1) Assume that Aruba and Iceland can switch between producing coolers and producing
radios at a constant rate.
Which of the following represents Iceland’s production possibilities frontier when 100
labor hours are available?
a.
b.
c.
d.
2) If your income is $40,000 and your income tax liability is $5,000, your
a.marginal tax rate is 8 percent.
b.average tax rate is 8 percent.
c.marginal tax rate is 12.5 percent.
d.average tax rate is 12.5 percent.
3) The Council of Economic Advisers consists of thirty members and a staff of several
dozen economists.
a.True
b.False
4) A monopolist produces where P > MC = MR.
a.True
b.False
5) Figure 8-24. The figure represents the relationship between the size of a tax and the
tax revenue raised by that tax.
Tax revenue would
a.decrease if the economy began at point B and then the tax rate was decreased.
b.increase if the economy began at point F and then the tax rate was decreased.
c.decrease if the economy began at point C and then the tax rate was increased.
d.All of the above are correct.
6) Figure 16-3
This figure depicts a situation in a monopolistically competitive market.
What price will the monopolistically competitive firm charge in this market?
a. $60
b. $70
c. $75
d. $80
7) Table 18-7
Refer to Table 18-7. To maximize its profit, how many workers will the firm hire?
a.2
b.3
c.4
d.5
8) Figure 17-3. Hector and Bart are roommates. On a particular day, their apartment
needs to be cleaned. Each person has to decide whether to take part in cleaning. At the
end of the day, either the apartment will be completely clean (if one or both roommates
take part in cleaning), or it will remain dirty (if neither roommate cleans). With
happiness measured on a scale of 1 (very unhappy) to 10 (very happy), the possible
outcomes are as follows:
Refer to Figure 17-3. In pursuing his own self-interest, Bart will
a.refrain from cleaning whether or not Hector cleans.
b.clean only if Hector cleans.
c.clean only if Hector refrains from cleaning.
d.clean whether or not Hector cleans.
9) The equilibrium price in a market characterized by oligopoly is
a.higher than in monopoly markets and higher than in perfectly competitive markets.
b.higher than in monopoly markets and lower than in perfectly competitive markets.
c.lower than in monopoly markets and higher than in perfectly competitive markets.
d.lower than in monopoly markets and lower than in perfectly competitive markets.
10) White women earn an average of 25% less than white men. A labor economist who
wants to investigate whether the differences in earnings indicate labor-market
discrimination against women should consider whether white men and women have
similar
(i)years of work experience.
(ii)educational attainments.
(iii)occupations.
(iv)child care responsibilities.
a.(i) and (ii) only
b.(iii) and (iv) only
c.(ii) only
d.(i), (ii), (iii), and (iv)
11) Figure 14-2
Suppose a firm operating in a competitive market has the following cost curves:
If the market price is Pb, in the short run the firm will earn
a.positive economic profits.
b.negative economic profits but will try to remain open.
c.negative economic profits and will shut down.
d.zero economic profits.
12) Arturo’s Production Possibilities FrontierDina’s Production Possibilities
Frontier
a.minimum wage laws.
b.the grade distribution in a class.
c.a leaky bucket.
d.the price of tea in China.