The statement “Resources employed in producing X are better suited to making Y” is
another way of saying
a. the production possibilities frontier is “bowed out.”
b. the production possibilities frontier is a straight line.
c. the production possibilities frontier is “bowed in.”
d. resources are unproductive.
e. resources have no opportunity cost.
Average growth rates of per capita income were close to zero, on average, prior to the
Industrial Revolution.
a. True
b. False
If the marginal profit from increasing output by one unit is negative, then to attain an
optimum the firm should
a. increase output until marginal profit equals zero.
b. reduce output until marginal profit equals zero.
c. increase output until marginal profit is maximized.
d. reduce output until marginal profit is maximized.
The United States is an example of a mixed economy.
a. True
b. False
Figure 10-8
Figure 10-8 displays the cost curves of a perfectly competitive firm. Profits at a price of
$10 would be approximately
a. $1 per unit.
b. $3 per unit.
c. $5 per unit.
d. $10 per unit.
Existing loopholes erode the progressivity of the U.S. tax system.
a. True
b. False
The price of an exhaustible resource sold in a perfectly competitive market in which
technology and consumer preferences do not change over time will tend to
a. stay constant over time.
b. always equal the price of the closest substitute for that resource.
c. fall over time.
d. rise over time.
Under laissez faire, the allocation of resources among different products depends on
a. consumer preferences.
b. production costs.
c. Both a and b are correct.
d. Neither a nor b is correct.
Before a market allocation of goods on the production possibilities curve can be judged
efficient, one must evaluate “what” goods the market produced.
a. True
b. False
Thomas Edison once said that he began making real profit on light bulbs when he
dumped his surplus on the European market at less than the “cost of production.” From
this we can deduce Edison
a. did not want to maximize profit.
b. understood the difference between marginal and average cost.
c. had a different definition of the term “profit.”
d. did not understand the difference between fixed and variable cost.
Figure 4-16
Assume that Figure 4-16 shows the supply of new houses. An improvement in the
technology for building houses will shift supply from
a. S1 to S2.
b. S2 to S1.
c. S3 to S2.
d. S3 to S1.
In oligopoly, one expects
a. frequent introduction of new or redesigned products.
b. aggressive advertising campaigns.
c. intense marketing research into the impact of price changes.
d. All of the above are correct.
If demand is more elastic, the portion of an excise tax borne by a buyer will
a. increase.
b. decrease.
c. be unchanged.
d. increase for normal goods, decrease for inferior goods.
By law, employers in the United States may not ask prospective female employees
whether they plan to have babies. The existence of this law seems most likely to
a. increase the probability that firms will practice economic discrimination against
women.
b. decrease the probability that firms will practice economic discrimination against
women.
c. increase the probability that firms will practice statistical discrimination against
women.
d. decrease the probability that firms will practice statistical discrimination against
women.
Equilibrium in the market for funds occurs when the
a. lenders and borrowers are mutually satisfied at some interest rate.
b. marginal revenue product of investment using the funds equals the interest rate.
c. demand curve for funds and the supply curve for funds intersect.
d. All of the above are correct.