Archives
BUS 11004
Suppose that each of the two firms in a duopoly has the independent choice of advertising or not advertising. If neither advertises, each gets $10 million in profit; if both advertise, their profits will be $5 million each; and if […]
BUS 17709
Figure: Marginal Private Benefits and Marginal Social Benefits (Figure: Marginal Private Benefits and Marginal Social Benefits) Look at the figure Marginal Private Benefits and Marginal Social Benefits. One way for the government to achieve this socially optimal level is by: […]
BUS 28991
The model suggesting that countries will specialize in producing the good that uses its relatively abundant factor of production most intensively is referred to as the _____ model. A) Heckscher”Ohlin B) absolute advantage C) sweatshop labor D) pauper labor fallacy […]
BUS 31197
Suppose a person rolls a typical six-sided die. What is the probability that the die will come up with a 1 two times in a row? A) 1 in 6 B) 1 in 3 C) 1 in 36 D) 1 […]
BUS 32382
Table: Lindsay’s Farm (Table: Lindsay’s Farm) Look at the table Lindsay’s Farm. When Lindsay produces 50 units of produce, her total cost is: A) $250. B) $50. C) $200. D) $350. Answer: A Figure: Demand for Coconuts (Figure: Demand for […]
BUS 37646
(Scenario: Linear Production Possibility Frontier) Look at the scenario Linear Production Possibility Frontier. Largetown CANNOT produce _____ shirts and _____ pairs of socks. A) 20; 0 B) 40; 40 C) 0; 40 D) 10; 20 The United States must give […]
BUS 38050
You notice that when a new yoga class is offered at the student recreation center at a highly desirable time, some students from the other yoga classes go to the new class instead. This statement best represents this economic concept: […]
BUS 39126
Monopolistic competition is similar to perfect competition because firms in both market structures: A) are price takers. B) produce goods that are perfect substitutes. C) find it beneficial to advertise. D) do not face any barriers to entry to the […]
BUS 44395
Figure: Indifference Curves and Consumption Bundles (Figure: Indifference Curves and Consumption Bundles) Look at the figure Indifference Curves and Consumption Bundles. In the figure, the initial optimum is at a. The price of hot dogs increases, and the new equilibrium […]
BUS 56328
As George ate pizza during one recent outing, he found that he enjoyed each additional slice less and less. This implies that his marginal benefit was: A) decreasing. B) increasing. C) constant. D) vertical. Decreasing and increasing returns to scale […]
BUS 73922
(Table: Cakes) Look at the table Cakes. Pat is opening a bakery to make and sell special birthday cakes. She is trying to decide how many mixers to purchase. Her estimated fixed and average variable costs if she purchases one, […]
BUS 77399
The study of behavior in situations of interdependence is called: A) cost”benefit analysis. B) econometric theory. C) game theory. D) strategic theory. Wendy sells ice-making machines. She can sell six per week at a price of $2,000 per machine. If […]
BUS 78234
Table: Denise’s Consumption of Coffee and Gasoline (Table: Denise’s Consumption of Coffee and Gasoline) Look at the table Denise’s Consumption of Coffee and Gasoline. Suppose Denise initially chooses consumption bundle A. She can increase her total utility by: A) consuming […]
BUS 80553
The incentives built into the market economy ensure that resources are put to good use and that opportunities to make people better off are not wasted. This means that: A) people usually are not selfish enough to exploit opportunities to […]
BUS 81562
Because of tax competition, state and local taxes tend to be _____; however, federal taxes tend to be _____. A) regressive; regressive B) progressive; regressive C) progressive; progressive D) regressive; progressive Jacquelyn is a student at a major state university. […]
BUS 85394
Which is NOT an example of a resource? A) land B) labor C) capital D) production The quantity demanded of labor will decrease if: A) the price of the product that the labor produces increases. B) the productivity of labor […]
BUS 96610
There are several close substitutes for Quaker State oil but fewer substitutes for a complete checkup of your car’s engine. We can expect the demand for: A) Quaker State oil to be more price-inelastic. B) the two to be equally […]
BUS 97680
Figure: Consumer Equilibrium III (Figure: Consumer Equilibrium III) Look at the figure Consumer Equilibrium III. Kurt would maximize his utility at point _____ with the consumption of _____. A) B; Q6 and Q3 B) E; Q1 and Q7 C) F; […]
Chapter 1 – First Principles This Sometimes Causes The First Manager Send
Page 1 1. Microeconomics deals with: A) the working of the entire economy or large sectors of it. B) economic growth. C) individual decision makers in the economy. D) gross domestic product. 2. The study of a single firm and […]
Chapter 10 – Appendix- Consumer Preferences And Consumer Choice Javon Consuming His Optimal Utility maximizing Consumption Bundle
Page 1 1. An indifference curve is a line showing all of the consumption bundles that: A) an individual can purchase with a given income. B) yield the same total utility for an individual. C) yield the same marginal utility. […]
Chapter 10 – The Rational Consumer Reeses Peanut Butter Cups There Not Enough
Page 1 1. The relation between an individual’s consumption bundle and her satisfaction is called a _____ function. A) demand B) production C) consumption D) utility 2. To say that you can’t have too much of a good thing means […]
Chapter 11 – Behind The Supply Curve- Inputs And Costs Cakes Look The Table Cakes Pat Opening
Page 1 1. A _____ is an organization that produces goods or services for sale. A) production function B) firm C) variable input D) fixed input 2. In the short run: A) all inputs are fixed. B) all inputs are […]
Chapter 12 – Perfect Competition And The Supply Curve Lillys Output The Long Run Rise
Page 1 1. If a California avocado stand operates in a perfectly competitive market, that stand owner will be a price: A) maker. B) taker. C) discriminator. D) maximizer. 2. If all firms in an industry are price takers: A) […]
Chapter 13 – Monopoly Price discriminating Firms Will Impose Price Structure That
