1) Critics of markets that are characterized by firms that sell brand name products argue
that brand names encourage consumers to pay more for branded products that
a.have elastic demand curves.
b.are very different from generic products.
c.are indistinguishable from generic products.
d.consumer-advocate groups have found to be inferior.
2) Which of the following lists correctly ranks countries from most equal to least equal
distribution of income?
a.Nigeria, India, Mexico, Germany
b.Brazil, United States, India, Japan
c.United States, Ethiopia, Japan, South Africa
d.Japan, India, United States, Brazil
3) Figure 8-7
The vertical distance between points A and B represents a tax in the market.
Before the tax is imposed, the equilibrium price is
a.$32, and the equilibrium quantity is 15.
b.$24, and the equilibrium quantity is 15.
c.$24, and the equilibrium quantity is 25.
d.$16, and the equilibrium quantity is 15.
4) If the demand for leather decreases, producer surplus in the leather market
a.increases.
b.decreases.
c.remains the same.
d.may increase, decrease, or remain the same.
5) Assumptions can simplify the complex world and make it easier to understand.
a.True
b.False
6) Table 7-5
For each of three potential buyers of oranges, the table displays the willingness to pay
for the first three oranges of the day. Assume Allison, Bob, and Charisse are the only
three buyers of oranges, and only three oranges can be supplied per day.
If the market price of an orange increases from $0.80 to $1.05, then consumer surplus
a.increases by $0.75.
b.decreases by $0.95.
c.decreases by $0.75.
d.decreases by $1.00.
7) When studying how some event or policy affects a market, elasticity provides
information on the
a.change in the costs of production.
b.tradeoff between equality and efficiency.
c.effect on the budget deficit or surplus.
d.direction and magnitude of the effect.
8) Suppose that flu shots create a positive externality equal to $8 per shot. Further
suppose that the government offers a $11-per-shot subsidy to producers. What is the
relationship between the equilibrium quantity and the socially optimal quantity of flu
shots produced?
a.They are equal.
b.The equilibrium quantity is greater than the socially optimal quantity.
c.The equilibrium quantity is less than the socially optimal quantity.
d.There is not enough information to answer the question.
9) In the United States, incomes have historically grown
a.about 0.5 percent per year.
b.about 2 percent per year.
c.about 4 percent per year.
d.about 6 percent per year.
10) The human-capital theory of education maintains that workers who complete
specific levels of education enhance their productivity through education.
a.True
b.False
11) Table 12-9
United States Income Tax Rates for a Single Individual, 2012 and 2013.
Samantha is a single person whose taxable income is $100,000 a year. What is her
average tax rate in 2012?
a. 22.3%
b. 25.3%
c. 27.8%
d. 28.4%
12) If a company making frozen orange juice expects the price of its product to be
higher next month, it will supply more to the market this month.
a.True
b.False
13) Market power refers to the
a.side effects that may occur in a market.
b.government regulations imposed on the sellers in a market.
c.ability of market participants to influence price.
d.forces of supply and demand in determining equilibrium price.
14) Suppose the United States had a short-term shortage of farmers. Which mechanisms
would adjust to remove the shortage?
a.The government would provide tax incentives to encourage people to become
farmers.
b.The government would subsidize the production of food.
c.The prices of food and the wages of farmers would adjust.
d.There are no mechanisms to remove the shortage.