Simple majority voting sometimes leads to projects being undertaken whose costs are
greater than the benefits. How is this possible?
a. It is not possible, unless the voting results are rigged.
b. Because voters have no way to express the intensity of their preferences.
c. Because many voters choose to be rationally ignorant.
d. Because free riding is pervasive.
A bear market is one in which prices are expected to rise.
a. True
b. False
If a firm is a monopsony, then it
a. can pay any price it wants for the factors that it hires.
b. will have to pay the same price to each factor owner that supplies its factor.
c. will have to pay a higher price to purchase additional units of a factor.
d. need not lower the price of its product to induce buyers to purchase additional
quantities.
Two variables are independent if as one variable __________, the other variable
__________.
a. rises; rises.
b. falls; falls.
c. rises; falls.
d. changes; does not change.
Exhibit 25-6
In the exhibit,
a. the demand curve and the marginal revenue curve are the same.
b. the MC curve must have a downward-sloping portion and an upward-sloping portion.
c. the MC curve cuts the ATC curve at point B.
d. if the firm produced Q2, it would be taking a loss.
e. c and d
Tariffs and quotas are often imposed when a government is more responsive to
__________ interests, and the benefits of those trade restrictions are often __________.
a. consumer; concentrated
b. consumer; widely dispersed
c. producer; concentrated
d. producer; widely dispersed
The law of diminishing marginal utility can be stated as follows:
a. As the amount of a good consumed increases, the sum of satisfaction received tends
to decrease.
b. As the amount of a good consumed increases, the additional satisfaction gained from
consuming additional units tends to decrease.
c. As the amount of a good consumed decreases, the additional satisfaction gained from
consuming additional units tends to increase.
d. As the amount of a good consumed increases, the sum of satisfaction received tends
to increase but at a diminishing rate.
e. b and d
Michelle can work at job A earning $50,000 a year, job B earning $83,000 a year, or job
C earning $85,000 a year. If Michelle chooses job C, then her economic rent from
working at that job rather than job A is
a. $35,000.
b. $2,000.
c. $0.
d. $33,000.
Suppose that the annual dividend per share of stock is $5.40 and the closing price of the
stock is $72.50, the yield of the stock would be
a. 13.43%
b. 7.45%
c. 23.62%
d. 8.38%
One of the criticisms of average cost regulated pricing of a natural monopoly is that the
firm
a. has no incentive to hold costs down.
b. must bear losses continually.
c. will retain positive economic profits.
d. produces more output than is resource-allocative efficient.