Page 1 1. Market structures are categorized by: A) the number and size of the firms. B) whether products are differentiated and the extent of advertising. C) the number of firms and whether products are differentiated. D) the size of […]
Chapter 14 – Oligopoly Gabriel Describes Two People Who Sell Handmade
Page 1 1. In an oligopoly: A) there are many sellers. B) there are no barriers to entry. C) firms recognize their interdependence. D) total surplus is maximized. 2. The most important source of oligopoly in an industry is: A) […]
Chapter 15 – Monopolistic Competition And Product Differentiation Profit Maximization Monopolistic Competition Look The Figure
Page 1 1. Which of the following industries is MOST likely to be monopolistically competitive? A) automobile production B) fresh bagel shops C) corn farming D) electric utility production 2. A monopolistically competitive industry, such as corn snack chips, and […]
Chapter 16 – Externalities Page 116 Figure City With Two Polluters
Page 1 1. A market economy will produce _____ without any government regulation. A) too little pollution B) too much pollution C) the socially optimal amount of pollution D) the amount of pollution that maximizes total surplus 2. A negative […]
Chapter 17 – Public Goods And Common Resources Correcting For Market Failure The Government Forces
Page 1 1. Which of the following is an example of a nonexcludable good? A) health care B) national defense C) education D) ice cream 2. Which of the following goods BEST fits the characteristics of a private good? A) […]
Chapter 18 – The Economics Of The Welfare State True False 88 Technological Change The United
Page 1 1. Government payments to individuals for which no good or service exchanged are: A) spending. B) purchases. C) spending on goods and services. D) transfer payments. 2. Which of the following transactions is a transfer payment? A) The […]
Chapter 19 – Appendix- Indifference Curve Analysis Of Labor Supply Keisha Will Work Hours Because The
Page 1 1. Dorothy is trying to decide how to allocate her time between work and leisure. Suppose that she can work a maximum of 75 hours per week. If she can earn $15 per hour, the vertical intercept of […]
Chapter 19 – Factor Markets And The Distribution Of Income Page 152 Which The Following Does Not
Page 1 1. G. Reecy’s Hamburger Joint is a fast-food restaurant. Which of the following is a factor of production? A) the raw meat used for the hamburgers B) the hamburger buns C) the cook D) the concentrate that is […]
Chapter 20 – Uncertainty, Risk, And Private Information Microsoft Invests 1000 Apple There 40 Probability
Page 1 1. Louis has invested $1,000 in the stock market. At the end of one year, there is a 30% chance that his stock will be worth only $800 and a 70% chance that it will be worth $1,200. […]
Chapter 4 – Consumer And Producer Surplus Tuscaloosa The Price Burger 2 Consumer Surplus
Page 1 1. A consumer’s willingness to pay reflects: A) the maximum price at which he or she would buy the good or service. B) the minimum price at which he or she would buy the good or service. C) […]
Chapter 5 – Price Controls And Quotas- Meddling With Markets Europe The Minimum Wage Has Led To
Page 1 1. A price control is: A) control of the price of a good by the firm that produces it. B) a legal restriction on how high or low a price in a market may go. C) an upper […]
Chapter 6 – Elasticity Market For Pizza Income Changes From 1000
Page 1 1. The price elasticity of demand measures the responsiveness of the change in the: A) quantity demanded to a change in the price. B) price to a change in the quantity demanded. C) slope of the demand curve […]
Chapter 7 – Taxes Page 148 Personal Income And Including 25000
Page 1 1. Suppose the government decides to fight obesity in America by imposing an excise tax based on the saturated fat content of food. The most likely effect of this tax would be to: A) lower the profits of […]
Chapter 9 – Decision Making By Individuals And Firms The Marginal Benefit Studying Economics For Two
Page 1 1. Jacquelyn is a student at a major state university. Which of the following is NOT an explicit cost of her attending college? A) tuition B) textbooks C) the salary that she could have earned working full-time D) […]
ECB 10678
To maximize her grade in economics, Stacey should study until: A) her marginal cost of studying begins to increase. B) her marginal benefit of studying begins to decrease. C) her marginal benefit of studying equals her marginal cost of studying. […]
ECB 11219
If an increase in the price of cotton increases total revenue, then the price effect is _____ the quantity effect. A) equal to B) stronger than C) weaker than D) not comparable to (Table: Producer Surplus and Phantom Tickets) The […]
ECB 11889
The income effects of a change in price are most important for goods that: A) take up a substantial share of a consumer’s spending. B) are very inexpensive. C) are imported. D) are normal. Figure and Table: The Budget Line […]
ECB 12124
Which of the following scenarios is likely to provide the LEAST amount of economic usefulness? A) NFL player Peyton Manning is shown throwing a football in a toothpaste commercial. B) An online advertisement is posted at Cars.com for a 2005 […]
ECB 14385
The efficient level of pollution is the quantity at which: A) its total benefits exceed its total costs to society by the greatest possible amount. B) its total benefits to society equal its total costs to society. C) the marginal […]
ECB 23226
Figure: The Market for Thumb Drives (Figure: The Market for Thumb Drives) Look at the figure The Market for Thumb Drives. Assume that PA is the autarky price, PW is the world price, and D and S represent domestic demand […]
ECB 26291
Assume that diminishing marginal utility applies to both coffee and football tickets and that the consumer is spending all of her income. If a consumer purchases a combination of coffee and football tickets such that MUCoffee / PCoffee = 20 […]
ECB 38476
If the marginal benefit received from consuming a good is less than the marginal cost of production: A) society’s well-being can be improved if production increases. B) society’s well-being can be improved if production decreases. C) society’s well-being cannot be […]
