1) Store clerks are known to have low wages. This is likely to reflect the fact that
a.store clerk jobs are perceived to be relatively easy, thus attracting low-skill workers.
b.store clerk jobs are perceived to be relatively difficult, thus attracting high-skill
workers.
c.many people perceive the job of store clerk as having significant risk of death on the
job.
d.store clerks are required to have a college degree.
2) A union’s major source of power is its
a.high-profile leadership.
b.ability to increase productivity.
c.ability to threaten a strike.
d.ability to deny employers the opportunity to bargain over wages.
3) Scenario 15-2
Consider a local, privately-owned electrical cooperative named Poweshiek Power
Company (PPCo). PPCo has just completed a clean-coal-burning electrical power plant
in Iowa. Currently, PPCo can meet the electricity needs of all residents in the county. In
fact, its capacity far exceeds the needs of the county. After just a few years of operation,
the shareholders of PPCo experienced incredibly high rates of return on their
investment due to the profitability of the corporation.
PPCo will continue to be a monopolist in the electricity industry only if
a.population growth leads to an increased demand for electricity.
b.there are no new entrants to the market.
c.the price of natural gas decreases.
d.All of the above are correct.
4) A monopolist’s average revenue is always
a.equal to marginal revenue.
b.greater than the price of its product.
c.equal to the price of its product.
d.less than the price of its product.
5)
If Producer A and Producer B are the only producers in the market, then the market
quantity supplied when the price is $6 is
a.4 units.
b.6 units.
c.12 units.
d.18 units.
6) Which of the following would shift a market labor supply curve to the left?
a.an increase in the wage paid to workers in a competing market
b.labor-saving technology
c.a change in worker tastes so that workers want to retire later
d.an increase in immigration
7) Taxes cause deadweight losses because they
a.lead to losses in surplus for consumers and for producers that, when taken together,
exceed tax revenue collected by the government.
b.distort incentives to both buyers and sellers.
c.prevent buyers and sellers from realizing some of the gains from trade.
d.All of the above are correct.
8) The laws governing patents and copyrights
a.eliminate the need for firms to engage in research and development.
b.are intended to serve private interests, not the public’s interest.
c.reduce fixed costs for firms that obtain them.
d.None of the above is correct.
9) As government debt increases,
a.Congress will reduce spending by an equal proportion.
b.the government must spend more revenue on interest payments.
c.a trade-off with government deficits is inevitable.
d.tax rates must rise to cover the deficit.
10) Figure 16-11
If this firm profit-maximizes, how much revenue will it earn?
11) Why is the commercial value of ivory a threat to the elephant, while the commercial
value of beef is the cow’s guardian?
a.Elephants live in Africa, whereas cows live in the United States.
b.Elephants are a common resource.
c.Cows are a common resource.
d.Cows are a public good.
12) A small island off the coast of Cape Cod contains two restaurants and two retail
stores. Tourists need to take a ferry boat to reach the island, but with a recent slowdown
in the economy, tourists are less willing to pay for the boat ride to visit the island. The
owners of the restaurants and stores on the island – Restaurants 1 and 2, and Stores A
and B – think that if tourists could ride the ferry for free, they would be happy to visit
the island, eat and shop. The business owners are considering contributing to a pool of
money that will be used to pay for roundtrip ferry service each day. The table represents
their willingness to pay, that is, the maximum amount that each business owner is
willing to contribute, per day, to pay for each ferry trip.
Suppose the cost to run the ferry for each roundtrip is $750 per day and the 4 business
owners have agreed to split the costs of the ferry trips equally. Which business owner(s)
would be opposed to having any ferry trips?
a.only the owner of Store B
b.only the owners of Stores A and B
c.only the owners of Stores A and B and Restaurant 2
d.All 4 business owners would be opposed to paying for any ferry trips.
13)
Using the points on the figure, describe the change that would occur if the price of this
good increases.