Exhibit 11-9
In Exhibit 11-9, what is the marginal revenue product of the fifth unit of the variable
resource?
a. $260
b. $130
c. $22
d. $44
e. -$18
The prisoner’s dilemma is applicable only when considering the illegal behavior that
firms in a non-competitive market may pursue
a. True
b. False
The destruction of tropical rain forests results in
a. a possible decrease in the greenhouse effect
b. a decrease in gases in the atmosphere
c. a decrease in the recycling of carbon dioxide
d. reduced erosion
e. better long-term growth prospects in the local economy
The exchange rate is the
a. total yearly amount of money changed from one country’s currency to another
country’s currency
b. total monetary value of exports minus imports
c. amount of a country’s currency that can be exchanged for one ounce of gold
d. sum of net unilateral transfers
e. price of one country’s currency in terms of another country’s currency
If the marginal productivity of labor was the sole determinant of household income in
the U.S., then
a. no households would be poor according to the official government definition of
poverty
b. no households would be poor according to a relative definition of poverty
c. the distribution of income would be unequal
d. every household would have sufficient income to meet biological needs
e. there would be no need for government programs to redistribute income
Excess capacity is defined as the difference between a firm’s maximum possible output
and its actual output.
a. True
b. False
Budget maximization by bureaus leads to
a. efficient budgets
b. budgets greater than those desired by median voters
c. budgets less than those desired by median voters
d. budgets equal to those desired by median voters
e. budgets less than those desired by the majority of voters
Which of the following represents the largest source of income for U.S. households?
a. personal interest
b. proprietor’s income
c. wages and salaries
d. rental income
e. transfer payments
There are six firms in the cresset industry. The market shares of the four largest firms
are 50 percent, 20 percent, 10 percent, and 7 percent. The Herfindahl index is
a. 87
b. 4,149
c. 10,000
d. 3,081
e. impossible to calculate because data for the fifth and sixth firms are not given
Growth in power couples and in single mothers anchors the top and bottom ends of the
income distribution, contributing to a narrowing income gap in the U.S. economy.
a. True
b. False
Exhibit 11-2
In Exhibit 11-2, which unit of the resource is earning the most economic rent?
a. the fifth
b. the tenth
c. the fifteenth
d. the twentieth
e. they are all earning the same economic rent
Exhibit 8-3
The shape of the total revenue curve in Exhibit 8-3 reflects
a. profitability
b. falling marginal revenue
c. increasing marginal revenue
d. the fact that perfectly competitive firms are price takers
e. the fact that consumers will purchase more from this firm at higher prices
A tangent line is a straight line
a. that intersects a curved line twice
b. with a slope equal to infinity
c. that touches a curved line at only one point
d. that intersects a curved line at several points
e. that runs along the vertical axis
Which of the following creates an obstacle to pursuing freer international trade?
a. Consumers do not recognize their potential gains
b. Losses are widespread
c. Domestic producers do not recognize their potential losses
d. Government has plenty of political will and support to remove trade barriers
e. Consumers can easily organize to demand free trade
Goods and services are exchanged in
a. product markets
b. resource markets
c. inventory markets
d. classified markets
e. government markets
An increase in the price of electronic cash registers will
a. increase the demand for cashiers if electronic cash registers are a complementary
resource
b. reduce the demand for cashiers if electronic cash registers are a complementary
resource
c. reduce the quantity of electronic cash registers supplied
d. reduce the demand for manual cash registers
e. reduce the average cost of retail stores
If a change in technology improves the marginal productivity of capital, the
a. supply of capital will increase
b. supply of capital will decrease
c. demand for loanable funds will increase
d. demand for loanable funds will decrease
e. supply of loanable funds will increase
Indifference curves in a consumer’s indifference map do not intersect.
Economic decision makers will continue to acquire information only as long as the
expected additional benefit exceeds the expected additional cost of the information.
a. True
b. False
The law of diminishing marginal utility implies it is possible that the marginal utility of
my tenth pistachio nut is less than the marginal utility of my third pistachio nut, other
things constant.
a. True
b. False
With the growth of international trade, U.S. antitrust law has become
a. more vague
b. more necessary
c. less necessary
d. stricter
e. more likely to enhance consumer welfare
Marginal utility is a measure
a. of total utility derived from consuming a given amount of a good
b. of the total utility gained from consuming an extra unit of a good
c. computed by dividing total utility by the amount of a good consumed
d. determined by production conditions in a market
e. of the cost associated with consuming one more unit of a good
Which of the following occurs if firms are able to restrict output and raise price?
a. resources are misallocated
b. wealth is shifted from consumers to government
c. wealth is shifted from producers to consumers
d. P = MC
e. P = minimum LRAC
Which resource generates the largest share of the income in the United States?
a. labor
b. land
c. capital
d. entrepreneurial ability
e. money
A firm’s opportunity costs of using resources provided by the firm’s owners are called
a. sunk costs
b. fixed costs
c. explicit costs
d. implicit costs
e. entrepreneurial costs
Which of the following is most appropriately measured along one axis of the production
possibilities frontier diagram?
a. the quantity of a produced good
b. the price of a produced good
c. the quantity of natural resources
d. the state of technology
e. society’s welfare and satisfaction
The exchange rate is
a. the price of foreign exchange determined by the interaction of supply and demand
b. an interest rate determined by the interaction of supply and demand
c. fixed by each government separately
d. always fixed for any two currencies by the two nations involved, regardless of any
agreements made with other nations
e. fixed by GATT
The price elasticity of demand
a. is of no use to producers
b. tells producers what will happen to total profit if they change product price
c. tells producers what will happen to quantity supplied if they change product price
d. tells producers what will happen to total revenue if they change product price
e. tells producers what will happen to price in the following time period
Exhibit 5-31
Refer to Exhibit 5-31. The revenue generated by the tax is:
a. P3DCP1
b. P2BDP3
c. Q2CAQ1
d. b and c
e. P2BCP1
The short run is a period of time
a. less than one year
b. greater than one year
c. during which all resources are variable
d. during which at least one resource is fixed
e. during which at least one resource is variable