ECB 41060
Wenqin is a farmer, and in the short run she produces 100 bushels of wheat. Her average total cost per bushel is $1.75, total revenue is $450, and total fixed costs are $100. Wenqin’s: A) average fixed cost is $1.50. […]
ECB 42861
If government decides to control the amount of a good allowed into a market, this will: A) always result in an increase in efficiency in the market. B) increase incentives for market participants to engage in black market activities. C) […]
ECB 44283
Tony runs Read Economic Reports. If Tony finds that the cost of completing an additional report is $100 and someone offers him $125 to complete this additional report, Tony should: A) not complete the additional report, since he will incur […]
ECB 49345
Assume an economy moves from autarky to free international trade. In the export sector, consumer surplus _____, producer surplus _____, and the economy as a whole _____. A) rises; rises; gains B) rises; falls; gains C) falls; rises; gains D) […]
ECB 53498
The price elasticity of a good will tend to be larger: A) the longer the relevant time. B) the fewer number of substitute goods available. C) if it is a staple. D) if it is relatively inexpensive. The price of […]
ECB 61386
(Figure: Wine and Wheat) Look at the figure Wine and Wheat. The opportunity cost of moving from producing ONLY wheat to producing at point D is _____ tons of wheat. A) 3 B) 6 C) 9 D) 15 Answer: Answer: […]
ECB 63249
If a firm operating in monopolistic competition is producing a quantity that generates MC = MR, then the marginal decision rule tells us that profit: A) is maximized. B) can be increased by decreasing production. C) can be increased by […]
ECB 64133
Chile has a comparative advantage over the United States in copper. Which of the following is a source of this comparative advantage? A) mild temperatures B) large deposits of copper ore C) no opportunity cost associated with copper production D) […]
ECB 67299
If a decision maker chooses an option that leaves him or her worse off than choosing another available option, he or she is: A) using bounded rationality. B) basing the decision on risk aversion. C) making an irrational decision. D) […]
ECB 71336
Figure: Monopolistic Competition II (Figure: Monopolistic Competition II) Which panel(s) in the figure Monopolistic Competition II show(s) a monopolistic competitor producing where price is greater than marginal revenue? A) panel (a) B) panel (b) C) panel (c) D) panels (a), […]
ECB 71782
Figure: Collusion (Figure: Collusion) Look at the figure Collusion. The price charged by the industry with collusion is shown by: A) W. B) X. C) Y. D) Z. Suppose the government imposes a $10 excise tax on the sale of […]
ECB 78347
Unwritten or unspoken understandings through which firms restrict competition are called: A) cartel agreements. B) oligopoly agreements. C) overt collusion. D) tacit collusion. If the government imposes binding rent control: A) rent will be set above the equilibrium price. B) […]
ECB 79176
(Table: The Demand for Chocolate-Covered Peanuts) Look at the table The Demand for Chocolate-Covered Peanuts. If George, Barbara, and Dan are the only three buyers in the market and the price of a bag of chocolate-covered peanuts is $0.80, the […]
ECB 81381
Common resources tend to be _____ in private markets. A) priced too high B) efficiently priced C) overconsumed D) underconsumed The strategy of investing in several assets so that any possible losses are independent events is: A) diversification. B) private […]
ECB 82962
The average total cost curve has a U shape because the ______ effect is dominant at low levels of output, and the _____ effect is dominant at high levels of output. A) diminishing returns; spreading B) spreading; diminishing returns C) […]
ECB 85601
For some people, coffee and milk are perfect complements. Their indifference curves are: A) right angles. B) straight lines between the X and Y axis. C) straight lines out of the origin. D) regular downward-sloping indifference curves, but their budget […]
ECB 85775
(Table: Production Possibilities Schedule I) Look at the table Production Possibilities Schedule I. If the economy produces 10 units of capital goods per period, it also can produce at most _____ units of consumer goods per period. A) 5 B) […]
ECB 89333
Answer: A Answer: B Answer: B Which of these is one of the four principles of individual choice? A) Resources are usually renewable. B) The real cost of something is impossible to measure. C) People take advantage of opportunities to […]
ECB 89359
Figure: Production Possibility Frontier (Figure: Production Possibility Frontier) Look at the figure Production Possibilities Frontier. This production possibility frontier is: A) bowed out because of increasing opportunity costs. B) bowed in because of increasing opportunity costs. C) bowed in because […]
ECB 90669
A strategy that is the same regardless of the action of the other player in a game is a _____ strategy. A) competitive B) trigger C) dominant D) tit-for-tat Figure: Computing Monopoly Profit (Figure: Computing Monopoly Profit) Look at the […]
ECB 92877 If a monopolist is
If a monopolist is producing a quantity that generates MC < MR, then profit: A) is maximized. B) is maximized only if MC = P. C) can be increased by increasing production. D) can be increased by decreasing production. Figure: […]
ECB 98429
The 1890 law intended to prevent the establishment of more monopolies and to break up existing ones in the United States was the: A) Taft-Hartley Act. B) Sherman Antitrust Act. C) Affordable Care Act. D) Federal Trade Commission Act Taxes […]
ECON 10514
Prices above equilibrium on agricultural products like milk exist to maximize the consumer surplus. Answer: A Answer: A Figure: Market I (Figure: Market I) Look at the figure Market I. A price floor at $15 would result in deadweight loss […]
ECON 10783
If quantity supplied responds substantially to a relatively small change in price, supply is: A) price-elastic. B) price-inelastic. C) negatively sloped. D) insensitive to changes in price. Along a given supply curve, an increase in the price of a good […]
ECON 10862
