The Mexican demand for American goods leads to
a. the demand for Mexican pesos and the supply of U.S. dollars on the foreign exchange
market.
b. the demand for U.S. dollars and the demand for Mexican pesos on the foreign
exchange market.
c. the demand for U.S. dollars and the supply of Mexican pesos on the foreign exchange
market.
d. the demand for U.S. dollars and the supply of U.S. dollars on the foreign exchange
market.
If a perfectly competitive firm and a single-price monopolist face the same demand and
cost curves, then
a. the competitive firm will attain resource-allocative efficiency, but the monopolist will
not.
b. the competitive firm will attain resource-allocative efficiency, but the monopolist
may or may not, depending upon the demand for its product.
c. the competitive firm will not attain resource-allocative efficiency, but the monopolist
will.
d. both the competitive firm and the monopolist will attain resource-allocative
efficiency.
e. neither the competitive firm nor the monopolist will attain resource-allocative
efficiency.
Efficiency is consistent with
a. maximizing net benefits.
b. equating marginal benefits and marginal costs.
c. maximizing total benefits.
d. minimizing total costs.
e. a and b
A negative externality is
a. a type of tax.
b. a type of subsidy.
c. a type of money price.
d. linked to external costs.
e. linked to external benefits.
Amy’s opportunity cost of going to the movies is
a. the price of the ticket.
b. zero, if she has a free pass to the movie.
c. the price of the ticket plus the value to Amy of what she would have chosen to do
with her time had she not chosen to go to the movies.
d. both b and c
Which of the following statements is false?
a. If a negative externality exists, the market output is greater than the socially optimal
output.
b. If a positive externality exists, the market output is less than the socially optimal
output.
c. If there are no external costs or benefits, then it follows that marginal private costs
equal marginal social costs and marginal private benefits equal marginal social benefits.
d. When a positive externality exists, marginal social benefits are greater than marginal
private benefits.
e. none of the above
Which of the following statements is true?
a. Oil is classified as part of the resource category land.
b. A person working for a company is classifiedas part of the resource category capital.
c. A machine in a factory is classified as part of the resource category land.
d. A person with the particular talent for organizing the resources of land, labor, and
capital to produce goods, seek new business opportunities, and develop new ways of
doing things is classified as part of the resource category labor.
e. a and d
In an oligopolistic market, the product being produced can be either homogeneous or
differentiated.
a. True
b. False
The antitrust act that bans anticompetitive mergers that occur as a result of one
company acquiring the physical assets of another company is the
a. Celler-Kefauver Antimerger Act.
b. Wheeler-lea Act.
c. Federal Trade Commission Act.
d. Robinson-Patman Act.
e. Clayton Act.
Smith sends her children to a private school on the other side of town.Tuition per
student per year is $15,000.Jones sends her children to a public school on her side of
town.Tuition per student per year is $0.Most people seem to think that the private
school and public school are equivalent when it comes to educating students. According
to a theory discussed in the textbook,
a. Smith lives in a more expensive home than Jones.
b. Jones lives in a more expensive home than Smith.
c. Smith and Jones live in homes that are priced the same.
d. Smith lives in a larger home than Jones.
e. none of the above
If there is an increase in the expected inflation rate, then,
a. the supply and demand for loanable funds will decrease.
b. the supply and demand for loanable funds will increase.
c. the supply of loanable funds will decrease, and the demand for loanable funds will
increase.
d. the supply of loanable funds will increase, and the demand for loanable funds will
decrease.
Wikipedia is an example of a project that follows the pattern of unstructured
collaboration.
a. True
b. False
An unintended effect of a new tax placed on the producers of good A may include
a. a higher price paid by the consumers of good A.
b. less consumers’ surplus for the buyers of good A.
c. fewer workers employed in the production of good A.
d. all of the above
Exhibit 3-5
In the market shown, if equilibrium was originally at point Z and the new equilibrium is
now at point V, this change may have been caused by
a. a decrease in consumers’ income (assuming that this is an inferior good) and a
simultaneous decline in technology in the production of this good.
b. an increase in consumers’ income (assuming that this is an inferior good) and a
simultaneous improvement in technology in the production of this good.
c. a decrease in consumers’ income (assuming that this is an inferior good) and no
change in supply.
d. an increase in consumers’ income (assuming that this is an inferior good) and no
change in supply.
All other things being equal, the __________ substitutes for a good, the __________
the price elasticity of demand.
a. fewer; higher
b. more; higher
c. more; lower
d. a and c
e. none of the above
When a professor announces to the class that she will grade on a curve and that no one
in the class will receive a grade lower than a “C”
a. a moral hazard problem for her students will likely arise.
b. an adverse selection problem for her students will likely arise.
c. the marginal social benefit will exceed the marginal social cost.
d. the marginal social cost will exceed the marginal social benefit.
Which of the following statements is false?
a. Ham has a higher price elasticity of demand than meat.
b. Peaches have a higher price elasticity of demand than fruit.
c. Soap has a higher price elasticity of demand than Ivory brand soap.
d. Carrots have a higher price elasticity of demand than vegetables.
Which of the following situations is used as a justification for government?
a. negative externalities
b. removal from the prisoner€s dilemma
c. nonexcludable goods
d. positive externalities
e. all of the above
If a person who generates a negative externality incorporates into his or her private
cost-benefit calculations the effects that this externality will have on third parties, the
externality has been
a. substituted.
b. accommodated.
c. compounded.
d. internalized.