1) Economists at the U.S. Department of Justice help enforce the nation’s antitrust laws.
a.True
b.False
2) Figure 14-14
Suppose a firm in a competitive market, like the one depicted in panel (a), observes
market price rising from P1 to P2. Which of the following could explain this
observation?
a.The entry of new firms into the market.
b.The exit of existing consumers from the market.
c.An increase in market supply from S0 to S1.
d.An increase in market demand from D0 to D1.
3) When a good is excludable,
a.one person’s use of the good diminishes another person’s ability to use it.
b.people can be prevented from using the good.
c.no more than one person can use the good at the same time.
d.everyone will be excluded from using the good.
4) Table 22-9
Voter Type
Refer to Table 22-9. The table shows the preferences of four types of voters over four
possible outcomes: A, B, C, and D. In addition, the table shows the percentage of voters
of each type. Suppose that, for some reason, D is eliminated as a possible option. Using
a Borda count election, with 3 points for the best choice, 2 points for the second best
choice, and 1 point for the last choice, which outcome would win this election?
a.A
b.B
c.C
d.There would be a three-way tie.
5) If Darby values a soccer ball at $50, and she pays $40 for it, her consumer surplus is
$90.
a.True
b.False
6)
It is possible for this economy to produce
a.60 dryers and 50 washers.
b.60 dryers and 60 washers.
c.80 dryers and 50 washers.
d.All of the above.
7) The United States has a more equal income distribution than many developing
economies such as Mexico, South Africa, and Brazil.
a.True
b.False
8) Which of the following does not explain the “beauty premium” differences in wages?
a.Better-looking people are preferred by customers; thus, employers will pay them
higher wages than average- looking people.
b.Beauty may be an indirect measure of other abilities that employers value.
c.Average-looking people are preferred by customers; thus, employers will pay them
higher wages than better- looking people.
d.Employers discriminate in favor of better-looking people.
9) Table 22-4
The fortunate residents of Anytown have a budget surplus. The mayor decided that it is
only fair to have the residents vote on what to do with the surplus. The mayor has
narrowed the options down to three possible projects: a playground, a library, or a
swimming pool. The voters fall into three categories and have preferences as illustrated
in the table.
Refer to Table 22-4. If the mayor asks the residents to choose between the library and
the swimming pool using pairwise voting,
a.the library wins by 30%.
b.the library wins by 65%.
c.the swimming pool wins by 10%.
d.the swimming pool wins by 35%.
10) Part of the deadweight loss from taxing labor earnings is that people
a.will work more.
b.will be reluctant to hire accountants to file their tax returns.
c.with low tax liabilities will universally be worse off than under some other tax policy.
d.will work less.
11) A likely effect of government policies that redistribute income and wealth from the
wealthy to the poor is that those policies
a.enhance equality.
b.reduce efficiency.
c.reduce the reward for working hard.
d.All of the above are correct.
12) The belief that tobacco is a “gateway drug” is consistent with
a.the idea that tobacco and marijuana are substitutes.
b.the idea that an increase in income causes a decrease in the demand for tobacco and
an increase in the demand for marijuana.
c.the idea that lower cigarette prices are associated with less use of marijuana.
d.most of the available evidence.
13) If income decreases and prices are unchanged, the consumer’s budget constraint
a.remains the same.
b.shifts outward.
c.shifts inward.
d.rotates outward along the horizontal axis.
14) The opportunity cost of an item is
a.the number of hours needed to earn money to buy the item.
b.what you give up to get that item.
c.usually less than the dollar value of the item.
d.the dollar value of the item.
15) For a monopoly firm, which of the following equalities is always true?
a.price = marginal revenue
b.price = average revenue
c.price = total revenue
d.marginal revenue = marginal cost
16) The enclosure movement in England in the 17th century represented an attempt to
transform
a.a public good into a private good.
b.a private good into a public good.
c.a private good into a common resource.
d.a common resource into a private good.
17) Scenario 18-4
In 1997, Albania experienced a civil war. The civil unrest sent thousands of refugees
across the Adriatic Sea to Italy where they sought relief from the fighting.
Refer to Scenario 18-4. The Italian government started to patrol the Adriatic Sea and
had a policy of returning all refugees to Albania. This policy would contribute to
a.an increase in the supply of labor in Italy.
b.an increase in the demand labor in Italy.
c.a decrease in the demand for labor in Italy.
d.preventing an increase in the supply of labor in Italy.
18) Which of the following is an example of labor-market discrimination? You may
assume that worker A and worker B have identical characteristics except for the ones
listed. A firm offers a higher salary to worker A than worker B because worker A
a.has more experience.
b.is willing to travel two weeks out of each month, whereas worker B will not travel
more than three nights a month.
c.has a special certification that directly relates to her job, whereas worker B does not.
d.is a young blonde woman, whereas worker B is an older, gray-haired man.