One implication of the median voter model is that candidates running for political office
take polls because
a. everyone does it.
b. they want to know if they should maintain their current positions or modify them.
c. it is good public relations, since if the public learns that the candidate is taking polls,
the public will feel that the candidate cares what it thinks.
d. taking polls is tax deductible.
e. none of the above
Which of the following statements is true?
a. The market demand for labor is the horizontal “addition” of the firms’ demand curves
for labor.
b. The elasticity of demand for labor is the percentage change in quantity demanded of
labor divided by the percentage change in wage rate.
c. The factor demand curve will shift to the right if the price rises for the good the factor
goes to produce.
d. b and c
e. a, b, and c
Exhibit 3-11
Fill in blanks (A) and (B) respectively with “Exchange” or “No Exchange” to indicate
whether or not exchange would take place at the given prices.
a. Exchange; Exchange
b. Exchange; No Exchange
c. No Exchange; Exchange
d. No Exchange; No Exchange
Exhibit 5-1
which shows supply and demand for freeway space at both 8 a.m. and 11 p.m. Which
toll creates equilibrium at 11 p.m.?
a. P2
b. P1
c. 0
d. It is not constant.
What value goes in blank (D)?
a. 47
b. 15
c. 35
d. 60
e. There is not enough information to answer this question.
In what sense are profit and loss signals?
a. They signal resources where to move.
b. They signal what goods consumers may want to buy and what goods they may not
want to buy.
c. They are important for government and business accounting procedures.
d. a and b
If the marginal cost (MC) curve is rising and is above the average fixed cost (AFC)
curve, then
a. the AFC curve is rising.
b. the AFC curve is declining, although the MC curve has nothing to do with this.
c. the AFC curve is at its minimum point.
d. the AFC curve is at its maximum point.
e. Nothing certain can be said about the AFC curve without additional information.
Which of the following statements is true?
a. As interest rates increase, present values increase.
b. Pure economic rent is a payment to a monopolist for the monopolist’s product.
c. Ricardo argued that land rent is price determined, not price determining.
d. The present value of $10,000 in one year, at a 6 percent interest rate, is $9,200.
e. none of the above
If there are five firms in an industry and the market shares of the firms are 40 percent,
22 percent, 20 percent, 16 percent and 2 percent.The four-firm concentration ratio for
this industry is __________________ percent and the Herfindahl Index is
________________.
a. 90; 3,300
b. 98; 2,506
c. 98; 2,744
d. 86; 9,216
e. This cannot be determined from the data given.
Studies show that, in the United States,
a. price elasticity of demand for agricultural products has hovered around 3.2 for many
years.
b. as real income has been increasing, the per-capita demand for food has been
decreasing.
c. as real income has been increasing, the per-capita demand for food has been
increasing by much more.
d. none of the above
If new legislation allowed patients to sue their health-maintenance organization (HMO),
we would expect the supply curve for HMO-provided health care to shift to the right
and the price of such coverage to fall.
a. True
b. False
If an industry is in long-run competitive equilibrium and experiences a decrease in
demand, then as a result the equilibrium price will __________, which will cause the
representative firm’s __________ curve to shift downward and some firms will
__________ the industry.
a. rise; marginal cost; enter
b. fall; marginal cost; enter
c. rise; marginal revenue; enter
d. fall; demand; exit
e. fall; marginal cost; exit
Exhibit 39-4
If the government sets a target price at $5 per bushel, the quantity of wheat produced
will be
a. 600 bushels.
b. 700 bushels.
c. 800 bushels.
d. 900 bushels.
e. 1,000 bushels.