1) According to the Hamermesh and Biddle study, people deemed more attractive than
average earn
a.30-40 percent more than unattractive people.
b.about 5 percent more than average looking people.
c.the same as average looking people and 15-20 percent more than unattractive people.
d.25 percent more than average looking people and 50 percent more than unattractive
people.
2) The poverty line in the country of Inequalia is $7,800. The distribution of income for
Inequalia is as follows:
The poverty rate in Inequalia is
a.7.8 percent.
b.between 10 percent and 25 percent.
c.between 25 percent and 50 percent.
d.39 percent.
3) Suppose a firm in a competitive market produces and sells 8 units of output and has a
marginal revenue of $8. What would be the firm‘s marginal revenue if it instead
produced and sold 4 units of output?
a.$2
b.$8
c.$32
d.$64
4) According to the maximin criterion, income should be transferred from the rich to the
poor as long as it
a.raises the well-being of the least fortunate.
b.does not alter incentives to work and save.
c.promotes an equal distribution of income.
d.does not lower the welfare of the elderly.
5) Which combination would produce a decrease in equilibrium price and an
indeterminate change in equilibrium quantity?
a.A
b.B
c.C
d.D
6) Consider two countries, Muria and Zenya. In Muria total annual output is worth $800
million and people work 40 million hours. In Zenya total annual output is worth $900
million and people work 50 million hours. In which country is productivity higher?
7) Firms that spend the greatest percentage of their revenue on advertising tend to be
firms that sell
a.industrial products.
b.homogeneous products.
c.consumer goods for which there are no close substitutes.
d.highly-differentiated consumer goods.
8) Table 12-9
United States Income Tax Rates for a Single Individual, 2012 and 2013.
Bill is a single person whose taxable income is $35,000 a year. What is his average tax
rate in 2013?
a. 15.3%
b. 17.6%
c. 21.3%
d. 24.8%
9) European countries tend to rely more on consumption taxes than does the United
States.
a.True
b.False
10) For a number of years country A had inflation of 3% but for the last five years has
had inflation of 6%. Country B had inflation of 4% for many years, but very recently
inflation unexpectedly rose to 9%. Other things the same, in which of the countries
would the higher inflation rate be more likely to reduce unemployment?
a.both country A and country B
b.neither country A nor country B
c.country A but not country B
d.country B but not country A
11) Figure 8-25
Suppose the government places a $4 tax per unit on this good. How much is the
deadweight loss from this tax?
12) Figure 8-25
Suppose the government places a $4 tax per unit on this good. What price will
consumers pay for the good after the tax is imposed?
13) A consumer’s budget constraint is drawn with the quantity of pizza measured along
the horizontal axis and the price of Pepsi measured along the vertical axis. If the market
is offering the consumer the trade-off of 3 pints of Pepsi for 1 pizza, then what is the
slope of the consumer’s budget constraint?
14) Table 7-20
Refer to Table 7-20. How much is total producer surplus at the equilibrium price in this
market?
15) The following table contains some production possibilities for an economy for a
given month.
If the production possibilities frontier is bowed outward, then ?
16) Figure 9-27
The following diagram shows the domestic demand and supply curves in a market.
Assume that the world price in this market is $20 per unit.
With no trade allowed, how much are consumer surplus, producer surplus, and total
surplus?
17) Briefly describe the practice of predatory pricing.
18) Studies show that lower cigarette prices are associated with greater use of
marijuana; therefore, tobacco and marijuana are