In 2013 ____ of national factor income consisted of employee compensation.
a. 90 percent
b. 50 percent
c. 60 percent
d. 70 percent
What is a key criterion involved in deciding a natural monopoly?
a. Size of the firm relative to its competitors.
b. Size of the firm relative to the total market demand for a product.
c. Magnitude of profits generated by the company.
d. A firm’s ability to adapt to market changes.
The term “bilateral monopoly” refers to market situations in which
a. there are two participants on the selling side.
b. there are two participants on the buying side.
c. there is a monopoly on the selling side and a monopsony on the buying side.
d. a monopoly has evaded antitrust laws.
“Common stock” is the type sold to small investors.
a. True
b. False
The welfare program economists believe to be most compatible with economic
efficiency is
a. a regressive tax system.
b. AFDC.
c. a negative income tax.
d. Medicare/Medicaid.
Is faster economic growth unambiguously better?
a. No, because growth has an opportunity cost.
b. No, because growth serves no useful purpose.
c. Yes, because more goods and services are always better.
d. Yes, because it expands the production possibilities of an economy.
e. Uncertain-economic growth has no answer to this question.
The slope of an indifference curve at all points reflects
a. the terms by which the consumer can trade off goods in the market.
b. the relative prices of the two goods.
c. the willingness of the consumer to trade one good for another.
d. consumer income relative to the price of a good.
e. the relative price ratio of the two goods.
Figure 5-16
In Figure 5-16, a decrease in the price of apples will
a. shift Adam’s budget constraint out.
b. make Adam’s budget constraint steeper.
c. shift Adam’s indifference curves out.
d. make Adam’s budget constraint flatter.
The three noteworthy features of corporations’ legal status include all of these except:
a. they are taxed
b. special limits are placed on the losses that may be incurred by those who invest
incorporations
c. the corporation is a distinct entity separate from its owners
d. they may invest in the stock market and acquire financing
The short-run supply curve of the perfectly competitive industry is found by summing
the
a. AC curves of the individual firms in the industry.
b. AVC curves of the individual firms in the industry.
c. MC curves above AVC of the individual firms in the industry.
d. There is no short-run supply curve in a competitive industry.
A minority candidate may not have the same chances as a white candidate for a job
simply based on an employer’s misconceptions about minorities.
a. True
b. False
An example of a beneficial externality is
a. airport noise.
b. a blooming curbside bed of violets.
c. pollution of a fishing lake.
d. freeway congestion.
The number of persons who could become lawyers or surgeons is potentially quite
large, yet these two groups earn fairly high incomes. One of the main reasons why they
do is the
a. return on the investment of many years of training.
b. evening-out of their low income during schooling.
c. rent on their unique and rare talents.
d. scarcity value of their abilities.
Economists emphasize the importance of ____ in analyzing demand.
a. quantity
b. market potential
c. wants and needs
d. price
e. sales opportunities
Figure 7-8
“Overfishing” impairs the ability of fish stock to replenish itself, so the stock of fish
declines. Fishermen then attempt to increase output by adding more boats and fishing
longer. Which average cost curve in Figure 7-8 depicts the “overfishing” situation?
a. 1
b. 2
c. 3
d. 4
The theory of the kinked demand curve is that
a. although the firm sells a differentiated product, too many competitors exist to make it
worthwhile speculating on responses to the firm’s behavior.
b. freedom of entry will reduce profits to zero.
c. a firm’s competitors will follow it in a price decrease but not follow it in a price
increase.
d. firms are all seeking the position of joint profit maximization.
Although finished goods are scarce, the inputs to produce them are not scarce.
a. True
b. False
According to the principle of increasing costs, as the production of one good expands,
the opportunity cost of producing another unit of the good tends to increase.
a. True
b. False
The emigration of some of Whoville’s workers reduces the quantity of thingamabobs
supplied at every price by 50 The new supply curve will ____ the old supply curve.
a. be steeper and less elastic at every price than
b. have the same slope and the same elasticity at every price as
c. have the same slope and be more elastic at every price than
d. More information is needed to predict the relationship between the elasticities of the
two supply curves.
If incomes were equally distributed in the United States, each fifth of the population
would receive ____ percent of the income.
a. 5
b. 10
c. 15
d. 20
Explain what happens to the magnitude of price elasticity of demand as price increases
along a straight-line demand curve.
What has been the trend in eliminating poverty since 1960?
Arrange the following goods from least to most elastic, explaining your ordering:
gasoline, Exxon gas, Exxon gas at a particular gas station.
How does the market mechanism distribute income?