The perfectly competitive market structure benefits consumers because
A) firms do not produce goods at the lowest possible price in the long run.
B) firms are forced by competitive pressure to be as efficient as possible.
C) firms add a much smaller markup over average cost than firms in any other type of
market structure.
D) firms produce high quality goods at low prices.
Economists working at federal government agencies have estimated that the marginal
social cost of carbon is about
A) $2 per ton.
B) $9 per ton.
C) $21 per ton.
D) $47 per ton.
Article Summary. Roberto Azevedo, director-general of the World Trade
Organization (WTO), reported that global trade growth estimates will be lowered
for 2013 and 2014 because of increasing global protectionism. The current
protectionism is based primarily in regulations rather than the more common
tariffs and subsidies. Since 2008, almost 700 new trade restrictions have
materialized – over 150 of those in 2012 alone – with Russia being singled out as
one of the primary offenders. Source: Kiran Moodley, “WTO warns of trade
slowdown due to protectionism,” CNBC, September 6, 2013.
The protectionism being granted to Russian firms will cause the greatest harm to
A) Russian manufacturers.
B) the Russian government.
C) manufacturers who export to Russia.
D) Russian consumers.
Table 20-17
Looking at the table above, real average hourly earnings between 2010 and 2011
changed by
A) 1.2%.
B) 4.5%.
C) 9.9%.
D) 14.5%.
Securities dealers that trade stocks and bonds outside exchanges comprise the
A) foreign exchange market.
B) over-the-counter market.
C) NASDAQ market.
D) outlet market.
________ describes the actions a firm takes to maintain the differentiation of its product
over time.
A) Product differentiation
B) Brand management
C) Aggressive marketing
D) Advertising
Red Stone Creamery currently hires 5 workers. When it added a 6th worker, its output
actually fell. Which of the following statements is true?
A) The marginal product of the sixth worker must be negative.
B) The average product of the sixth worker is negative.
C) The sixth worker is not as skilled as the fifth worker.
D) The total product becomes negative.
Economic surplus
A) does not exist when a competitive market is in equilibrium.
B) is equal to the sum of consumer surplus and producer surplus.
C) is the difference between quantity demanded and quantity supplied when the market
price for a product is greater than the equilibrium price.
D) is equal to the difference between consumer surplus and producer surplus.
All of the following will shift the labor supply curve except
A) an increase in labor force participation rate among women.
B) an increase in the average age of retirement.
C) an increase in the wage rate.
D) a change in a country’s immigration policy.
Table 9-12 Production and
Consumption Production
Without Trade With Trade
Estonia and Morocco can produce both swords and belts. Table 9-12 shows the
production and consumption quantities without trade, and the production numbers with
trade.
If the actual terms of trade are 1 belt for 1.5 swords and 70 belts are traded, how many
swords will Estonia consume?
A) 95
B) 100
C) 105
D) 200
The actual division of the burden of a tax between buyers and sellers in a market is
called
A) tax incidence.
B) tax liability.
C) tax bearer.
D) tax parity.
Which of the following is the best example of a short run adjustment?
A) A local bakery purchases another commercial oven as part of its capacity expansion.
B) Your local Wal-Mart hires two more associates.
C) Smith University completed negotiations to acquire a large piece of land to build its
new library.
D) Toyota builds a new assembly plant in Texas.
One result of the financial meltdown of the late 2000s was that mortgage institutions
________ and ________ were brought under direct control of the government.
A) Fannie Mae; Freddie Mac
B) Glass Steagall; Sarbanes Oxley
C) Goldman Sachs; Morgan Stanley
D) Lehman Brothers; FDIC
What is the profit-maximizing rule for a monopolistically competitive firm?
A) to produce a quantity that maximizes market share
B) to produce a quantity that maximizes total revenue
C) to produce a quantity such that marginal revenue equals marginal cost
D) to produce a quantity such that price equals marginal cost