Is the monopolist supply decision more complicated than that of competitive supply?
a. Yes, because the monopolist can choose its price, and the perfect competitor cannot.
b. No, because they are both price takers.
c. No, because the market determines the quantity for the monopolist.
d. No, because the market determines the price for both firms.
The U.S. government
a. intervenes to prevent the monopolization of any market.
b. forbids the creation of legal impediments to entry into any market.
c. intervenes to prevent the monopolization of some markets and actively encourages
the monopolization of others.
d. encourages the permanent monopolization of all markets in which the monopolist has
technical superiority over potential competitors.
A consumer will consume the combination of goods at the crossing point of a budget
line and indifference curve.
a. True
b. False
The percentage of the burden of an excise tax that is borne by sellers generally depends
on the
a. size of the tax.
b. relationship between the elasticity of demand and the elasticity of supply.
c. elasticity of demand.
d. elasticity of supply.
If government forced a firm to charge a price equal to marginal cost in a situation where
there are scale economies,
a. new firms would enter the industry.
b. the firm would be forced to go bankrupt.
c. positive economic profit would grow even larger.
d. marginal cost would exceed average cost.
In 2013, which of the following countries spent the most on Research and
Development?
a. China
b. Germany
c. Japan
d. the U.S.
The amount of a good sold in a market at a particular price cannot exceed the quantity
a. demanded at that price.
b. supplied at that price.
c. sold when there is a price floor.
d. sold when there is a price ceiling.
What would be the opportunity cost of a child using a coupon for a free ice cream cone?
a. the dollar cost of the cone she selected
b. the other types of ice cream she could have selected
c. zero – because the good was not a durable good
d. zero – because the good was free
In practice, turning horizontal and vertical equity into tax law
a. hasn’t been tried.
b. has been fairly easy.
c. is resisted by nearly all taxpayers.
d. has been extremely difficult.
Roughly what was the median level of household income in the U.S. in 2012?
a. 50,000
b. 60,000
c. 70,000
d. 80,000
As interest rates rise, more and more investments become profitable for a firm.
a. True
b. False
Figure 22-6
From Figure 22-6, one can infer that
a. Honduras will be willing to trade bananas for corn at a unit ratio of no less than 2
corn:1 banana.
b. Honduras will be willing to trade bananas as long as the unit exchange ratio is greater
than 1/2 corn:1 banana.
c. Honduras has no potential to gain from trade.
d. Honduras will be unwilling to trade at an exchange ratio.
Marginal productivity analysis shows that a drop in the price of the product will cause
input use to
a. increase.
b. decrease.
c. stay the same.
d. The information is insufficient to provide an answer.
In the short run, a firm may have accounting losses and remain in operation.
a. True
b. False
Economics is a social science in the sense that it
a. rigorously examines human behavior.
b. is not as scientific as physics.
c. relies on historical data instead of mathematical data.
d. relies on statistics instead of mathematics.
e. All of the above are correct.
Which of the following is an imperfection of market economies?
a. They produce inexpensive services but expensive manufactured goods.
b. They place undue importance on the needs of future generations.
c. They cannot provide certain goods such as national defense.
d. They distribute income too unequally.
Which of the following is an example of a price floor?
a. rent controls
b. maximum prices for gasoline
c. usury laws that set maximum interest rates
d. the minimum wage
Which of the following is the most open economy?
a. Germany
b. the Netherlands
c. the United States
d. Japan
e. Canada
“Correlation” is a measure of how one variable causes another to change.
a. True
b. False
Table 7-4
The production relationship in Table 7-4 indicates a process characterized by
a. decreasing returns to scale.
b. constant returns to scale.
c. increasing returns to scale.
d. increasing then decreasing returns to scale.
Providing medical services for smaller fees to the poor than to the rich is
a. misplaced charity.
b. benevolent pricing.
c. price discrimination.
d. social pricing.