Which of the following statements is true?
a. Treasury bills mature in 2 to 10 years.
b. Treasury notes mature in 13 or 26 weeks.
c. Treasury bills, notes, and bonds are considered to be very safe investments.
d. Municipal bonds are issued to help the federal government build new projects such as
highways and stadiums.
If the supply of aisle seats and middle seats on an airplane is the same, but the demand
for aisle seats is greater than the demand for middle seats, then the equilibrium price of
aisle seats will be less than the equilibrium price of middle seats.
a. True
b. False
Some monopolistic competitive firms earn positive economic profits in the long run
because
a. there are high barriers to entry in monopolistic competition.
b. they have successfully differentiated their products from their competitors’ products.
c. there is easy entry and exit.
d. b and c
e. none of the above
The percentage change in the quantity demanded of labor divided by the percentage
change in the wage rate is called the
a. marginal revenue product of labor.
b. elasticity of demand for labor.
c. elasticity of supply of labor.
d. marginal factor cost of labor.
Exhibit 25-3
Which of the following points represents the profit-maximizing quantity and price of a
monopolistic competitor?
a. A
b. B
c. C
d. D
e. E
“As additional units of a variable input are added to a fixed input, eventually the
marginal physical product of the variable input will decline.” This is a statement of the
a. law of supply.
b. average-marginal rule.
c. law of diminishing marginal utility.
d. law of diminishing marginal returns.
Public choice is concerned with decision making by
a. consumers.
b. businesses.
c. government.
d. foreigners.
e. consumers and businesses.
Exhibit 27-6
Let AA represent the value marginal product curve of an oligopolist. Which of the
following could represent his marginal revenue product curve?
a. AA
b. BB
c. CC
d. any of the above
Suppose the current exchange rate between the U.S. dollar and the Mexican peso is
$0.10 = 1 peso. Furthermore, suppose the price level in Mexico rises 15 percent while
the U.S. price level remains constant. According to the purchasing power parity theory,
which of the following exchange rates comes closest to being the equilibrium exchange
rate?
a. $0.087 = 1 peso
b. $0.085 = 1 peso
c. $0.115 = 1 peso
d. $0.13 = 1 peso
If the price of good X is $90 and the price of good Y is $30, it follows that the relative
price of one unit of good Y is ___________ unit(s) of good X.
a. 0.33
b. 1.33
c. 3.00
d. 2.00
e. There is not enough information to answer the question.
The monopolistic competitor’s demand curve is
a. perfectly elastic because of the many buyers and sellers in the market.
b. downward sloping because of product differentiation.
c. perfectly elastic because of identical products.
d. downward sloping because of the few buyers and sellers in the market.
e. none of the above
There is evidence that __________ were the main lobbyists behind passage of the
Factory Acts which put restrictions on women and children working in early 19th
century England.
a. male workers
b. female workers
c. child-care advocates
d. factory owners
Exhibit 24-3
The profit-maximizing single-price monopolist charges price
a. P1.
b. P2.
c. P3.
d. P4.
e. P5.