The environmental approach found in the Clean Air Act of 1990 is:
a. marketable pollution permits. c. command-and-control regulation.
b. price caps. d. a thousand points of light.
The costs of an economic activity borne by the producers are:
a. always less than social costs.
b. the full resource costs of an economic activity.
c. private costs.
d. all of these.
Which of the following would be a human capital investment?
a. On-the-job training programs.
b. Health care programs.
c. Formal education.
d. All of these.
Karl Marx was a(n):
a. 19th century German philosopher. c. 14th century Polish banker.
b. 18th century Russian economist. d. 19th century Russian journalist.
Which of the following would be expected if the tariff on foreign-produced automobiles
were increased?
a. The domestic price of automobiles would fall.
b. The supply of foreign automobiles to the domestic market would decline, causing
auto prices to rise.
c. The number of unemployed workers in the domestic automobile industry would rise.
d. The demand for foreign-produced automobiles would increase, causing the price of
automobiles to increase in other nations.
Economic profit is:
a. always less than zero.
b. never less than accounting profit.
c. less than accounting profit if implicit costs are zero.
d. less than accounting profit if implicit costs are greater than zero.
In Exhibit 9-3, how much vaccine should GeneTech produce to maximize its profit?
a. 300 doses per hour.
b. 400 doses per hour.
c. negative.
d. 500 doses per hour.
According to the statistics, the distribution of money income:
a. fluctuated widely since 1947.
b. changed significantly in favor of the bottom 5 percent.
c. has not changed greatly since 1947.
d. has not changed greatly since 1929.
Suppose a consumer wants to obtain the highest possible satisfaction from goods
purchased on a fixed budget. Which of the following must be equal for all goods?
a. Total utility.
b. Marginal utility.
c. Average utility.
d. Marginal utility per dollar.
Which of the following is a basic question answered by an economic system?
a. for whom goods and services are produced.
b. how goods and services are produced.
c. what goods and services are produced.
d. all of these.
The official poverty line is defined as:
a. one-half the average family income.
b. one-third the average family income.
c. three times the cost of a minimal food requirement.
d. two times the cost of a minimal food requirement.
Which of the following does not result in a change in the demand for foreign currency?
a. c and d.
b. changes in income.
c. changes in foreign currency supply.
d. changes in the foreign exchange rate.
e. changes in the interest rate.
According to the law of supply:
a. producers are willing to supply larger amounts of a good as its price increases.
b. a direct relationship exists between the price of a good and the amount buyers choose
to buy.
c. an inverse relationship exists between the price of a good and the amount buyers
wish to buy.
d. an inverse relationship exists between the price of a good and the amount producers
supply.
Which of the following best explains why a firm in a perfectly competitive market must
take the price determined in the market?
a. The short-run average total costs of firms that are price takers will be constant.
b. If a price taker increased its price, consumers would buy from other suppliers.
c. Firms in a price-taker market will have to advertise in order to increase sales.
d. There are no good substitutes for the product supplied by a firm that is a price taker.
Exhibit 4-1 Supply and demand data
Exhibit 4-1 shows that at a price of $3.00,
a. the market is in equilibrium.
b. there will be excess quantity demanded.
c. there will be excess quantity supplied.
d. there is a price ceiling in effect.
Consumers always ____ indifference curves that are farther from the origin.
a. reject
b. cross
c. prefer
d. maximize
An apple orchard currently hires 10 workers. The owner estimates that hiring an
additional worker would increase apple yields by 20 bushels per day. The price of
apples is $15 per bushel. The owner should hire the extra worker if the wage rate is no
greater than:
a. $50 per day.
b. $150 per day.
c. $200 per day.
d. $300 per day.
When marginal cost is below average total cost:
a. total cost is falling.
b. total cost is rising.
c. average total cost is falling.
d. average fixed cost is rising.
e. total variable cost is falling.
The slope of a line parallel to the horizontal axis is:
a. 1.
b. 0.
c. infinite.
d. undefined.
Suppose a state discovered chemical compounds in their water. The source of these
chemicals is the waste discharges of industrial plants in another state. This is an
example of a(n):
a. market failure where the market price of the output of these industrial plants does not
fully reflect the social cost of producing these goods.
b. external cost imposed by the industrial plants of another state.
c. externality where the marginal social costs of producing these industrial goods differ
from the marginal private costs.
d. all of these.
A union may negotiate limits on workload in order to increase the demand for labor and
raise workers’ salaries. This practice is known as:
a. featherbedding.
b. human capital formation.
c. monopsonistic bargaining.
d. artificial demand stimulus.
Which of the following statements is true?
a. A tariff is a physical limit on the quantity of a good allowed to enter a country.
b. An embargo is a tax on an imported good.
c. A quota is a law that bars trade with another country.
d. When a nation exports more than it imports it is running a balance of trade surplus.
Exhibit 7-17 Long-run average cost curve
In Exhibit 7-17, economies of scale exist up to:
a. Q1 units of output per week.
b. Q2 units of output per week.
c. Q3units of output.
d. Q4 units of output.
Which one of the following is a positive economic statement?
a. An increase in the minimum wage will reduce employment for teenagers.
b. The minimum wage should be increased.
c. Social justice will be served by increasing the minimum wage.
d. Thoughtful people oppose an increase in the minimum wage.
A merger between McDonald’s and Burger King would be called a:
a. horizontal merger.
b. vertical merger.
c. conglomerate merger.
d. cartel.
e. game theory.
Most industrialized nations today use a gold standard to establish exchange rates.
Unemployment or underemployment of labor might explain why an economy would be
operating inside its production possibilities curve (PPC).
A normative economic statement can be proven either true or false.
An improvement in technology that increases the marginal product will shift the
demand for labor curve to the right.
Economists most often disagree over positive rather than normative economic issues.
Combating the “greenhouse effect” does not create classic free-rider problems.
What are the benefits and costs to a nation that participates in international trade? Do
the benefits outweigh the costs or do the costs outweigh the benefits?
Policies to increase the supply of money in the economy are primarily a concern of
microeconomics.