1) Demand for a good is said to be inelastic if the quantity demanded increases
substantially when the price falls by a small amount.
a.True
b.False
2) Which of the following statements accurately explains the superstar phenomenon in
wages?
a.Better carpenters earn more than average carpenters because people are willing to pay
higher prices for higher-quality work.
b.The more productive an author is, the more books she can write each year, so the
more she earns.
c.Talented movie stars earn more than equally talented mechanics because technology
allows the delivery of the services provided by the movie stars to all interested
customers.
d.Athletes get paid for performing services that everyday people perform as hobbies.
3) Total surplus with a tax is equal to
a.consumer surplus plus producer surplus.
b.consumer surplus minus producer surplus.
c.consumer surplus plus producer surplus minus tax revenue.
d.consumer surplus plus producer surplus plus tax revenue.
4) Imperfectly competitive firms are characterized by
a.horizontal demand curves.
b.standardized products.
c.a large number of small firms.
d.price making ability.
5) Figure 21-24
The figure shows three indifference curves and a budget constraint for a certain
consumer named Steve.
Refer to Figure 21-24. At his optimum, Steve is buying
a.0.6 pounds of apples.
b.2.0 pounds of apples.
c.4.5 pounds of apples.
d.5.5 pounds of apples.
6) You are in charge of the local city-owned aquatic center. You need to increase the
revenue generated by the aquatic center to meet expenses. The mayor advises you to
increase the price of a day pass. The city manager recommends reducing the price of a
day pass. You realize that
a.the mayor thinks demand is elastic, and the city manager thinks demand is inelastic.
b.both the mayor and the city manager think that demand is elastic.
c.both the mayor and the city manager think that demand is inelastic.
d.the mayor thinks demand is inelastic, and the city manager thinks demand is elastic.
7) The Tragedy of the Commons occurs because
a.government property is most heavily used by the wealthy.
b.everyone deserves an equal share of government property.
c.social and private incentives differ.
d.established property rights create competition.
8) Of the four countries below, the country that has the most income equality is
a.Ethiopia.
b.France.
c.Russia.
d.Thailand.
9) Individual supply curves are summed vertically to obtain the market supply curve.
a.True
b.False
10) Figure 18-4
The graph below illustrates the market for nurses who work in doctors’ offices.
Refer to Figure 18-4. Each August many high school and college students visit a
doctor’s office to have a sports physical. If the price of sports physicals rises, what
happens in the market for nurses?
a.Demand increases from D1 to D2.
b.Demand decreases from D2 to D1.
c.Supply increases from S1 to S2.
d.Supply decreases from S2 to S1.
11) The case study of segregated street cars in southern cities illustrates which of the
following?
a.Streetcar owners opposed segregation laws primarily because they were concerned
with civil rights.
b.Segregation laws were supported by both local business owners and patrons.
c.Firms usually care more about maximizing profits than discriminating against certain
customers.
d.Laws passed by the government cannot reduce discrimination.
12) When the price of an eBook is $15.00, the quantity demanded is 400 eBooks per
day. When the price falls to
$10.00, the quantity demanded increases to 700. Given this information and using the
midpoint method, we know that the demand for eBooks is
a.inelastic.
b.elastic.
c.unit elastic.
d.perfectly inelastic.