The midpoint quantity between 100 and 300 units is
a. 100 units
b. 200 units
c. 300 units
d. 150 units
e. 20,000 units
Darryl graduated with honors from college. However, he obtained his outstanding
grades by cheating on every final exam with help from his best friend; Darryl actually
has the talent of a C student. Nevertheless, he gets a job with a top accounting firm in
Boston. The fact that he is hired illustrates a failure of
a. comparable worth
b. signaling and screening
c. marginal productivity
d. supply and demand
e. specialization
Exhibit 9-11
Total revenue for the profit-maximizing monopoly in Exhibit 9-11 that does not price
discriminate will be
a. $95,200
b. $84,000
c. $79,000
d. $52,000
e. $42,000
The least-cost way of producing a particular rate of output is represented by a point of
tangency between a short-run average cost curve and the
a. total cost curve
b. short-run average total cost curve
c. average variable cost curve
d. long-run average cost curve
e. marginal cost curve
The economic efficiency approach to emission control provides the polluting firm with
a. a license produce as much emissions as it wants
b. the option of choosing between focusing on profit or cost
c. a process for determining the optimum quantity of emissions
d. more flexibility in selecting the most cost effective method of control
e. a subsidy for producing additional emissions
Exhibit 2-4
Point e in Exhibit 2-4 represents
a. an attainable combination of good A and good B
b. an unattainable combination of good A and good B
c. the combination of good A and good B that the economy will produce
d. one possible efficient combination of good A and good B
e. the only unattainable combination of good A and good B
If the quality of an input is easily determined at the time of purchase, then it is likely to
a. be the cause of high transaction costs of using markets
b. encourage vertical integration of a firm
c. encourage supplier firms to produce low-quality inputs
d. be produced internally by the firm
e. be purchased in the market
Which of the following statements about gold jewelry and round-trip bus tickets to
Bismarck, North Dakota, is most likely to be correct?
a. They are both inferior goods.
b. Their demand curves probably are quite similar.
c. They are complements.
d. They are substitutes.
e. They are unrelated.
It is possible for one person to have a comparative advantage in the production of all
products?
a. True
b. False
Privatization is the
a. process of turning private enterprises into public enterprises
b. the same as nationalization
c. process of turning public enterprises into private enterprises
d. process of turning state-owned enterprises into public enterprises
e. process of turning sole proprietor enterprises into corporate enterprises
One consequence of raising tax rates is that it
a. provides an added incentive to work
b. provides less incentive to participate in the underground economy
c. always increases total tax revenues
d. leads to less underreporting of income
e. leads to more underreporting of income
Which of the following is not considered a unilateral transfer?
a. foreign aid from one government to another
b. income earned from foreign investments
c. personal gifts to friends in foreign countries
d. donations to foreign countries from non-government domestic charities
e. government transfers to foreign residents
Why would we be likely to observe dentists engaging in price discrimination?
a. Dental care is expensive.
b. All dentists are basically alike.
c. It is very important to exercise care in choosing a dentist.
d. It is nearly impossible to resell the services of a dentist.
e. The demand for dentists is very inelastic.
Interest provides an incentive for households to defer current consumption
a. True
b. False
Utility is determined by an individual’s
a. income
b. price
c. relative price
d. profit
e. tastes and preferences
Exhibit 5-10
In Exhibit 5-10, between the two equilibrium prices shown, demand is
a. price elastic
b. price inelastic
c. unit elastic
d. perfectly elastic
e. perfectly inelastic
Exhibit 7-13 The Total Product of Labor
Given the information in Exhibit 7-13, at what point do negative marginal returns set
in?
a. after the first unit of labor
b. after the fourth unit of labor
c. after the fifth unit of labor
d. after the sixth unit of labor
e. after the eighth unit of labor
Jamal maximizes utility by allocating his time among leisure, market work, and
household work so that
a. expected marginal utility is equal among all three
b. expected total utility per hour is equal among all three
c. expected marginal utility per hour is equal among all three
d. the maximum amount of goods and services can be acquired
e. expected total utility of each use is equal
Exhibit 13-2
The marginal product of the seventh copy machine listed in Exhibit 13-2 is
a. -5 copies
b. 5 copies
c. 25 copies
d. 135 copies
e. 165 copies
Exhibit 19-6
In Exhibit 19-6, if the world price of a baseball is $3 and a tariff of $1 per baseball is
imposed in the United States, how many baseballs will the United States import?
a. 4,000
b. 6,000
c. 8,000
d. 10,000
e. 12,000
Many country inns shut down in the off-season because
a. the off-season market price falls below average total cost
b. the off-season market price can’t cover their average fixed cost
c. the off-season revenue can’t cover variable cost
d. the off-season price is below the marginal cost of providing a room
e. innkeepers are interested in maximizing revenue
Exhibit 8-9
In Exhibit 8-9, total revenue at the profit-maximizing output equals
a. $2,400
b. $4,000
c. $5,200
d. $5,600
e. $6,000
The Bretton Woods system
a. fixed exchange rates in terms of U.S. dollars
b. fixed exchange rates in terms of all major currencies
c. fixed exchange rates in terms of gold
d. established a system of flexible exchange rates
e. established the European monetary system
If suppliers expect an increase in price, they will reduce the current supply of a good.
a. True
b. False
For which of the following products would price discrimination be easiest?
a. orange juice
b. diamonds
c. compact disks
d. haircuts
e. gasoline
One feature of the gold standard was that
a. countries had almost complete control over their own monetary policies
b. surplus could cause the money supply to decrease
c. slow gold production could lead to deflation
d. exchange rates were unstable
e. each currency was worth the same as other currencies
An improvement in technology shifts the supply curve rightward.
a. True
b. False
In the U.S., the poverty rate is lowest among young families with a head of household
under 25.
a. True
b. False
In the long run, which of the following is nota problem for a monopolist earning
economic profit?
a. other firms have an incentive to create substitutes for the monopolist’s product
b. technological change tends to break down barriers to entry
c. patents expire, licenses must be renewed, and new sources of essential resources may
be discovered
d. government often decides to regulate monopolies
e. all profit will gradually be converted to consumer surplus
If a monopolist is producing a rate of output at which market demand is inelastic,
a. it may or may not be maximizing its short-run profit
b. reducing output would reduce both total revenue and total cost
c. reducing output would increase both total revenue and total cost
d. reducing output would increase total revenue and reduce total cost
e. increasing output will increase its short-run economic profit
Exhibit 15-2
In Exhibit 15-2, the increase in consumer surplus that occurs when price is set equal to
marginal cost rather than at the profit-maximizing level, as it would be in an
unregulated monopoly, is shown by area
a. abc
b. adf
c. cef
d. dfeg
e. bcfd
Monopolists always earn positive short-run economic profit.
a. True
b. False
The production possibilities frontier can be used to show all of the following except
one. Which is the exception?
a. scarcity
b. opportunity cost
c. the law of increasing opportunity cost
d. efficiency
e. the best combination of goods and services for an economy