Economists can evaluate the desirability of the distribution of income.
a. True
b. False
A concentration ratio provides a better assessment of market power than the
Herfindahl-Hirschman index does.
a. True
b. False
In labor markets, risk taking accounts for some income differences.
a. True
b. False
A surplus occurs when price is higher than the market equilibrium.
a. True
b. False
The corporate tax applies to firms’ total revenues.
a. True
b. False
An increase in market demand will cause an increase in industry output in the long run
because
a. new firms enter the industry.
b. new firms enter the industry and all firms increase their output.
c. all firms decrease their output but more new firms enter.
d. no firms enter but the existing firms increase their output.
John’s Bait Shop was surprised to learn that when it raised prices by 10 percent, total
revenue was unaffected. This is because the elasticity for bait is
a. unit elastic.
b. inelastic.
c. elastic.
d. Not enough information is given.
The marginal physical product of an input is the
a. addition to output from using one more unit of an input.
b. extra amount of an input needed to produce one additional unit of output.
c. change in average physical product, given a change in the quantity of an input.
d. slope of the production indifference curve for an output made using the input.
Economies of scale
a. require inputs’ MPP to fall as output increases (everything else equal).
b. pertain to the long run only.
c. refer to increased output generalized by an increase in the quantity of a single input.
d. imply that the AC curve will fall continuously as output increases in the short run.
Which nation listed below is successfully transitioning from a planned economy to a
hybrid market economy?
a. People’s Republic of China.
b. Japan.
c. United Kingdom.
d. United States.
Compared to OECD countries, in the U.S.
a. the poverty level is above the OECD average, but inequality is below the average
b. the poverty level is below the OECD average, but inequality is above the average
c. both poverty and inequality levels are below the OECD average
d. both poverty and inequality levels are above the OECD average
The division of labor benefits society only if
a. a system of exchange exists.
b. society uses all of its resources efficiently.
c. society has no specialized resources.
d. labor resources are not scarce.
A tariff is a limitation on the amount of a good that can be imported.
a. True
b. False
From 1975 to 2008, which of the following countries experienced greater wage
increases than the U.S.?
a. Japan
b. South Korea
c. Taiwan
d. all of the above
Firms should use a resource up to a point where MRP = P.
a. True
b. False
A profit-maximizing firm will hire inputs until MRP = P of the input.
a. True
b. False
If a firm has short-run losses, will it stay open? Under what conditions will a firm close
in the short run? Explain.
Give an example of a price floor. Draw a corresponding diagram and explain why there
is a continuing surplus.
Complete the table below by computing the missing numbers from those that are given.
Unscrupulous managers have learned ways to manipulate stock options and undermine
their benefits to stockholders. Discuss some provisions that could be built into the
process to curb such practices.
Why are time series data unlikely to give an accurate estimate of demand?
How does the price system cope with depletable resources?
One of the conclusions of the model of monopoly is that the firm earns economic
profits above the required opportunity cost of the factors of production. Are these
profits lost to society? Do they take spending power from the economy, and act as a
brake on economic growth?