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Charging firms that emit pollutants is one way to deal with pollution.
a. True
b. False
The principle of comparative advantage helps explain trade between nations.
a. True
b. False
A common misconception about supply is that
a. supply depends on many other variables.
b. price is a major determinant of quantity.
c. it is a fixed amount.
d. quantity cannot be determined in advance.
e. All of the above are correct.
If the market mechanism is efficient, the marginal cost accurately measures the
opportunity cost of a good or service.
a. True
b. False
A tax is progressive if the ratio of taxes to income rises as income rises.
a. True
b. False
Schooling and other types of training
a. are regarded as investment in human capital.
b. are an important cause of income differentials.
c. involve workers' sacrificing current income in order to enjoy higher future income.
d. All of the above are correct.
A monopolist can earn a positive economic profit, even in the long run.
a. True
b. False
"Never put all your eggs in one basket." This saying refers to the concept of
a. averaging.
b. market timing.
c. diversification.
d. leveraging.
Figure 14-2
As we move down the production possibilities schedule in Figure 14-2, each successive
point is
a. less efficient.
b. more efficient.
c. equally efficient.
d. more or less efficient; we cannot tell which.
The rent earned on marginal land is
a. zero.
b. the average of all qualities of land.
c. above the average of all qualities of land.
d. below the average of all qualities of land.
Economists use a resource's price as an indicator of its relative scarcity.
a. True
b. False
Universal service means that one company provides service to all consumers,
everywhere.
a. True
b. False
A market economy allocates resources primarily in accordance with orders from
government bureaucrats.
a. True
b. False
Union membership was relatively low during the Great Depression.
a. True
b. False
Which of the following decisions cannot be taken by a firm in a perfectly competitive
market?
a. Market exit decision
b. Market price of the product
c. Quantity of output it can produce
d. Entering a market
There is much world concern over the deteriorating condition of the Pyramids and other
historical structures in Egypt. While people of all nations enjoy visiting these structures,
there has been little financial support for preservation coming from within Egypt or
from elsewhere. Economists would describe this as an example of
a. an externality.
b. a public good.
c. a free rider problem.
d. imperfect information.
Any point on the lowest indifference curve is preferable to a point on a higher
indifference curve.
a. True
b. False
The production of smoke as a pollutant is a failure of the market system.
a. True
b. False
When the price of the product falls
a. consumer's surplus remains the same.
b. producers' surplus increases.
c. consumer's surplus falls.
d. producer's surplus falls.
"Circuit breaker" rules halt trading when the Dow declines below its previous day's
closing value by a percentage amount, for:
a. one hour
b. two hours
c. the remainder of the trading day
d. any of these
Politicians and citizens may often choose policies that reduce economic efficiency
because they are perceived as "fairer."
a. True
b. False
Total utility will be at its maximum when
a. marginal utility is negative.
b. marginal utility is positive.
c. marginal utility is maximized.
d. marginal utility is zero.
Table 11-1
Table 11-1 shows demand and total cost schedules for Monopoliteria. At the
profit-maximizing output, what quantity is Monopoliteria producing?
a. 10
b. 12
c. 14
d. 16
