. True b. False Answer: False Answer: False Answer: False When beneficial externalities are present in a market, the actual output will be a. greater
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ECON 736 Unemployment Rates In The
Unemployment rates in the U.S. are generally: a. higher than in Europe b. lower than in Europe c. about the same asin Europe d. there are no unemployed in Europe Answer: a Answer: a Answer: a Under a tying contract, a. the price a buyer must pay for a good is tied to the size of his purchase. b. a
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ECON 805 Quiz 3
A market society will always protect the natural environment. a. True b. False Answer: False Answer: False Answer: False Table 5-1 Table 5-1 gives information on George's total utility from consuming milkshakes and sandwiches. If George's income this week is $15, milkshakes are $3 each, and sandwiches $2, he will maximize his utility if he buys a. three
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ECON 819 Midterm
State and local governments typically spend most of their budgets on providing a. education. b. public goods. c. public welfare programs. d. police protection and administrative services. Answer: a Answer: a Answer: a A market a. may be an organized exchange. b. refers to a set of sellers and buyers whose actions affect a commodity's price. c. is that area in
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ECON 840 Midterm
Economic rent is the payment made to a factor of production above the amount necessary to induce any of that factor to be supplied at its present employment. a. True b. False Answer: True Answer: True Answer: True A straight-line demand curve has the same elasticity throughout its length. a. True b. False Answer: False Answer: False Answer: False If a profit-maximizing
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ECON 854 Quiz 2
Poverty is defined in two ways: the absolute concept of poverty and the relative concept of poverty. a. True b. False Answer: True Answer: True Answer: True The assignment of inputs to specific industries by central planners is made difficult by a. the interdependency among industries. b. lack of data for decision making. c. the danger of a chain reaction
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ECON 858 Quiz 3
Government gives subsidies to encourage production of products with beneficial externalities. a. True b. False Answer: True Answer: True Answer: True Total profit is maximized if the slope of the total profit curve is a. positive. b. negative. c. increasing. d. zero. Answer: d Answer: d Answer: d In short-run equilibrium, a perfectly competitive firm a. may earn a profit or a loss. b. always earns
Microeconomics: Principles and Policy 13th Edition
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ECON 860
One major problem with Social Security is that it is a "pay as you go" system. a. True b. False Answer: True Answer: True Answer: True Increasing GDP generally causes increases in problems of waste disposal. a. True b. False Answer: True Answer: True Answer: True Suppose that Joan, the only consumer of pork, has a downward-sloping demand curve for pork and
Microeconomics: Principles and Policy 13th Edition
351977
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ECON 885 Midterm 1
A free market system tends to a. produce a fairly equal distribution of income. b. pay people exactly what they are worth. c. produce a relatively unequal distribution of income. d. pay most people more than they are worth, at the expense of reducing firms' profits. Answer: c Answer: c Answer: c Mutually beneficial trade is impossible when
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352011
Exam Prep
ECON 899
Unemployment and inflation are important determinants of short-run material welfare, whereas productivity growth is an important determinant of long-run material well-being. a. True b. False Answer: True Answer: True Answer: True Productivity in manufacturing sectors has risen faster than in service sectors. a. True b. False Answer: True Answer: True Answer: True Oligopolists seldom change prices, because they don't like change. a. True b.
Microeconomics: Principles and Policy 13th Edition
351658
Exam Prep
ECON A 109
The terms "correlation" and "causation" are synonymous. a. True b. False Answer: False Answer: False Answer: False The subject of borrowing by the U.S. from its citizens and from other countries, has resulted in one of the fiercest policy debates in recent years. a. True b. False Answer: True Answer: True Answer: True Whenever average cost exceeds marginal cost, a. average cost is
Microeconomics: Principles and Policy 13th Edition
351492
Exam Prep
ECON A 116
The socialist countries of Eastern Europe have a. fewer environmental problems than capitalist countries. b. improved their environment more than the capitalist countries. c. worse environmental problems than capitalist countries. d. worsened since the collapse of communism there. Answer: c Answer: c Answer: c Equilibrium in a market is a. a situation in which there are no inherent forces
Microeconomics: Principles and Policy 13th Edition
351490
Exam Prep
ECON A 120 Homework
Which of the following is not a source of inequality in incomes? a. redistribution of income b. differences in intensity of work c. differences in ability d. risk taking Answer: a Answer: a Answer: a Marginal utility is a. the difference in price between one store and another. b. the difference in value between 'some" of a thing and "none"
Microeconomics: Principles and Policy 13th Edition
351769
Exam Prep
ECON A 136 Test
In a properly functioning economy, money costs approximate opportunity costs. a. True b. False Answer: True Answer: True Answer: True A positive aspect of monopolies is that they may aid innovation in the marketplace. a. True b. False Answer: True Answer: True Answer: True Which of the following makes invention and entrepreneurship more likely in today's economy? a. increasing morality of inventors b. government
Microeconomics: Principles and Policy 13th Edition
351497
Exam Prep
ECON A 243 Midterm 2
Price ceilings will likely a. result in the accumulation of surpluses. b. increase the volume of transactions as we move along the demand curve. c. increase production as producers respond to higher consumer demand at the low ceiling price. d. result in the development of black markets. Answer: d Answer: d Answer: d A monopolistic competitor faces a
Microeconomics: Principles and Policy 13th Edition
351856
Exam Prep
ECON A 326 Midterm 1
The invention of new mining methods will affect price through the supply side. a. True b. False Answer: True Answer: True Answer: True If a firm shuts down, its a. fixed costs remain unchanged. b. revenue will fall to zero. c. short-run variable costs will fall to zero. d. All of the above are correct. Answer: d Answer: d Answer: d An unplanned economy
Microeconomics: Principles and Policy 13th Edition
351720
Exam Prep
ECON A 358 Midterm 1
A contour map illustrates which of the following? a. the cause-effect relationship between two variables b. the cause-effect relationship between three variables c. the way that three variables are correlated d. the way that one variable affects another, which in turn affects a third variable e. the way that two variables are correlated and in
Microeconomics: Principles and Policy 13th Edition
351999
Exam Prep
ECON A 466
When it is cheaper for one firm to produce a number of different commodities together than it is for a group of small firms to produce those commodities, ____ exist(s). a. economies of scale b. economies of scope c. diminishing marginal returns d. marginal-cost pricing Answer: b Answer: b Answer: b Airline deregulation led to the demise of
Microeconomics: Principles and Policy 13th Edition
351736
Exam Prep
ECON A 478 If Corporations Have
If corporations have their choice, they will prefer to invest using a. revenue from the sale of stocks. b. revenue from the sale of bonds. c. plowback. d. money borrowed from the bank. Answer: c Answer: c Answer: c A relatively large increase in the cost of electricity would likely a. result in a large increase in the use
Microeconomics: Principles and Policy 13th Edition
351815
Exam Prep
ECON A 501 Midterm 1
Ideally, a free trade policy should be accompanied by a. a public education program to make the benefits known. b. open borders and amnesty for all undocumented workers. c. programs to ensure no one loses a job as a result of foreign competition. d. programs to assist workers who lose their jobs to foreign
Microeconomics: Principles and Policy 13th Edition
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Exam Prep
ECON A 557 Final
Government in the United States spends more as a percentage of GDP than in most other industrialized nations. a. True b. False Answer: False Answer: False Answer: False Payroll tax is a proportional tax. a. True b. False Answer: False Answer: False Answer: False During a war, a government will often draft people, most of whom are presently employed, into the army.
