1) What is the difference between a “change in supply” and a “change in quantity
supplied?” Graph your answer.
a.For each of the following changes, determine whether there will be a change in
quantity supplied or a change in supply.
i.a change in input costs
ii.a change in producer expectations
iii.a change in price
iv.a change in technology
v.a change in the number of sellers
2) Which of the following firms is most likely to have market power?
a.a grocery store in a metropolitan area
b.a convenience store in a suburb
c.a pub in a college town
d.the only gasoline station in a rural area
3) Which of the following equations corresponds to an optimal choice point?
(i)MRS=P
X
/P
Y
(ii)MU
X
/MU
Y
=P
X
/P
Y
(iii)MU
X
/P
X
=MU
Y
/P
Y
(iv)MU
X
/P
Y
=MU
Y
/P
X
a.(i) only
b.(i), (ii), and (iii) only
c.(ii) and (iv) only
d.(i), (ii), (iii), and (iv)
4) For a self-sufficient producer, the production possibilities frontier
a.is the same as the consumption possibilities frontier.
b.is greater than the consumption possibilities frontier.
c.is less than the consumption possibilities frontier.
d.is always a straight line.
5) Table 22-11
Five voters must choose from among four options: A, B, C, or D. Each voter’s
preferences are summarized in the table below. Options higher in the table are more
preferred by the voter.
Refer to Table 22-11. If the vote were conducted according to a modified Borda count
system where each person’s first choice receives 10 points, second choice 5 points, third
choice 3 points and fourth choice 1 point, the result would be that
a.A would win.
b.B would win.
c.C would win.
d.D would win.
6) At price of $1.20, a local pencil manufacturer is willing to supply 150 boxes per day.
At a price of $1.40, the manufacturer is willing to supply 170 boxes per day. Using the
midpoint method, the price elasticity of supply is about
a. 2.0
b. 1.23
c. 1.00
d. 0.81
7) Table 22-18
The following table shows the preferences of four types of voters over four possible
alternatives as well as the percentage of the electorate with the given preferences.
Refer to Table 22-18. Suppose voters first choose in a majority vote between W and X.
Second, voters choose in a majority vote between the winner of the first vote and Y.
Third, voters choose in a majority vote between the winner of the second vote and Z.
Which alternative will win?
a.W
b.X
c.Y
d.Z
8) Figure 7-31
Refer to Figure 7-31. If the market equilibrium price is $25, how much is total producer
surplus in this market?
9) When marginal revenue equals marginal cost, the firm
a.should increase the level of production to maximize its profit.
b.may be minimizing its losses rather than maximizing its profit.
c.must be generating positive economic profits.
d.must be generating positive accounting profits.
10) When a country allows international trade and becomes an importer of a good,
a.domestic producers of the good become better off.
b.domestic consumers of the good become better off.
c.the gains of the winners fall short of the losses of the losers.
d.All of the above are correct.
11) Which of the following conditions is characteristic of a monopolistically
competitive firm in short-run equilibrium?
a.P > AR
b.MR > MC
c.P > MC
d.All of the above are correct.
12) Which of the following industries has the highest concentration ratio?
a.jeans
b.fruit
c.household laundry equipment
d.restaurants
13) Scenario 12-2
Suppose that Bob places a value of $10 on a movie ticket and that Lisa places a value of
$7 on a movie ticket. In addition, suppose the price of a movie ticket is $5.
Suppose the government levies a tax of $3 on a movie ticket and that, as a result, the
price of a movie ticket increases to $8. What is the deadweight loss from the tax?
a.$0
b.$1
c.$2
d.$3
14) When an increase in the price of one good lowers the demand for another good, the
two goods are called complements.
a.True
b.False
15) Tiffany has just graduated from Stanford University and has applied for a job as an
engineer at a manufacturing plant. The manufacturer decides to offer Tiffany a job
because it perceives she’s gained valuable skills while at Stanford. To which of the
following views of education does the manufacturer subscribe?
a.signaling
b.human-capital view
c.compensating-differentials
d.superstar