If a seller is a price taker it means that the seller sells his product at the price
a. he chooses.
b. determined in the market.
c. determined by the biggest firm in the market.
d. determined by the largest consumer in the market.
e. none of the above
From an economist’s point of view, zero pollution is always preferable to some
pollution.
a. True
b. False
Which of the following statements is true?
a. As a consequence of the monopoly firm producing the quantity of output at which
price equals marginal cost, it is resource allocative efficient.
b. As a consequence of the perfectly competitive firm producing the quantity of output
at which price equals marginal cost, it is resource allocative efficient.
c. a and b
d. none of the above
Suppose the current exchange rate between the U.S. dollar and the Mexican peso is
$0.12 = 1 peso. Furthermore, suppose the price level in Mexico rises 25 percent while
the U.S. price level remains constant. According to the purchasing power parity theory,
what will be the equilibrium exchange rate?
a. $0.15 = 1 peso
b. $0.09 = 1 peso
c. $0.16 = 1 peso
d. $0.096 = 1 peso
Refer to Exhibit 28-12. As the firm increases employment from 3 to 4 workers, its
marginal factor cost (MFC) is
Exhibit 28-12
a. $7.50.
b. $26.
c. $48.
d. $13.
Under a fixed exchange rate system, if the dollar price of a Mexican peso is below its
equilibrium level, the peso is said to be
a. depreciable.
b. undervalued.
c. overvalued.
d. appreciable.
e. none of the above
The excludability versus nonexcludability issue is
a. relevant to the issue of market failure.
b. not relevant to the issue of market failure.
c. relevant to the free-rider problem.
d. a and c
e. b and c
Which of the following statements is true?
a. If a good is nonrivalrous in consumption then it is nonexcludable, too.
b. A good can be rivalrous in consumption but not nonexcludable, too.
c. An apple is nonrivalrous in consumption.
d. Many economists maintain that the market fails to produce nonexcludable private
goods.
e. none of the above
A divisive society is one in which members of society work together for the common
good.
a. True
b. False
If the coupon payment on a bond is $640 and the coupon rate is 6%, then what is the
face value of the bond?
a. $10,667
b. $10,000
c. $1,067
d. $678.40
e. There is not enough information provided to answer this question.
Dumping occurs when a firm sells goods abroad at a price below their cost and below
the price charged in their domestic market.
a. True
b. False
Refer to Exhibit 22-14. What is the MPP of the first unit of labor [blank (C)]?
Exhibit 22-14
a. 700 units
b. 600 units
c. 100 units
d. 50 units
If a union seeks to maximize the total wage bill received by its members, then it
a. should seek to establish the highest possible wage rate.
b. should seek to establish the lowest possible wage rate.
c. will find that this cannot be done under any circumstances.
d. none of the above
Refer to Exhibit 20-7. Which of the graphs shows a perfectly inelastic demand curve?
Exhibit 20-7
a. (1)
b. (2)
c. (3) and (4)
d. none of the above
Refer to Exhibit 3-14.At a price of $11, there is a ____________ unit____________ of
good X.
a. 290; shortage
b. 215; shortage
c. 40; surplus
d. 290; surplus
e. 230; shortage
As interest rates increase, present values __________, and firms will buy __________
capital goods.
a. increase; fewer
b. decrease; fewer
c. increase; more
d. decrease; more
When the official dollar price of a foreign currency is set below its equilibrium level,
the foreign currency
a. has been depreciated.
b. is overvalued.
c. is undervalued.
d. is devalued.
e. is revalued.
Refer to Exhibit 3-1. Equilibrium price and quantity are ____________________,
respectively. Exhibit 3-1
a. $2 and 250 units
b. $4 and 250 units
c. $2 and 150 units
d. $6 and 250 units
e. none of the above