Microeconomics: Principles and Policy 13th Edition
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Exam Prep
ECON A 586 Quiz 1
A $10 fee to obtain a driver's license is a a. regressive tax. b. degressive tax. c. proportional tax. d. progressive tax. Answer: a Answer: a Answer: a The federal government receives most of its revenue from three sources: personal income tax, corporate income tax, and payroll tax. a. True b. False Answer: True Answer: True Answer: True If marginal revenue and marginal cost
Microeconomics: Principles and Policy 13th Edition
351675
Exam Prep
ECON A 620 An Efficient
An efficient allocation of resources exists if a. one group of people can get more of the things they want without someone else having to give up anything. b. no one can get more of the things he wants without someone else having to give up something. c. the economy operates at any
Microeconomics: Principles and Policy 13th Edition
351624
Exam Prep
ECON A 683 Quiz
Both parties gain in a voluntary exchange. a. True b. False Answer: True Answer: True Answer: True TANF compels welfare recipients to go to work after a period of two years. a. True b. False Answer: True Answer: True Answer: True For any combination or outputs, there is an efficient allocation of income. a. True b. False Answer: False Answer: False Answer: False Figure 7-13 Figure 7-13 shows the
Microeconomics: Principles and Policy 13th Edition
351531
Exam Prep
ECON A 716
Which of the following observations concerning the absolute definition of poverty is true? a. It is based on average income. b. It is an optimistic definition. c. It is not arbitrary in nature. d. It is a cultural definition. Answer: b Answer: b Answer: b Figure 4-4 Assume that Figure 4-4 shows demand for MP3 players. An increase in
Microeconomics: Principles and Policy 13th Edition
351627
Exam Prep
ECON A 767 Final
If the production possibilities curves of two countries have the same slope, a. neither has a comparative advantage, and there are no gains from trade. b. although there is no comparative advantage, there are potential gains if there are differences in absolute advantage. c. neither has an absolute advantage, and there cannot be
Microeconomics: Principles and Policy 13th Edition
351882
Exam Prep
ECON A 787 Quiz 2
A corporation seeking to expand, and looking for the least risky financing option would choose: a. stocks b. bonds c. retained earnings d. a bank loan Answer: c Answer: c Answer: c If a competitive firm's short run average cost curve lies above the price of the product, we can conclude that the firm a. is earning a huge
Microeconomics: Principles and Policy 13th Edition
351626
Exam Prep
ECON A 872 Midterm 1
A theory is an abstraction used often by economists to a. describe a problem. b. keep all assumptions in their proper places. c. explain why things work the way they do. d. describe a hierarchical ordering of facts. e. arrange variables into a graphical format. Answer: c Answer: c Answer: c The demand curve depicts quantities demanded that have
Microeconomics: Principles and Policy 13th Edition
351688
Exam Prep
ECON A 872 Midterm 2
Which of the following best expresses the attitude toward competition of a firm engaged in tacit collusion with its rivals? a. A rolling stone gathers no moss. b. Waste not, want not. c. Do unto others as you would have them do unto you. d. Ask, and ye shall receive. Answer: c Answer: c Answer: c Average revenue
Microeconomics: Principles and Policy 13th Edition
351525
Exam Prep
ECON A 882 Quiz
Marginal utility is measured by the maximum amount of money a consumer is willing to pay for one more unit of a commodity. a. True b. False Answer: True Answer: True Answer: True What type of cost is not relevant to the process of research and development or invention in general? a. fixed cost b. marginal cost c. variable
Microeconomics: Principles and Policy 13th Edition
351787
Exam Prep
ECON A 887 Midterm 1
People generally purchase less of a commodity as its price increases. This implies that the relationship between quantity purchased and the price of the commodity must have a a. slope always equal to one. b. positive slope. c. zero slope. d. negative slope. Answer: d Answer: d Answer: d Once a firm's marginal revenue curve is known, the
Microeconomics: Principles and Policy 13th Edition
351816
Exam Prep
ECON E 170
If a firm's average cost is currently $100, and the marginal cost is $95, then the average cost is currently falling. a. True b. False Answer: True Answer: True Answer: True A small increase in productivity growth can have a huge impact on a country's standard of living. a. True b. False Answer: True Answer: True Answer: True The U.S. economy rarely
Microeconomics: Principles and Policy 13th Edition
351630
Exam Prep
ECON E 218 Quiz 1
Price discrimination leads to higher prices for all consumers. a. True b. False Answer: False Answer: False Answer: False Many large universities rent out parts of their campuses to conference groups during the summer because such groups cause little damage, require little staff attention, and bring in large amounts of income. A university's decision to rent its campus
Microeconomics: Principles and Policy 13th Edition
351791
Exam Prep
ECON E 366 Test 2
Figure 14-1 In Figure 14-1, a technological breakdown in calculator production would cause which movement? a. B to E b. B to C c. B to D d. A to D Answer: c Answer: c Answer: c There is no way that externalities can be corrected. a. True b. False Answer: False Answer: False Answer: False Which of the following is considered by economists to
Microeconomics: Principles and Policy 13th Edition
351850
Exam Prep
ECON E 375 Midterm 1
The concept of opportunity cost is more applicable to society as a whole than it is for an individual household. a. True b. False Answer: False Answer: False Answer: False The system of grants from one level of government to another is an example of fiscal federalism. a. True b. False Answer: True Answer: True Answer: True Where interdependence is especially pronounced, competition
Microeconomics: Principles and Policy 13th Edition
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Exam Prep
ECON E 383 Test
If there are many close substitutes available for a good, its elasticity of demand will be higher. a. True b. False Answer: True Answer: True Answer: True Wages are comparatively low in markets where demand for labor is low and supply is high. a. True b. False Answer: True Answer: True Answer: True The method of financing the Social Security system until
Microeconomics: Principles and Policy 13th Edition
351690
Exam Prep
ECON E 385 Test 2
Figure 6-5 If the demand curve in Figure 6-5 is unit elastic, then total expenditure at A is ____ total expenditure at B. a. greater than b. less than c. equal to d. less elastic than Answer: c Answer: c Answer: c Education is subsidized because it generates beneficial externalities. a. True b. False Answer: True Answer: True Answer: True In an ideal competitive market economy a.
