In which market structure can the good being produced be either homogeneous or
differentiated?
a. monopolistic competition
b. oligopoly
c. monopoly
d. perfect competition
e. none of the above
If the four-firm concentration ratio in an industry is 80 percent, and the top four firms
hold equal market shares, the Herfindahl index for the industry is
a. 1,600.
b. 2,000.
c. 3,200.
d. 6,400.
e. There is not enough information provided to answer this question.
Exhibit 1-2
Based on the data provided in this table,if these data were plotted in a two-variable
diagram the result would be a ______________ sloping ____________________.
a. downward; (nonlinear) curve.
b. downward; (straight) line.
c. upward; (nonlinear) curve.
d. upward; (straight) line.
e. none of the above
By itself, knowing a country€s Gini coefficient does not tell one anything about the
income distribution of a particular quintile within that country.
a. True
b. False
Suppose that all countries in the world agree that it is important to undertake policies to
reduce global warming and its associated negative economic effects.If the countries
agree to undertake these policies, the prisoner’s dilemma setting that this situation
places the countries in would lead one to conclude that
a. each country will have an incentive not to implement the agreed upon policies.
b. smaller countries will implement the agreed upon policies, but larger countries will
not.
c. each country will have an incentive to implement the agreed upon policies.
d. larger countries will implement the agreed upon policies, but smaller countries will
not.
Exhibit 27-8
The dollar amounts that go in blanks (E) and (F) are, respectively,
a. $6 and $6.
b. $70 and $60.
c. $84 and $72.
d. $72 and $24.
e. There is not enough information to answer the question.
Compared to those people who prefer to play it safe, individuals who are more
comfortable taking risks are more likely to reach the top of the income distribution, or
to hit the bottom, ceteris paribus.
a. True
b. False
Suppose that the price of loanable funds is greater than the return on capital. It follows
that firms will
a. not borrow funds and eventually the capital stock will decrease and the return on
capital will rise.
b. borrow funds and, as a result, the capital stock will rise.
c. not borrow funds and eventually the capital stock will increase and the return on
capital will rise.
d. borrow funds and, as a result, the price of credit will rise.
e. none of the above
The answer is: “A geographic area in which exchange rates can be fixed or a common
currency used without sacrificing domestic economic goals.”What is the question?
a. What is a flexible exchange rate system?
b. What is a managed float area?
c. What is a purchasing power parity area?
d. What is an optimal currency area?
If the government sets out to make home buying easier for more people by forcing
lenders to accept ____________ down payments and ______________ interest rates,
the result will likely be a(n) _______________ in housing prices.
a. lower; lower; increase
b. higher; higher; increase
c. lower; higher; decrease
d. higher; lower; decrease
If someone gives you a free ticket to the movies, then there is no opportunity cost
involved with going to the movies.
a. True
b. False
Accounting profit is always greater than or equal to economic profit.
a. True
b. False
Some economists contend that in-kind transfers should be included in the calculation of
an individual’s income because
a. in-kind items do not cost anything.
b. simple money income is not a complete measure of one’s command over goods and
services.
c. in-kind items make a person “better off” than the person’s actual money income
would lead us to believe.
d. b and c