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
When other nations Orient “dump” products on the U.S. market, they
a. sell at prices that do not cover costs of production.
b. sell at prices lower than prices charged to their own domestic customers.
c. expect the United States to help pay any industrialists’ losses.
d. All of the above are true.
The concept of equity pertains to the fairness of a tax.
a. True
b. False
Moral hazard encourages people to take risks.
a. True
b. False
If two goods are complements, their cross elasticity of demand will normally be
a. zero.
b. a negative number.
c. a positive number.
d. infinity.
To maximize sales revenue, an oligopoly will expand output until the price is zero.
a. True
b. False
Professor Gordon posits that the best years of U.S. growth are behind us because of four
“headwinds,” which are:
a. lackluster growth and poverty
b. demographids and education
c. debt and inequality
d. a and b only
e. b and c only
Society benefits from monopolistic competition because the firms are allocatively
efficient.
a. True
b. False
Which of the following environmental approaches is most appropriate when
surveillance and enforcement is impractical?
a. direct controls
b. emissions tax
c. volunteerism
d. tradable emission permits
If an economic curve has a negative slope, then one variable
a. falls as the other rises.
b. changes at a slower rate than another.
c. has a smaller value than another.
d. changes after another variable.
Over the past century, the main factor responsible for rising living standards in the
United States has been productivity growth.
a. True
b. False
In an economist’s view, a cartel usually offers to society
a. all the cost benefits of large-scale production and none of the allocative inefficiencies
of monopoly.
b. all the cost benefits of large-scale production and all of the allocative inefficiencies of
monopoly.
c. none of the cost benefits of large-scale production and none of the allocative
inefficiencies of monopoly.
d. none of the cost benefits of large-scale production and all of the allocative
inefficiencies of monopoly.
As one moves down a straight-line demand curve away from the vertical axis, demand
becomes less elastic and then inelastic.
a. True
b. False
Why do economists tend to create models in diagrammatic form?
a. Diagrams hide reality, and theory is an attempt to avoid reality.
b. It is easier than building models out of physical objects.
c. Economic reality cannot possibly be represented except in diagrams.
d. Most economists are frustrated artists, and like to draw when possible.
e. All of the above are correct.
Exhibit 4-1
The following are the equations for the supply and demand curves in the market for
weezils:
Demand: Qd = 20 − 2P
Supply: Qs = 5 + 3P
where Qd is the quantity demanded, Qs is the quantity supplied, and P is the price per
weezil in dollars
Refer to Exhibit 4-1. According to the data given, the equilibrium price of a weezil is
a. $3.
b. $5.
c. $11.
d. $14.
Total revenue cannot be derived from the demand curve or a demand schedule.
a. True
b. False
The majority of new jobs created in the service sector of the U.S. economy have been in
the information sector.
a. True
b. False
Predictions of stock prices by stock market analysts
a. usually improve on simple extrapolation of past trends.
b. are good in both the short term and in the long term.
c. are poor since Wall Street does not pay enough to attract the best analysts.
d. are poor because of randomness.
According to William Safire, “helpfulism” is basically protectionism.
a. True
b. False
A monopolist’s profit per unit is shown by the difference between price and marginal
cost per unit.
a. True
b. False
Figure 5-15
Hal initially consumes the combination marked as A in Figure 5-15. After his income
increases, Hal consumes combination B. We can conclude that Hal views
a. X as an inferior good and Y as a noninferior good.
b. X as a noninferior good and Y as an inferior good.
c. both X and Y as noninferior goods.
d. both X and Y as inferior goods.