Mikail’s perfectly competitive camera memory card”producing factory is making positive economic profits. If the price of memory cards is $9, if Mikail’s output is 3,000 cards a month, and if his monthly average total cost is $7, what are his […]
ECON 13297
An unwritten, unspoken agreement through which firms limit competition among themselves is called: A) satisfying. B) tacit collusion. C) overt collusion. D) a cartel. Answer: A Answer: A Which of the following U.S. welfare programs is a means-tested in-kind benefit? […]
ECON 24167
Figure: The Linear Demand Curve (Figure: The Linear Demand Curve) Look at the figure The Linear Demand Curve. If you increase the price of your scarves from $7 to $8, your total revenue will _____, and you notice that your […]
ECON 25214
Pizza is a normal good. If students’ incomes at your college increase, the effect on pizza will be: A) an increase in the demand. B) an increase in the quantity demanded. C) a decrease in the demand. D) no change […]
ECON 25939
In the short run, as output gets larger: A) fixed cost gets smaller. B) the average variable cost curve gets closer to the average total cost curve. C) marginal cost gets smaller. D) average total cost decreases after the point […]
ECON 27429
Figure: Indifference Curves and Consumption Bundles (Figure: Indifference Curves and Consumption Bundles) Look at the figure Indifference Curves and Consumption Bundles. For this consumer pizza is a(n) _____ good and hot dogs are a(n) _____ good. A) normal; inferior B) […]
ECON 31063
Producers of artificially scarce goods face _____ that are similar to those of natural monopolists; they decline over the relevant range of output. A) external benefits B) external costs C) total fixed costs D) average total costs Answer: D Answer: […]
ECON 31365
Figure: Demand Curves (Figure: Demand Curves) Look at the figure Demand Curves. Which graph shows a perfectly elastic demand curve? A) A B) B C) C D) D Marginal cost can be calculated as: A) DTC / DQ, where TC […]
ECON 39903
When comparing the characteristics of common resources and artificially scarce goods, we find that: A) they are both nonrival in consumption. B) they are both excludable. C) common resources are nonrival in consumption (while artificially scarce goods are not), and […]
ECON 40153
If at a given quantity _____, the decision maker should do _____ of the activity. A) MB < MC; that amount B) MB < MC; less C) MB > MC; less D) MB > MC; none (Table: Alaina’s Utility from […]
ECON 41689
The demand curve for a monopoly is: A) the MC curve above the AVC curve. B) the MR curve above the horizontal axis. C) identical to the MR curve. D) also the industry demand curve. Suppose the elasticity of demand […]
ECON 45706
Dorothy is trying to decide how to allocate her time between work and leisure. Suppose that she can work a maximum of 75 hours per week. If she can earn $15 per hour, the vertical intercept of her time allocation […]
ECON 48118
A recent news story reported that the Organization of Petroleum Exporting Countries is expected to decrease the supply of oil next summer. Summer is traditionally a time of increased demand for oil because of vacation travel. What would be the […]
ECON 60038
(Table: Marginal Utility per Dollar of M&Ms) Look at the table Marginal Utility per Dollar of M&Ms. The price of M&Ms is $2 per bag. If the price of M&Ms decreases to $1 per bag, the marginal utility per dollar […]
ECON 63337
Figure: Consumer and Capital Goods Answer: A Answer: A (Figure: Consumer and Capital Goods) Look at the figure Consumer and Capital Goods. The movement from curve 1 to curve 2 indicates: A) a growing ability of the economy to produce […]
ECON 64084
If the government decides to impose a $700 tax on U.S. citizens vacationing abroad, then the deadweight loss from this tax will be: A) relatively small. B) relatively large. C) zero. D) absorbed by foreign governments. Figure: Water Works (Figure: […]
ECON 69900
The market for milk is initially in equilibrium. Milk producers successfully advertise to encourage milk drinking. At the same time, more milk producers enter the market. Standard demand and supply analysis tells us that: A) the equilibrium price and quantity […]
ECON 72215
All else equal, if a price floor above the equilibrium is imposed on a market and the government buys the surplus, consumer surplus will _____ and producer surplus will _____. A) fall; rise B) fall; fall C) rise; fall D) […]
ECON 72867
There are several close substitutes for Bayer aspirin but fewer substitutes for a complete medical examination. Therefore, all other things equal, you would expect the demand for: A) medical exams to be more price-elastic. B) Bayer aspirin to be more […]
ECON 72901
Deadweight losses arising from an excise tax are greatest when demand: A) and supply are relatively inelastic. B) is relatively inelastic and supply is relatively elastic C) is relatively elastic and supply is relatively inelastic. D) and supply are relatively […]
ECON 73312
(Table: Trade-off of Study Time and Leisure Time) Look at the table Trade-off of Study Time and Leisure Time. A student sleeps 8 hours per day and divides the remaining time between study time and leisure time. The table shows […]
ECON 76475
Figure: The Market for Yachts (Figure: The Market for Yachts) Look at the figure The Market for Yachts. A price _____ of _____ will bring the about the same price and output in the market for yachts as would an […]
ECON 77096
Suppose the government levies a $4 per month excise tax on cable TV. If the demand for cable TV is relatively (but not perfectly) inelastic and the supply curve is relatively (but not perfectly) elastic, then the price of cable […]
ECON 87306
Krista’s dry-cleaning business incurs $900 per month in fixed costs. Last month her total output was 3,000 pounds of clothes. This month her total output fell to 2,700 pounds. This means her average fixed cost _____ by a little more […]
ECON 92172
Figure: Gain in Consumer Surplus (Figure: Gain in Consumer Surplus) Look at the figure Gain in Consumer Surplus. Identify the area or areas that represent the total change in consumer surplus when the price falls from P1 to P2. A) […]
ECON 94334
