1) One method used to control the ability of firms to capture monopoly profit in the
United States is through
a.government purchase of products produced by monopolists.
b.government distribution of a monopolist’s excess production.
c.enforcement of antitrust laws.
d.regulation of firms in highly competitive markets.
2) Which of the following is an example of customer discrimination?
a.A foreign government prevents women from legally working as teachers.
b.White theater goers prefer to watch movies with white stars rather than black stars.
c.Customers prefer more experienced lawyers over less experienced ones.
d.All of the above are correct.
3) Figure 15-3
Which panel could represent the demand curve facing a soybean farmer?
a.Panel A
b.Panel B
c.Panel C
d.Panel D
4) Table 12-12
If the government imposes a $3,000 lump-sum tax, the marginal tax rate for Charles
would be
a.0 percent.
b.5 percent.
c.6.7 percent.
d.10 percent.
5) A firm‘s marginal cost has a minimum value of $4, its average variable cost has a
minimum value of $6, and its average total cost has a minimum value of $7. Then the
firm will shut down in the short run once the price of its product falls below
a.$7.
b.$6.
c.$4.
d.We do not have enough information to answer the question.
6) In the market for widgets, the supply curve is the typical upward-sloping straight
line, and the demand curve is the typical downward-sloping straight line. The
equilibrium quantity in the market for widgets is 250 per month when there is no tax.
Then a tax of $6 per widget is imposed. As a result, the government is able to raise
$750 per month in tax revenue. We can conclude that the after-tax quantity of widgets is
a.75 per month.
b.100 per month.
c.125 per month.
d.150 per month.
7) Goods with many close substitutes tend to have
a.more elastic demands.
b.less elastic demands.
c.price elasticities of demand that are unit elastic.
d.income elasticities of demand that are negative.
8) When economists are trying to explain the world, they are scientists, and when they
are trying to help improve the world, they are policy advisers.
a.True
b.False
9) The deadweight loss from a tax of $x per unit will be smallest in a market
a.in which demand is elastic and supply is inelastic.
b.in which demand is inelastic and supply is elastic.
c.in which demand is inelastic and supply is inelastic.
d.None of the above are correct; we need to know the value of x in order to determine
the answer.
10) A common argument in favor of restricting trade
a.concerns the strategy of bargaining.
b.is that efforts should be made to get new industries started.
c.emphasizes the belief that all countries should play by the same rules.
d.All of the above are correct.
11) Who would be more likely to study the effects of rent control on housing in New
York City, a macroeconomist or a microeconomist?
12) What does a production possibilities frontier represent?
13) What is the at any point on a perfectly inelastic demand curve?
14) Figure 15-22
If the monopolist uses perfect price discrimination, how much profit does the firm earn?
15) Are common resources excludable? Are they rival in consumption?
16) Using the theory of wage determination, explain why wages in developing
countries, where levels of capital are small, are typically quite low.
17) If a father earns 20% above his generation’s average income, his son will most
likely earn what percent above his generation’s average income? What does this statistic
indicate?
18) In the market for “home heating” consumers typically have several options (e.g.,
electricity, heating fuel, natural gas, propane, etc.), yet we often think of firms in this
industry as behaving like monopolists. Discuss the context in which your electricity
provider is a monopolist. Is this characterization universally applicable? Explain your
answer.