The coordinates of point A are 20 units of X and 36 units of Y. The coordinates of point
B are 22 units of X and 30 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. + 3.00
b. + .20
c. + 0.33
d. – 0.33
e. – 3.00
In order to make the income distribution more equal, the federal government could
a. increase taxes on the rich and increase transfer payments to the poor.
b. decrease transfer payments to the rich.
c. increase taxes on the poor.
d. increase taxes on the rich and increase transfer payments to the middle class.
e. a and d
If scarcity didn’t exist, neither would
a. rationing devices.
b. competition.
c. labor.
d. capital.
e. a and b
If we define poverty as income below $10,000 per year, we have set a(n) __________
definition of poverty.
a. relative
b. constrained
c. absolute
d. denominated
There are two goods, X and Y, and the absolute price of good Y falls. It follows that
a. a person can now buy more of good Y.
b. a person cannot buy more of good Y.
c. the slope of the budget constraint changes.
d. the indifference curve between goods X and Y changes.
e. a and c
A “revaluation” occurs when
a. a nation’s currency appreciates under a flexible exchange rate system.
b. the official price of a currency is lowered.
c. a nation’s currency depreciates under a flexible exchange rate system.
d. the official price of a currency is raised.
e. none of the above
Firm A has a higher labor cost-total cost ratio than Firm B. If both firms employ the
same type of labor, and the wage rate rises by $1, then Firm A’s product price will most
likely ____________ than Firm B’s product price.
a. rise by more
b. fall by more
c. fall by less
d. rise by less
A single buyer in a factor market is known as a
a. monopoly.
b. monopsony.
c. oligopsony.
d. pure buyer.
If there are two factors used in producing a good, the least-cost rule specifies that costs
have been minimized when
a. the MPP of the first factor divided by its price is equal to the MPP of the second
factor divided by its price.
b. the MPP of the first factor multiplied by its price is equal to the MPP of the second
factor minus its price.
c. the MPP of the first factor divided by the price of the second factor is equal to the
MPP of the second factor divided by the price of the first factor.
d. the MPP of the second factor minus the MPP of the first factor is equal to the price of
the second factor minus the price of the first factor.
e. none of the above
Interest rates differ because of differences in
a. risk.
b. the term of the loan.
c. the cost of making the loan.
d. a and b
e. all of the above
A single-price monopolist with the same demand and cost conditions as a perfectly
price-discriminating monopolist produces __________ output than the perfectly
price-discriminating monopolist and __________ resource-allocative efficient.
a. less; is
b. less; is not
c. more; is
d. more; is not
At the level of output at which a single-price monopolist maximizes profit, price is
a. equal to marginal cost.
b. equal to marginal revenue.
c. greater than marginal cost.
d. less than marginal cost.
e. less than marginal revenue.
If we define poverty using absolute terms, it follows that
a. people are poor if they earn less than a specified income level.
b. there can be situations in which no one would be considered poor.
c. poverty exists if the Gini coefficient is small.
d. b and c
e. a and b
If increasingly more units of good Y must be given up as each successive unit of good
X is produced, then the PPF for these two goods is
a. a downward-sloping straight line.
b. circular.
c. an upward-sloping curve.
d. a downward-sloping curve that is bowed outward.
e. a downward-sloping curve that is bowed inward.
Describe the difference between market coordination and managerial coordination.
Give an example of each to support your answer.
List and describe the four assumptions that underlie the theory of perfect competition.
Describe what the term positive rate of time preference means.Explain the difference
between having a high rate of time preference and a low rate of time preference.State
who would be more likely to save money and who would be more likely to borrow
money based upon their degree of time preference.
Using proper economic terminology, describe why Mexican restaurants often provide
chips and salsa for free to their customers.
How does price elasticity of demand vary along a straight-line downward-sloping
demand curve?Why does this occur?
Explain how the combination of major changes in the weather and price inelasticity of
demand for a food item can lead to wide fluctuations in a farmer’s income from year to
year.
What is the median voter model?Describe four different ways in which this theory is
predicted to impact the behavior of political candidates.
Maria and Lourdes work for the same company. If Maria earns more than Lourdes, is
this evidence of wage discrimination?Explain your answer.
Explain why the price of a good tends to rise when there is a shortage of the good.Give
a hypothetical numerical example to help support your answer.
Explain what it means to say that €the market€ feeds Cleveland.Give an example
using a specific food item to help support your answer.