1) The indifference curves for perfect substitutes are straight lines.
a.True
b.False
2)
Unemployment could cause this economy to produce at which point(s)?
a.L, M
b.N, O, P, Q
c.N, O, P
d.Q
3) The consumer’s optimum is where
a.MUx/MUy = Py/Px.
b.MUx/Py = MUy/Px.
c.MUx/MUy = Px/Py.
d.None of the above is correct.
4) Figure 10-9
d.greater than the sum of consumer surplus plus producer surplus.
8) Like spending on Social Security, the share of federal government spending on
Medicare has risen substantially over time. This is most likely a result of
a.a rising population of poor in the economy.
b.a rising population of the elderly in the economy.
c.an immigration policy that promotes an influx of migrant farm workers.
d.All of the above are important factors.
9) Table 17-11
Only two firms, ABC and XYZ, sell a particular product. The table below shows the
demand curve for their product. Each firm has the same constant marginal cost of $8
and zero fixed cost.
Refer to Table 17-11. If ABC and XYZ operate to jointly maximize profits and agree to
share the profit equally, then how much profit will each of them earn?
a.$105
b.$125
c.$250
d.$450
10) In a monopolistically competitive market, social welfare would be enhanced if
a.price equaled marginal cost.
b.government regulation eliminated the product-variety externality.
c.the government raised taxes to subsidize firms that price below average total cost.
d.there were fewer firms, making the industry closer to an oligopoly.
11) Figure 9-3. The domestic country is China.
With trade, China will
a.import 100 pencil sharpeners.
b.import 250 pencil sharpeners.
c.export 150 pencil sharpeners.
d.export 250 pencil sharpeners.
12) Variable tolls on roads
a.are politically unpopular because people do not like the idea of paying for a good that
they used to consume without paying for it directly.
b.rise when traffic volume increases to ensure the speed on the road is kept high.
c.are an effective way of correcting the common resource problem on roads.
d.All of the above are correct.
13) The Ogallala aquifer is a large underground pool of fresh water under several
western states in the United States.
Any farmer with land above the aquifer can at present pump water out of it. We might
expect that
a.over time, the aquifer is likely to be overused.
b.each farmer has a sufficient incentive to conserve the water.
c.state governments have an incentive to insure that their farmers do not overuse the
water.
d.resources would be used more efficiently if the government paid for the pumps
farmers use to get the water.
14) A monopolistically competitive market has characteristics that are similar to
a.a monopoly only.
b.a competitive firm only.
c.both a monopoly and a competitive firm.
d.neither a monopoly nor a competitive firm.
15) The is defined as the percentage change in quantity demanded divided by the
percentage change in price.
a.True
b.False
16) Which good(s) does Denmark have an absolute advantage producing?
a.both eggs and ham.
b.eggs but not ham.
c.ham but not eggs.
d.neither ham nor eggs.
17) Assume that the farmer and the rancher each has 40 labor hours available. If each
person divides his time equally between the production of meat and potatoes, then total
production is
a.5 pounds of meat and 4 pounds of potatoes.
b.6 pounds of meat and 7.5 pounds of potatoes.
c.7.5 pounds of meat and 6 pounds of potatoes.
d.10 pounds of meat and 8 pounds of potatoes.
18) Assume that Maya and Miguel can switch between producing mixers and producing
toasters at a constant rate.
Which of the following combinations of mixers and toasters could Maya produce in 60
hours?
a.5 mixers and 12 toasters.
b.6 mixers and 4 toasters.
c.7 mixers and 7 toasters.
d.8 mixers and 5 toasters.
19) The effects of foreign competition on the U.S. textile industry would be studied by a
microeconomist rather than a macroeconomist.
a.True
b.False
20) When economists make positive statements, they are
a.speaking as scientists.
b.speaking as policy advisers.
c.making claims about how the world should be.
d.revealing that they are very conservative in their views of how the world works.
21) Tracy quits her job, which pays $25,000 a year, to finish her college degree. Her
annual college expenses are $12,000 for tuition and fees and $1,000 for books. What is
her opportunity cost of attending college for the year?
22) If the average total cost curve is falling, what is necessarily true of the marginal cost
curve? If the average total cost curve is rising, what is necessarily true of the marginal
cost curve?
23) What particular characteristic do public goods and club goods have in common?
24) What particular characteristic do private goods and common resources have in
common?
25) Figure 19-6
Refer to Figure 19-6. Given demand, D1, and supply, S1, how many workers are
unemployed if a minimum wage of $8 per hour is imposed on this market?
26) Using the midpoint method, what is the between $6 and $8?