According to the textbook, Iceland used crowdsourcing to
a. rewrite its constitution.
b. elect members of its parliament.
c. elect its president.
d. rename its capitol city.
Implicit in the solution to the diamond-water paradox is the idea that prices reflect
__________ utility instead of __________ utility.
a. marginal; total
b. total; marginal
c. average; total
d. total; average
e. none of the above
Refer to Situation 22-2. What is Alejandro’s marginal cost at the present level of
production?
a. $60
b. $80
c. $100
d. $200
e. There is not enough information to answer the question.
When the cross elasticity of demand between two goods is __________, the goods are
__________.
a. negative; substitutes for one another
b. negative; complements for one another
c. positive; normal goods
d. positive; inferior goods
If a small increase in the price of a good reduces quantity demanded to zero, demand is
________________ and the price elasticity of demand is equal to _______________.
a. perfectly inelastic; zero
b. perfectly elastic; infinity
c. unit elastic; one
d. perfectly elastic; zero
Dan is currently consuming 10 Cokes and 5 slices of pizza per week such that the
marginal utility of the tenth Coke is 12 utils and that of the fifth slice of pizza is also 12
utils. How should Dan redirect his purchases so as to attain consumer equilibrium?
a. He should buy more pizza slices and less Coke.
b. He should buy fewer pizza slices and more Coke.
c. He is currently attaining consumer equilibrium and should not redirect his purchases.
d. He could gain more satisfaction by buying less of both and more of something else.
e. There is not enough information to answer the question.
Bonds that are rated in the D category are of higher quality than bonds that are rated in
the A category.
a. True
b. False
Suppose that a tariff is imposed on imported cheese. This will have the effect of
__________ the price of cheese, __________ consumers’ surplus, and __________
producers’ surplus.
a. increasing; increasing; increasing
b. decreasing; decreasing; decreasing
c. increasing; increasing; decreasing
d. increasing; decreasing; increasing
e. decreasing; decreasing; increasing
Which of the following statements is true?
a. The short run is always somewhere between six and twelve months.
b. In the short run, changes in output can only be brought about by a change in the
quantity of variable inputs.
c. The long run is any period of time over one year.
d. In the short run, there are variable costs but no fixed costs.
e. b and d
Suppose for a consumer the marginal utility (MU) of bread is 20 utils and the MU of
milk is 10 utils; the price of bread is $3 and the price of milk is $1. Given this,
a. more utility per dollar is gained from consuming bread than milk.
b. more utility per dollar is gained from consuming milk than bread.
c. the same amount of utility per dollar is gained from consuming milk as bread.
d. the consumer is in consumer equilibrium.
Unions generally call for __________ the barriers against foreign trade, as a way of
__________ the elasticity of demand for union labor.
a. lowering; increasing
b. lowering; decreasing
c. raising; increasing
d. raising; decreasing
Consider the following data: equilibrium price = $9, quantity of output produced =
1,000 units, average total cost = $7, and average variable cost $5. Given this, total
revenue is __________, total cost is __________, and total fixed cost is __________.
a. $6,000; $8,000; $1,000
b. $9,000; $7,000; $5,000
c. $10,000; $8,000; $3,000
d. $9,000; $7,000; $2,000
e. none of the above
Refer to Exhibit 2-8. Who has the comparative advantage in the production of good X?
Exhibit 2-8
a. Maria
b. Maya
c. Both Maria and Maya
d. Neither Maria nor Maya
Refer to Exhibit 34-9. Which of the following statements is true?
Exhibit 34-9
a. Country X has a comparative advantage in the production of good A.
b. Country Y has a comparative advantage in the production of good B.
c. It would be better for country A to specialize in (the production of) and trade good A
than to specialize in and trade good B.
d. a and c
e. a, b, and c
If a college sets its tuition __________ the equilibrium tuition, then it will have to use
some form of nonprice-rationing device to determine who will be accepted for
admission to the college.
a. above
b. below
c. equal to
d. all of the above
Suppose that a tariff is imposed on imported cheese. This will have the effect of
__________ the quantity consumed of cheese, __________ consumers’ surplus, and
__________ the government’s tariff revenues.
a. increasing; increasing; increasing
b. decreasing; decreasing; increasing
c. increasing; decreasing; decreasing
d. decreasing; increasing; increasing
e. decreasing; increasing; decreasing
Marginal productivity theory implies that a worker will be paid a wage (W) such that
a. W = MRP, but W < VMP.
b. W < MRP, but W = VMP.
c. W = MRP and W = VMP.
d. W = MFC, but W < MRP.
e. W < MRP and W < VMP.
Refer to Exhibit 3-9. A wave of immigrants who love to consume X enters the country.
An economist would expect a movement in the market for X from
Exhibit 3-9
a. S1 to S2.
b. D2 to D1.
c. D1 to D2.
d. S2 to S1.
In 1930, agriculture accounted for 10 percent of the U.S. GDP; in 2000, it accounted for
only 5 percent of the GDP.
a. True
b. False
The three major components of a bond are the bond price, maturity date, and coupon
rate.
a. True
b. False
If the price of good X rises and the demand for good X is inelastic, then the percentage
fall in quantity demanded is __________ the percentage rise in price, and total revenue
__________.
a. greater than; rises
b. less than; falls
c. equal to; remains constant
d. greater than; falls
e. none of the above