1) A monopolistically competitive market is like both a competitive market and a
monopoly in that firms in all three market structures
a.can earn economic profits in the short run.
b.can earn economic profits in the long run.
c.charge a price above marginal cost.
d.All of the above are correct.
2) Figure 15-13
A profit-maximizing monopolist would create a deadweight loss to society valued at
a. $12.
b.$24.
c.$42.
d.$84.
3) A surplus is the same as an excess demand.
a.True
b.False
4) Economists disagree on whether labor taxes have a small or large deadweight loss.
a.True
b.False
5) The rental price of capital is determined by the
a.forces of supply and demand in capital markets.
b.amount of equity that is generated in equity markets.
c.amount of bond financing used by profit-maximizing firms.
d.amount of dividends paid out to stockholders by profit-maximizing firms.
6) Anti-poverty programs
a.encourage saving among recipient groups.
b.impose a very low marginal tax rate on income.
c.are only made available to those with no other source of income.
d.may discourage the poor from escaping poverty on their own.
7) Sellers as a group determine the demand for a product, and buyers as a group
determine the supply of a product.
a.True
b.False
8) Arturo’s Production Possibilities FrontierDina’s Production Possibilities
Frontier
a.triangle.
b.rectangle.
c.trapezoid.
d.None of the above is correct¾ government’s tax revenue is the area between the
supply and demand curves, above the horizontal axis, and below the effective price to
buyers
10) In comparison to the average poverty rate,
a.children and the elderly are more likely to be poor.
b.children and the elderly are less likely to be poor.
c.children are more likely to be poor, but the elderly are less likely to be poor.
d.children are less likely to be poor, but the elderly are more likely to be poor.