Figure: Market Failure (Figure: Market Failure) In the figure Market Failure, if production in this competitive market is at quantity E: A) marginal benefit is equal to marginal cost. B) marginal benefit is less than marginal cost. C) marginal benefit […]
ECON 95065
Table: The Lemonade Market Price of Lemonade (per cup) Number of Cups Demanded (QD) Number of Cups Supplied (QS) $0.50 250 25 0.75 200 50 1.00 150 75 1.25 100 100 1.50 50 125 1.75 20 150 (Table: The Lemonade […]
ECON 98377
Figure: The Demand for Shirts (Figure: The Demand for Shirts) Look at the figure The Demand for Shirts. The price elasticity of demand, by the midpoint method, for the segment FG is approximately: A) 0. B) 0.09. C) 0.5. D) […]
ECON A 10205
If the price is consistently below the average variable cost, then in the short run a perfectly competitive firm should: A) raise the price. B) sell more output. C) shut down. D) lower the price to sell more. (Table: Demand […]
ECON A 14289
(Table: Quantity Supplied and Quantity Demanded) Look at the table Quantity Supplied and Quantity Demanded. If a price ceiling of $10 is imposed in this market: A) the quantity demanded will be greater than the quantity supplied. B) the quantity […]
ECON A 19307
In the United States, payments to labor account for: A) 70% of total income, a share that has not fluctuated much in the past 30 years. B) 50% of total income, but the returns to land have been increasing. C) […]
ECON A 23344
Figure: The Market for Yachts (Figure: The Market for Yachts) Look at the figure The Market for Yachts. A price _____ of _____ will bring about the same price and output in the market for yachts as would an excise […]
ECON A 23745
If two goods are complements, their cross-price elasticity of demand is: A) less than 0. B) equal to 0. C) positive but almost equal to 0. D) greater than 0. (Table: Marginal and Total Benefit) Look at the table Marginal […]
ECON A 27491
Figure: The Average Total Cost Curve (Figure: The Average Total Cost Curve) Look at the figure The Average Total Cost Curve. The total cost of producing 10 pairs of boots is approximately: A) $13. B) $54. C) $131. D) $1,308. […]
ECON A 42364
(Table: Demand Schedule for Gadgets) Look at the table Demand Schedule for Gadgets. The market for gadgets consists of two producers, Margaret and Ray. Each firm can produce gadgets with no marginal cost or fixed cost. If these two producers […]
ECON A 46194
The income elasticity of demand measures: A) how much the quantity demanded changes in response to a price change. B) how much a consumer can buy at given income levels. C) how much consumer purchasing power is affected when prices […]
ECON A 46803
Accountants use only _____ costs in their computations. A) opportunity B) implicit C) explicit D) variable Moral hazard: A) occurs when incentives are distorted because an individual knows more about his or her own actions than other people do. B) […]
ECON A 49140
Restrictions on free international trade designed to insulate domestic industries from competitive market forces that originate beyond the borders of the country are _____ policies. A) competitive B) protectionist C) free-trade D) antitrust Some highways have one lane; others have […]
ECON A 50878
Figure: Market for Hamburgers (Figure: The Market for Hamburgers) The figure The Market for Hamburgers shows the weekly market for hamburgers in Irvine, Kentucky. If 400 hamburgers are sold, producer surplus will equal: A) $650. B) $400. C) $510. D) […]
ECON A 55185
If the price elasticity of supply is: A) greater than 1, then the supply is price-elastic. B) greater than 1, then the supply is price-inelastic. C) zero, then the supply is price unit-elastic. D) greater than 1, then the quantity […]
ECON A 58937
As you consume more turkey relative to mashed potatoes, the _____ of turkey eventually decreases. A) price B) usefulness C) marginal utility D) demand Answer: A Answer: A Figure: The Demand for Bricklayers (Figure: The Demand for Bricklayers) Look at […]
ECON A 60526
The sources of product differentiation do NOT include: A) differences in location. B) differences in quality. C) the perception by consumers that products are different, even if they are physically identical. D) consumers’ value in uniformity. Figure: Strawberries and Submarines […]
ECON A 64921
Figure: The Value of the Marginal Product Curve (Figure: The Value of the Marginal Product Curve) In the figure The Value of the Marginal Product Curve, the VMPL curve will shift to the right if: A) the wage rate increases. […]
ECON A 68494
If the extra output that is produced by hiring one more unit of labor adds more to _____ than to _____, the firm will increase its profit by increasing the use of labor. A) total cost; total revenue B) total […]
ECON A 71389
Figure: The Market for Yachts (Figure: The Market for Yachts) Look at the figure The Market for Yachts. If the government imposes a $30,000 tax on yachts (collected from the producers), consumers will pay _____ of the tax and producers […]
ECON A 72070
(Table: Demand Schedule for Gadgets) Look at the table Demand Schedule for Gadgets. The market for gadgets consists of two producers, Margaret and Ray. Each firm can produce gadgets with no marginal cost or fixed cost. If these two producers […]
ECON A 72919
Workers in China earn low wages relative to world standards. A person who believes trade must be bad for workers in China because of this adheres to the: A) sweatshop labor fallacy. B) Heckscher”Ohlin theory. C) pauper labor fallacy. D) […]
ECON A 77664
Figure and Table: An Indifference Curve Map (Figure and Table: Indifference Curve Map) Look at the figure and table An Indifference Curve Map. Combination _____ is preferred to combination _____. A) A; B B) B; D C) C; A D) […]
ECON A 84182
Figure: Monopolistic Competition VI (Figure: Monopolistic Competition VI) The figure Monopolistic Competition VI illustrates a firm in the _____; in the _____, the demand and marginal revenue curves will shift to the _____. A) short run; long run; right B) […]
ECON A 91078
Figure: The Profit-Maximizing Output and Price (Figure: The Profit-Maximizing Output and Price) Look at the figure The Profit-Maximizing Output and Price. Assume that there are no fixed costs and AC = MC = $200. At the profit-maximizing output and price […]