Microeconomics: Principles and Policy 13th Edition
351833
Exam Prep
ECON E 424 Midterm
A progressive tax is one in which the fraction of income paid in taxes rises as a person's income increases. a. True b. False Answer: True Answer: True Answer: True Collective bargaining is a process used by unions and management to settle upon the terms of a labor contract. a. True b. False Answer: True Answer: True Answer: True Given a fixed amount
Microeconomics: Principles and Policy 13th Edition
351502
Exam Prep
ECON E 424 Test 2
If oranges and grapefruit are close substitutes, an increase in the price of oranges will shift the demand curve of a. both products to the right. b. both products to the left. c. grapefruit to the right. d. oranges to the left. Answer: c Answer: c Answer: c If a person owns 2,000 shares in a corporation which
Microeconomics: Principles and Policy 13th Edition
351651
Exam Prep
ECON E 436 Midterm 1
An investment in yourself is an investment in what economists call human capital. a. True b. False Answer: True Answer: True Answer: True The definition of efficiency implies that production is carried out on the production possibilities frontier. a. True b. False Answer: True Answer: True Answer: True Discounting is the process of a. cutting prices to get rid of surplus stocks. b. finding
Microeconomics: Principles and Policy 13th Edition
351695
Exam Prep
ECON E 481 Midterm 1
One possible solution to improve performance of regulated firms is which of the following? a. Allow the firm to set its own rate of return. b. Allow higher rates of return to cover higher cost of better performance. c. Allow a higher rate of return for better performance. d. Set lower prices when efficiency
Microeconomics: Principles and Policy 13th Edition
351998
Exam Prep
ECON E 498 Test
Members of the European Union (EU), rely heavily on this form of indirect taxes. a. Value-added tax b. Excise tax c. Property tax d. Sales tax Answer: a Answer: a Answer: a Necessities such as food and shelter have inelastic demand. a. True b. False Answer: True Answer: True Answer: True In August 1988, the Los Angeles Kings hired Wayne Gretzky for $15 million
Microeconomics: Principles and Policy 13th Edition
351563
Exam Prep
ECON E 500
A line that slopes downward from left to right has a positive slope. a. True b. False Answer: False Answer: False Answer: False A cartel is a. a group of oligopolists who try to behave like a single monopolist and split the benefits among themselves. b. a government-approved organization for the exchange of technical information among firms. c. a
Microeconomics: Principles and Policy 13th Edition
351845
Exam Prep
ECON E 522 Quiz 2 The Basic
The basic principle that explains the demand for a factor of production is the a. principle of marginal productivity. b. Hotelling principle. c. principle of opportunity cost. d. Ramsey pricing principle. Answer: a Answer: a Answer: a The cost of processors and memory has decreased dramatically in the past twenty-five years. As a result, we have seen a. an
Microeconomics: Principles and Policy 13th Edition
351880
Exam Prep
ECON E 551 Test 2
In 1989, Hurricane Hugo devastated Charleston, South Carolina, leaving residents with no electricity for light or refrigeration, and completely cut off from the outside world by fallen trees and washed-out roads. Consequently, the price of ice rose 1,000 percent and generators 300 percent. Tree removal firms were charging $4,000 to cut up
Microeconomics: Principles and Policy 13th Edition
352004
Exam Prep
ECON E 570 Midterm
Purchasers of corporate bonds lend money to a corporation. a. True b. False Answer: True Answer: True Answer: True There are about 5 million business firms in the Unites States. a. True b. False Answer: False Answer: False Answer: False In the long run, more costs become fixed. a. True b. False Answer: False Answer: False Answer: False The aim of antitrust policy is to a. provide adequate incentives
Microeconomics: Principles and Policy 13th Edition
351538
Exam Prep
ECON E 574 Quiz 1 Society Can
Society can produce at a point outside the production possibilities frontier, but only if it is using all of its resources efficiently. a. True b. False Answer: False Answer: False Answer: False Which of the following statements is correct? a. Low prices may not always be in the public interest. b. If prices on scarce resources are set
Microeconomics: Principles and Policy 13th Edition
351644
Exam Prep
ECON E 579 Final
What are the major problems that will tend to arise if there are legal limits on the movement of prices? a. favoritism and corruption of officials and market participants b. unenforceability of laws and higher costs of transactions c. increasing restrictions to enforce the laws d. misallocation of resources as prices no longer correspond
Microeconomics: Principles and Policy 13th Edition
351685
Exam Prep
ECON E 590
It can be shown that average revenue and price are always equal. a. True b. False Answer: True Answer: True Answer: True The Organization of Petroleum Exporting Countries is a a. professional trade association for oil companies. b. cartel. c. consortium for joint ventures in oil exploration. d. loose collection of democracies that promote international pipelines. Answer: b Answer: b Answer: b Critics of
Microeconomics: Principles and Policy 13th Edition
351751
Exam Prep
ECON E 633
Capitalism is an economic system in which the production process is controlled primarily by private firms operating in markets. a. True b. False Answer: True Answer: True Answer: True The federal income tax is an example of a a. progressive tax. b. regressive tax. c. proportional tax. d. value-added tax. Answer: a Answer: a Answer: a The questions of what to produce, how to
Microeconomics: Principles and Policy 13th Edition
