Points along a budget line represent the maximum combinations of two commodities
that a consumer can afford.
a. True
b. False
Employers can shift payroll taxes by substituting capital for labor.
a. True
b. False
Figure 7-14
Of the long-run AC curves in Figure 7-14, which displays increasing returns to scale for
all levels of output?
a. 1
b. 2
c. 3
d. 4
Figure 21-1
In Figure 21-1, if the existing antipoverty program were replaced by a negative income
tax, most economists believe that it would result in a move like which of the following?
a. C to F
b. A to B
c. D to E
d. G to D
As a resource becomes more scarce, we expect its price to
a. rise.
b. fall.
c. remain constant.
d. fluctuate wildly.
Higher efficiency in the economy can be reached if prices are held low by law.
a. True
b. False
If a market system is functioning well, we can conclude that goods with
a. high opportunity costs tend to have high money costs.
b. low opportunity costs tend to have high money costs.
c. high opportunity costs tend to have low money costs.
d. low opportunity costs tend to have zero money costs.
e. high opportunity costs tend to have zero money costs.
The difference in prices for first-class and coach airline tickets exemplifies price
discrimination.
a. True
b. False
Figure 8-5
From Figure 8-5 one can deduce
a. TR = TC at outputs 10 and 60.
b. MR = MC at output 35.
c. TFC = 100.
d. All of the above are correct.
If fixed cost rises,
a. the profit maximizing level of output would decrease.
b. the profit maximizing level of output would not change.
c. marginal cost rises.
d. variable cost falls.
The demand curve for a good connects points describing how much consumers
a. actually bought at different prices during a particular period.
b. actually bought at different prices in different periods.
c. would have been willing and able to buy at different prices during a particular period.
d. would have been willing and able to buy at different prices in different periods.
If the MRP of labor is below the wage rate, the firm should lay off workers.
a. True
b. False
A monopolist will stop production when MR equals MC.
a. True
b. False
A tariff is
a. a tax on imports.
b. a tax on exports.
c. a payment by the government to an exporter.
d. a legal limit on the amount of a good that may be imported.
The Wall Street Journal reports that “hard times aid poultry companies as people eat
cheaper fowl.” In the language of economists, this means
a. chicken is an inferior good.
b. chicken has a negative substitution effect.
c. chicken has a positive substitution effect.
d. people’s tastes change during recessions.
e. chicken has a positive income effect.
If the marginal utility to Juan of sleeping an extra hour (from 8 a.m. to 9 a.m.) is
negative,
a. Juan is better off getting up at 8 a.m.
b. Juan is better off getting up at 9 a.m.
c. Juan’s total utility from sleeping must be negative.
d. Juan’s average utility from every hour he sleeps must be negative.
The maximin criterion seeks to minimize the maximum payoffs in order to win.
a. True
b. False