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1) Figure 13-2
As the number of workers increases,
a.total output increases but at a decreasing rate.
b.marginal product increases but at a decreasing rate.
c.marginal product increases at an increasing rate.
d.total output decreases.
2)
Along which of these segments of the supply curve is supply most elastic?
a.AB
b.CD
c.DH
d.GH
3)
If this economy devotes all of its resources to the production of blankets, then it will
produce
a.0 blankets and 360 pillows.
b.200 blankets and 240 pillows.
c.320 blankets and 120 pillows.
d.360 blankets and 0 pillows.
4) The current policy on kidney donation effectively sets a price ceiling of zero.
a.True
b.False
5) If a monopolist sells 100 units at $8 per unit and realizes an average total cost of $6
per unit, what is the monopolist's profit?
a. $200
b. $400
c. $600
d. $800
6) An externality is
a.the costs that parties incur in the process of agreeing and following through on a
bargain.
b.the uncompensated impact of one person's actions on the well-being of a bystander.
c.the proposition that private parties can bargain without cost over the allocation of
resources.
d.a market equilibrium tax.
7) Inflation is the primary determinant of a country's living standards.
a.True
b.False
8) If the size of a tax triples, the deadweight loss increases by a factor of six.
a.True
b.False
9) Economists at which of the following offices help formulate spending plans and
regulatory policies?
a.Office of Management and Budget
b.Department of the Treasury
c.Congressional Budget Office
d.The Federal Reserve
10) Trade allows each person to specialize in the activities he or she does best, thus
increasing each individual's productivity.
a.True
b.False
11) Figure 21-6
Refer to Figure 21-6. Suppose a consumer has $100 in income, the price of Mt. Dew is
$2, and the value of A is 200. What is the price of popcorn?
a. $0.50
b.$1
c.$2
d.$4
12) If the price of gasoline rises, when is the likely to be the highest?
a.immediately after the price increases
b.one month after the price increase
c.three months after the price increase
d.one year after the price increase
13) Which of the following events would cause both the equilibrium price and
equilibrium quantity of number two grade potatoes to increase if number two grade
potatoes are an inferior good?
a.an increase in consumer income
b.a decrease in consumer income
c.greater government restrictions on agricultural chemicals
d.fewer government restrictions on agricultural chemicals
14) Suppose the U.S. and Japan can both produce airplanes and televisions and the U.S.
has a comparative advantage in the production of airplanes while Japan has a
comparative advantage in the production of televisions. Also suppose the U.S. has an
absolute advantage in the production of both airplanes and televisions. The U.S. should
a.not trade airplanes or televisions with Japan.
b.import airplanes from Japan and export televisions to Japan.
c.export airplanes to Japan and import televisions from Japan.
d.export both airplanes and televisions to Japan.
15) Which of the following could increase the labor-supply curve for computer-repair
technicians?
a.an increase in the wages paid to computer-repair technicians
b.an increase in immigration
c.a change in the work preferences of men, with more of them preferring to be
stay-at-home fathers
d.an increase in the wages paid to television-repair technicians
16) If firms in a monopolistically competitive market are earning positive profits, then
a.firms will likely be subject to regulation.
b.barriers to entry will be strengthened.
c.some firms will exit the market.
d.new firms will enter the market.
17) Rank the following state and local government expenditure categories from largest
to smallest.
a.education, health, highways
b.education, highways, income security
c.highways, education, public order and safety
d.public order and safety, highways, health
