1) Bob’s Butcher Shop is the only place within 100 miles that sells bison burgers.
Assuming that Bob is maximizing his profit, which of the following statements is true?
a.The price of Bob’s bison burgers will be less than Bob’s marginal cost.
b.The price of Bob’s bison burgers will exceed Bob’s marginal cost.
c.The price of Bob’s bison burgers will equal Bob’s marginal cost.
d.Costs are irrelevant to Bob because he is a monopolist.
2) Assume, for England, that the domestic price of wine without international trade is
lower than the world price of wine. This suggests that, in the production of wine,
a.England has a comparative advantage over other countries and England will export
wine.
b.England has a comparative advantage over other countries and England will import
wine.
c.other countries have a comparative advantage over England and England will export
wine.
d.other countries have a comparative advantage over England and England will import
wine.
3) When a monopolist decreases the price of its good, consumers
a.continue to buy the same amount.
b.buy more.
c.buy less.
d.may buy more or less, depending on the price elasticity of demand.
4) Table 14-14
The following table presents cost and revenue information for Bob‘s bakery production
and sales.
When Bob produces and sells the profit-maximizing quantity, how much profit does he
earn?
a. $0.25
b. $2.75
c. $4.00
d. $5.25
5) Figure 13-1
Which of the following could explain why the total product curve would shift from TP2
to TP1?
a.There is additional capital equipment available to the firm.
b.Labor skills have become rusty and outdated in the firm.
c.The firm has developed improved production technology.
d.The firm is now receiving a higher price for its product.
6) If the outer loop of this
circular-flow diagram represents flows of dollars, then the inner loop includes
a.flows of goods and services from households to firms.
b.flows of inputs from households to firms.
c.flows of rent payments paid to owners of land.
d.flows of wages and salaries paid to workers.
7) Figure 10-4
If this market is currently producing at Q2, then total economic well-being would
increase if output
a.increased beyond Q4.
b.decreased to Q1.
c.increased to Q3.
d.stayed at Q2.
8) Table 22-6
Refer to Table 22-6. The table shows the preferences of 100 voters over three possible
outcomes: A, B, and C. In pairwise majority voting in which voters choose first
between A and B and then choose between the winner of the first vote and C,
a.outcome A will win the election.
b.outcome B will win the election.
c.outcome C will win the election.
d.the outcome of the election cannot be determined with the given information.
9) Scenario 14-4
The information below applies to a competitive firm that sells its output for $40 per
unit.
– When the firm produces and sells 150 units of output, its average total cost is $24.50.
– When the firm produces and sells 151 units of output, its average total cost is $24.55.
When the firm increases its output from 150 units to 151 units, its marginal cost is
a. $29.95.
b. $32.05.
c. $33.00.
d. $34.25.
10) England can benefit from trade
a.only with nations that can produce goods England cannot produce.
b.only with less developed nations.
c.only with nations outside of Europe.
d.with any nation.
11) Table 12-9
United States Income Tax Rates for a Single Individual, 2012 and 2013.
Darby is a single person whose taxable income is $320,000 a year. What happened to
her average tax rate between 2012 and 2013?
a.It increased.
b.It decreased.
c.It did not change.
d.We do not have enough information to answer this question.
12) The Council of Economic Advisers
a.was created in 1946.
b.advises the president of the United States on economic policy matters.
c.writes the annual Economic Report of the President.
d.All of the above are correct.
13) Figure 8-2
The vertical distance between points A and B represents a tax in the market.
Consumer surplus without the tax is
a.$6, and consumer surplus with the tax is $1.50.
b.$6, and consumer surplus with the tax is $4.50.
c.$10, and consumer surplus with the tax is $1.50.
d.$10, and consumer surplus with the tax is $4.50.
14) If the world price of a good is greater than the domestic price in a country that can
engage in international trade, then that country becomes an importer of that good.
a.True
b.False
15) Charlotte can produce pork and beans and can switch between producing them at a
constant rate. If it takes her 10 hours to produce a pound of pork and 5 hours to produce
a pound of beans, what is her opportunity cost of pork and what is her opportunity cost
of beans?
16) In country A a worker who works 40 hours can produce 200 pounds of rice or 100
pounds of broccoli. In country B a worker who works 40 hours can produce 160 pounds
of rice or 120 pounds of broccoli.
Which country, if either, has an absolute advantage producing rice? Defend your
answer.
17) Average total cost will increase if _______.
18) Figure 18-12. The figure shows the relationship between the number of mechanics
hired and the number of car repairs performed per day at a car-repair shop.
Refer to Figure 18-12. If the
shop charges $150 per repair, then what is the value of the marginal product of the
second mechanic?
19) Thomas faces prices of $6 for a unit of good X and $30 for a unit of good Y. At his
optimum, Thomas is willing to give up 1 unit of good Y for_______units of good X.
20) The largest category of expenditures for state and local governments is.
21) Figure 7-33
Refer to Figure 7-33. How much is total surplus in this market at the equilibrium price?