1) A similarity between monopoly and monopolistic competition is that in both market
structures
a.strategic interactions among sellers are important.
b.there are a small number of sellers.
c.sellers are price makers rather than price takers.
d.there are only a few buyers but many sellers.
2) When a country allows trade and becomes an exporter of a good, which of the
following is not a consequence?
a.The price paid by domestic consumers of the good increases.
b.The price received by domestic producers of the good increases.
c.The losses of domestic consumers of the good exceed the gains of domestic producers
of the good.
d.The gains of domestic producers of the good exceed the losses of domestic consumers
of the good.
3) Discrimination occurs when the marketplace offers different opportunities to similar
individuals who differ only by
a.race.
b.level of education.
c.attitudes toward risk.
d.All of the above are forms of discrimination.
4) The unanimity property states that the ranking between any two outcomes should not
depend on whether some third outcome is available.
a.True
b.False
5) Ken and Traci are two woodworkers who both make tables and chairs. In one month,
Ken can make 3 tables or 18 chairs, whereas Traci can make 8 tables or 24 chairs.
Given this, we know that the opportunity cost of 1 chair is
a.1/6 table for Ken and 1/3 table for Traci.
b.1/6 table for Ken and 3 tables for Traci.
c.6 tables for Ken and 1/3 table for Traci.
d.6 tables for Ken and 3 tables for Traci.
6) Table 15-7
Sally owns the only shoe store in town. She has the following cost and revenue
information.
What is the marginal cost of the 8th pair of shoes?
a. $50
b. $60
c. $90
d. $110
7) Table 14-3
The table represents a demand curve faced by a firm in a competitive market.
For this firm, the price is
a. $39.
b.$26.
c.$13.
d.$0.
8) Resources tend to be allocated inefficiently when goods
a.are private goods.
b.are rival in consumption and excludable.
c.are available free of charge.
d.are available only at very high prices.
9) In the ordered pair (10,30), 10 is the horizontal location of the point and 30 is the
vertical location of the point.
a.True
b.False
10) Price discrimination requires the firm to
a.separate customers according to their willingnesses to pay.
b.differentiate between different units of its product.
c.engage in arbitrage.
d.use coupons.
11) In which of the following cases is the Coase theorem most likely to solve the
externality?
a.Ed is allergic to his roommate’s cat.
b.Chemicals from manufacturing plants in the Midwest are causing acid rain in Canada.
c.Polluted water runoff from farms is making residents of a nearby town sick.
d.Industrialization around the world is causing global warming.
12) Economists are skeptical that discrimination is employer driven because
a.discrimination cannot exist in markets.
b.employers are not really interested in maximizing profit.
c.employers typically base wages paid on the prevailing market wage.
d.holding productivity constant, a profit-maximizing employer will hire the cheapest
labor available.
13) When the supply of workers is plentiful, one would predict that market wages
would be
a.determined outside the domain of economic theory.
b.determined solely by factors that affect demand.
c.low, other things equal.
d.high, other things equal.
14) The General Agreement on Tariffs and Trade (GATT) was initiated in response to
a.in increase in exports of low-priced goods from developing countries to developed
countries.
b.the replacement of manufacturing jobs with service jobs in developed countries.
c.economic dislocations caused by the North American Free Trade Agreement
(NAFTA) in the 1990s.
d.high tariffs imposed during the Great Depression of the 1930s.
15) Figure 8-5
Suppose that the government imposes a tax of P3 – P1.
After the tax is levied, consumer surplus is
represented by area
a.A.
b.A+B+C.
c.D+H+F.
d.F.