In the supply-and-demand diagram of the market for peanut butter, the equilibrium
point has moved down and to the right. What could have caused this?
a. a fall in the price of peanuts
b. a rise in the price of peanuts
c. a rise in income, assuming that peanut butter is an inferior good
d. a shift in preferences toward peanut butter
Economic profit is
a. total revenue minus total cost (including both explicit and implicit costs).
b. the same as accounting profit.
c. accounting profit plus implicit costs.
d. accounting profit minus implicit costs.
e. a and d
The theory of monopolistic competition assumes
a. the production of a slightly differentiated product.
b. significant barriers to entry.
c. many buyers and sellers.
d. a and c
e. all of the above
Carol works for Firm X. She takes long breaks and often daydreams when she is being
paid to work. Carol is
a. satisfying.
b. shirking.
c. monitoring.
d. separating ownership from control.
An indifference curve shows
a. the bundles of two goods that give an individual equal total utility.
b. two bundles of two goods each where one bundle gives greater utility to an
individual than the other bundle.
c. two bundles of two goods each where one bundle is preferred to the other.
d. the bundles of two goods that give an individual equal marginal utility.
For farmers as a group, increased productivity can lead to lower incomes.
a. True
b. False
For a perfectly competitive firm, a decrease in the price of the product it sells will shift
a. the demand curve of its product to the left.
b. the demand curve of its product to the right.
c. its MRP curve to the left.
d. its MRP curve to the right.
e. b and c
A public good can be excludable or nonexcludable.
a. True
b. False
For the perfectly price-discriminating monopolist, its __________ curve is the same as
its __________ curve.
a. marginal cost; average fixed cost
b. average variable cost; average total cost
c. demand; marginal revenue
d. demand; marginal cost
e. marginal revenue; marginal product of labor
The acronym NASDAQ (one of the stock exchanges) stands for
a. National Academy of Stock Dealers Automated Quotations
b. New American Securities Dealers Automated Quotations
c. National Association of Securities Dealers Automated Quotations
d. North American Stock Dealers Automated Quotations
Which of the following statements is true?
a. Productive inefficiency implies that it is possible to produce more of one good and no
less of another, but only if additional resources are made available.
b. Productive efficiency implies that it is possible to produce more of one good and no
less of another, even without additional resources.
c. Productive inefficiency implies that it is impossible to produce more of one good and
no less of another.
d. Productive inefficiency implies that it is possible to produce more of one good and no
less of another, even without additional resources.
Why might special interest groups be more likely to push for transfers instead of
economic growth?The answer is because it usually takes a much __________________
percentage _______________ in growth to equal what they can get from the transfer.
a. smaller; decrease
b. larger; increase
c. larger; decrease
d. smaller; increase
e. none of the above
When the actual Lorenz curve is as far away from the 45-degree line as possible, there
is
a. perfect income equality.
b. perfect income inequality.
c. a more equal distribution of income than before.
d. a less equal distribution of income than before.
Anna gives Billy a gift of $200.We can be sure that Billy will
a. spend the $200 on what Anna hopes that he will spend it on.
b. save the $200, and not spend it on anything.
c. spend the $200 on whatever is next on Billy’s list of things to buy.
d. spend the $200 on something that Anna does not want him to spend it on.
The existence of switching costs in the use of computer software means that buyers of
computer software are __________ likely to change software programs than would be
the case in the absence of switching costs, and therefore, the maker of the software
program may have __________ reason to innovate.
a. less; more
b. less; less
c. more; more
d. more; less
Which of the following is a positive economic statement?
a. We should raise the minimum wage in order to provide a decent wage for more
people.
b. Consumers bought fewer cars when the relative price of cars increased.
c. The budget deficit has been rising in recent years.
d. Federal government spending ought to be curtailed.
e. b and c
Refer to Exhibit 3-14.At a price of $10, there is a ____________ unit____________ of
good X.
a. 340; surplus
b. 230; shortage
c. 60; surplus
d. 340; shortage
e. 270; shortage
In monopolistic competition, firms can compete in terms of
a. price.
b. quality of product.
c. service.
d. location.
e. all of the above
Refer to Exhibit 20-6. Let S1 be the supply curve of a producer. If S2 is the supply curve
of the same producer after the government imposes a per-unit tax, the tax revenue
generated will be
Exhibit 20-6
a. greater if D1 is the demand curve facing the firm.
b. greater if D2 is the demand curve facing the firm.
c. the same regardless of which demand curve the firm faces.
d. Any of the above, depending on the type of good the tax is imposed on.