ECON E 13555
Jeanette is willing to pay $100 for the first pair of shoes, $80 for the second pair, $50 for the third, and $30 for the fourth. If shoes cost $50, Jeanette will buy _____ pairs of shoes and her total […]
ECON E 17411
Figure: The Demand for Bricklayers (Figure: The Demand for Bricklayers) Look at the figure The Demand for Bricklayers. If there is an increase in technology that increases the productivity of bricklayers, then the value of the marginal product of the […]
ECON E 19852
(Table: Cherry Farm) Look at the table Cherry Farm. How much will the industry produce in long-run equilibrium? A) 600 pounds B) 500 pounds C) 400 pounds D) 0 pounds (Table: Value of the Marginal Product of Labor and Demand) […]
ECON E 22264
Suppose the price elasticity of demand for blueberries is 1.5. If climate change destroys one-fourth of the nation’s blueberry crop, how will that affect total revenue, all other things unchanged? A) Total revenue will rise. B) Total revenue will fall. […]
ECON E 23213
(Table: Competitive Market for Good Z) Look at the table Competitive Market for Good Z. If the demand curve for good Z is linear, it can be expressed as: A) Qd = 3P. B) Qd = 50 ” 2P. C) […]
ECON E 23486
Which of the following is an example of individual choice? A) The government announces plans to ban smoking in all Florida restaurants. B) Lauren spends her allowance on pillows for her bed. C) France decides to withhold funding to rebuild […]
ECON E 37328
Which of the following best describes the income effect of a price increase? A) The price of bacon increases, so Michelle buys more sausage. B) The price of corn chips increases, so Michelle buys potato chips. C) The tuition at […]
ECON E 37805
Scenario: Monopolist The demand curve for a monopolist is P = 75 ” 0.5Q, and the monopolist has the following MC expressed as P = 2Q. Assume also that ATC at the profit-maximizing level of production is equal to $12.50. […]
ECON E 39256
Assume that two combinations of two goods yield the same level of satisfaction. We can conclude that these combinations are always on: A) the same price line. B) the same budget constraint. C) the same indifference curve. D) different indifference […]
ECON E 40253
If a good has a price-inelastic demand, then which of the following is NOT likely to be characteristic of this good? A) It is a necessity and is relatively small proportion of the household budget. B) It has many substitutes. […]
ECON E 44658
Which of the following statements concerning monopoly is TRUE? A) Monopoly firms are always larger than perfectly competitive firms. B) A monopoly has no rivals. C) Barriers to entry do not prevent other firms from entering a monopolized industry. D) […]
ECON E 46204
Figure: The Marginal Decision Rule (Figure: Marginal Decision Rule) Look at the figure The Marginal Decision Rule. To the left of point C (e.g., at q1): A) economic profit is the vertical distance between curves B and MC. B) the […]
ECON E 51562
A cartel is an example of: A) price extortion. B) price leadership. C) overt collusion. D) perfect competition. If they spend all night writing computer programs, Laurence can write 10 programs, and Carrie Anne can write 5. If they spend […]
ECON E 55454
Figure: The Profit-Maximizing Output and Price (Figure: The Profit-Maximizing Output and Price) Look at the figure The Profit-Maximizing Output and Price. Assume that there are no fixed costs and AC = MC = $200. At the profit-maximizing output and price […]
ECON E 55527
The trade-off between work and leisure underlying the supply of labor involves the income effect and the _____ effect. A) substitution B) elasticity C) production D) wage Answer: A Which of the following is NOT a reason that markets usually […]
ECON E 58289
Assume the supply curve shifts to the right by a given amount at each price. The price in the market will decline the most if demand is more _____ and supply is more _____. A) price-elastic; price-elastic B) price-inelastic; price-elastic […]
ECON E 60072
A tax leads to a(n) _____ in consumer surplus and a(n) _____ in producer surplus. A) increase; increase B) increase; decrease C) decrease; increase D) decrease; decrease Public goods are NOT sold in efficient quantities in the marketplace because: A) […]
ECON E 60354
An analytical approach through which strategic choices can be assessed is called: A) cost”benefit analysis. B) econometric theory. C) game theory. D) monopolistic competition. The opportunity cost of an hour of leisure: A) is always assumed to be equal to […]
ECON E 61325
If a country has the comparative advantage in producing cloth, in the market for cloth the autarky price would be _____ the world price and the country would _____ cloth. A) less than; export B) greater than; export C) less […]
ECON E 61458
Over the past several years, the demand for phone operators has fallen dramatically. Which of the following would account for this development? A) an increase in the number of automated answering services B) a decrease in the technology associated with […]
ECON E 62549
A leftward shift of a supply curve is caused by: A) an increase in the number of sellers. B) a technological improvement in production. C) an increase in the cost of an input. D) an increase in the number of […]
ECON E 80971
The demand for meals at a local Applebee’s will shift to the left if: A) the Olive Garden offers a 10 percent discount coupon in the local newspaper. B) the price of a meal at Applebee’s rises. C) local incomes […]
ECON E 81330
If an insurance company insured 100,000 cars across the state against theft, which of the following would NOT be true? A) The insurance company would be fairly certain of the number of cars that will be stolen. B) The insurance […]
ECON E 92378
A price ceiling will have NO effect if: A) it is set above the equilibrium price. B) the equilibrium price is above the price ceiling. C) it is set below the equilibrium price. D) it creates a shortage. (Table: Workers […]
ECON E 98436
(Table: Market for Fried Twinkies) Look at the table Market for Fried Twinkies. Suppose the government decides to reduce fried Twinkie consumption as part of a war on obesity. After careful study, the government decides to impose a quota of […]
