A man moves from a large city to a small town.In the small town he seems like a very
different person than the person he was in the big city.For instance, he is more polite in
the small town than he was in the big city.This could be because
a. the costs of his being impolite are higher in the big city than in the small town.
b. the costs of his being impolite are higher in the small town than in the big city.
c. he is a happier person in the small town and it could be that happier people are more
polite.
d. b and c
e. a and c
Which of the following is not consistent with the view of labor unions as a collective
voice?
a. Unions reduce job exiting.
b. Labor productivity declines as a result of labor unions
c. The worker turnover rate is reduced by labor unions.
d. Workers feel more secure in their jobs as a result of labor unions.
In a given community, if the government builds more freeways, then the supply curve
for freeway space shifts rightward and the demand curve for freeway space shifts
leftward.
a. True
b. False
Producers’ surplus is the difference between the price
a. sellers receive for a good and the maximum price they would have paid for the good.
b. sellers receive for a good and the minimum price for which they could have sold the
good.
c. buyers pay for a good and the maximum price they would have paid for the good.
d. buyers pay for a good and the minimum price for which they would have sold the
good.
If it is discovered that using drugs enhances a person’s chance of contracting a lethal
disease, the cost of using drugs
a. increases.
b. decreases.
c. is not affected.
d. is irrelevant, since they are illegal anyway.
Which of the following is not an effect of an agricultural price support?
a. a surplus
b. fewer exchanges
c. higher prices paid by consumers
d. government purchase and storage of surplus
e. higher-quality products
Exhibit 3-6
If an increase in income causes the demand for good X to shift from D1 to D3, then
good X is
a. a normal good.
b. an inferior good.
c. a substitute good.
d. a complementary good.
e. a neutral good.
A consequence of a negative externality is that social costs __________ private costs,
and the efficient level of output __________.
a. equal; does not require any type of government intervention
b. are less than; requires the government to create a subsidy
c. are greater than; requires the government to impose a tax
d. are greater than; requires the government to create a subsidy
e. are less than; requires the government to impose a tax
Exhibit 4-3
If price P1 is a price ceiling, then
a. there is a surplus in the market for good X.
b. the highest price that can legally be charged in this market is P3.
c. the price at which exchange legally takes place is P2.
d. the price at which exchange legally takes place is P1.
e. both a and b
Exhibit 1-2
Based on the data provided in this table,what type of relationship exists between
variables X and Y?
a. inverse
b. direct
c. independent
d. There is no relationship between variables X and Y.
The wage rate increases 10 percent, and the quantity demanded of labor falls by 25
percent. The absolute value of the elasticity of demand for labor is
a. 0.40.
b. 2.50.
c. 0.25.
d. 5.00.
e. none of the above
Government wants to maximize its tax revenue and it can only place a $2 per-unit tax
on one of two goods. It should place the tax (on the production) of the good whose
demand curve has the
a. higher price elasticity of demand.
b. lower price elasticity of demand.
c. greater length.
d. shorter length.
e. a or c
Public choice theorists say that the greater the number of potential voters in an election,
the __________ the perceived benefits of voting held by each voter, and so the
__________ the likely percentage turnout of voters.
a. greater; lower
b. greater; higher
c. smaller; lower
d. smaller; higher