351575
Exam Prep
ECON E 662 Since It Spent Over 36
Since it spent over $3.6 trillion in 2010, opportunity cost was not an issue for the U.S. government. a. True b. False Answer: False Answer: False Answer: False Table 22-4 Table 22-4 presents the demand and supply schedules for television sets in Japan and the United States. If Japan and the United States trade with each other,
Microeconomics: Principles and Policy 13th Edition
351838
Exam Prep
ECON E 691 The Benefits Principle
The benefits principle states that the users of a service should pay for that service. a. True b. False Answer: True Answer: True Answer: True Wages in American industry are very high because of wage laws. a. True b. False Answer: False Answer: False Answer: False The key difference between oligopoly and other market structures is the interdependence among producers. a. True b. False Answer:
Microeconomics: Principles and Policy 13th Edition
351981
Exam Prep
ECON E 832 Midterm 1
Price ceilings will likely result in the growth of black markets. a. True b. False Answer: True Answer: True Answer: True Interest is the payment for the use of funds used to produce capital. a. True b. False Answer: True Answer: True Answer: True Input-output analysis is rarely used because a. it requires tremendously complex calculations. b. it requires large amounts of data. c. market
Microeconomics: Principles and Policy 13th Edition
351541
Exam Prep
ECON E 846 Quiz
Mr. Paque is a bear hunter for timber companies that want to diminish damage to trees done by bears in the spring. Due to a reduction in the bear population between 1995 and 2005, Mr. Paque finds fewer bears each year and additional hours spent hunting produce fewer additional bears. This
Microeconomics: Principles and Policy 13th Edition
351655
Exam Prep
ECON E 847 Midterm 1 The
The observed change in the reserves of copper, lead, and zinc between 1960 and 1990 was most likely caused by a. low prices discouraging exploration for new reserves. b. a slowdown in demand growth. c. high prices that stimulated exploration. d. the discovery of substitutes. Answer: c Answer: c Answer: c To the corporation, bonds are more risky
Microeconomics: Principles and Policy 13th Edition
351784
Exam Prep
ECON E 880 Test
The payroll tax receipts a. are used to reduce the national debt. b. are invested in private business for future payments. c. pay off current recipients of Social Security payments. d. go directly into a trust fund for investment in private businesses. Answer: c Answer: c Answer: c Trade occurs only when a country has an absolute advantage
Microeconomics: Principles and Policy 13th Edition
351859
Exam Prep
ECON E 886 Test 2
In the U.S., health care may be expensive, but Americans enjoy the longest life-expectancy of any nation. a. True b. False Answer: False Answer: False Answer: False Figure 11-2 In Figure 11-2, at what quantity would the monopolist maximize profit? a. E b. F c. G d. H Answer: d Answer: d Answer: d Taxes are either a. regressive, proportional, or degressive. b. regressive, proportional, or progressive. c.
Microeconomics: Principles and Policy 13th Edition
351711
Exam Prep
ECON E 896 Midterm
Laissez faire refers to a program of minimal interference in the market system. a. True b. False Answer: True Answer: True Answer: True If the interest rate is r (expressed as a decimal number), the present value today of $1 to be received n years from today equals ____. a. $1rn b. $1(1 + r)n c. $1/(1
Microeconomics: Principles and Policy 13th Edition
351641
Exam Prep
Economics 105 Quiz 3
Marginal profit is the slope of the total profit curve. a. True b. False Answer: True Answer: True Answer: True The demand curve for a monopolistic competitor has a negative slope. a. True b. False Answer: True Answer: True Answer: True Since it is a centrally planned economy, China does not face opportunity costs when economic decisions are made. a. True b. False Answer: False Answer:
Microeconomics: Principles and Policy 13th Edition
351862
Exam Prep
Economics 138
Inputs in production processes are called resources. a. True b. False Answer: True Answer: True Answer: True Production technology determines the relationship of total cost to outputs. a. True b. False Answer: True Answer: True Answer: True Increasing scarcity of a resource causes new supplies to become more and more costly. a. True b. False Answer: True Answer: True Answer: True A quota ordinarily specifies both minimum and
Microeconomics: Principles and Policy 13th Edition
351656
Exam Prep
Economics 139 Test
One effect of market intervention is resource misallocation. a. True b. False Answer: True Answer: True Answer: True A progressive income tax system can be defined as one in which a. the government uses taxes paid by the wealthy to fund programs for the poor. b. an individual pays more dollars in taxes when his income rises. c. the
Microeconomics: Principles and Policy 13th Edition
351864
Exam Prep
Economics 165 Quiz
The total physical product of an input is the same thing as its a. total revenue product. b. marginal physical product times output. c. output. d. total consumer's surplus. Answer: c Answer: c Answer: c A natural monopoly is one that deliberately erects entry barriers. a. True b. False Answer: False Answer: False Answer: False The "law" of diminishing returns a. is deduced from the
Microeconomics: Principles and Policy 13th Edition
351744
Exam Prep
Economics 180 Midterm 2
Externalities are social costs that affect parties external to a particular economic transaction. a. True b. False Answer: True Answer: True Answer: True Figure 4-16 Assume that Figure 4-16 shows the supply of soda. An increase in the price of syrup used in the production of soda will shift supply from a. S1 to S2. b. S2 to S1. c.
