Figure 16-5
Suppose the firm represented in the diagram decides to use a two-part pricing strategy
such that it charges a fixed fee and a per-unit price equal to the monopoly price. What is
the revenue collected from the fixed fee portion of the price?
A) $10,240
B) $7,870
C) $2,560
D) $1,440
Tom Searchinger, a senior attorney at the Environmental Defense Fund, observed that
generous farm subsidies have encouraged farmers to produce more corn and more
wheat. How does this affect the market for fertilizer?
A) The supply of fertilizer increases.
B) The supply of fertilizer decreases
C) The demand for fertilizer increases.
D) The demand for fertilizer decreases.
Differences in marginal revenue products are the most important factor in explaining
wage differences. Other factors that explain wage differences include all but one of the
following. Which factor does not help explain differences in wages?
A) cognitive differentials
B) compensating differentials
C) discrimination
D) labor unions
The United States Post Office
A) faces no competition for its mail services.
B) has a monopoly in the provision of first-class mail service.
C) can safely ignore the prices for mail services charges by its rivals such as FedEx and
UPS.
D) is an example of a monopoly that results from the ownership of a key resource: first
class mail service.
Compare the effect on the price level and real GDP of a decrease in tax rates assuming a
supply-side effect versus no supply-side effect. Compared to no supply-side effect,
including a supply-side effect for the decrease in tax rates will cause the price level to
increase ________ and real GDP to increase ________.
A) less; less
B) less; more
C) more; less
D) more; more
Table 11-2
Table 11-2 summarizes production at the Crunchy Apple Orchard for the month of April
2005. What is the marginal product of the 4th worker?
A) 230 bushels
B) 57.4 bushels
C) 50 bushels
D) 12.4 bushels
The Fed can increase the federal funds rate by
A) selling Treasury bills, which increases bank reserves.
B) buying Treasury bills, which increases bank reserves.
C) selling Treasury bills, which decreases bank reserves.
D) buying Treasury bills, which decreases bank reserves.
Which of the following will raise consumer expenditures?
A) an increase in interest rates
B) a general decline in housing prices
C) an increase in expected future income
D) an increase in the price level
For which of the following firms is patent protection of vital importance?
A) furniture producers
B) software firms
C) pharmaceutical firms
D) auto makers
Assuming the United States is the “domestic” country, if the real exchange rate between
the United States and France increases from 1.5 to 1.8,
A) the prices of U.S. goods and services have increased by 53% relative to France.
B) the prices of U.S. goods and services have increased by 3% relative to France.
C) the prices of U.S. goods and services have decreased by 16% relative to France.
D) the prices of U.S. goods and services have increased by 20% relative to France.