Figure 12-9
Figure 12-9 shows cost and demand
curves facing a profit-maximizing, perfectly competitive firm.
At price P2, the firm would produce
A) Q2 units.
B) Q3 units.
C) Q4 units.
D) zero units.
Which of the following describes a positive externality?
A) John Henry paints the outside of his house in order to increase its market value just
before he puts the house up for sale.
B) People who do not attend college still benefit from others who receive a college
education.
C) The government imposes a tax on cigarettes in order to discourage smoking among
teenagers.
D) Mary volunteers to drive her neighbor’s children to soccer practice.
If Ebenezer Scrooge spends rather than saves his vast wealth, he will
A) slow economic growth because he is reducing the amount of funds available for
investment.
B) slow economic growth because he is increasing the amount of funds available for
investment.
C) promote economic growth because he is increasing the amount of funds available for
investment.
D) promote economic growth because he is decreasing the amount of funds available
for investment.
Between 1981 and 2011, deaths from kidney disease increased largely due to the effects
of
A) increasing obesity.
B) increasing alcohol consumption.
C) increased smoking.
D) increased pollution.
Figure 13-11
The diagram depicts a firm
A) in a constant cost industry.
B) in an increasing cost industry.
C) in long run equilibrium.
D) that is making short run losses.
In the United States, the annual growth rate of real GDP per hour worked between 1996
and 2012 averaged
A) -0.3%.
B) 1.9%.
C) 6.9%.
D) 10.2%.
When the price of a good rises, consumers buy a smaller quantity because of the
________ effect and the ________ effect.
A) substitution; income
B) normal; inferior
C) substitute; complement;
D) supply; demand
Inventories refer to
A) goods which have been presold before they are produced.
B) goods that have been produced but not yet sold.
C) goods that have been planned but not yet produced.
D) goods that have been produced and sold in the same year.
Which of the following would explain why accounting profit might be greater than
economic profit?
A) A firm has implicit costs as well as explicit costs.
B) A firm has only explicit costs.
C) A firm’s net income is greater than its accounting profit.
D) A firm’s net income is less than its accounting profit.
A transfer payment is a payment by the government to an individual
A) for a service.
B) for an investment good.
C) for a consumption good.
D) for which the government does not receive a good or service in return.
E) for a debt owed.
Parker Hannifin benefitted when the Federal Reserve ________ in 2008. This Fed
action would help increase demand for its machinery components, which allowed
Parker Hannifin to increase employment and increase prices.
A) drove down interest rates
B) increased the discount rate
C) lowered the required reserve rate
D) implemented a series of open market sales of Treasury bonds
Refer to Figure 16-6. Suppose instead of charging the monopoly price for his classes,
Sensei charges the competitive price. What is the competitive price and what is the
quantity demanded at this price?
A) P0, Q1
B) P0, Q0
C) P1,Q0
D) P1, Q1
Is it possible for a firm to have a comparative advantage in producing something
without having an absolute advantage? Why or why not?
What is the difference between a monopoly’s marginal revenue curve and a perfect
competitor’s marginal revenue curve?
What is the marginal productivity theory of income distribution?
Fill in the missing values in the table of data collected in the household survey for
November, 2009. The working-age population, employment, unemployment, and labor
force are measured in thousands. Show your work.
Book publishers often use price discrimination across time to increase profits. Toni
Morrison’s book, A Mercy, was published as a hardcover edition in November 2008 at a
price of $23.95. In August 2009, the paperback version was published at a price of
$15.00. Assume that 100,000 hardcover books were sold to hard-core Toni Morrison
fans in November 2008, and 400,000 paperback books were sold to casual readers in
August 2009. Illustrate each of these situations graphically. Assume that the marginal
cost of the hardcover version is $2.00 and the marginal cost of the paperback version is
$0.75.
Although gold is highly valued by most people, it is difficult to use as a medium of
exchange. Explain.
Table 11-2
Calculate the GDP per capita for each country in the table. Which country has the
highest standard of living? Why?
How is economic profit found?