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1) Arturo's Production Possibilities FrontierDina's Production Possibilities
Frontier
a.her tax obligation divided by her average tax rate.
b.the increase in taxes she would pay as a percentage of the rise in her income.
c.her tax obligation divided by her income.
d.the increase in taxes if her average tax rate were to rise by 1percent.
7) Suppose that firms in a competitive industry are earning positive economic profits.
All else equal, in the long run, we would expect the number of firms in the industry to
a.increase.
b.decrease.
c.remain the same.
d.We do not have enough information with which to answer this question.
8) Olivia was accepted by Northwestern and by another university. She is trying to
decide where to go. Which of the following should influence her decision?
a.how much she spent applying to Northwestern, and the difference between living
expenses at Northwestern and the other university
b.how much she spent applying to Northwestern, but not the difference between living
expenses at Northwestern and the other university
c.the difference between living expenses at Northwestern and her second choice, but not
how much she spent applying to Northwestern
d.neither how much she spent applying to Northwestern nor the difference between
living expenses at Northwestern and her second choice
9) The larger the deadweight loss from taxation, the larger the cost of government
programs.
a.True
b.False
10) A rightward shift of a supply curve is called a(n)
a.increase in supply.
b.decrease in supply.
c.decrease in quantity supplied.
d.increase in quantity supplied.
11) Which of the following represents a consumer's optimum?
a.MUx/MUy = Py/Px
b.MUx/Py = MUy/Px
c.MUx/Px = MUy/Py
d.MUy/MUx = Px/Py
12) The primary economic explanation as to why a world-renowned architect cannot
attain the 'superstar" status that an athlete or actor can attain is that
a.architects' services are not as highly valued by society as are the services of athletes
and actors.
b.only physically attractive people can become superstars, and it would be a
coincidence if a highly talented architect were also physically attractive.
c.government regulations place restrictions on the incomes of architects, but there are
no such restrictions on the incomes of athletes or actors.
d.it is impossible, currently, for an architect to supply his or her services at low cost to
every customer.
13) Figure 18-8
This figure below shows the labor market for automobile workers. The curve labeled S
is the labor supply curve, and the curves labeled D1 and D2 are the labor demand
curves. On the horizontal axis, L represents the quantity of labor in the market.
Refer to Figure 18-8. What is measured along the vertical axis on the graph?
a.the quantity of automobiles produced
b.the price of automobiles
c.the wage paid to automobile workers
d.time spent by workers producing automobiles
14) Table 15-3
Consider the following demand and cost information for a monopoly.
The marginal revenue of the 2nd unit is
a. $10.
b.$15.
c.$20.
d.$25.
15) Figure 8-21
Suppose the government places a $3 per-unit tax on this good. The largest deadweight
loss from the tax would occur in a market where demand is represented by
a.Demand 1, and supply is represented by Supply 1
b.Demand 1, and supply is represented by Supply 2
c.Demand 2, and supply is represented by Supply 1
d.Demand 2, and supply is represented by Supply 2
16) Which of the following events would increase producer surplus?
a.Sellers' costs stay the same and the price of the good increases.
b.Sellers' costs increase and the price of the good stays the same.
c.Sellers' costs increase and the price of the good decreases.
d.All of the above are correct.
