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Unemployment rates in the U.S. are generally:
a. higher than in Europe
b. lower than in Europe
c. about the same asin Europe
d. there are no unemployed in Europe
Under a tying contract,
a. the price a buyer must pay for a good is tied to the size of his purchase.
b. a customer agrees as a condition of buying a good to purchase one or more additional
goods from the same seller.
c. a firm agrees to allow members of its competitors' boards of directors to sit on its
board.
d. a firm agrees to pay an intermediary for having arranged a business deal for the firm.
A monopolistically competitive firm in the long run will
a. have a demand curve tangent to its AC.
b. have a demand curve below its AC.
c. have a demand curve above its AC.
d. operate where excessive profit can be achieved.
Being on the PPF implies that increasing the production of one good or service can only
be accomplished by decreasing the quantity produced of another good or service.
a. True
b. False
If a nation has "cheap labor,"
a. it can still benefit from trade.
b. other nations can still compete with it.
c. it cannot have a comparative advantage in everything.
d. All of the above are true.
Faced with a shortage of funds to pay claims, the workman's compensation systems in
many states have been forced to raise the workman's compensation tax rate
substantially. The tax is paid by employers. Employers have complained that they
cannot afford the tax and threaten to go out of business. Assuming the supply of labor is
very inelastic, one can argue that ultimately the burden of this tax actually will rest
a. mostly on workers.
b. mostly on employers.
c. about 50/50 on workers and employers, like the Social Security tax.
d. all on employers by statute.
Direct controls on polluting activity
a. have never been tried as an instrument of environmental policy.
b. have been the chief instrument of environmental policy.
c. have been rejected as a tool of environmental policy.
d. are the tool of future environmental policy, based on 1993 legislation.
The firm's average cost curve is the result of cost minimization in the use of fixed
inputs.
a. True
b. False
Economic profit equals gross earnings minus the firm's direct costs.
a. True
b. False
If interest rates fall, the opportunity cost of spending money today rather than tomorrow
a. rises.
b. falls.
c. rises only if the prices of goods today rise.
d. falls only if the prices of goods today fall.
If point A on an indifference curve lies higher (measured vertically) than point B on the
same curve, Point A automatically represents higher total utility than point B.
a. True
b. False
Direct taxes are levied on specific economic activities.
a. True
b. False
For legal purposes, a corporation is treated as
a. an individual.
b. a nonprofit organization.
c. a partnership.
d. a limited partner in a partnership.
MRP represents what the marginal physical product is worth.
a. True
b. False
Joe and Ed go to a diner that sells hamburgers for $5 and hot dogs for $3 They agree to
split the lunch bill evenly. Ed chooses a hot dog. The marginal cost to Joe then of
ordering a hamburger instead of a hot dog is
a. $1
b. $2
c. $2.50
d. $3
Oligopolists almost always cooperate in making price and output decisions.
a. True
b. False
