Decision making “at the margin” means making a choice based on __________ of a
decision.
a. the total benefits
b. the total costs
c. comparing the total benefits and costs
d. comparing the additional benefits and costs
Exhibit 3-2
Suppose equilibrium is at point A. Something then changes and equilibrium becomes
point C. Which of the following is consistent with the change in equilibrium from point
A to C (assuming that good X is a normal good)?
a. There was a decrease in the number of buyers and business taxes increased.
b. There was an increase in the number of buyers and business taxes decreased.
c. There was an increase in the number of buyers and business taxes increased.
d. There was a decrease in the number of buyers and business taxes decreased.
What is the Dow Jones Industrial Average (DJIA)?Give a description of why the DJIA
was first created, how it is computed, and how it has evolved over time.
Which of the following statements is false?
a. As a result of a quota, consumers’ surplus falls.
b. As a result of a tariff, producers’ surplus rises.
c. As a result of a tariff, consumers’ surplus falls.
d. As a result of a quota, producers’ surplus rises.
e. none of the above
Which of the following statements is true?
a. The motivation to try to explain something is at the heart of building a theory.
b. If a theory makes people uncomfortable then it should be discarded or ignored.
c. In order for a theory to be valid it must be a perfect description of reality.
d. Building a theory and evaluating a theory are the same thing.
A firm defending itself in an antitrust suit would prefer to have the market it operates in
defined broadly, rather than narrowly.
a. True
b. False
People may vote in a presidential election if
a. they feel it is their civic duty to vote.
b. they believe their vote will matter.
c. the costs of doing so are greater than the benefits received from voting.
d. a or b
e. a, b, or c
Suppose there are no barriers to competing for real rents. It follows that if real rents
exist, people will compete for them
a. and in the process produce less of the good or service that is connected with the real
rents.
b. and in the process produce more of the good or service that is connected with the real
rents.
c. only if the real rents can be turned into artificial rents and therefore maintained over a
long period of time.
d. only if the real rents are pure economic rents and not simply economic rents.
e. There is not enough information to answer the question.
Exhibit 20-3
If price decreases from $5.50 to $4.50, total revenue along the demand curve
a. increases to $67.50.
b. increases to $87.50.
c. remains at $87.50.
d. decreases to $67.50.
e. decreases to $27.50.
Logrolling refers to
a. choosing political platforms to appeal to special interests.
b. trading votes to gain support for legislation.
c. choosing political platforms to appeal to the “middle-of-the-road” voter.
d. gathering votes by pretending to support policies that appeal to voters.
e. c and d
The federal government and many state governments gave tax credits to first-time home
buyers in 2009 and 2010.An effect of these tax credits was to
a. make the price of houses higher than they would have been without the tax credit.
b. lower house prices.
c. shift the demand curve for houses leftward.
d. b and c
e. none of the above