The monopoly firm may earn positive economic profits in the long run because
a. it produces a homogeneous product.
b. it is the only firm that wishes to produce the product.
c. of high barriers to entry.
d. a and c
e. all of the above
Exhibit 3-1
Equilibrium price and quantity are ____________________, respectively.
a. $2 and 250 units
b. $4 and 250 units
c. $2 and 150 units
d. $6 and 250 units
e. none of the above
Suppose Andrea is taking just two courses and is at a point on her PPF of grades for
those two courses.Now this PPF shifts inward and Andrea moves to a point on the new
PPF.Which of the following would be impossible after her PPF has shifted inward
compared to before the PPF shifted?
a. both of her grades to fall
b. both of her grades to rise
c. one of her grades to rise and the other grade to fall
d. one of her grades to fall while the other grade stays constant
Demand increases in an increasing-cost industry that is initially in long-run competitive
equilibrium. After full adjustment, price will be
a. equal to its original level.
b. below its original level.
c. above its original level.
d. There is not enough information to answer the question.
In reading the stock market quotes in the newspaper, the column with the heading
“Ticker” gives the
a. number of shares of the stock traded that day.
b. the full name of the company whose stock is being studied.
c. stock symbol for the company.
d. highest price the stock has sold for in the past year.
Candidate X and Candidate Y have a debate. X’s advisers believe that one result of the
debate is that Y will appear to the voters as further to the left than before. This is good
news for X
a. if Y was already left-of-center before the debate.
b. if Y was right-of-center before the debate.
c. no matter what Y’s previous position was.
d. under no circumstances.
Michael can produce the following combinations of X and Y: 10X and 10Y, 5X and
15Y, and 0X and 20Y. Vernon can produce the following combinations of X and Y:
100X and 20Y, 50X and 30Y, or 0X and 40Y. It follows that
a. Michael has the comparative advantage in producing X and Vernon has the
comparative advantage in producing Y.
b. Michael has the comparative advantage in producing Y and Vernon has the
comparative advantage in producing X.
c. Neither Michael nor Vernon has a comparative advantage in producing X.
d. Neither Michael nor Vernon has a comparative advantage in producing Y.
e. There is not enough information to answer the question.
Which of the following statements is false?
a. To an economist, the resource land includes natural resources such as minerals,
forests, water and unimproved land.
b. To an economist, the resource capital consists of unproduced goods that can be
turned into produced goods.
c. To an economist, the resource labor consists of the physical and mental talents people
contribute to the production process.
d. To an economist, the resource entrepreneurship refers to a particular talent that some
people have for organizing the resources of land, labor, and capital to produce goods,
seek new business opportunities, and develop new ways of doing things.
One of the necessary conditions for a contestable market is that new firms entering the
market have a cost advantage over the existing firms.
a. True
b. False
Special interest group Q receives a 1/10,000th slice of the economic pie.Its net benefit
from either an economic growth policy or a transfer policy is $50,000.In order for
group Q to be indifferent between the two policies, the economic growth policy would
have to make the size of the economic pie (Real GDP) grow
by_________________.This type of analysis is used to show that special interest
groups tend press government for ______________ instead of ________________.
a. $50,000,000; economic growth; transfers
b. $500,000; transfers; economic growth
c. $500,000,000; transfers; economic growth
d. $5,000,000; transfers; economic growth
e. none of the above
The coordinates of point A are 400 units of X and 40 units of Y. The coordinates of
point B are 480 units of X and 60 units of Y. With X on the horizontal axis and Y on the
vertical axis, the slope of the line between points A and B is
a. + 0.25
b. + 4.00
c. + 0.33
d. – 4.00
e. – 0.25
Which of the following exchange rates between the dollar and the peso would an
American buyer of Mexican goods most prefer?
a. $0.10 = 1 peso
b. $0.08 = 1 peso
c. $0.06 = 1 peso
d. $0.04 = 1 peso
The profit-maximizing monopolistic competitor produces at the level of output where
a. price equals marginal cost and marginal revenue.
b. marginal cost equals marginal revenue, but not price.
c. price equals marginal revenue, but not marginal cost.
d. price equals marginal cost, but not marginal revenue.
For ABC, Inc., 250,000 units of output per year represent minimum efficient scale. If
ABC, Inc. decides to produce 200,000 units this year, it will be operating in the region
of
a. decreasing returns to scale.
b. economies of scale.
c. diseconomies of scale.
d. constant returns to scale.
e. none of the above
A consumer is in equilibrium if he or she derives the same
a. total utility from each good consumed.
b. total utility per dollar spent on each good consumed.
c. marginal utility from each good consumed.
d. marginal utility per dollar spent on each good consumed.
The slope of a straight line is always equal to either 1.0 or -1.0.
a. True
b. False
Exhibit 21-8
If the price of good X falls, the budget constraint moves from budget constraint
a. 1 to 2.
b. 3 to 2.
c. 3 to 1.
d. 1 to 3.