Microeconomics: Principles and Policy 13th Edition
351578
Exam Prep
Economics 187 Midterm 1
A line that is perfectly elastic has an elasticity of demand of zero. a. True b. False Answer: False Answer: False Answer: False In a planned economy, a. prices are used to coordinate economic activity. b. central planners set production targets and tell producers how to produce. c. high prices discourage use of the most scarce resources. d. central planners
Microeconomics: Principles and Policy 13th Edition
351498
Exam Prep
Economics 214 Quiz 3
All of the following are associated with a mixed economy except a. some public influence over the workings of free markets. b. public ownership mixed in with private property. c. homogenization. d. different countries blending the state and market sectors in different ways. Answer: c Answer: c Answer: c A price cut will decrease the revenue a firm
Microeconomics: Principles and Policy 13th Edition
351779
Exam Prep
Economics 215 Midterm
Which of the following formulas defines average cost? a. AC = TC/Q b. AC = MRP = MFC c. AC = MPP/Q d. AC = TC Q Answer: a Answer: a Answer: a In the case study discussed in the chapter, the electronics firm was losing money by selling its calculators at a price that was below average
Microeconomics: Principles and Policy 13th Edition
351465
Exam Prep
Economics 269
"Assuming the long-run average cost curve is U-shaped, a firm will always seek to operate at the lowest point on the long-run average cost curve." True or false? Answer: False. The optimal point in the long run depends on the demand for the firm's product. If demand is small, the
Microeconomics: Principles and Policy 13th Edition
351478
Exam Prep
Economics 417 Quiz 3 The US
The U.S. Postal Service engages in price discrimination. a. True b. False Answer: True Answer: True Answer: True The U.S. government banned cigarette advertising on radio and television after January, 1971. You would expect to find that after the ban took effect the price of magazine ads for a. all goods fell. b. only cigarettes fell. c. all goods rose. d.
Microeconomics: Principles and Policy 13th Edition
351788
Exam Prep
Economics 450 Final
The short-run equilibrium of the firm under monopolistic competition has excess capacity. a. True b. False Answer: True Answer: True Answer: True Using prices to promote efficiency in the utilization of bridges, a. higher prices should be charged for the use of the most crowded bridges. b. lower prices should be charged for the use of the uncrowded
Microeconomics: Principles and Policy 13th Edition
351993
Exam Prep
Economics 489
An oligopoly using a maximin strategy must believe that the losses from underestimating a competitor's skill are worse than those from overestimating it. a. True b. False Answer: True Answer: True Answer: True The marginal productivity theory of distribution has been criticized because a. it assumes that the existing distribution of ownership factors is fair and just
Microeconomics: Principles and Policy 13th Edition
351867
Exam Prep
Economics 506 The Marginal
The marginal revenue product of an input is the marginal physical product times the price per unit of output under perfect competition. a. True b. False Answer: True Answer: True Answer: True Taxing pollution will encourage firms to reduce pollutants dumped in the atmosphere or in streams. a. True b. False Answer: True Answer: True Answer: True Corporations account for a ____ proportion
Microeconomics: Principles and Policy 13th Edition
351996
Exam Prep
Economics 510 Homework
A change in consumer preferences will shift the budget line. a. True b. False Answer: False Answer: False Answer: False If a firm has increasing returns to scale at all levels of output, the a. slope of its long-run total cost curve is always negative. b. slopes of its short-run average cost curves are always negative. c. slope of
Microeconomics: Principles and Policy 13th Edition
352002
Exam Prep
Economics 569 Midterm 2
Which of the following characteristics of a PPF indicates that tradeoffs must be made? a. the downward slope b. the upward slope c. the constant slope d. the curvature Answer: a Answer: a Answer: a A decrease in price of a certain good most likely will lead to a. an increase in quantity demanded and an increase in demand. b.
Microeconomics: Principles and Policy 13th Edition
351638
Exam Prep
Economics 598
When the marginal revenue product of an input is less than its price, the a. producer should expand the use of that input. b. price of the input will automatically rise in a free market. c. producer should reduce the use of that input. d. marginal physical product of that input must be below
Microeconomics: Principles and Policy 13th Edition
351741
Exam Prep
Economics 646
A firm is operating with an optimal combination of inputs. Suddenly the price of one input rises. The firm should a. buy less of that input and more of the other input. b. change its input mix so that the marginal physical product of the input whose price has risen falls and
Microeconomics: Principles and Policy 13th Edition
351677
Exam Prep
Economics 675 Test
In the long run the prices charged by a firm in monopolistic competition will be a. high enough to provide profits to the firm. b. so low that many firms will drop out of the industry. c. equal to marginal cost. d. equal to average cost, including the opportunity cost of capital. Answer: d Answer: d Answer:
Microeconomics: Principles and Policy 13th Edition
351768
Exam Prep
Economics 681 Quiz
As the rate of interest on borrowed funds increases, the quantity of investment funds demanded diminishes. a. True b. False Answer: True Answer: True Answer: True If the United States imposed a 25 percent tariff on imports of minivans, the effect would be to a. raise the price and reduce the quantity of imports. b. raise the price and
Microeconomics: Principles and Policy 13th Edition
351985
Exam Prep
Economics 695 Quiz 2
Figure 1-2 Identify the slope of the two curves A and B in Figure 1-2. a. A - zero, B - one. b. A - one, B - zero. c. A - one, B - different at different points. d. A - different at different points, B - zero. Answer: c Answer: c Answer: c The tangent at point
Microeconomics: Principles and Policy 13th Edition
352001
Exam Prep
Economics 741 Quiz
Direct taxes are levied directly on people or corporations. a. True b. False Answer: True Answer: True Answer: True Taxes on polluting firms have a. been tried, but not successfully. b. been successful in Germany in reducing water pollution. c. resulted in bankruptcy of the affected firms. d. never been tried to see if they work. Answer: b Answer: b Answer: b A horizontal
Microeconomics: Principles and Policy 13th Edition
351595
Exam Prep
Economics 768 Midterm
An empirical study determines that price exceeds marginal cost at the levels of output of firms in long-run equilibrium in the widget industry. The widget industry may therefore a. be monopolistically competitive. b. have firms whose goal is sales maximization. c. have firms that act as price leaders. d. All of the above are
Microeconomics: Principles and Policy 13th Edition
351826
Exam Prep
Economics 808 Quiz 3
If good "A" is represented on the horizontal axis and good "B" on the vertical axis, then the steeper the production possibilities frontier at a given level of production of good "A," the a. larger the opportunity cost of producing an extra unit of good "A." b. larger the quantity of resources being
Microeconomics: Principles and Policy 13th Edition
351798
Exam Prep
Economics 816 Midterm 1
Consider the following information regarding a person's decision to go to college: college tuition is $20,000 per year, room and board is $10,000 per year, and books and materials are $2,000 per year. Suppose that instead of going to college this person could have earned $18,000 working in a store. An
Microeconomics: Principles and Policy 13th Edition
351619
Exam Prep
Economics 823
Statistical studies suggest that the cost of direct controls for any target level of pollution is a. much higher than the cost of taxes on emissions. b. about the same as the cost of taxes on emissions. c. lower than the cost of taxes on emissions. d. impossible to compare to the cost of taxes
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351534
Exam Prep
Economics 867 Test 1
Which of the following observations concerning labor cost patterns over the last century is true? a. Average real wages started rising after 1973. b. Hourly compensation rates have fallen dramatically. c. Compensation growth slowed markedly. d. Average hours worked per week have increased by almost 50 percent. Answer: c Answer: c Answer: c A total cost curve shows
Microeconomics: Principles and Policy 13th Edition
351485
Exam Prep
Economics 879
A graph conveys information about a cause-and-effect relationship. a. True b. False Answer: False Answer: False Answer: False Affirmative action laws require employers to search for qualified minority applicants, but not to necessarily give them jobs. a. True b. False Answer: True Answer: True Answer: True An example of "cream skimming" is when: a. a firm charges the same price to all consumers,
Microeconomics: Principles and Policy 13th Edition
674122
Exam Prep
Economics Chapter 1 One The Consequences Allowing Wages Fall The
2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 2016 Cengage Learning. All Rights
Microeconomics: Principles and Policy 13th Edition
674231
Exam Prep
Economics Chapter 11 To Be A Natural Monopoly, A Firm Must
2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 2016 Cengage Learning. All Rights Reserved.
