GDP per capita is a relatively good measurement of:
a. the distribution of income. c. household production.
b. purchasing power. d. the standard of living.
Currently, union membership in the United States is about:
a. 10 percent.
b. 15 percent.
c. 20 percent.
d. 25 percent.
In the short run, consumers typically ____ to price changes (when compared to the long
run).
a. are very responsive
b. are more demand sensitive
c. are less demand sensitive
d. do not respond at all
e. overreact
If the demand for a good increases because consumer income increases, the good is
a(n):
a. inferior good. c. necessity good.
b. normal good. d. luxury good.
Market structure describes which of the following characteristics?
a. The ease of entry into and exit from the market.
b. The similarity of the product sold.
c. The number of firms in each industry.
d. All of these are true.
Exhibit 7-7 Cost schedule for a firm
In Exhibit 7-7, by filling in the blanks it can be determined that the fixed costs are:
a. 0.
b. 200.
c. 900.
d. 1,000.
e. 3,000.
Rent control applies to about two-thirds of the private rental housing in New York City.
Economic theory suggests that a below-equilibrium price established by rent control:
a. creates a surplus of rental housing.
b. promotes a rapid increase in the future supply of housing.
c. results in poor service and quality deterioration of many rental units.
d. leads to a reduction in housing discrimination against minorities.
Exhibit 6-3 Marginal utility data for goods X and Y
As shown in Exhibit 6-3, assume that the price of good X is $2 per unit and the price of
good Y is $1 per unit and your budget is $11. If you consume 3 units of good X and 4
units of good Y and maximize utility, you should consume:
a. neither X nor Y.
b. more of X.
c. more of Y.
d. more of both X and Y.
e. less of both X and Y.
For a monopolist to practice effective price discrimination, one necessary condition is:
a. identical price elasticity among groups of buyers.
b. differences in the price elasticity of demand among groups of buyers.
c. that the product is homogeneous market.
d. none of these.
Exhibit 2-3 Production possibilities curve data
According to the data given in Exhibit 2-3, the production of 1 unit of capital goods and
14 units of consumer goods:
a. is possible but would be inefficient.
b. may be a result of unemployment.
c. may be a result of unused natural resources.
d. all of these.
Which of the following statements is true?
a. Discrimination against women and blacks reduces the demand for these workers
resulting in lower wages paid these workers.
b. Discrimination is no longer a problem in the United States.
c. A negative income tax system is a plan where everyone pays the same percentage of
their income as taxes.
d. A negative income tax system is a plan where those below a certain income receive a
cash payment from government.
Mutual interdependence applies to actions of:
a. monopolistic competitors.
b. oligopolists.
c. perfect competitors.
d. monopolists.
e. firms operating in different industries.
An indifference curve is:
a. downward sloping and concave to the origin.
b. downward sloping and convex to the origin.
c. upward sloping and concave to the origin.
d. upward sloping and convex to the origin.
Demand for a good will always rise when:
a. the price of a complementary good falls.
b. the price of a substitute good falls.
c. tastes change.
d. incomes decrease.
e. the price of the good falls.
Which of the following is true if the total variable cost curve is rising?
a. Average fixed cost is increasing.
b. Marginal cost is decreasing.
c. Marginal cost is increasing.
d. Average fixed cost is constant.
According to the Lorenz curve shown in Exhibit 12-3, what percentage of total income
is earned by the richest 20 percent of families?
a. 20 percent.
b. 40 percent.
c. 60 percent.
d. 80 percent.
If a monopsonist’s labor supply curve is positively sloped, the marginal factor cost
(MFC) will exceed the wage rate.
Imperfect information is a rationale for regulation.
According to critics, the Utah Pie case represents a failure by the Supreme Court to
distinguish between injury to competition that benefits consumers and injury to a
specific competitor.
Applying supply and demand analysis, other factors held constant, the steeper the
supply curve (more elastic), the larger the burden of a sales tax that is borne by the
sellers.
If the total variable cost of producing 5 units of output is $10 and the total variable cost
of producing 6 units is $15, the marginal cost of producing a sixth unit is $5.
In order for a monopolist to earn an economic profit in short-run equilibrium, marginal
revenue must be equal to zero.
Higher gasoline prices would likely raise the price of large, gas-guzzling automobiles.
Cite an advantage and a disadvantage for command-and-control vs. incentive-based
approaches. Then do the same for environmental taxes vs. emissions trading.