Figure 9-5 Suppose the U.S. government
imposes a $0.75 per pound tariff on coffee imports. Figure 9-5 shows the impact of this
tariff. The loss in domestic consumer surplus as a result of the tariff is equal to
A) $5 million.
B) $19.875 million.
C) $24.875 million.
D) $31.125 million.
In the long run, which of the following is true?
A) Total cost = fixed cost + variable cost.
B) The size of a firm’s physical plant can be changed but the firm cannot adopt new
technology.
C) There are no fixed costs.
D) The firm can vary its explicit costs but not its implicit costs.
In the United States, consumption per-person of carbonated soft drinks ________
between 2005 and 2013.
A) declined by more than 15 percent
B) increased by approximately 22 percent
C) fell by almost 80 percent
D) remained virtually unchanged
When the coupon rate on newly issued bonds decreases relative to older, outstanding
bonds, what happens?
A) The market price of the older bond falls in the secondary market.
B) The market price of the older bond rises in the secondary market.
C) Older bonds can still be sold at their face value.
D) Older bonds will sell for more than their face value.
An increase in aggregate demand in the economy will have what effect on
macroeconomic equilibrium in the long run?
A) The price level will fall, and the level of GDP will rise.
B) The price level will fall, and the level of GDP will fall.
C) The price level will rise, and the level of GDP will fall.
D) The price level will rise, and the level of GDP will be unaffected.
The law of demand implies, holding everything else constant, that
A) as the price of bagels increases, the quantity of bagels demanded will decrease.
B) as the price of bagels increases, the demand for bagels will decrease.
C) as the price of bagels increases, the quantity of bagels demanded will increase.
D) as the price of bagels increases, the demand for bagels will increase.
Table 15-2
The government of a small developing country has granted exclusive rights to Linden
Enterprises for the production of plastic syringes. Table 15-2 shows the cost and
demand data for this government protected monopolist. What is the amount of profit
that the firm earns?
A) $34.50
B) $42
C) $47
D) $49
Figure 4-5 Figure 4-5 shows the
market for apartments in Bay City. Recently, the government imposed a rent ceiling at
R0. What is the area that represents the portion of producer surplus transferred to
consumers as a result of the rent ceiling?
A) D + E
B) D + F
C) D
D) F
If rapid increases in oil prices caused price levels to increase and real GDP to decrease
in the short run, the economy would experience
A) stagflation.
B) long-run economic decline.
C) hyperinflation.
D) an increase in the natural rate of unemployment.
Which of the following is not a reason why China is unlikely to maintain high enough
rates of productivity growth to catch up with the standard of living in the United States?
A) The United States invests more in research and development. than does China.
B) Much of China’s growth is likely due to the transition from a centrally-planned
economy to a market economy.
C) Because of the low birth rate in China, the labor force will soon decline.
D) The Chinese migration of rural workers to more productive urban jobs.
Table 2-17
Table 2-17 shows the output per week of two people, James and Lucy. They can either
devote their time to making wagons or making tricycles.
What is Lucy’s opportunity cost of making a tricycle?
A) 3/4 of a wagon
B) 3 wagons
C) 1 1/3 tricycles
D) 2 tricycles
Table 10-5
which lists the values of Harry Taber’s marginal utility and marginal utility per dollar
for Italian submarine (sub) sandwiches and tacos. Assume that the price of the sub
sandwiches is $4 and the price of tacos is $2. When Harry’s income is $14 he buys two
Italian sub sandwiches and three tacos. The last column lists the values of the marginal
utility per dollar for tacos when the price of tacos decreases to $1. Complete this
statement: As a result of the change in price
A) Harry’s purchasing power has increased. He will reduce his consumption of tacos so
he can buy one more sub. This is an example of the substitution effect of a price change.
B) Harry’s purchasing power has increased. If tacos are a normal good for Harry he will
buy fewer tacos. This is an example of the income effect of a price change.
C) Harry’s purchasing power has increased. If tacos are a normal good for Harry he will
buy more tacos. This is an example of the income effect of a price change.
D) Harry’s purchasing power has increased. Harry buys fewer tacos. This is an example
of the substitution effect of a price change
If the marginal cost curve is below the average variable cost curve, then
A) average variable cost is increasing.
B) average variable cost is decreasing.
C) marginal cost must be decreasing.
D) average variable cost could either be increasing or decreasing.