Microeconomics: Principles and Policy 13th Edition
674237
Exam Prep
Economics Chapter 12 Third They Will Observe Rivals Advertising And May
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Microeconomics: Principles and Policy 13th Edition
674244
Exam Prep
Economics Chapter 14 Price Acts Rationing Device That Apportions The
2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 2016 Cengage Learning. All Rights Reserved.
Microeconomics: Principles and Policy 13th Edition
674241
Exam Prep
Economics Chapter 14 The Existence Universal Law Scarcity Creates
2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 2016 Cengage Learning. All Rights Reserved.
Microeconomics: Principles and Policy 13th Edition
674248
Exam Prep
Economics Chapter 15 For Both These Reasons There Opportunity Cost
2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 2016 Cengage Learning. All Rights Reserved.
Microeconomics: Principles and Policy 13th Edition
674255
Exam Prep
Economics Chapter 17 Necessities More The Incidence Tax Borne
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Microeconomics: Principles and Policy 13th Edition
674263
Exam Prep
Economics Chapter 19 General Increase Wages Will Lead Some
2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. ANSWER: d POINTS: 1 DIFFICULTY: Easy
Microeconomics: Principles and Policy 13th Edition
674266
Exam Prep
Economics Chapter 19 Us Labor Force Into Service Industries And
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Microeconomics: Principles and Policy 13th Edition
674136
Exam Prep
Economics Chapter 2 Objectives Disc The Study Economics Disc The Study
2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 2016 Cengage Learning. All Rights Reserved.
Microeconomics: Principles and Policy 13th Edition
674267
Exam Prep
Economics Chapter 20 Income Redistribution Policy Based The Relative
2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 2016 Cengage Learning. All Rights Reserved.
Microeconomics: Principles and Policy 13th Edition
674275
Exam Prep
Economics Chapter 22 Overt Export Subsidies Are Minor The United
2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 2016 Cengage Learning. All Rights Reserved.
Microeconomics: Principles and Policy 13th Edition
674273
Exam Prep
Economics Chapter 22 They Were Irrational And Distraught Over The Loss
2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 2016 Cengage Learning. All Rights Reserved.
Microeconomics: Principles and Policy 13th Edition
674142
Exam Prep
Economics Chapter 3 Suppose The Us Government Has Annual
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Microeconomics: Principles and Policy 13th Edition
674177
Exam Prep
Economics Chapter 6 But Simultaneously The Price Keeps Going Lower That
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Microeconomics: Principles and Policy 13th Edition
674198
Exam Prep
Economics Chapter 8 The Marginal Cost Alexas Guide Street
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Microeconomics: Principles and Policy 13th Edition
674201
Exam Prep
Economics Chapter 8 The Optimal Number Units Produce Best
2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 2016 Cengage Learning. All Rights Reserved.
Microeconomics: Principles and Policy 13th Edition
674210
Exam Prep
Economics Chapter 9 Disc The Study Economics And Definitions In
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Microeconomics: Principles and Policy 13th Edition
674213
Exam Prep
Economics Chapter 9 New York Several Smaller Regional Exchanges Across
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Microeconomics: Principles and Policy 13th Edition
674216
Exam Prep
Economics Chapter 9 Oscar Will Forfeit The Stock Purchases With Freds
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Microeconomics: Principles and Policy 13th Edition
674207
Exam Prep
Economics Chapter 9 When Corporation Needs Capital Expand Its
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Microeconomics: Principles and Policy 13th Edition
351812
Exam Prep
MicroEconomic 136 Homework
List the three coordination decisions made by every economy. a. Where? When? How? b. How? What? To whom? c. Why? Where? What? d. When? To Whom? Where? Answer: b Answer: b Answer: b It is relatively easy for a firm to enter a perfectly competitive market. a. True b. False Answer: True Answer: True Answer: True The major incentive for cost minimization is the a.