Economics 12900
If a perfectly competitive firm is producing a quantity where P > MC, then the firm can increase profit by: A) making no change in output or price because it is already maximizing profit. B) increasing the price. C) decreasing […]
Economics 13656
The scaling of the axes of a time-series graph: A) is not a critical element in presenting the intended information. B) may change the interpretation of the data. C) generally places the time period on the vertical axis. D) generally […]
Economics 14416
(Table: Production of Bagels) Look at the table Production of Bagels. Diminishing marginal returns begin with the addition of the _____ worker. A) third B) fourth C) fifth D) sixth Answer: B Answer: Which of the following is most likely […]
Economics 17619
Gas prices recently increased by 25%. In response, purchases of gasoline decreased by 5%. According to this finding, the price elasticity of demand for gas is: A) 5. B) 2. C) 0.2. D) 0.5. Governments continue to impose price controls. […]
Economics 20312
Joe’s budget line reflects the _____ available to Joe if he spends _____ of his income. A) consumption bundles; all B) consumption bundles; part C) utility; all D) utility; part Figure: Supply of Coconuts (Figure: Supply of Coconuts) Look at […]
Economics 22408
Which of the following is NOT one of the four principles for understanding individual choice? A) Resources are scarce. B) Overall spending sometimes gets out of line with the economy’s productive capacity. C) “How much” is a decision at the […]
Economics 25104
Which of the following is studied in macroeconomics? A) the change in automobile sales due to a change in the price of automobiles B) the effect of a tax reduction on the profits of an individual business C) recessions D) […]
Economics 40575
_____ is a means-tested program. A) Expenditure on national defense B) Social Security payments to the disabled C) The food stamp program D) Purchasing a new city police car (Table: Costs of Birthday Cakes) Look at the table Costs of […]
Economics 40677
(Table: Total Cost and Output) Look at the table Total Cost and Output, which describes Sergei’s total costs for his perfectly competitive all-natural ice cream firm. If the market price of a tub of ice cream is $35, how much […]
Economics 41707
Cindy operates Birds-R-Us, a small store manufacturing and selling 100 bird feeders per month. Cindy’s monthly total fixed costs are $500, and her monthly total variable costs are $2,500. If for some reason Cindy’s fixed cost fell to $400, then […]
Economics 47344
_____ tax is NOT used in the United States. A) Property B) Value-added C) Profits D) Sales If a perfectly competitive firm sells 10 units of output at $30 per unit, its marginal revenue is: A) $10. B) $30. C) […]
Economics 48583
Scenario: Alexander and Vanessa Alexander and Vanessa benefit from scientific research. Alexander’s marginal private benefit from such research is given by the equation P = 200 ” Q, where Q refers to the amount of research undertaken and P is […]
Economics 49082
Which of the following is most likely to be observed when firms engage mainly in nonprice competition? A) actively encouraging the sale of generic as opposed to brand-name products B) advertising and product differentiation C) discounts offered through coupons D) […]
Economics 50761
An artificially scarce good is a good or service for which exclusion is _____ and which is _____ in consumption. A) possible; rival B) possible; nonrival C) not possible; rival D) not possible; nonrival (Table: Marginal Utility per Dollar of […]
Economics 56560
(Table: Costs of Birthday Cakes) Look at the table Costs of Birthday Cakes. Assume that fixed costs are $10. What is the average variable cost of 4 cakes? A) $38.00 B) $10.00 C) $9.50 D) $8.00 Figure: Profits in Monopolistic […]
Economics 63373
Scenario: Diversification Morris is considering investing $10,000 in a sunglass company or a rain poncho company. If it is a rainy year and he invests only in the sunglass company, he will lose $5,000. However, if it is a rainy […]
Economics 65128
Firms will choose a tit-for-tat strategy if they: A) expect that price wars will ultimately provide benefits for the dominant firm. B) believe that the firms in the industry will be competing with each other for a long time. C) […]
Economics 65720
Many public utilities burn oil to generate electricity. If the price of oil increases, we expect a shift to the _____ in the _____ curve for _____ and a _____ price for electricity A) right; supply; electricity; lower B) left; […]
Economics 72612 Figure Cost
Figure: Cost Curves for Corn Producers (Figure: Cost Curves for Corn Producers) Look at the figure Cost Curves for Corn Producers. The market for corn is perfectly competitive. If the price of a bushel of corn is $4, in the […]
Economics 84906
(Table: The Cost of Producing Gadgets) Look at the table The Cost of Producing Gadgets. According to this table, the marginal cost is: A) increasing at a constant rate equal to $5. B) increasing at an increasing rate. C) increasing […]
Economics 86706
Figure: Three Firms That Pollute (Figure: Three Firms that Pollute) In the figure Three Firms That Pollute, at what tax rate would firm C produce zero tons of pollution? A) $400 B) $500 C) $700 D) $400, $500, or $700 […]
MicroEconomic 14248
If the government intervened in the market by lowering the price of a good below the equilibrium price, which of the following would NOT occur? A) Some consumers would receive an increase in consumer surplus. B) Producers would likely lose […]
MicroEconomic 16333
In perfect competition, the firm produces the output such that _____, and in monopoly, the firm produces the output such that _____. A) P > MR = MC; P = MR = MC B) P = MR = MC; P […]
MicroEconomic 17698
(Table: Trade-off of Study Time and Leisure Time) Look at the table Trade-off of Study Time and Leisure Time. A student sleeps 8 hours per day and divides the remaining time between study time and leisure time. The table shows […]
MicroEconomic 19561
Table: Crop Income) Look at the table Crop Income. Brent is a farmer, and his income depends on the weather. A) Calculate Brent’s expected income. B) Calculate Brent’s expected utility. If Japan levies tariffs on U.S. goods entering Japan, this […]
