1) The invisible hand ensures that economic prosperity is distributed equally.
a.True
b.False
2) Assume that Bart’s Batteries has entered into a resale price maintenance agreement
with Radio Shanty but not with Prime Purchase. In this case,
a.the wholesale price of Bart’s Batteries will be different for Radio Shanty than it is for
Prime Purchase.
b.Bart’s Batteries will never increase profits by having a resale price maintenance
agreement with all retail outlets that sell its products.
c.Prime Purchase might benefit from customers who go to Radio Shanty for
information about different batteries.
d.Radio Shanty will sell Bart’s Batteries at a lower price than Prime Purchase.
3) A decrease in the price of blueberries will decrease both the equilibrium price and
quantity in the market for blueberry muffins.
a.True
b.False
4) The line that relates the price of a good and the quantity demanded of that good is
called the demand
a.schedule, and it usually slopes upward.
b.schedule, and it usually slopes downward.
c.curve, and it usually slopes upward.
d.curve, and it usually slopes downward.
5) Scenario 16-1
Suppose the following are the sales for all of the firms in two different industries.
What are the concentration ratios for these industries?
a.Industry A: 22%, Industry B: 26%
b.Industry A: 41%, Industry B: 47%.
c.Industry A: 68%, Industry B: 79%
d.Industry A: 100%, Industry B: 100%.
6) Table 15-20
A monopolist faces the following demand curve:
If a monopolist faces a constant marginal cost of $20, how much output should the firm
produce in order to maximize profit?
a.2 units
b.3 units
c.4 units
d.5 units
7) Figure 21-5
Refer to Figure 21-5. In graph (a), if income is equal to $200, then the price of good Y
is
a. $3.
b.$5.
c.$7.
d.$10.
8) In 2011, what percentage of U.S. families had income levels below $75,000?
a.20 percent
b.40 percent
c.60 percent
d.80 percent
9) In which of the following market structures does free entry and exit play an
important role in the long-run equilibrium outcome?
(i)perfect competition
(ii)monopolistic competition
(iii)monopoly
a.(i) only
b.(i) and (ii) only
c.(ii) and (iii) only
d.(i), (ii), and (iii)
10) Figure 7-25
Refer to Figure 7-25. Suppose the government imposes a price floor of $28 in this
market. If the sellers with the lowest cost are the ones who sell the good and the
government does not purchase any excess units produced, then total surplus will be
a. $400.
b. $800.
c. $1,120.
d. $1,184.
11) Scenario 19-2
Travis, a student at a community college, is considering what he should do for summer
employment. Two recruiters show up at his school in search of summer workers.
Recruiter A is looking for workers to help a disaster relief agency distribute food aid in
Africa. Recruiter B is looking for custodial help to clean motel rooms in a motel located
near the entrance to a famous national park.
Refer to Scenario 19-2. Travis is carefully considering the options that each recruiter
presents. On the basis of knowledge obtained in his economics class, Travis concludes
that
a.if the motel job requires some night shift work, wages will be lower than otherwise.
b.the job that is more fun will have a higher wage.
c.if the motel job doesn’t require any special skills, the wage offer will be lower than
otherwise.
d.All of the above are correct.
12) The price of diamonds is high, in part because the majority of the world’s diamonds
are controlled by a single firm. This is an example of
a.a market failure caused by an externality.
b.a market failure caused by market power.
c.a market failure caused by equality.
d.There is no market failure in this case.
13) Suppose the government imposes a tax of 10 percent on the first $40,000 of income
and 20 percent on all income above $40,000. What is the average tax rate when income
is $50,000?
a.20 percent
b.15 percent
c.12 percent
d.10 percent