1) A statement describing how the world should be
a.is a normative statement.
b.is a positive statement.
c.would only be made by an economist speaking as a scientist.
d.would only be made by an economist employed by the government.
2) Figure 8-8
Suppose the government imposes a $10 per unit tax on a good.
One effect of the tax is to
a.reduce consumer surplus by $108.
b.reduce producer surplus by $72.
c.create a deadweight loss of $60.
d.All of the above are correct.
3) Figure 14-4
Suppose a firm operating in a competitive market has the following cost curves:
The firm will earn positive economic profits if the price is
(i)P4.
(ii)P3.
(iii)P2.
(iv)P1.
a.(i) only
b.(i) or (ii) only
c.(i), (ii), or (iii) only
d.(i), (ii), (iii), and (iv)
4) The marginal benefit Susie gets from purchasing a third pair of gloves is
a.the same as the total benefit she gets from purchasing three pairs of gloves.
b.more than the marginal cost of purchasing the third pair of gloves.
c.the total benefit she gets from purchasing three pairs of gloves minus the total benefit
she gets from purchasing two pairs of gloves.
d.the total benefit she gets from purchasing four pairs of gloves minus the total benefit
she gets from purchasing three pairs of gloves.
5) Figure 10-9
9) Evidence suggests that business owners are generally
a.interested in profits only when discrimination is illegal.
b.more interested in discrimination than in making a profit.
c.unable to determine the link between discrimination and profitability.
d.more interested in making a profit than in discriminating against a particular group.
10) Figure 8-9
The vertical distance between points A and C represents a tax in the market.
The consumer surplus with the tax is
a. $2,000.
b. $4,000.
c. $6,000.
d. $8,000.