One of the objectives of the health-care reform bills passed in March 2010 was to bring
_____________ people into the pool of insured persons so that insurance policies
would become ________________.However, provisions in the bill are likely to make
the average cost of an insurance policy _____________ than it would have been
without reform.
a. fewer; cheaper; lower
b. fewer; more expensive; lower
c. more; cheaper; lower
d. more; cheaper; higher
e. none of the above
Economists usually assume that money has __________ marginal utility.
a. increasing
b. constant
c. decreasing
d. zero
The resource termed labor consists of the physical, but not the mental, talents that
people contribute to the production process.
a. True
b. False
Good Z is income unit elastic. This means that the percentage change in income is
a. equal to the percentage change in the quantity demanded of good Z.
b. greater than the percentage change in the demand for good Z.
c. less than the percentage change in the quantity demanded of good Z.
d. equal to the percentage change in the price of good Z.
e. greater than the percentage change in the price of good Z.
Suppose that television show A is much more popular than television show B.The
equilibrium price for a ticket to view the taping of show A is $40 and the equilibrium
price for a ticket to view the taping of show B is -$30.If free tickets are offered for the
taping of both shows, it is likely that
a. there will be a shortage of tickets for show A and a surplus of tickets for show B.
b. there will be a surplus of tickets for show A and a shortage of tickets for show B.
c. there will be a surplus of tickets for both shows.
d. there will be a shortage of tickets for both shows.
One thing a monopoly firm has to do that a perfectly competitive firm does not have to
do is
a. search for its profit-maximizing price.
b. advertise.
c. minimize its losses.
d. produce the quantity of output at which P = MC.
e. produce a high-quality product.
Exhibit 23-8
What is the total variable cost of firm B at the profit-maximizing (or loss-minimizing)
level of production?
a. $6
b. $750
c. $1,650
d. $900
The latest Taylor Swift album is available to be downloaded for $18.99. Is this price a
rationing device?
a. No, the album will be sold to anyone having the required number of dollars.
b. Yes, because the album will only be purchased by people who are willing and able to
pay $18.99.
c. No, for price to be a rationing device, it must be so high that only one unit of the item
is sold.
d. Yes, since that is a reasonable price.
Thomas Edison constructed the first building that was used solely to make
a. movies.
b. airplanes.
c. telephones.
d. cameras.
The demand for factors (which arises from the demand for the products that the factors
help produce) is called a(n) __________ demand.
a. derived
b. indirect
c. secondary
d. expressed
Exhibit 3-9
Consumers view X and Y as substitutes. If the price of Y increases, an economist would
expect a movement in the market for X from
a. F to E.
b. A to B.
c. E to F.
d. B to A.
In a monopolistic competitive industry,
a. each firm in the industry produces a slightly differentiated product.
b. there are significant barriers to entry.
c. there are significant barriers to exit.
d. there are few sellers.
Exhibit 22-13
What dollar amounts go in blanks (C) and (D), respectively?
a. $100; $50
b. $25; $68
c. $200; $200
d. $66.67; $50
e. There is not enough information to answer this question.
To an economist, it is preferable to
a. assume that all criminals are rational.
b. assume that all criminals are irrational.
c. build a theory based on a rational criminal and then check the evidence.
d. a or b
Which of the following is most likely to be an unintended effect of placing safety caps
on medicines?
a. It is now harder for people to open their medicine containers.
b. People leave their medicine containers open more often, which ends up making it
easier for children to get into the medicine.
c. Fewer people get sick and need medicine.
d. Medicine prices fall sharply.
Consider the following information about a business Diane opened last year: price =
$15, quantity sold = 25,000; implicit cost = $155,000; explicit cost = $260,000. What
was Diane’s economic profit?
a. $40,000
b. $115,000
c. -$40,000
d. $220,000
e. There is not enough information provided to answer this question.