1) Suppose the point (Q = 3,400, P = $20) is the midpoint on a certain
downward-sloping, linear demand curve. Then
a.a decrease in price from $18 to $16 will increase total revenue.
b.a decrease in price from $24 to $22 will decrease total revenue.
c.a decrease in the price from $21 to $19 will decrease total revenue.
d.the maximum value of total revenue is $68,000.
2) Advertising that uses celebrity endorsements is most likely intended to
a.increase elasticity of demand for the advertised product.
b.reduce the ability of markets to allocate resources efficiently.
c.provide a signal of product quality.
d.be useful only for psychological effects.
3) A market includes
a.buyers only.
b.sellers only.
c.both buyers and sellers.
d.the place where transactions occur but not the people involved.
4) Which tax system requires all taxpayers to pay the same percentage of their income
in taxes?
a.a regressive tax
b.a proportional tax
c.a progressive tax
d.a horizontal equity tax
5) Table 16-2
The following table shows the total output produced by the top six firms as well as the
total industry output for each industry.
What is the concentration ratio for Industry J?
a.about 14%
b.about 48%
c.about 74%
d.about 80%
6) Within a country, the domestic price of a product will equal the world price if
a.trade restrictions are imposed on the product.
b.the country allows free trade.
c.the country chooses to import, but not export, the product.
d.the country chooses to export, but not import, the product.
7) Figure 18-3
Refer to Figure 18-3. What is the marginal product of the second worker?
a.4 units
b.6 units
c.8 units
d.12 units
8) The substitution effect of a price change is the change in consumption that results
from the movement to a new indifference curve.
a.True
b.False
9) Which of the following is necessarily a problem with antitrust laws?
a.They may target a business whose practices appear to be anti-competitive but in fact
have legitimate purposes.
b.They may encourage firms to collude and reduce social welfare compared to the
unregulated market.
c.They reduce the effectiveness of the market to self-regulate.
d.They are enforced by agencies whose self-interest contradicts the interests of society
as a whole.
10) The English philosophers Jeremy Bentham and John Stuart Mill founded the school
of thought called
a.liberalism.
b.libertarianism.
c.mobilism.
d.utilitarianism.