A successful market economy requires well defined property rights and
A) balanced supplies of all factors of production.
B) an independent court system to adjudicate disputes based on the law.
C) detailed government regulations.
D) a safety net to ensure that those who cannot participate in the market economy can
earn an income.
Figure 3-7
Assume that the graphs in this figure represent the demand and supply curves for rice.
What happens in this market if buyers expect the price of rice to fall?
A) Panel (a)
B) Panel (b)
C) Panel (c)
D) Panel (d)
If the price of train tickets decreases, what will be the impact in the market for bus
travel?
A) The demand curve for bus travel shifts to the right.
B) The quantity of bus travel demanded increases.
C) The demand curve for bus travel shifts to the left.
D) The quantity of bus travel demanded decreases.
Figure 15-4 Figure
15-4 shows the demand and cost curves for a monopolist.
What is the amount of the monopoly’s total revenue?
A) $21,600
B) $20,400
C) $19,740
D) $7,800
If the quantity demanded for a good rises as income rises then the income elasticity of
demand for this good is ________ than 0, and the good is ________ good.
A) greater; an inferior
B) less; a normal
C) less; an inferior
D) greater; a normal
Figure 3-7
Assume that the graphs in this figure represent the demand and supply curves for
bicycle helmets. Which panel best describes what happens in this market if there is a
substantial increase in the price of bicycles?
A) Panel (a)
B) Panel (b)
C) Panel (c)
D) Panel (d)
The currency adopted by most countries in ________ is referred to as the euro.
A) Western Europe
B) Eastern Europe
C) Europe and Asia
D) Southern Europe and Northern Africa
The Apple iPhone is sold in a box labeled “Made in China.” A study by economists at
the Asian Development Bank found the value of the iPhone components China
________ U.S. firms is ________ the value of assembling the iPhones in Chinese
factories.
A) exports to; equal to
B) exports to; greater than
C) imports from; less than
D) imports from; greater than
Rational ignorance
A) explains why consumers ignore sunk costs when they vote.
B) explains the Arrow impossibility theorem.
C) refers to attempts by special interests to use government action to make themselves
better off at the expense of others.
D) helps to explain why rent seeking by special interest groups occurs.
Figure 3-4
At a price of $15, how many units will be sold?
A) 300
B) 400
C) 600
D) 700
What is the present value of $575 in a one year if the current rate of interest is 4
percent?
A) $410.71
B) $552.88
C) $598
D) $805
Which of the following statements is not true?
A) Consumer surplus measures the Difference between the highest price a consumer is
willing to pay for a product and the price she actually pays.
B) Marginal benefit is the additional benefit to a consumer from consuming one more
unit of a product.
C) Consumer surplus measures the net benefit from participating in a market.
D) Producer surplus measures the total benefit received by producers from participating
in a market.
________ tended to increase spending on health care in the United States.
A) The aging of the U.S. population, rather than advances in medical technology, has
B) Advances in medical technology, rather than the aging of the U.S. population, has
C) The aging of the U.S. population, as well as advances in medical technology, have
D) Neither the aging of the U.S. population, nor advances in medical technology, have
Figure 2-1
________ is (are) unattainable with current resources.
A) Point A
B) Point B
C) Point C
D) Points A and C