1) Which is the best example of price discrimination?
A.An airline company charging lower fares per pound for air freight than for passengers
B.A telephone company charging lower rates to weekend users than weekday users
C.A supermarket charging lower prices in its city stores than its out-of-the-way rural
store
D.A private doctor charging higher fees to patients receiving special services than
patients receiving regular services
2) You should decide to go to a movie:
A.if the marginal cost of the movie exceeds its marginal benefit.
B.if the marginal benefit of the movie exceeds its marginal cost.
C.if your income will allow you to buy a ticket.
D.because movies are enjoyable.
3) Studies generally show that if there is more investment in capital goods in DVCs,
there will be greater:
A.Capital flight
B.Economic growth
C.Underemployment
D.Unemployment
4) If a firm faces an upsloping labor supply curve (and there is no union or minimum
wage), its:
A.MRC curve is also upsloping.
B.MRC curve is perfectly elastic.
C.MRP curve is perfectly inelastic.
D.MRP curve is also upsloping.
5) Answer the question on the basis of the following cost data for a purely competitive
seller:
Refer to the data. If product price is $75, the firm will produce:
A.3 units of output.
B.4 units of output.
C.5 units of output.
D.6 units of output.
6) Each of the following contributes to income inequality except:
A.differences in ability and training.
B.differences in job tastes.
C.differences in wealth ownership.
D.government transfers.
7) If a college admits only a fixed number of applicants every year, then the school’s
supply curve for admissions is:
A.Perfectly elastic
B.Perfectly inelastic
C.Quite flat
D.Downward-sloping
8) Answer the question on the basis of the information given in the following table:
Refer to the given data. If the firm is hiring workers under purely competitive
conditions at a wage rate of $22, it will employ:
A.1 worker.
B.2 workers.
C.3 workers.
D.4 workers.
9) Government’s ability to force people to do things involuntarily is:
A.Unconstitutional in the U.S. and other market economies
B.Always going to lead to lower economic efficiency
C.Beneficial if it is used to improve economic efficiency
D.Always beneficial in reducing the deadweight loss in the economy
10) Microsoft charges a substantially lower price for a software upgrade than for the
initial purchase of the software. This implies that Microsoft views the demand curve for
the software upgrade to be:
A.more elastic than the demand for the original software.
B.upsloping rather than downsloping.
C.less elastic than the demand for the original software.
D.of less value than the original software.
11) A major difference between social insurance and public assistance is that the:
A.former is regarded as an earned right while the latter is public charity.
B.latter is regarded as an earned right while the former is public charity.
C.latter is financed through earmarked payroll taxes and the former is financed by
general tax revenues.
D.former are state and local programs while the latter are federal programs.
12) Credit card companies require low minimum payments that impose significant
interest costs on consumers choosing to pay the minimum. Recent legislation has
required credit card companies to show on customer billing statements how much
interest would be paid and how long it would take to repay the current balance if only
the minimum is paid. Behavioral economists would expect this legislation to:
A.substantially increase monthly payments, as consumers make better decisions when
they have more information.
B.overcome the status quo bias that keeps people paying the minimum.
C.cause credit card companies to increase the minimum payments.
D.have little effect, as anchoring would keep many people paying the minimum.