Figure 13-2
The marginal revenue from selling the additional unit Qinstead of Qa equals
A) the area (G + H).
B) the area (H – E).
C) the area (E + F) – (G + H).
D) the area G.
In England during the Middle Ages each village had an area of pasture on which any
family in the village was allowed to graze its cows and sheep without charge.
Eventually, the grass in the pasture would be depleted and no family’s cow or sheep
would get enough to eat. The reason the grass was depleted was
A) the area of pasture was nonexcludable and the consumption of the grass was rival.
B) self-interest motives led livestock owners to raise too many cows and sheep.
C) due to a policy of neglect on the part of the English government.
D) it did not get enough rainfall.
If prices are rising on average, then
A) real GDP will always be equal to nominal GDP.
B) real GDP will be greater than nominal GDP in the years after the base year.
C) real GDP will be less than nominal GDP in the years before the base year.
D) real GDP will be greater than nominal GDP in the years before the base year.
If fixed costs do not change, then marginal cost
A) also remains constant.
B) equals the change in variable cost divided by the change in output.
C) equals the change in average variable cost divided by the change in output.
D) equals the change in average fixed cost divided by the change in output.
Globalization is defined as the process of countries becoming ________ open to foreign
trade and ________ open to foreign investment.
A) more; less
B) more; more
C) less; more
D) less; less
In 2008, Zimbabwe ran out of locally produced Coca Cola and local Coke bottlers were
not able to import the concentrated syrup needed to make Coke from the United States
because they could not obtain U.S. dollars. A small amount of Coke was imported from
South Africa, but a single bottle sold for around 15 billion Zimbabwean dollars.
Zimbabwe was experiencing rapid increases in the price level, which is known as
A) stagflation.
B) deflation.
C) inflation.
D) hyperinflation.
All of the following are ways in which health insurance companies can potentially
reduce adverse selection except
A) by insuring only large groups of people.
B) by lowering the co-payments and deductibles on the policies they issue.
C) by refusing to insure some applicants, for example based on prior health conditions.
D) by finding out as much information about a person applying for insurance, for
example requiring a medical examination.
Table 17-2
The marginal profit from hiring the second unit of labor is
A) $4,200.
B) $1,960.
C) $1,800.
D) $1,450.
Table 6-2
Assume that an economist has estimated the price elasticity of demand values in the
table above. Use the data in the table to select the correct statement.
A) The demand for Coca-Cola is inelastic.
B) The elasticity for “All soft drinks” is less than the elasticity for Coca-Cola because
Coca-Cola is more of a luxury than a necessity; “All soft drinks” represents goods that
are more necessity than luxury.
C) The Difference in elasticity values is explained by the fact that the more narrowly we
define a market, the more elastic the demand will be.
D) There are fewer substitutes for “All carbonated soft drinks” than there are for “All
soft drinks.”
________ of unemployment during ________ make it easier for workers to ________
wages.
A) High levels; a recession; negotiate higher
B) Low levels; an expansion; negotiate higher
C) Low levels; a recession; accept lower
D) High levels; an expansion; accept lower
Which of the follow is a result of imposing a rent ceiling?
A) Some consumer surplus is converted to producer surplus.
B) There is an increase in the quantity of apartments supplied.
C) There is an increase in the quantity of apartments demanded.
D) The marginal benefit of the last apartment rented is less than the marginal cost of
supplying it.
Cross-price elasticity of demand is calculated as the
A) percentage change in quantity demanded divided by percentage change in price of a
good.
B) percentage change in quantity demanded of one good divided by percentage change
in price of a Different good.
C) percentage change in quantity sold divided by percentage change in buyers’ incomes.
D) percentage change in quantity supplied divided by percentage change in price of a
good.
Nike has used Michael Jordan to create the impression that Air Jordan basketball shoes
are superior to any other basketball shoes. Nike is attempting to
A) differentiate Air Jordan basketball shoes from other types of basketball shoes.
B) lower the marginal cost of producing Air Jordan basketball shoes.
C) increase its profit by raising the price of Air Jordan basketball shoes.
D) convince consumers that Air Jordan basketball shoes are no different from other
basketball shoes favored by celebrities.
Calling long distance is often more expensive on weekdays between 8 am and 5 pm
than in the evening hours. Why is this the case?
A) Telephone companies hope to discourage customers from calling long distance
during the day to keep their labor costs down.
B) The cost of making long-distance connections is higher during the day than in the
evenings.
C) Businesses who must call suppliers or customers during business hours have few
alternatives and therefore have an inelastic demand during the workday compared to
after-work hours.
D) Increasingly, businesses who must call suppliers or customers during business hours
resort to the internet, thereby reducing demand for long-distance calls. To make up for
this fall in demand, telephone companies charge higher rates.
In economics, activities done for others, such as providing house cleaning or dental
work, are referred to as
A) technology.
B) physical capital.
C) services.
D) goods.
Figure 10-5
Suppose the price of pizza increases while the price of hamburger remains constant.
Then, the consumer’s
A) indifference curve becomes more concave away from the origin.
B) indifference curve becomes straighter.
C) budget constraint moves inward toward the origin on the pizza axis while the
hamburger intercept remains the same.
D) budget constraint moves outward away from the origin on the pizza axis while the
hamburger intercept remains the same.
A stock’s dividend yield is determined by
A) dividing the dividend payment by the stock’s initial price.
B) dividing the dividend payment by the stock’s closing market price.
C) dividing the stock’s closing market price by the dividend payment.
D) subtracting the stock’s initial purchase price from the stocks’ closing market price on
a given day.