Economists often assert that a person who receives an in-kind transfer payment (from
government) has a higher income as a result. But an in-kind transfer is not money
income, so what are economists thinking?
a. They are thinking that an additional in-kind benefit, like more money income, makes
a person better off and thus they are equating being better off (in the sense of having
more goods and services) with a higher income.
b. They are thinking that persons who receive in-kind benefits end up selling them,
receiving money in exchange.
c. They are thinking that the individuals who receive the in-kind benefits equate more
in-kind benefits with more money income.
d. They are thinking that individuals who receive in-kind benefits would prefer to
receive them over receiving additional money income, so that in-kind benefits are worth
at least their monetary value.
e. none of the above
Which of the following statements is false?
a. Congress has granted the U.S. Postal Service the exclusive franchise to deliver
first-class mail.
b. A natural monopoly exists where economies of scale are so pronounced in an
industry that only one firm can survive.
c. In the United States patents are granted for a period of 10 years.
d. A public franchise is a right granted to a firm by government that permits the firm to
provide a particular good or service and excludes all others from doing the same.
At the optimal or efficient level of an activity, the activity€s marginal benefit must
a. be zero.
b. be greater than zero.
c. equal the marginal cost of the activity.
d. exceed the marginal cost of the activity.
Given the choice between a sure-thing option and a gamble option with the same
expected payoff, a____________ person will choose gamble.
a. risk averse
b. risk loving
c. risk neutral
d. risk avoiding
e. none of the above
Situation 37-2
Dan and Ann live in the same community and both can participate in two activities,
producing and stealing.
Ann spends 8 hours of each day producing and 1 hour of each day stealing.It is
probably the case for her that
a. at some point the MB/MC ratio for producing fell below the MB/MC ratio for
stealing.
b. her MB/MC ratio for producing was always greater than her MB/MC ratio for
stealing.
c. her MB/MC ratio for producing never changed, no matter how much or how little she
produced.
d. her MB/MC ratio for stealing never changed, no matter how much or how little she
stole.
e. There is not enough information to answer the question.
Concentration ratios are often used to determine the degree of oligopoly in an industry.
a. True
b. False
Which of the following statements is true?
a. An extra dollar earned by a millionaire necessarily brings him or her less utility than
an extra dollar earned by a poor person.
b. If marginal utility is constant, then total utility for two units of a good is equal to the
marginal utility of the second unit of the good.
c. The marginal and total utility of a good are the same for the first unit of the good.
d. Total utility will rise if marginal utility is negative.
e. a and c
The percentage change in the quantity demanded of good X is 20 percent and the
percentage change in the price of good Y is 10 percent. It follows that the __________
elasticity of demand is __________ and that the two goods are __________.
a. income; 0.50; substitutes
b. cross; 2.00; complements
c. cross; 0.50; substitutes
d. cross; 2.00; substitutes
e. price; 2.00; substitutes
The act that was passed in an attempt to decrease the failure rate of small businesses by
protecting them from the competition of large and growing chain stores was the
a. Wheeler-Lea Act.
b. Robinson-Patman Act.
c. Celler-Kefauver Antimerger Act.
d. Clayton Act.
e. Sherman Act.
A single-price monopolist
a. must lower price on all previous units to sell an additional unit of output.
b. is a price taker.
c. finds that its marginal revenue and price are the same for the first unit of the good it
sells.
d. necessarily faces a perfectly inelastic demand curve.
e. a and c