Figure 15-10
The deadweight loss due to a monopoly is represented by the area
A) FHE.
B) FGE.
C) GEH.
D) FQ1Q2E.
The following equations represent the demand and supply for kumquats.
QD = 60 – 3P
QS = -20 + 5P What is the equilibrium price (P) and quantity (Q – in thousands) of
kumquats?
A) P = $5; Q = 20 thousand
B) P = $30; Q = 5 thousand
C) P = $20; Q = 10 thousand
D) P = $10; Q = 30 thousand
A decrease in aggregate demand causes a decrease in ________ only in the short run,
but causes a decrease in ________ in both the short run and the long run.
A) the price level; real GDP
B) real GDP; real GDP
C) the price level; the price level
D) real GDP; the price level
Which of the following would result in a positive externality?
A) A local government establishes a price ceiling on rental apartments.
B) An electric utility burns coal that causes acid rain.
C) Medical research results in a cure for malaria.
D) McDonald’s adds new fat-free items to its menu.
In the United States in 2012, of the firms that employed more than 200 workers that
offer health insurance to workers, about ________ of employees did not accept the
coverage.
A) 2%.
B) 38%.
C) 62%.
D) 98%.
Which of the following cause the unemployment rate as measured by the Bureau of
Labor Statistics to understatethe true extent of joblessness?
A) inflation
B) discouraged workers
C) people employed in the underground economy
D) unemployed persons falsely report themselves to be actively looking for a job
Which of the following is an example of a product that is nonexcludable and rivalrous?
A) free concert (with limited seating) in a park
B) national defense
C) automobiles
D) flu vaccinations
Figure 7-3 Since 1953 the
United States has imposed a quota to limit the imports of peanuts. Figure 7-3 illustrates
the impact of the quota. What is the value of domestic producer surplus after the
imposition of a quota?
A) $10.75 million
B) $15.75 million
C) $17.25 million
D) $27.75 million
The supply curve of a perfectly competitive firm in the short run is
A) the firm’s average variable cost curve.
B) the portion of the firm’s marginal cost curve below the minimum point of the
average variable cost curve.
C) the portion of the firm’s marginal cost curve above the minimum point of the average
variable cost curve.
D) the portion of the firm’s marginal cost curve above the minimum point of the
average total cost curve.
Which of the following is not an advantage of starting a new business as a corporation?
A) separation of ownership and business liability
B) enhanced ability to raise funds
C) ability to share risks
D) possibility of double taxation
Doctors and lawyers in every state need a license to practice. This is an example of
A) consumer protection laws.
B) consumer advocacy.
C) occupational licensing.
D) ownership of a key input.
Standard economic theory asserts that sunk costs are irrelevant in making economic
decisions, yet studies conducted by behavioral economists reveal that sunk costs often
affect economic decisions. Which of the following could explain this observation?
A) People measure the value of a good in terms of its purchase price.
B) Even though sunk costs cannot be recovered, it has been incurred and therefore
should be treated as part of the product’s value.
C) If consumers maximize their utility, it makes sense to consider the full purchase
price of a product in their consumption decisions.
D) Sunk costs have a higher opportunity cost than costs that can be recovered.
Figure 3-5
At a price of $20, the quantity sold
A) is 0 units.
B) is 4 units.
C) is 8 units.
D) cannot be determined.
Figure 11-1
Diminishing marginal returns is illustrated in the per-worker production function in the
figure above by a movement from
A) A to C.
B) B to C.
C) C to D.
D) D to C.
Figure 18-1
Area B+C represents
A) the portion of sales tax revenue borne by consumers.
B) the portion of sales tax revenue borne by producers.
C) the excess burden of the sales tax.
D) sales tax revenue collected by the government.
Figure 24-1
Ceteris paribus, a decrease in the growth rate of domestic GDP relative to the growth
rate of foreign GDP would be represented by a movement from
A) AD1 to AD2.
B) AD2 to AD1.
C) point A to point B.
D) point B to point A.
The price elasticity of demand for canned soup is estimated at -1.62. What happens to
sales revenue if the price of canned soup rises?
A) It falls by 162 percent.
B) It rises by 1.62 percent.
C) It falls.
D) It rises.