The following statement, “Every contract, combination in the form of trust or
otherwise, or conspiracy, in restraint of trade or commerce among the several states, or
with foreign nations, is hereby declared illegal,” is part of the
a. Clayton Act.
b. Sherman Act.
c. Federal Trade Commission Act.
d. Wheeler-Lea Act.
e. Celler-Kefauver Antimerger Act.
Resource X is necessary to the production of good Y. If the price of resource X falls, the
equilibrium price of Y will ______________ and the equilibrium quantity of Y will
a. rise; rise.
b. fall; fall.
c. fall; rise.
d. rise; fall.
Refer to Exhibit 3-8. A surplus exists at any price above
Exhibit 3-8
a. $2.00.
b. $4.50.
c. $4.00.
d. $3.50.
e. $3.00.
Suppose there are two labor markets, A and B, and labor is homogeneous between
markets. The wage rate in labor market A falls relative to the wage rate in labor market
B. What happens in labor market B?
a. The supply curve of labor shifts leftward.
b. The supply curve of labor shifts rightward.
c. The demand curve for labor shifts leftward.
d. b and c
e. none of the above
In which market structure is the interdependence of firms a key characteristic?
a. perfect competition
b. monopolistic competition
c. oligopoly
d. monopoly
Unlike a perfectly competitive firm, a monopolistic competitor operates in the long run
at a point at which
a. P = ATC.
b. MR = MC.
c. unit costs are not minimized.
d. profits are zero.
The profit-maximizing monopolistic competitor produces where price
a. equals marginal cost and marginal revenue.
b. is less than marginal cost and marginal revenue.
c. is greater than both marginal cost and marginal revenue.
d. equals marginal cost and is less than marginal revenue.
e. equals marginal cost and is greater than marginal revenue.
Refer to Exhibit 35-4. Under a fixed exchange rate system, at the exchange rate of E1,
the peso is __________ and there is a __________.
Exhibit 35-4
a. overvalued; surplus of dollars
b. undervalued; shortage of pesos
c. overvalued; shortage of dollars
d. undervalued; surplus of pesos
Refer to Exhibit 22-10. Marisol encounters diminishing marginal returns in hour
Exhibit 22-10
a. 2.
b. 3.
c. 4.
d. 5.
e. 6.
The present value of $10,000 one year in the future at a 5 percent interest rate is
approximately
a. $4,762.
b. $9,524.
c. $2,000.
d. $10,500.
The higher the U.S. dollar price per Mexican peso, the __________ Mexican goods are
for Americans and the __________ Mexican goods Americans will buy; thus
__________ pesos will be demanded.
a. more expensive; fewer, more
b. less expensive; more, fewer
c. more expensive; fewer, fewer
d. less expensive; fewer, more
e. none of the above
The prisoner’s dilemma game illustrates rational decisions made by individuals which
lead to a jointly efficient outcome.
a. True
b. False
The market supply curve of labor
a. slopes downward, indicating that as the wage rate falls, the quantity supplied of labor
rises.
b. slopes upward, indicating that as the wage rate rises, the quantity supplied of labor
rises.
c. is vertical, indicating that the quantity supplied of labor is independent of the wage
rate.
d. slopes upward, indicating that as the wage rate falls, the quantity supplied of labor
rises.
A demand schedule is a numerical tabulation of the ___________________ of a good at
different ____________________.
a. quantity supplied; prices
b. quantity demanded; incomes
c. quantity demanded; prices
d. quantity supplied; incomes
Refer to Exhibit 27-l. What dollar value goes in blank (A)?
Exhibit 27-1
a. $120
b. $96
c. $48
d. $35
If hot dogs are an inferior good, a decrease in income will cause the equilibrium price
of hot dogs to rise.
a. True
b. False
Logrolling consists of
a. exchanging votes to gain support for legislation.
b. spreading the costs of a piece of special interest legislation over many millions of
people.
c. attempts directed at slowing down the growth of rational ignorance.
d. increasing taxes on some people and lowering taxes on other people.
e. none of the above
Demand takes into account goods, but not services.
a. True
b. False
Which of the following statements is false?
a. A change in the price of good X will usually change the quantity supplied of good X,
ceteris paribus.
b. A change in the number of sellers of a good can change the supply of that good.
c. Price and quantity supplied are directly related.
d. A vertical supply curve represents a direct relationship between price and quantity
supplied.
Which of the following statements is true?
a. The fewer the substitute factors for union labor, the higher the elasticity of demand
for union labor, and the smaller the cutback in union labor for any given wage increase.
b. The fewer the substitute factors for union labor, the lower the elasticity of demand for
union labor, and the larger the cutback in union labor for any given wage increase.
c. The more the substitute factors for union labor, the higher the elasticity of demand for
union labor, and the smaller the cutback in union labor for any given wage increase.
d. The more the substitute factors for union labor, the higher the elasticity of demand
for union labor, and the larger the cutback in union labor for any given wage increase.
e. none of the above
Refer to Exhibit 34-9. For country Y, the opportunity cost of producing one unit of good
A is __________ unit(s) of good B.
Exhibit 34-9
a. 1.5
b. 2
c. 1/2
d. 2/3
e. 10
The reason people can’t have everything they want is because
a. people are selfish.
b. scarcity exists.
c. there is not enough economic growth in the world.
d. none of the above
A cost of resources used in production for which no actual monetary payment is made is
a(n) __________ cost.
a. tacit
b. implicit
c. covert
d. explicit