Microeconomics: Principles and Policy 13th Edition
351545
Exam Prep
MicroEconomic 137 Midterm 2
Figure 10-7 In Figure 10-7, output at which point represents short-run but not long-run equilibrium? a. A only b. B only c. both A and B d. both B and C Answer: d Answer: d Answer: d On necessities, more of the incidence of tax is a. borne by the producer. b. borne by the consumer. c. shared equally between the producer
Microeconomics: Principles and Policy 13th Edition
351778
Exam Prep
MicroEconomic 147 Midterm 2
Which of the following is not a barrier to entry? a. Legal restrictions b. Patents c. Large sunk costs d. Survivor rights Answer: d Answer: d Answer: d One protection that encouraged entrepreneurs in the U.S. was the enforceability of contracts by the courts. a. True b. False Answer: True Answer: True Answer: True John Amaker owns orange groves and hires pickers for a
Microeconomics: Principles and Policy 13th Edition
351480
Exam Prep
MicroEconomic 197 Midterm 2
A sum of money to be received in the future is worth more than a sum of money today. a. True b. False Answer: False Answer: False Answer: False The theory of the kinked demand curve is used to explain a. bizarre corporate behavior. b. sales maximization. c. the maximin criterion. d. sticky prices in oligopolies. Answer: d Answer: d Answer: d Economists believe
Microeconomics: Principles and Policy 13th Edition
351495
Exam Prep
MicroEconomic 220 Test
The idea of horizontal equity in taxation implies that a. equally situated individuals should be taxed equally. b. unequally situated individuals should be taxed unequally. c. benefits should be given first to those individuals who need them most. d. the greatest tax burden should be borne by the wealthiest individuals. Answer: a Answer: a Answer: a The "law"
Microeconomics: Principles and Policy 13th Edition
351654
Exam Prep
MicroEconomic 239 Test 1
Which of the following would cause an increase in demand for Toyota automobiles? a. an increase in the price of Toyota automobiles b. a decrease in the price of Toyota automobiles c. a decrease in the price of Honda automobiles d. an increase in the price of Honda automobiles Answer: d Answer: d Answer: d To find a
Microeconomics: Principles and Policy 13th Edition
351753
Exam Prep
MicroEconomic 269 Midterm 2
The price for labor is the wage rate. What happens to the supply of labor if wages increase? a. It increases. b. It decreases. c. It does not change. d. Uncertain-economic theory has no answer to this question. Answer: c Answer: c Answer: c According to the kinked demand curve model, an oligopolist may face a. more elastic demand
Microeconomics: Principles and Policy 13th Edition
351970
Exam Prep
MicroEconomic 322 Test 2
When economists are critical of government regulations that prohibit free individuals from making certain kinds of contracts, for example, to purchase a good or service, they will usually invoke the concept of a. marginal analysis. b. mutual gains from voluntary trade. c. inflation-unemployment trade-off. d. the need for abstraction. e. externalities. Answer: b Answer: b Answer: b The demand for
Microeconomics: Principles and Policy 13th Edition
351839
Exam Prep
MicroEconomic 369
The optimal number of units to produce is best expressed when: a. marginal benefit exceeds marginal cost b. marginal cost exceeds marginal benefit c. marginal benefit and marginal cost are close to equal d. both a and c Answer: cEssay Answer: cEssay Answer: c Essay Land on both sides of the border of Brazil and Venezuela has long been
Microeconomics: Principles and Policy 13th Edition
352008
Exam Prep
MicroEconomic 376 Homework
The contestable market theory best applies to a. pure monopoly. b. oligopoly. c. monopolistic competition. d. perfect competition. Answer: b Answer: b Answer: b Which of the following is not generally considered a failing of market economies? a. Market economies can have severe swings from boom to bust. b. Market economies tend to underprovide public goods. c. Market economies tend to
Microeconomics: Principles and Policy 13th Edition
351818
Exam Prep
MicroEconomic 403 Test 2
If the price of garbage removal rises, people will a. demand a lesser quantity of garbage removal. b. take more waste to recycling centers. c. repair broken items rather than throwing them out. d. All of the above are correct. Answer: d Answer: d Answer: d Which of the following is not held constant along a demand curve
Microeconomics: Principles and Policy 13th Edition
351853
Exam Prep
MicroEconomic 445 Midterm 1
Monopolistic competition differs from perfect competition only in the number of firms participating in the market. a. True b. False Answer: False Answer: False Answer: False A certain machine will last one year, will produce $120 in income (received one year later), and will cost $100 The lowest interest rate at which this investment will be
Microeconomics: Principles and Policy 13th Edition
352014
Exam Prep
MicroEconomic 516 Quiz 2
Figure 4-3 A 1985 Harvard study showed that the price of cigarettes does not affect how much an individual smokes but whether he smokes. If this is correct, which graph in Figure 4-3 shows the typical individual's demand curve for cigarettes? a. 1 b. 2 c. 3 d. 4 Answer: d Answer: d Answer: d Figure 4-21 Which price in
Microeconomics: Principles and Policy 13th Edition
351520
Exam Prep
MicroEconomic 544 Quiz
As a rule, as a consumer acquires more and more of a good, the marginal utility declines. a. True b. False Answer: True Answer: True Answer: True Productivity growth is the main cause of rising living standards. a. True b. False Answer: True Answer: True Answer: True If the demand curve for a product is vertical, then a. consumers will refuse to bear
Microeconomics: Principles and Policy 13th Edition
352015
Exam Prep
MicroEconomic 561 Midterm 2
At his profit-maximizing level of output, a monopolist's average total cost curve is tangent to his demand curve. The monopolist a. is earning a negative economic profit. b. may or may not be earning a negative economic profit. c. is earning zero economic profit. d. is earning a positive economic profit. Answer: c Answer: c Answer: c Entrepreneurs
Microeconomics: Principles and Policy 13th Edition
351808
Exam Prep
MicroEconomic 587
Usury laws carry the potential of hurting a. borrowers. b. lenders. c. borrowers and lenders. d. government. Answer: c Answer: c Answer: c Firms often seek to borrow money to expand their capital stock, and the price they pay for that money is the interest rate. What happens to quantity of money demanded if the interest rate increases? a.
