The horizontal summation of all individual demands at different given prices results in
the:
a. market supply curve.
b. individual supply curve.
c. individual demand curve.
d. equilibrium demand and supply curves.
e. market demand curve.
If official U.S. poverty statistics included in-kind transfer payments the:
a. poverty rate would be close to zero.
b. poverty rate would be lower.
c. government deficit would be lower.
d. top 10 percent of those in the income distribution would be wealthier.
Harold Brown runs a company that sells encyclopedia sets for $250 each. When he
employs 10 workers, they can sell 60 sets per week, while only 54 sets are sold when 9
workers are employed. What is the weekly marginal revenue product of the tenth
worker?
a. $250.
b. $1,250.
c. $1,500.
d. $15,000.
Juanita, a lawyer, can type faster than Jill, her secretary. Jill, on the other hand, does not
have the ability or skills to practice law. Applying the principles of international trade to
this situation, an economic consultant advises Juanita to:
a. fire Jill, practice law during the day, and do her own typing at night.
b. practice law and leave all the typing to the secretary.
c. divide her time equally between typing and practicing law.
d. quit practicing law and take a job as a secretary.
e. have Jill attend law school.
Economies of scale are created by greater efficiency of capital and by:
a. longer chains of command in management.
b. better wages for labor.
c. smaller plant sizes.
d. increased specialization of labor.
Suppose the president of a textbook publisher argues that a 10 percent increase in the
price of textbooks will raise total revenue for the publisher. It can be concluded that the
company president thinks that demand for textbooks is:
a. unitary elastic. c. elastic.
b. inelastic. d. perfectly inelastic.
In the long-run, surviving firms in monopolistic competition earn:
a. higher pure economic profits. c. below-normal profits.
b. zero pure economic profits. d. substantial economic losses.
Exhibit 3A-2 Comparison of Market Efficiency and Deadweight Loss
As shown in Exhibit 3A-2, if the market is in equilibrium, then ____ represents
producer surplus.
a. FEH c. EGH
b. FEH d. DFEA
Exhibit 6-3 Marginal utility data for goods X and Y
As shown in Exhibit 6-3, assume that the price of both goods is $1 per total unit, and
your budget is $8. If you consume 4 units of good X and 1 unit of good Y. To maximize
utility, you should consume:
a. neither X nor Y.
b. more of X and less of Y.
c. less of X and more of Y.
d. more of both X and Y.
e. less of both X and Y.
A country that can produce a good using fewer resources than another country has a(n):
a. lower opportunity cost of producing the good than another country.
b. absolute advantage.
c. specialization in the production of the good.
d. all of these.
Exhibit 8-3 Cost per unit curves
As shown in Exhibit 8-3, the firm will produce in the short run if the price is at least
equal to:
a. $1.00 per unit (point A).
b. $1.50 per unit (point B).
c. $2.00 per unit (point C).
d. $4.00 per unit (point D).
A perfectly elastic supply curve is expressed graphically as a(n):
a. downward sloping line or curve. c. vertical line.
b. upward sloping line or curve. d. horizontal line.
Per-unit taxes have which effect on the equilibrium price of a good?
a. They cause demand curves to shift downward, thus lowering price.
b. They cause demand curves to shift downward, thus raising price.
c. They cause supply curves to shift downward, thus lowering price.
d. They cause supply curves to shift upward, thus lowering price.
e. They cause supply curves to shift upward, thus raising price.
Which of the following would be most likely to cause the production possibilities curve
for computers and education to shift outward?
a. A choice of more computers and less education.
b. A choice of more education and less computers.
c. A reduction in the labor force.
d. An increase in the quantity of resources.
To be valid, an economic model must:
a. include every activity which occurs in the real world.
b. include at least 85 percent of the activity which occurs in the real world.
c. be able to predict events occurring in the real world.
d. exclude any link to the real world.
e. not be based on an abstraction of the real world.
Examples of market failure include lack of competition, externalities, public goods, and
income inequality.
Monopsony means a labor market with a single buyer.
Official figures indicate that the percentage of persons below the poverty level in the
U.S. is more today than it was in 1959.
In the short run, the supply curve for a perfectly competitive firm is its marginal cost
curve for all levels of output.
Money is one of our nation’s resources (factors or means of production).