According to the text, farming today in the U.S. is __________ productive compared to
a century ago, resulting in there being __________ farmers today than at the turn of the
previous century.
a. about as; fewer
b. about as; more
c. much more; fewer
d. much more; more
The marginal physical product (MPP) of a variable input is
a. total output divided by the quantity of the input used.
b. the change in total output that results from changing the variable input by one unit.
c. the change in total revenue that results from changing the variable input by one unit.
d. the change in total output that results from changing the fixed input by one unit.
e. the change in total costs that results from a change in output.
Assume a decreasing-cost industry that is initially in long-run competitive equilibrium.
A decrease in demand will cause a(n) __________ in prices and profits, and as a result,
firms will __________ the industry, causing the market supply curve to shift
__________,which, in turn, will eventually cause the equilibrium price to be
__________ before.
a. a decrease; exit; rightward; lower than
b. an increase; enter; rightward; higher than
c. a decrease; exit; leftward; higher than
d. an increase; enter; rightward; the same as
e. an increase; exit; leftward; lower than
Ronald Coase stressed the necessity of using taxes to internalize negative externalities.
a. True
b. False
If implicit costs equal accounting profit, economic profit must be
a. negative.
b. positive.
c. zero.
d. higher in the short run than in the long run.
e. higher in the long run than in the short run.
Which of the following is a positive microeconomics statement?
a. The central bank should increase the nation’s money supply.
b. The increase in the nation’s money supply helped push the nation’s unemployment
rate down in the short run.
c. Ford Motor Company’s new advertising campaign ended up hurting General Motors’s
sales.
d. The local government ought to spend more on recreational activities.
Refer to Exhibit 5-1, which shows supply and demand for freeway space at both 8 a.m.
and 11 p.m. Which toll creates equilibrium at 8 a.m.?
Exhibit 5-1
a. P2
b. P1
c. 0
d. It is not constant.
Which of the following statements is true?
a. The more broadly a market is defined, the less likely a firm will be considered a
monopoly.
b. The Celler-Kefauver Antimerger Act was designed to close the merger loophole that
existed in the Clayton Act.
c. The Sherman Act declared illegal acts that constitute restraint of trade.
d. a and b
e. a, b, and c
Which of the following statements is true?
a. In a price support program, consumers end up paying the price support.
b. In a target price system, consumers end up paying the target price.
c. In a target price system, the per-unit deficiency payment is equal to the difference
between the quantity demanded at the market price and the quantity supplied at the
market price.
d. Acreage allotment programs directly (as opposed to indirectly) raise agricultural
product prices.
e. b and d
Which of the following statements is true?
a. The people that make up the top 5 percent of all income earners are all millionaires.
b. In 2009, the lowest 20 percent of all income earners earned less than 5 percent of the
total money income.
c. The income distribution in the United States is completely equal.
d. Between 1967 and 2009, the income distribution in the United States became more
equal.
Refer to Exhibit 24-4. The profit-maximizing single-price monopolist will produce
Exhibit 24-4
a. 3 units.
b. 4 units.
c. 5 units.
d. 6 units.
If variable X goes down as a result of variable Y going down, then X and Y are
a. directly related.
b. negatively related.
c. inversely related.
d. independent.
Refer to Exhibit 3-3. A movement from point V to point W could nothave been the
result of
Exhibit 3-3
Good Y
a. a increase in the price of good Y.
b. an increase in good Y buyers’ income (assuming that good Y is an inferior good).
c. an increase in the price of a complement to good Y.
d. a decrease in the number of buyers of good Y.
e. a decrease in good Y buyers’ income (assuming that good Y is a normal good).
The synonym economists commonly use for additional is
a. capital.
b. rational.
c. marginal.
d. economic.
The poverty income threshold (or poverty line) is updated each year to reflect changes
in the consumer price index.
a. True
b. False
A negative externality exists and government wants to impose a per-unit tax in order to
bring about the socially optimal output. To accomplish its objective, government must
set the tax equal to marginal
a. private cost.
b. social benefit.
c. external cost.
d. social cost.
e. private benefit.