Microeconomics: Principles and Policy 13th Edition
351609
Exam Prep
MicroEconomic 593 Homework
A good's marginal social cost is defined as its a. marginal private cost minus the value of any detrimental externality. b. incidental cost. c. marginal private cost plus the value of any taxes paid on its production. d. marginal private cost plus its incidental cost. Answer: d Answer: d Answer: d A usury rate is like a price
Microeconomics: Principles and Policy 13th Edition
351844
Exam Prep
MicroEconomic 615
The psychological rewards of inventing a new product generally result in ____ profits for entrepreneurs. a. below average b. only average c. above average d. indeterminate Answer: a Answer: a Answer: a Economists favor a negative income tax because they believe a. that it will create more jobs for economists to monitor the program. b. the current welfare programs have
Microeconomics: Principles and Policy 13th Edition
351505
Exam Prep
MicroEconomic 624
Since price tends to equal marginal utility, the price of water is low and the price of diamonds is high. a. True b. False Answer: True Answer: True Answer: True Elasticity of demand equals the ratio of the percentage change in quantity demanded to the percentage change in the price of the good. a. True b. False Answer: True Answer:
Microeconomics: Principles and Policy 13th Edition
351962
Exam Prep
MicroEconomic 637 Because There
Because there is a trade-off between inflation and unemployment in the short run, a. lower unemployment will typically cause inflation to fall. b. policies designed to reduce unemployment will typically set off a recession. c. policies designed to reduce inflation will cause unemployment to fall as well. d. higher inflation will generally be associated
Microeconomics: Principles and Policy 13th Edition
351735
Exam Prep
MicroEconomic 702
Table 7-4 Table 7-4 shows a production relationship. Assuming the labor input is fixed at 4, what will be the optimum capital input assuming an output price of $1 and a $90-per-day cost for one unit of capital? a. 1 b. 2 c. 3 d. 4 Answer: c Answer: c Answer: c A tariff is better than a quota
Microeconomics: Principles and Policy 13th Edition
351990
Exam Prep
MicroEconomic 709
Which of the following events create an outward shift of the production possibilities curve? a. The United States moves resources from the production of goods for domestic production to the production of goods for export. b. Tax reductions reduce the cost and increase the volume of investment in factories, machinery, and research
Microeconomics: Principles and Policy 13th Edition
351728
Exam Prep
MicroEconomic 724 Quiz 3
Money spent on college tuition is considered human capital by economists. a. True b. False Answer: True Answer: True Answer: True Figure 22-2 In Figure 22-2, if the United States and Mexico are negotiating to trade wheat for petroleum, a. the United States must receive more than 1 2/3 units of petroleum for a unit of wheat. b. Mexico
Microeconomics: Principles and Policy 13th Edition
351698
Exam Prep
MicroEconomic 728 Test 1
Table 7-5 Table 7-5 shows short-run total cost figures for a stereo manufacturer. At what output level does short-run average total cost reach a minimum? a. 2 b. 3 c. 4 d. 5 Answer: d Answer: d Answer: d Command economies are able to achieve greater allocative efficiency than market economies. a. True b. False Answer: False Answer: False Answer: False The sole owner of
Microeconomics: Principles and Policy 13th Edition
351823
Exam Prep
MicroEconomic 777 Quiz 3
The share of industry output sold by the top four steel producers in the country are 19%, 15%, 12%, and 9% respectively. The four-firm concentration ratio for the steel industry is a. 0,19 b. 0,55 c. 0,138 d. 0,65 Answer: b Answer: b Answer: b Natural monopolies are of theoretical, but not practical interest. a. True b. False Answer: False Answer: False Answer: False In
Microeconomics: Principles and Policy 13th Edition
351571
Exam Prep
MicroEconomic 781 Quiz 3
The growth rate of productivity is the most important determinant of material well-being in the short run. a. True b. False Answer: False Answer: False Answer: False The demand curve for funds is downward sloping because a. the value of the MRP in terms of today's money shrinks as the interest rate rises. b. future returns must be
Microeconomics: Principles and Policy 13th Edition
351761
Exam Prep
MicroEconomic 788
The Industrial Revolution refers to the stream of new technology and the resulting growth of output than began in England toward the end of the eighteenth century. a. True b. False Answer: True Answer: True Answer: True The marginal revenue curve for a monopolist is a. always above the demand curve. b. generally below the average cost curve. c.
Microeconomics: Principles and Policy 13th Edition
351681
Exam Prep
MicroEconomic 789 Midterm
Profits will be maximized when the slope of the total revenue curve and the slope of the total cost curve equal zero. a. True b. False Answer: False Answer: False Answer: False Figure 7-6 Which of the lines in Figure 7-6 represents a typical average fixed cost curve? a. 1 b. 2 c. 3 d. 4 Answer: d Answer: d Answer: d A monopoly firm a. has
Microeconomics: Principles and Policy 13th Edition
351767
Exam Prep
MicroEconomic 795 Quiz 3
Figure 5-16 Figure 5-16 shows Adam's purchases of bananas and apples when apples cost $5 each and bananas $4 each. The information implies that Adam's income a. must be $9. b. must be $20. c. must be $40. d. Adam's income cannot be determined without further information. Answer: b Answer: b Answer: b Industries, where economies of scale dictate
Microeconomics: Principles and Policy 13th Edition
351474
Exam Prep
MicroEconomic 819 Quiz 3
Consumer spending accounts for what share of GDP? a. 20% b. 40% c. 70% d. 90% Answer: c Answer: c Answer: c Taxes on polluting firms for pollution are intended to a. raise enough revenue to cut the deficit in half. b. encourage firms to reduce charges by polluting less. c. be efficient, i.e., result in no excess burden. d. raise revenue
Microeconomics: Principles and Policy 13th Edition
351980
Exam Prep
MicroEconomic 843 Test 2
If a farmer's opportunity cost of producing 50,000 bushels of wheat is 20,000 fewer bushels of soybeans, then her opportunity cost of producing 50,000 bushels of soybeans must also be 20,000 fewer bushels of wheat. a. True b. False Answer: False Answer: False Answer: False Define the following terms and explain their importance to the study of
Microeconomics: Principles and Policy 13th Edition
351731
Exam Prep
MicroEconomic 860 Quiz 1
Which of the following is most likely to reduce the consumption of an exhaustible natural resource? a. a decrease in monopoly control of the market for the resource b. government tax policies that give tax breaks to entrepreneurs who search for new reserves of the resource c. implementation of a price ceiling for
Microeconomics: Principles and Policy 13th Edition
351665
Exam Prep
MicroEconomic 866 Test
Takeovers and takeover attempts waste valuable capital. a. True b. False Answer: False Answer: False Answer: False Debt grew faster than GDP during and after the recent Great Recession, when the government had to spend more (as for unemployment benefits), while its tax revenue shrank. a. True b. False Answer: True Answer: True Answer: True The payroll tax is the federal government's
Microeconomics: Principles and Policy 13th Edition
351471
Exam Prep
MicroEconomic 870
Price controls on resources generally lead to surpluses. a. True b. False Answer: False Answer: False Answer: False As we move down a straight-line demand curve, the price elasticity becomes a. larger. b. smaller. c. larger, then smaller. d. smaller, then larger. Answer: b Answer: b Answer: b Figure 8-3 Figure 8-3 shows a firm's total profit function. At an output of 40, the firm's
Microeconomics: Principles and Policy 13th Edition

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