Figure 5-10
Chicken pox vaccinations for toddlers benefit society by protecting young children and
by preventing an epidemic of the disease. Thus, the social benefits of chicken pox
vaccinations exceed the private benefit for any quantity of vaccinations as illustrated in
Figure 5-10.
What is the value of the net gain to society as a result of subsidizing chicken pox
vaccinations?
A) (PEQE)
B) (PFQF)
C) value equal to the area of FEG
D) value equal to the area of QFFGQE
The key factors in raising standards of living in low-income countries have been
increases in
A) capital accumulation and the money supply.
B) technology and knowledge.
C) foreign aid and population.
D) income and government ownership of resources.
What are liabilities?
A) anything of value owned by a person or a business
B) anything a person or a business owes to entities outside the business
C) the total cost of labor for a firm
D) only those unpaid expenses for which a business or person is making interest
payments
Prior to 1970, mortgages were ________ resold in the secondary market.
A) never
B) rarely
C) often
D) always
The base period for CPI calculations is generally 1982-84. In 2005, 50% of households
accessed the Internet through a broadband connection that would not have existed in the
1980s. This potential for bias in the CPI is referred to as ________ bias and results in
________.
A) outlet; the CPI underestimating the true change in the cost of living
B) new product; the CPI overestimating the true change in the cost of living
C) outlet; the CPI overestimating the true change in the cost of living
D) net product; the CPI underestimating the true change in the cost of living
Which of the following is true at the output level where average total cost is at its
minimum?
A) Marginal cost equals average total cost.
B) Average variable cost equals fixed cost.
C) Marginal cost equals average variable cost.
D) Average total cost equals average fixed cost.
When we graph consumption as a function of ________ rather than as a function of
disposable income, the slope of this consumption function is ________.
A) national income; the MPC
B) personal income; (MPC – MPS)
C) national income; the MPS
D) personal income; the MPS
How does the owner of a corporation relate to the business?
A) The owners of the business have a separate legal distinction from the business.
B) The owners of the business have no separate legal distinction from the business.
C) The personal assets are part of the corporation’s assets.
D) None of these describe the legal relationship of corporate owners to the business.
In order for a labor supply curve to be backward bending at high wages,
A) leisure must be an inferior good.
B) the substitution effect of a wage increase must be greater than the income effect.
C) workers must have an irrational response to wage increases.
D) the income effect of a wage increase must be greater than the substitution effect.
Jack just told his boss that he thinks his boss is an idiot. It is likely that Jack will be
experiencing ________ unemployment in the near future.
A) permanent
B) cyclical
C) frictional
D) structural
Figure 16-7 The Lizard Lounge is well
known for its exotic cocktails. Figure 16-7 shows its estimated demand curve for
cocktails.
The owners of the Lizard Lounge are considering the following four pricing options:
a. A single price scheme where the price of cocktails equals the monopoly price.
b. A single price scheme where the cocktail price equals the competitive price.
c. A two-part tariff: a monopoly price for cocktails and a cover charge that will generate
total revenue equal to the area X.
d. A two-part tariff: a competitive price for cocktails and a cover charge that will
generate total revenue equal to the area X + Y + Z. Which scheme will earn the largest
profit?
A) scheme a
B) scheme b
C) scheme c
D) scheme d
Figure 3-5
At a price of $15,
A) there would be a surplus of 4 units.
B) there would be a shortage of 2 units.
C) there would be a surplus of 6 units.
D) there would be a shortage of 4 units.
A firm increased its production and sales because the firm’s manager rearranged the
layout of his factory floor. This is an example of
A) investment in human capital.
B) economies of scale.
C) positive technological change.
D) inspired management.
If a producer is not able to expand its plant capacity immediately, it is
A) bankrupt.
B) operating in the long run.
C) operating in the short run.
D) losing money.
The market for smart phones has grown rapidly over the past few years, due in part to
the overwhelming success of the Apple iPhone. Following the successful launch of the
iPhone in 2007, companies such as Samsung, HTC, and LG have all introduced
products to compete with the iPhone. The smart phones introduced to compete with the
iPhone would be considered
A) complements to the iPhone.
B) substitutes for the iPhone.
C) inferior goods compared to the iPhone.
D) normal goods compared to the iPhone.
Figure 1-5
Calculate the area of the triangle A.
A) $8.4 million
B) $6.3 million
C) $3.15 million
D) $2.1 million
Which of the following statements is false?
A) An implicit cost is a nonmonetary opportunity cost.
B) Economic costs include both accounting costs and implicit costs.
C) An explicit cost is a cost that involves spending money.
D) Economists consider all costs to be implicit costs.
Figure 12-17
The graphs in Figure 12-17 represent the perfectly competitive market demand and
supply curves for the apple industry and demand and cost curves for a typical firm in
the industry. Which of the following statements is true?
A) The current market price is $3 but the firm will be able to increase the price in the
future.
B) The current market price is $3 but the price will fall in the long-run as a result of a
decrease in demand.
C) The current market price is $3 but the price will fall in the long-run as new firms
enter the market.
D) The current market price is $3 but the price will increase in the future as the market
demand increases.
Figure 18-1
The excess burden of the tax is represented by the area
A) B+C.
B) F+G.
C) E+H.
D) B+C+F+G.
Figure 18-1
Of the tax revenue collected by the government, the portion borne by consumers is
represented by the area
A) B + C.
B) F + G.
C) E + H.
D) B + C + F + G.