1) When it comes to people’s tastes, economists generally believe that
a.tastes are based on forces that are well within the realm of economics.
b.tastes are based on historical and psychological forces that are beyond the realm of
economics.
c.tastes can only be studied through well-constructed, real-life models.
d.because tastes do not directly affect demand, there is little need to explain people’s
tastes.
2) When each person specializes in producing the good in which he or she has a
comparative advantage, total production in the economy
a.falls.
b.stays the same.
c.rises.
d.may fall, rise, or stay the same.
3) Figure 13-2
As the number of workers increases,
a.marginal product decreases.
b.total output decreases.
c.marginal product increases but at a decreasing rate.
d.Both a and b are correct.
4) Economists normally
a.do not try to explain people’s tastes, but they do try to explain what happens when
tastes change.
b.believe that they must be able to explain people’s tastes in order to explain what
happens when tastes change.
c.do not believe that people’s tastes determine demand, so they ignore the subject of
tastes.
d.incorporate tastes into economic models only to the extent that tastes determine
whether pairs of goods are substitutes or complements.
5) A linear, upward-sloping supply curve has
a.a constant slope and a changing price elasticity of supply.
b.a changing slope and a constant price elasticity of supply.
c.both a constant slope and a constant price elasticity of supply.
d.both a changing slope and a changing price elasticity of supply.
6) Figure 9-3. The domestic country is China.
With trade, producer surplus in China is
a. $800.
b. $1,200.
c. $1,800.
d. $2,700.
7) A cooperative agreement among oligopolists is more likely to be maintained,
a.the greater the number of oligopolists.
b.the larger the number of buyers of the oligopolists’ product.
c.the smaller the number of buyers of the oligopolists’ product.
d.the more likely it is that the game among the oligopolists will be played over and over
again.
8) Table 8-1
Suppose the government is considering levying a tax in one or more of the markets
described in the table. Which of the markets will allow the government to minimize the
deadweight loss(es) from the tax?
a.market A only
b.markets A and C only
c.markets B and D only
d.market C only
9) The field of political economy
a.casts aside most of the standard methods of economic analysis.
b.is also referred to as the field of public choice.
c.is also referred to as the field of macroeconomics.
d.produces the conclusion that democratic principles rarely lead to desirable economic
outcomes.
10) A key determinant of the price elasticity of supply is the time period under
consideration. Which of the following statements best explains this fact?
a.Supply curves are steeper over long periods of time than over short periods of time.
b.Buyers of goods tend to be more responsive to price changes over long periods of
time than over short periods of time.
c.The number of firms in a market tends to be more variable over long periods of time
than over short periods of time.
d.Firms prefer to change their prices in the short run rather than in the long run.
11) In a competitive market, the quantity of a product produced and the price of the
product are determined by
a.a single buyer.
b.a single seller.
c.one buyer and one seller working together.
d.all buyers and all sellers.