1) Implicit costs are costs that do not require an outlay of money by the firm.
a.True
b.False
2) Figure 13-9
The figure below depicts average total cost functions for a firm that produces
automobiles.
The firm experiences economies of scale at which output levels?
a.output levels less than M
b.output levels between M and N
c.output levels greater than N
d.All of the above are correct as long as the firm is operating in the long run.
3) Figure 9-4. The domestic country is Nicaragua.
Which of the following statements is accurate?
a.Consumer surplus with trade is $3,200.
b.Producer surplus with trade is $375.
c.The gains from trade amount to $800.
d.The gains from trade are represented on the graph by the area bounded by the points
(0, $12), (300, $12), (300, $7) and (0, $7).
4) The fundamental cause of monopolies is barriers to entry.
a.True
b.False
5) Figure 8-9
The vertical distance between points A and C represents a tax in the market.
The producer surplus with the tax is
a. $3,000.
b. $6,000.
c. $9,000.
d. $12,000.
6) When a tax is levied on a good,
a.government collects revenues which might justify the loss in total welfare.
b.there is a decrease in the quantity of the good bought and sold in the market.
c.a wedge is placed between the price buyers pay and the price sellers effectively
receive.
d.All of the above are correct.
7) Table 10-3
The table represents a market in which
a.there is no externality.
b.there is a positive externality.
c.there is a negative externality.
d.The answer cannot be determined from inspection of the table.
8) One way to eliminate the Tragedy of the Commons is to
a.increase law enforcement in public areas.
b.limit access to the commons.
c.increase access to the commons.
d.decrease taxes.
9) Figure 18-1
On the graph, L represents the quantity of labor and Q represents the quantity of output
per week.
Refer to Figure 18-1. The marginal product of the fourth worker is
a.60 units of output.
b.75 units of output.
c.285 units of output.
d.345 units of output.
10) The demand schedule below pertains to sandwiches demanded per week.
Suppose Harry, Darby, and Jake are the only demanders of sandwiches and that the
market demand violates the law of demand. Then, in the table, the value of x must be
a.less than or equal to 5
b.greater than or equal to 5
c.greater than or equal to 7
d.greater than or equal to 10