1) The most important tax in the U.S. economy is the tax on corporations’ profits.
a.True
b.False
2) Which of these instances would constitute labor-market discrimination? Henry
receives a higher wage than Ryan.
Henry and Ryan are identical in all of their labor-market characteristics except that
a.Henry is a college graduate, and Ryan has only a high school diploma.
b.Henry has 10 years of experience at his job, whereas Ryan has only five years of
experience.
c.Henry is white and Ryan is Black.
d.by objective measures Henry consistently outperforms Ryan.
3) Cold Duck Airlines flies between Tacoma and Portland. The company leases planes
on a year-long contract at a cost that averages $600 per flight. Other costs (fuel, flight
attendants, etc.) amount to $550 per flight. Currently, Cold Duck‘s revenues are $1,000
per flight. All prices and costs are expected to continue at their present levels. If it
wants to maximize profit, Cold Duck Airlines should
a.drop the flight immediately.
b.continue the flight.
c.continue flying until the lease expires and then drop the run.
d.drop the flight now but renew the lease if conditions improve.
4)
Which of the following items is not a clear-cut example of the type of good represented
by Box A?
a.a mobile phone
b.a garden of blooming flowers
c.a candy bar
d.a stapler
5) Table 12-7
The following table shows the marginal tax rates for unmarried individuals for two
years.
For an individual who earned $35,000 in taxable income in both years, which of the
following
describes the change in the individual’s average tax rate between the two years?
a.The average tax rate increased from 2009 to 2010.
b.The average tax rate decreased from 2009 to 2010.
c.The average tax rate remained constant from 2009 to 2010.
d.The change in the average tax rate cannot be determined for the two tax schedules
shown.
6) Table 15-19
A monopolist faces the following demand curve:
If a monopolist faces a constant marginal cost of $5, how much output should the firm
produce in order to equate marginal revenue with marginal cost?
a.3 units
b.4 units
c.5 units
d.6 units
7) Suppose goods A and B are substitutes for each other. We would expect the
cross-price elasticity between these two goods to be
a.positive.
b.negative.
c.either positive or negative. It depends whether A and B are normal goods or inferior
goods.
d.either positive or negative. It depends whether the current price level is on the elastic
or inelastic portion of the demand curve.
8) Uzbekistan’s Production Possibilities FrontierAzerbaijan’s Production
Possibilities Frontier
If Uzbekistan and Azerbaijan each divides its time equally between making bolts and
making nails, then total production is
a.15 bolts and 40 nails.
b.25 bolts and 70 nails.
c.30 bolts and 80 nails.
d.50 bolts and 140 nails.
9) Suppose that Makemoney Movies produces two new films € The Hulk and The
Piano. Makemoney offers theaters the two films together at a single price but will not
supply the movies separately. What do economists call this business practice?
a.predatory pricing
b.resale price maintenance
c.tying
d.leverage
10) Peru’s Production Possibilities Frontier
Suppose Peru decides to increase its production of emeralds by 2. What is the
opportunity cost of this decision?
a.30 rubies
b.40 rubies
c.60 rubies
d.120 rubies
11) Table 14-9
Suppose that a firm in a competitive market faces the following revenues and costs:
In order to maximize profit, the firm will produce a level of output where marginal cost
is equal to
a.$6.
b.$7.
c.$8.
d.$9.
12) Assume that England and Spain can switch between producing cheese and
producing bread at a constant rate.
Spain should export
a.cheese and import bread.
b.bread and import cheese.
c.both goods and import neither good.
d.neither good and import both goods.