In moving along a demand curve for good X, which of the following is NOT held
constant?
a. the prices of substitute goods for good X
b. the prices of complementary goods for good X
c. incomes of consumers of good X
d. the price of good X
People will be more likely to vote if they believe that their vote will determine the
outcome of the election.
a. True
b. False
Which of the following exchange rates between the dollar and the peso would a
Mexican buyer of American goods most prefer?
a. $0.10 = 1 peso
b. $0.08 = 1 peso
c. $0.06 = 1 peso
d. $0.04 = 1 peso
Which of the following is a determinant of price elasticity of demand for good Z?
a. the number of substitutes for good Z
b. the percentage of one’s budget spent on good Z
c. the amount of time that has passed since the price of good Z has changed
d. b and c
e. all of the above
If the seller of good X raises the price of good X, it follows that the total revenue of
good X will __________, if demand is __________.
a. rise; unit elastic
b. rise; elastic.
c. fall; unit elastic.
d. fall; inelastic.
e. fall; elastic
The effects of a quota include:
a. decreasing consumers’ surplus.
b. increasing total revenue for the importers who sell the allowed number of imported
units.
c. increasing producers’ surplus.
d. b and c
e. a, b, and c
There is a direct relationship between the opportunity cost of bad behavior in a public
venue and the use of bad behavior in that venue.
a. True
b. False
The question of how a tax change might impact U.S. economic output is most closely
associated with the study of
a. microeconomics.
b. managerial economics.
c. macroeconomics.
d. consumer economics.
If the demand for a good is unit elastic, then
a. the percentage change in quantity demanded is greater than the percentage change in
price.
b. the percentage change in quantity demanded is less than the percentage change in
price.
c. the percentage change in quantity demanded is equal to the percentage change in
price.
d. quantity demanded is extremely responsive to changes in price.
e. quantity demanded is not responsive to changes in price.
When the government institutes a target price,
a. a surplus is created.
b. consumers must pay the target price.
c. the farmer receives a deficiency payment if the market price is below the target price.
d. the farmer receives a deficiency payment if the market price is above the target price.
e. all of the above
The perfectly competitive firm will seek to produce the level of output for which
a. average variable cost is at a minimum.
b. average total cost is at a minimum.
c. average fixed cost is at a minimum.
d. marginal cost equals marginal revenue.
Karen earned a large income by buying houses when they were selling for relatively
low prices, and selling them at a later time when they were selling for relatively high
prices. Which of the following theories of profit best describes the reason behind her
success?
a. Uncertainty is the source of profits.
b. Profit is the reward for alertness to arbitrage opportunities.
c. Profit is the return to the entrepreneur as innovator.
d. Land is always a source of economic profit.
e. If you work hard enough, you will be rewarded.
Exhibit 24-8
Average total cost at the profit-maximizing level of output equals
a. $53.00.
b. $58.33.
c. $59.00.
d. $51.50.
e. There is not enough information given to answer this question.
Price elasticity of supply is perfectly inelastic if the coefficient of price elasticity of
supply is
a. infinity.
b. 1.
c. 0.
d. -1.