1) Jacqui decides to open her own business and earns $50,000 in accounting profit the
first year. When deciding to open her own business, she turned down three separate job
offers with annual salaries of $30,000, $40,000, and $45,000. What is Jacqui’s
economic profit from running her own business?
a. $-55,000
b. $-5,000
c. $5,000
d. $20,000
2) Table 22-22
The town of Fairview is considering a renovation to the high school. The voters in
Fairview have different preferences on the budget for the renovation as displayed
below.
Refer to Table 22-22. If there is a vote between a budget of $12 million and $16 million,
the median voter will vote to spend
a.$12 million and the voting outcome will be $12 million.
b.$12 million and the voting outcome will be $16 million.
c.$16 million and the voting outcome will be $12 million.
d.$16 million and the voting outcome will be $16 million.
3) Incomes of U.S. households in the 1970s and 1980s
a.grew rapidly, due to the widespread success of labor unions in pushing up wages
during those decades.
b.grew rapidly, due to several increases in the minimum wage during those decades.
c.grew rapidly, due to government policies that discouraged the importation of foreign
products during those decades.
d.grew slowly, due to slow growth of the output of goods and services per hour of U.S.
workers’ time during those decades.
4) Assume that England and Spain can switch between producing cheese and producing
bread at a constant rate.
Which of the following combinations of cheese and bread could Spain produce in 24
hours?
a.4 units of cheese and 3 units of bread.
b.6 units of cheese and 1 units of bread.
c.7 units of cheese and 1.5 units of bread.
d.3 units of cheese and 3 units of bread.
5) Table 15-2
Tanya has the following demand curve for selling taffy. Assume that Tanya has a
marginal cost of $3 per unit.
What is Tanya’s profit-maximizing price?
a.$2
b.$4
c.$6
d.$8
6) The suggestion that people are ‘satisficers” is similar to the view that people
a.are wealth-maximizers.
b.exhibit “bounded rationality.”
c.go to a lot of trouble to weigh costs and benefits before choosing a course of action.
d.change their minds often.
7) In a particular town, Comvision and Veriview are the only two providers of cable TV
service. Comvision and Veriview constitute a
a.duopoly, whether they collude or not.
b.cartel, whether they collude or not.
c.Nash industry, whether they collude or not.
d.monopolistically competitive market if they charge the same price.
8) Tom walks Bethany’s dog once a day for $50 per week. Bethany values this service
at $60 per week, while the opportunity cost of Tom’s time is $30 per week. The
government places a tax of $35 per week on dog walkers. Before the tax, what is the
total surplus?
a.$60
b.$50
c.$30
d.$25
9) A college professor hires a student to babysit her children and pays the student an
efficiency-wage. Which of the following is correct about the wage the student earns?
a.The wage is higher than the wage the student could earn working a similar job
elsewhere.
b.The wage is the same as the wage the student could earn working a similar job
elsewhere.
c.The wage is lower than the wage the student could earn working a similar job
elsewhere.
d.The wage is likely to result in the student shirking responsibilities.
10) People are likely to respond to a policy change
a.only if they think the policy is a good one.
b.only if the policy change changes the costs of their behavior.
c.only if the policy change changes the benefits of their behavior.
d.if the policy changes either the costs or benefits of their behavior.
11) In any economic system, scarce resources have to be allocated among competing
uses. Market economies harness the forces of
a.government to allocate scarce resources.
b.supply and demand to allocate scarce resources.
c.credit cards to allocate scarce resources.
d.nature to allocate scarce resources.
12) Table 22-21
The following table shows the number of voters preferring various amounts of spending
to develop a river to make it more attractive for canoeing and kayaking.
Refer to Table 22-21. The city council is considering two alternative ballots. The first
would allow voters to choose between $1.5 million and $2 million. The second would
allow voters to select between $2 million and $2.5 million. If the first ballot is used,
a.voters will select $1.5 million. If the second ballot is used voters will select $2
million.
b.voters will select $1.5 million. If the second ballot is used voters will select $2.5
million.
c.voters will select $2 million. If the second ballot is used voters will select $2 million.
d.voters will select $2 million. If the second ballot is used voters will select $2.5 million
13) Marcus says that he would smoke one pack of cigarettes each day regardless of the
price. If he is telling the truth,
Marcus’s
a.demand for cigarettes is perfectly inelastic.
b. for cigarettes is infinite.
c.income elasticity of demand for cigarettes is 0.
d.More than one of the above is correct.
14) People tend to wait until deadlines get close to work on projects in part because
they believe that they can complete the projects in less time than it will actually take.
Which findings from behavioral economics is this observation consistent with?
a.People tend to be time inconsistent and people tend to be overconfident.
b.People tend to be time inconsistent but not that people tend to be overconfident.
c.People tend to be overconfident, but not that people tend to be time inconsistent.
d.Neither that people tend to be overconfident nor that people tend to be time
inconsistent.