MicroEconomic 20016
(Table: Expected Exam Scores from Studying Economics and Accounting) Look at the table Expected Exam Scores from Studying Economics and Accounting. If you studied for a total of three hours and divided your time to maximize your combined scores, you […]
MicroEconomic 20646
(Table: Cakes) Look at the table Cakes. Pat is opening a bakery to make and sell special birthday cakes. She is trying to decide how many mixers to purchase. Her estimated fixed and average variable costs if she purchases one, […]
MicroEconomic 22802
The point at which the axes of a graph intersect is called the: A) slope. B) origin. C) graph. D) intercept. (Table: Cakes) Look at the table Cakes. Pat is opening a bakery to make and sell special birthday cakes. […]
MicroEconomic 23469
(Table: Variable Costs for Lots) Look at the table Variable Costs for Lots. During the winter, Alexa runs a snow-clearing service in a perfectly competitive industry. Assume that costs are constant in each interval; that is, the variable cost of […]
MicroEconomic 25575
When firms price-discriminate, people with _____ price elasticity of demand will pay _____ prices relative to those purchasing the same product who have a _____ price elasticity of demand. A) higher; higher; lower B) lower; lower; higher C) lower; higher; […]
MicroEconomic 43055
In making an “either”or” decision: A) choose the activity that results in the greater economic profit. B) choose the activity that results in the greater accounting profit. C) continue in an activity as long as the marginal cost is greater […]
MicroEconomic 44052
Figure: Short-Run Costs (Figure: Short-Run Costs) Look at the figure Short-Run Costs. A is the _____ cost curve. A) average total B) average variable C) marginal D) total Answer: C Which of the following statements is FALSE? A) The income […]
MicroEconomic 47407
Redistribution programs are means-tested. To qualify for such a program, a person must demonstrate that: A) his or her family is larger than the mean family size for the country as a whole. B) his or her average (or mean) […]
MicroEconomic 52102
Advocates of trade barriers suggest that the barriers are needed for national security, job creation, and to: A) protect producers who are just starting out so that they can become more established. B) eliminate the need for governments to become […]
MicroEconomic 54711
If the market for buffalo meat is in equilibrium, the price of buffalo meat will probably _____ in the near future. A) increase B) not change C) decrease D) increase considerably Answer: B Answer: A Tankao makes Bluetooth sets for […]
MicroEconomic 58706
The government might impose a price ceiling if _____ can make a strong moral or political argument for _____ prices. A) demanders; lower B) suppliers; lower C) demanders; higher D) suppliers; higher Total revenue will decrease if the price goes […]
MicroEconomic 63359
Both monopolists and monopolistic competitors: A) make positive economic profits in the long run. B) have high barriers to entry. C) charge a price that is greater than the marginal cost of production. D) produce a product for which there […]
MicroEconomic 66808
Figure: The Market for Melons in Russia (Figure: The Markets for Melons in Russia) Look at the figure The Market for Melons in Russia. Suppose the world price of melons is D. Russia will _____ of melons. A) import I […]
MicroEconomic 76590
Figure: Possible Long-Run Outcome (Figure: Possible Long-Run Outcome) In the figure Possible Long-Run Outcome, which price and quantity refer to a potential long-run profit maximizing outcome for a firm producing in a monopolistically competitive market? A) P1 and Q3 B) […]
MicroEconomic 76606
Steven consumes staples and paper clips. He is maximizing his utility in consumption of both goods. The price of staples rises. After the change in price Steven should consume _____ staples and _____ paper clips. A) more; fewer B) more; […]
MicroEconomic 77018
Figure: The Optimal Consumption Bundle (Figure: The Optimal Consumption Bundle) Look at the figure The Optimal Consumption Bundle. Which of the following could lead to an optimal consumption bundle on indifference curve I1? A) an increase in income B) a […]
MicroEconomic 79124
A perfectly competitive firm maximizes profit in the short run by producing the quantity at which: A) TR = TC. B) MR = MC. C) Q × (P ” ATC) = 0. D) P < AVC. Both the United States […]
MicroEconomic 80074
Figure: A Market in Equilibrium (Figure: A Market in Equilibrium) Look at the figure A Market in Equilibrium. At the equilibrium price, this market’s producer surplus is equal to the area: A) ADI. B) EHF. C) AIF. D) DIF. A […]
MicroEconomic 80878
The price elasticity of demand for fresh tomatoes has been estimated to be 2.22. If a new insecticide and fertilizer treatment yields a 20% increase in the nation’s fresh tomato crop, how will that affect total revenue from fresh tomatoes, […]
MicroEconomic 81216
After learning about indifference curves, Sandy realizes that her marginal rate of substitution of grapes for cheese is 2. Since the price of cheese is $3 and the price of grapes is $1, Sandy: A) should buy more grapes and […]
MicroEconomic 83161
If a good is a necessity with few substitutes, then demand will tend to: A) be more price-elastic. B) be more price-inelastic. C) have price elasticity equal to 1. D) be the same as that of a luxury good. Figure: […]
MicroEconomic 83220
To minimize deadweight loss, markets where demand is relatively _____ and supply is relatively _____ should be taxed. A) elastic; inelastic B) elastic; elastic C) inelastic; elastic D) inelastic; inelastic Figure: Shifts in Demand and Supply II (Figure: Shifts in […]
MicroEconomic 94574
Which of the following is an example of an artificially scarce good? A) diamonds, because their supply is artificially restricted by monopoly producers B) music that is downloadable from the Internet for a fee C) a daily newspaper D) hot […]
MicroEconomic 99923
A small public park in a large town with many other parks often has very few visitors because of its size. There is no fee to enter the park, but few people visit it, since other parks have more amenities. […]