DeShawn’s Detailing is a service that details cars at the customers’ homes or places of
work. DeShawn’s cost for a basic detailing package is $40, and he charges $75 for this
service. For a total price of $90, DeShawn will also detail the car’s engine, a service that
adds an additional $20 to the total cost of the package. What is DeShawn’s marginal
benefit if he sells a basic detailing package?
A) $35
B) $75
C) He makes a marginal loss of $15, not a marginal benefit.
D) The marginal benefit cannot be determined.
If the price of toothpaste is represented by equation P = 40 – .5QD, then the
corresponding quantity of toothpaste demanded is represented by the equation
A) QD = 20 – .5P.
B) QD = 40 – P.
C) QD = 80 – 2P.
D) QD = -20 + P.
The growing popularity of energy conservation has enticed large home improvement
stores like Home Depot and Lowes to offer tankless water heaters. How does the fact
that home improvement stores now offer these products affect the tankless water heater
market?
A) The demand curve for tankless water heaters shifts to the right.
B) The demand curve for tankless water heaters shifts to the left.
C) The supply curve for tankless water heaters shifts to the right.
D) The supply curve for tankless water heaters shifts to the left.
Most payments in the United States for goods and services are made using
A) currency.
B) checking account deposits.
C) traveler’s checks.
D) gold.
Figure 12-5 Figure 12-5 shows cost and
demand curves facing a typical firm in a constant-cost, perfectly competitive industry.
If the firm’s fixed cost increases by $1,000 due to a new environmental regulation, what
happens in the diagram above?
A) All the cost curves shift upward.
B) Only the average variable cost and average total cost curves shift upward; marginal
cost is not affected.
C) Only the average total cost curve shifts upward; the marginal cost and average
variable cost curves are not affected.
D) None of the curves shifts; only the fixed cost curve, which is not shown here, is
affected.
________ raised average tariff rates by over 50 percent in the United States in 1930.
A) The GATT
B) The WTO
C) NAFTA
D) The Smoot-Hawley Tariff
Table 2-9
Table 2-9 shows the number of labor hours required to produce a canoe and a sailboat in
Guatemala and Honduras. Guatemala has a comparative advantage in the production of
A) canoes.
B) sailboats.
C) both products.
D) neither product.
Figure 4-1
Figure 4-1 shows Arnold’s demand curve for burritos.
What is the total amount that Arnold is willing to pay for 4 burritos?
A) $1.00
B) $4.00
C) $7.00
D) $10.00
The best measure of the standard of living is
A) nominal GDP.
B) real GDP.
C) nominal GDP per capita.
D) real GDP per capita.
Economists often analyze the interaction of individuals and firms in markets.
Economists also examine the actions of individuals and firms as they attempt to use
government to make themselves better off at the expense of others, a process that is
referred to as
A) rent seeking.
B) logrolling.
C) government failure.
D) the public choice initiative.
Published in 1776, ________ was written by Adam Smith.
A) The General Theory of Employment, Interest, and Money
B) The Communist Manifesto
C) The Declaration of Economics
D) An Inquiry into the Nature and Causes of the Wealth of Nations
Figure 12-2
Why is the total revenue curve a ray from the origin?
A) because revenue increases at an increasing rate
B) because revenue increases at a decreasing rate
C) because the firm can sell its product at a constant price
D) because the firm must lower its price to sell more
When demand is elastic, a fall in price causes total revenue to rise because
A) when price falls, quantity sold increases so total revenue automatically rises.
B) the increase in quantity sold is large enough to offset the lower price.
C) the percentage increase in quantity demanded is less than the percentage fall in price.
D) the demand curve shifts.