Corporate taxes are a direct tax.
a. True
b. False
A firm’s total revenue is simply the price of its product multiplied by the quantity sold.
a. True
b. False
An upward-sloping supply curve shows that
a. buyers are willing to pay more for a scarce product.
b. suppliers are willing to increase production of their goods if they can receive higher
prices for them.
c. buyers are unaffected by sellers’ costs of production.
d. the price of a product is not influenced by the price buyers are willing to pay.
e. at higher prices, an envy effect begins to affect the demand curve.
The highest-income fifth of the U.S. population earns more than 50 percent of all
income.
a. True
b. False
A public good has the quality of excludability but not the quality of depletability.
a. True
b. False
Abstraction can be thought of as
a. ignoring reality in order to build theory.
b. omitting unimportant details in order to understand complex phenomena.
c. creating absurdity in order to explain simplicity.
d. assuming complexity when simplicity will do.
e. stylizing reality rather than analyzing cause and effect.
An externality is defined as
a. an opportunity cost that is not considered, which causes inefficiency.
b. a social cost that affects parties external to a transaction.
c. a transaction which imposes a loss on one of the parties involved.
d. a “cost of doing business” that cannot be allocated to any particular good.
e. the increase in cost associated with increased production.
An efficient tax is one that raises the desired tax revenue but creates the least possible
a. total burden.
b. excess burden.
c. tax incidence.
d. tax shifting.
A country like the U.S., which is operating at the technological frontier, can improve its
technology only by:
a. repurposing
b. redeveloping
c. innovating
d. purchasing
Usury laws that set maximum interest rates
a. are designed to protect the consumer.
b. interfere with the market allocation process.
c. have an effect only if the market rate is higher than the legal maximum.
d. All of the above are correct.
If a farmer’s opportunity cost of producing 10,000 bushels of wheat is 5,000 fewer
bushels of soybeans, then her opportunity cost of producing 5,000 bushels of soybeans
must be 10,000 fewer bushels of wheat.
a. True
b. False
Figure 20-4
In Figure 20-4, which panel shows the impact of union efforts to have goods produced
in Asia excluded from the U.S. market?
a. 1
b. 2
c. 3
d. 4
If a demand curve is unit elastic, then P times Q will remain constant when P changes.
a. True
b. False
What is new about environmental problems today is
a. that for the first time in history we have environmental problems.
b. the increased rate at which air and water pollution is occurring in the United States.
c. the amount of attention the community now gives them.
d. that environmental problems with pollution and garbage disposal have almost
completely disappeared.
“Plowback” is that portion of corporate profits used to
a. invest in future activities of the corporation.
b. advertise the company’s product.
c. buy back bonds (reduce debt).
d. pay owners for the use of their capital.
Minimum wage laws usually
a. increase the number of unskilled workers who are employed.
b. benefit all unskilled workers.
c. raise the wages paid to unskilled workers who are employed.
d. All of the above are correct.
Economic rents can lead to large wage differentials.
a. True
b. False
A monopolist faces a horizontal demand schedule.
a. True
b. False
Which of the following is an example of tacit collusion?
a. OPEC
b. copper cartel
c. price leadership
d. government franchise granted to a utility
Hutch Technology makes computer monitors, which sell for $100 each. What is the
opportunity cost of ten monitors?
a. $1,000
b. the other goods that could be produced with the resources that produce the ten
monitors
c. the profits that Hutch earns when it sells the ten monitors
d. the profits that Hutch loses if it does not produce the monitors
e. All of the above are correct.
How can one tell from cross elasticity what kind of relationship exists between any two
goods?
Between 1960 and 2013 U.S. GDP, measured in dollars of constant purchasing power,
expanded about 5,0 times. However, the standard of living only increased by 4 times
over this period. Explain the difference.
What are the two important programs in practice in America that strongly resemble a
negative income tax?
A nation’s citizens often dislike the economy’s distribution of income. Explain two
methods for creating a more equal distribution of income.
Define discrimination. Why does discrimination occur and what evidence exists that it
does occur?
What are the implications of the law of conservation of matter and energy for recycling
and waste disposal?
Consumers expressed outrage at the high price of chainsaws after Hurricane Andrew hit
Florida and Louisiana, with newspaper editorials accusing suppliers of unconscionable
price gouging. Use a supply and demand graph to assist in explaining the increase in the
price of chain saws after Hurricane Andrew.
What is the relationship between marginal utility and an individual demand curve?