Economic rent is the payment made to a factor of production above the amount
necessary to induce any of that factor to be supplied at its present employment.
a. True
b. False
A straight-line demand curve has the same elasticity throughout its length.
a. True
b. False
If a profit-maximizing firm’s fixed cost of producing widgets falls,
a. its total cost curve is unaffected.
b. its marginal cost curve shifts down.
c. the firm will produce more widgets.
d. the firm’s average profit per widget produced rises.
The term “unit elasticity” is used to describe a situation in which a rise in price is
accompanied by
a. a fall in total expenditure.
b. a rise in total expenditure.
c. constant total expenditure.
d. a unit decrease in total expenditure.
Countries that are unable to produce goods as efficiently as other countries will never
be able to trade.
a. True
b. False
Figure 10-8
For the perfectly competitive firm in Figure 10-8, what is the long-run price and
quantity?
a. P = 4, Q = 150
b. P = 9, Q = 200
c. P = 10, Q = 200
d. P = 5, Q = 150
The process by which new product or production methods are introduced is called the
Industrial Revolution.
a. True
b. False
Horizontal equity is the concept that
a. equally situated individuals should be taxed equally.
b. persons with the same income should be taxed equally.
c. equal property value should be taxed equally.
d. persons living in the same neighborhood should be taxed equally.
The demand curve for a monopolistic competitor is likely to be steeper than that of a
monopolist.
a. True
b. False
Elasticity provides a guide to both
a. market stability and change in revenue as price changes.
b. responsiveness of quantity demanded to a change in price and market stability.
c. responsiveness of quantity demanded to a change in price and change in revenue as
price changes.
d. technological change and change in revenue as price changes.
In the short run, efforts to reduce the unemployment rate are likely to cause
a. a decrease in the inflation rate.
b. an increase in the inflation rate.
c. no change in the inflation rate.
d. Uncertain-economists have found no relationship between the two variables.
State and local governments receive money from sales taxes, property taxes, and the
federal government.
a. True
b. False
As manufacturing becomes more efficient, services can be expected to become more
costly.
a. True
b. False
A shift in the demand curve for sailboats resulting from an increase in incomes will lead
to
a. higher prices of sailboats.
b. lower prices of sailboats.
c. a corresponding shift in the supply curve for sailboats.
d. lower output of sailboats.
e. no change in the price of sailboats.
A shortage occurs when price is higher than the market equilibrium.
a. True
b. False
If an increase in quantity demanded of a product reduces the quantity demanded of
another, then the two goods are said to be substitutes.
a. True
b. False
In a free market the quantity demanded will not exceed the quantity supplied of a
resource, even if it is undergoing rapid depletion.
a. True
b. False
The majority of American workers are employed in the manufacturing sector.
a. True
b. False