The primary intent of antitrust legislation is to
a. ensure that product safety standards are met.
b. eliminate positive economic profits.
c. eliminate price discrimination.
d. control monopoly power and preserve and promote competition.
e. all of the above
Saying “the marginal costs are greater than the marginal benefits” is the same as saying
a. the average costs are greater than the average benefits.
b. the total costs are greater than the average benefits.
c. the benefits are greater than the costs.
d. the additional costs are greater than the additional benefits.
e. the costs minus the benefits equal the net costs.
If a perfectly competitive firm and a perfectly price-discriminating monopolist face the
same demand and cost curves, then
a. the competitive firm will attain resource-allocative efficiency, but the monopolist will
not.
b. the competitive firm will attain resource-allocative efficiency, but the monopolist
may or may not, depending upon the demand for its product.
c. the competitive firm will not attain resource-allocative efficiency, but the monopolist
will.
d. both the competitive firm and the monopolist will attain resource-allocative
efficiency.
e. neither the competitive firm nor the monopolist will attain resource-allocative
efficiency.
Evidence indicates that tariffs and quotas are
a. beneficial for producers in a protected industry, but not beneficial for the workers in
the industry.
b. beneficial for producers in a protected industry, but not beneficial for consumers.
c. beneficial for workers in a protected industry, but not beneficial for consumers.
d. not beneficial for the workers in a protected industry or for consumers.
e. b and c
You turn to the Treasury bond market page of a newspaper and look under the column
headed “Bid” and see that it says, “125:8” this indicates that
a. the price that the buyer is willing to pay for this bond is $125.08.
b. the price that the buyer is willing to pay for this bond is $1,252.50.
c. the price that the seller is willing to sell this bond for is $125.80.
d. the price that the seller is willing to sell this bond for is $125.08.
The higher the opportunity cost of attending college,
a. the more likely an individual will go to college.
b. the more economics classes an individual will take at college.
c. the fewer economics classes an individual will take at college.
d. the less likely an individual will go to college.
As long as the maximum buying price of a good is less than the minimum selling price
of that good, an exchange will occur.
a. True
b. False
There is a monitorless team (firm) of 10 persons. The 10 persons agree to work together
and split the revenue (they earn) equally. In this setting, the cost of shirking to an
individual is
a. higher than it would be if the individual worked alone.
b. the same as it would be if the individual worked alone.
c. lower than it would be if the individual worked alone.
d. necessarily greater than the benefits of shirking.
e. necessarily less than the benefits of shirking.
If a good is income elastic, it follows that the percentage change in quantity demanded
of a good
a. is less than the percentage change in income.
b. is greater than the percentage change in income.
c. is equal to the percentage change in income.
d. is greater than the percentage change in the price of another good.
e. none of the above
Exhibit 34-9
In the no specialization-no trade case, suppose country X produces and consumes 100
units of good A and 20 units of good B. Country Y produces and consumes 20 units of
good A and 60 units of good B. If the two countries specialize and trade, and the actual
amounts traded are 125 units of good A for 25 units of good B, how many more units of
good B will country X consume by specializing and trading?
a. 75
b. 25
c. 5
d. 105
e. 50
In the theory of perfect competition,
a. the market demand curve is horizontal.
b. the single firm faces a horizontal demand curve.
c. the single firm faces a downward-sloping demand curve.
d. the market demand curve is downward sloping.
e. b and d
Suppose that the total utility from consuming one unit of good Z is 220 utils, the total
utility from consuming two units of good Z is 320 utils, and the total utility from
consuming three units of good Z is 400 utils.The marginal utility received from
consuming the third unit of good Z is
a. 313.33 utils.
b. 80 utils.
c. 100 utils.
d. 50 utils.
If you place $10,000 in a savings account that pays 3 percent interest per year and you
leave all the money, principal plus interest earned, in the account for three years,
approximately how much money will you have at the end of the three years?
a. $10,090
b. $11,120
c. $10,927
d. $9,152
e. $10,124
If marginal cost is rising, average variable cost must also be rising.
a. True
b. False
Which of the following statements is true?
a. Costs are always explicit, never implicit.
b. Costs are always implicit, never explicit.
c. George runs a stationery shop; he paid Frank $5,000 for the carpet he installed in the
shop. The $5,000 for carpet is an implicit cost.
d. An implicit cost is a cost that represents the value of resources used in production for
which no actual monetary payment is made.
e. none of the above
A public good can be excludable or nonexcludable.
a. True
b. False
List and describe the three assumptions upon which oligopoly behavior are based.
List and describe the two major jobs performed by price.
Describe the difference between positive and normative economics. Cite an example of
each.
Describe the average-marginal rule. Give a hypothetical numerical example that
illustrates the average-marginal rule.
Explain how a technological advancement in one sector of the economy can lead to a
change in the number of people who work in another sector of the economy.Give an
example to help support your answer.
Define the term rationing device and give an example of each of three possible
rationing devices.Explain how scarcity implies the need for a rationing device.
Describe one of the two reasons given in the textbook to help explain why price and
quantity demanded are inversely related.
Give a definition of an advance in technology. Suppose that you are drawing a PPF for
civilian goods and military goods, describe the effect on the PPF of an advance in
technology in both civilian goods and military goods.How would the impact on the PPF
be different if the technological improvement only helped in the production of military
goods, but not civilian goods?