Unions are interested in increasing the productivity of their members because as their
productivity rises, the __________ their labor __________ and their wages
__________.
a. demand for; falls; rise.
b. demand for; rises; rise.
c. supply of; rises; rise.
d. supply of; falls; rise.
Exhibit 24-4
The profit-maximizing single-price monopolist will produce
a. 3 units.
b. 4 units.
c. 5 units.
d. 6 units.
In the textbook, economics is defined as the science of scarcity.
a. True
b. False
Many people buy one newspaper per day, but rarely do they buy two of the same
newspapers on the same day.What is the economic justification for this behavior?
a. The marginal benefit of purchasing the second newspaper exceeds the marginal cost
of purchasing that paper.
b. The marginal cost of purchasing the second newspaper exceeds the marginal benefit
of purchasing that paper.
c. The marginal benefit of purchasing the second newspaper equals the marginal cost of
purchasing that paper.
d. none of the above is an appropriate economic justification for this behavior.
Exhibit 39-4
At a target price of $4 per bushel, what price does the consumer pay?
a. $5
b. $4
c. $3
d. $2
A positive externality exists and government wants to impose a subsidy in order to
bring about an efficient outcome. To accomplish its objective, government must set the
subsidy equal to marginal
a. private cost.
b. social benefit.
c. external cost.
d. social cost.
e. external benefit.
An indifference curve shows
a. the bundles of two goods that give an individual equal total utility.
b. two bundles of two goods each where one bundle gives greater utility to an
individual than the other bundle.
c. two bundles of two goods each where one bundle is preferred to the other.
d. the bundles of two goods that give an individual equal marginal utility.
In the theory of perfect competition, the market demand curve is __________ and the
firm faces a demand curve that is __________.
a. perfectly elastic; perfectly elastic
b. downward sloping; downward sloping
c. perfectly elastic; downward sloping
d. downward sloping; perfectly elastic
e. perfectly inelastic; downward sloping
Exhibit 29-1
If the Gini coefficient equals 0, then the Lorenz curve is
a. point A.
b. line OB.
c. the horizontal axis from 0 to A.
d. line AB.
e. the horizontal axis from 0 to A and the line AB.
The effects of tariffs and quotas are: a(n) __________ in consumers’ surplus, and a(n)
__________ in producers’ surplus.
a. increase; increase
b. increase; decrease
c. decrease; increase
d. decrease; decrease
The Gini coefficient is computed by dividing the
a. area between the line of perfect income equality and the actual Lorenz curve by the
area below the Lorenz curve.
b. area below the Lorenz curve by the total area below the line of perfect equality.
c. area between the line of perfect income equality and the actual Lorenz curve by the
total triangular area below the line of perfect income equality.
d. either a or b
e. any of the above
A product price searcher (monopolist, oligopolist, or monopolistic competitive firm)
will hire more factor units as long as
a. MRP > MFC.
b. MRP > VMP.
c. MRP = MFC.
d. VMP = MFC.
e. c and d
Suppose Andrea is taking just two courses and is at a point inside her PPF of grades for
those two courses.If Andrea changes her work habits then it is impossible for
a. either one of her grades to rise.
b. both of her grades to rise.
c. both of her grades to fall.
d. either one of her grades to rise while the other grade remains constant.
e. none of the above is impossible in this situation
Exhibit 24-8
The maximum profits earned by a single-price monopolist will be
a. $127.
b. $50.
c. $95.
d. $32.
Demand refers to
a. how much of a good people are willing and able to buy at a particular price.
b. the different quantities of a good people are willing and able to buy at different
prices.
c. the different quantities of a good people are willing and able to buy at a particular
price.
d. how much of a good people are willing to buy at different prices.
e. none of the above
Which of the following would NOT be considered a macroeconomic topic?
a. the reasons for a decline in the price of crude oil
b. the cause of a downturn in the economy
c. the effect of the government budget deficit on inflation
d. the causes of inflation and unemployment
Exhibit 24-8
The marginal cost of the last unit produced at the profit-maximizing output level equals
a. $8.
b. $31.
c. $60.
d. $15.