Exhibit 3-8 Demand and supply data for Video games
Exhibit 3-8 presents supply and demand data for the video game market. If the price of
video games was currently $70, there would be an ____ of ____ video games in this
market.
a. excess demand; 450
b. excess demand; 500
c. excess supply; 400
d. excess supply; 850
e. excess demand; 400
If a firm decreases output when MR > MC, then:
a. profit will equal zero.
b. profit will increase.
c. profit will decrease.
d. profit will remain the same.
e. the firm is minimizing losses.
Exhibit 5-4 Demand curves for silver
Assume that a wealthy buyer, Mr. Hunt, declares that he will purchase any amount of
silver at a price of $125 an ounce. In Exhibit 5-4, which graph illustrates the shape of
the demand curve for silver?
a. Graph A. c. Graph C.
b. Graph B. d. Graph D.
Exhibit 8-2 Total revenue and total cost graph
In Exhibit 8-2, economic profit for the firm is at a maximum when output per week
equals:
a. zero units.
b. 100 units.
c. 200 units.
d. 250 units.
e. 300 units.
If the price elasticity of supply equals zero, this implies that:
a. suppliers can easily change the quantity supplied of the product as the price of the
product changes.
b. the period under consideration is a very long-run time period.
c. the supply curve is perfectly vertical.
d. the percentage change in quantity supplied exceeds the percentage change in product
price.
e. the percentage change in quantity supplied equals the percentage change in product
price.
If the current price of a good is the same as that found at the intersection of the market
demand and supply curves, then:
a. excess demand exists.
b. excess supply exists.
c. price will rise.
d. price will fall.
e. the market is in equilibrium.
Some economists argue that monopolistically competitive markets are inefficient
because:
a. the firms earn economic profits in the long run.
b. the firms’ marginal costs and marginal revenues are not always equal.
c. firms do not produce the output rate that would minimize their average total cost.
d. barriers to entry are high.
Exhibit 5-5 Demand curve for computers
In Exhibit 5-5, the total revenue at point B on the demand curve equals:
a. OA.
b. CB.
c. AB.
d. OABC.
e. None of these.
Efficient production means producing:
a. less than feasible output for a given amount of resources.
b. more than feasible output for a given amount of resources.
c. the maximum feasible output for a given amount of resources.
d. no more than what is needed.
e. in excess of what is needed.
If an employer currently finds that the MRP of its labor resources equals $67, and the
MFC equals $56, what would you advise the firm to do?
a. Stay at its current output level.
b. Hire additional workers.
c. Raise product prices.
d. Reduce employment.
e. Purchase new technology.
Exhibit 1A-8 Straight line relationship
According to the Exhibit 1A-8, the relationship between the price and quantity
purchased of pizza is:
a. direct. c. complex.
b. inverse. d. independent.
A 10 percent rise in the price of housing reduces the quantity demanded of housing by 3
percent. We can conclude that the demand for housing is:
a. inelastic. c. unitary elastic.
b. elastic. d. perfectly elastic.
Which of the following statements is true?
a. Emissions-trading is trading that allows firms to buy and sell the right to pollute.
b. The Coase Theorem is the proposition that private markets can rarely ever achieve
social efficiency.
c. The free-rider problem refers to those who ride on public transit systems without
paying.
d. Government failure has never occurred in the United States.
Which of the following is the best example of a normative economic statement?
a. A rise in gasoline prices will cause gasoline purchases to fall.
b. The federal government should spend more on health care.
c. Raising the minimum wage will result in greater unemployment.
d. If more money is printed, then the economy’s price level will rise.
Marginal utility can be measured by the change in:
a. total utility / the change in quantity.
b. income / the change in utility.
c. quantity / the change in income.
d. price / the change in utility.
e. income / the change in price.
Exhibit 3-8 Demand and supply data for Video games
In Exhibit 3-8, if the price of video games was currently $45, there would be an ____ of
____ video games in this market.
a. excess demand; 700
b. excess demand; 500
c. excess supply; 100
d. excess supply; 600
e. excess demand; 100
If demand price elasticity measures 2, this implies that consumers would:
a. buy twice as much of the product if the price drops 10 percent.
b. require a 2 percent drop in price to increase their purchases by 1 percent.
c. buy 2 percent more of the product in response to a 1 percent drop in price.
d. require at least a $2 increase in price before showing any response to the price
increase.
e. buy twice as much of the product if the price drops 1 percent.
Suppose two variables are directly related. If one variable rises, then the other variable:
a. also rises. c. remains unchanged.
b. falls. d. reacts unpredictably.
Reducing pollution to zero emissions would be socially efficient.
In order from the most to the least competitive market structure is the perfectly
competitive, monopolistically competitive, monopolist and then the oligopolistic
market structure.
Under socialism, no markets can operate at all.
Other things being equal, an increase in the price of aspirin will decrease the demand
for aspirin.
The Sherman Antitrust Act makes cartels illegal in the United States.
Policies to determine the price of troll dolls are a concern of macroeconomics.
Under a negative income tax program, the higher the income earned in the marketplace,
the higher will be the family’s after-tax income.
Other things being equal, an increase in U.S. interest rates would be likely to cause an
increase in the capital account surplus or a decrease in the capital account deficit.