Exhibit 28-6
L and W are the equilibrium quantity of labor employed and the wage rate respectively.
A person arguing that a worker is being exploited if she is paid less than the value of her
marginal product would say that the exhibit is an illustration of the fact that
a. perfect competition entails labor exploitation.
b. monopoly entails labor exploitation.
c. monopoly entails no labor exploitation.
d. monopsony entails labor exploitation.
e. monopsony entails no labor exploitation.
The Herfindahl index is obtained by
a. adding the squares of the market shares of each firm in the industry.
b. adding the market shares of the largest four firms in the industry.
c. finding the difference between the squares of the market shares of each firm in the
industry.
d. finding the difference between the market shares of each firm in the industry.
e. none of the above
If a person pays back $2,300 on a loan of $1,900, the interest is __________ and the
interest rate is approximately __________ percent.
a. $400; 21.05
b. $2,300; 17.4
c. $400; 17.4
d. $400; 11.4
e. none of the above
Exhibit 2-4
This economy is productive
a. efficient, if it operates at point B or C.
b. efficient, if it operates at point A or D.
c. inefficient, if it operates at point A or D.
d. inefficient regardless of the particular point.
e. both a and b
Exhibit 26-3
If Firms J, K, and L were to merge, the four-firm concentration ratio would
____________________ and the Herfindahl Index would _____________________.
a. rise to 50 percent; rise to 1,062
b. rise to 28 percent; rise to 10,000
c. rise to 60 percent; fall to 986
d. rise to 59 percent; rise to 1,212
e. not be affected; not be affected
Exhibit 32-4
Suppose that producers of this good engage in rent seeking which results in the
government imposing a price floor of P2.The gain in producers€ surplus that occurs due
to the price floor is
a. B + C
b. A + B + C + D + E
c. A + B + C
d. C + E
e. B
Implicit cost is a
a. cost that is incurred when a monetary payment is made.
b. cost incurred in the past that cannot be changed by current decisions and therefore
cannot be recovered.
c. cost that represents the value of resources used in production for which no monetary
payment is made.
d. sunk cost.
e. b and d
Often, candidates running for political office will speak in general terms instead of
specific terms because voters agree more on __________ than __________.
a. benefits; costs
b. costs; benefits
c. means; ends
d. ends; means
e. none of the above
The answer is, “This is principally used to exhibit changes in data over time.” The
question is,
a. What is a pie chart?
b. What is a 45-degree line?
c. What is a tangent line?
d. What is a line graph?
e. b and d
A mandatory seatbelt law ends up raising the number of traffic fatalities if it lowers
fatalities per accident from 0.10 to 0.07 while raising the number of accidents per
period from 35,000 to any more than
a. 35,000.
b. 38,500.
c. 37,450.
d. 50,000.
For farmers as a group, increased productivity can lead to lower incomes.
a. True
b. False
Exhibit 5-5
If the airline charges price P2 for both aisle seats and middle seats, the result will be
a. a surplus of middle seats and the equilibrium quantity of aisle seats.
b. a surplus of aisle seats and the equilibrium quantity of middle seats.
c. a shortage of middle seats and the equilibrium quantity of aisle seats.
d. a shortage of aisle seats and the equilibrium quantity of middle seats.
The supply curve for land will be upward sloping as long as
a. there is unimproved land ready for development.
b. the money price of land is greater than zero.
c. land has alternative uses.
d. the demand for land is variable.
The slope of a horizontal line is always equal to zero.
a. True
b. False
Suppose Will receives 350 utils from consuming one banana and 490 utils from
consuming two bananas. What is the marginal utility of the second banana?
a. 840 utils
b. 75 utils
c. 140 utils
d. 425 utils
e. none of the above
If the nominal rate of interest is 9 percent and the expected rate of inflation is 6 percent,
then the real rate of interest is
a. 6 percent.
b. 15 percent.
c. 3 percent.
d. 7.5 percent.
If there is freeway congestion at 8 a.m., we can reduce (or eliminate) the congestion by
a. building more freeways.
b. raising the price to drive on the freeway at 8 a.m.
c. encouraging workers to carpool..
d. a and b
e. a, b,and c
In year 1 the price of good X is $10 and 100 units are bought and sold. In year 2 the
price of good X is $13 and 230 units are bought and sold. What can explain this?
a. The supply of good X was higher in year 2 than in year 1 and the demand for good X
was the same in year 2 as in year 1.
b. The demand for good X was higher in year 2 than in year 1 and the supply of good X
was the same in year 2 as in year 1.
c. Both the demand for, and supply of, good X were higher in year 2 than in year 1.
d. b or c
e. a, b, or c