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
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.
Homeowners
a. are subject to double taxation.
b. benefit from several loopholes.
c. have no particular advantages in the tax system.
d. must pay tax on the “income” of living in a house.
Economics
a. is a narrowly focused discipline.
b. is a broad-ranging discipline.
c. concerns itself only with the U.S. economy.
d. says little about “everyday life.”
e. deals with minor problems.
Looking at the record of concentration in the United States during the last century, one
finds concentration has
a. steadily increased.
b. risen dramatically in the past 15 years.
c. changed very little.
d. fallen steadily except in wartime.
Pollution is a relatively new phenomenon.
a. True
b. False
Give a short concise definition for the following terms and explain their relationship to
the study of economics.
a. marginal physical product
b. marginal revenue product
c. law of diminishing returns
d economies of scale
Abstraction can lead to gross distortions of pertinent facts.
a. True
b. False
An increase in a consumer’s income will always increase the demand for a good.
a. True
b. False
Economists generally recognize that rent controls cause shortages in housing, yet rent
controls tend to persist. Why does this occur?
a. Many people do not understand the effects that controls cause.
b. Property owners are politically unpopular.
c. Many persons tend to benefit from rent controls.
d. All of the above are correct.
Private goods are characterized by two important attributes. What are they?
a. marginality and depletability
b. scalability and desirability
c. repeatability and reliability
d. depletability and excludability
A market economy provides solutions to almost all social ills such as poverty and
environmental damage.
a. True
b. False
Scarcity
a. necessitates choice among consumer goods.
b. of income renders purchase decisions interdependent.
c. affects all consumer decisions.
d. may involve forgoing the pleasure of one good in order to enjoy another.
e. All of the above answers are correct.
If the marginal profit of the next unit is negative, the firm should produce more output
in order to generate greater profit.
a. True
b. False
If an economy is operating inefficiently, then
a. the economy can increase production of consumption goods without reducing capital
goods.
b. there is always a positive opportunity cost to increasing output.
c. output can only be increased through capital investment.
d. output cannot be increased.
A report on the dangers of cholesterol would likely shift the demand curve for beef
downward and to the left.
a. True
b. False
Which of the following is an example of opportunity cost not measured by money cost?
a. the time spent eating a business lunch at a restaurant
b. the time spent preparing a meal eaten at home
c. the time spent studying to obtain an “A” in economics
d. the time spent repairing a car in one’s own garage
e. All of the above are correct.
Activities that indiscriminately impose costs on others are externalities.
a. True
b. False
How might a market research analyst use measures of elasticity-price, cross, and
income-in her work? Explain.
From the Industrial Revolution to the present, innovation has played a major role in the
growth of output. What do the leading analysts of economic growth argue were some of
the most significant innovations of this period?
Some years ago New York City imposed rent controls in an effort to provide housing at
“fair” prices for as many people as possible. The result was a serious shortage of
housing and deterioration of existing rental properties. How would an economist have
described the result in terms of economic efficiency?
Figure 14-4
In Figure 14-4, if the cheese industry and the cracker industry have the indicated
quantities of capital and labor and are on the indicated production indifference curves,
is there the possibility of mutually beneficial trade in inputs? Explain.
Explain how derivates were used to increase risk making the financial crisis of
2007-2009 more severe.