Exhibit 24-1
If the product is produced under single-price monopoly, what do profits equal at the
profit maximizing level of output?
a. area 0P1BQ1
b. area BCA
c. area P1P2CB
d. area P2CAP1
e. none of the above
If fewer cigarettes are consumed with symmetric information than asymmetric
information, it follows that
a. with asymmetric information the demand for cigarettes is lower than with symmetric
information.
b. with symmetric information the demand for cigarettes is lower than with asymmetric
information.
c. the demand for cigarettes is the same with or without asymmetric information.
d. there are more free riders with asymmetric information than symmetric information.
e. There is not enough information to answer the question.
Which of the following statements is sequentially correct?
a. Changes in marginal physical product change marginal cost, which changes average
variable and average total cost.
b. Changes in marginal cost change marginal physical product, which changes average
variable and average total cost.
c. Changes in average variable cost change marginal cost, which changes average total
cost, which changes marginal physical product.
d. Changes in average variable and average total cost change marginal cost, which
changes marginal physical product.
The opportunity cost of attending college
a. consists of the tuition costs only.
b. consists of the tuition costs plus the costs of room and board and other expenses.
c. is zero, if the student receives a scholarship that covers the costs of tuition, room and
board, and other expenses.
d. varies from person to person.
e. both b and c
Grown children fawning over an elderly parent in order to try to secure a larger
inheritance is an example of
a. rent seeking.
b. logrolling.
c. rational ignorance.
d. public choice.
If consumers prefer earlier availability of goods to later availability, they are said to
have a __________ rate of time preference.
a. positive
b. negative
c. rational
d. roundabout
e. none of the above
Which of the following is a normative macroeconomics statement?
a. The central bank should increase the nation’s money supply.
b. The increase in the nation’s money supply helped push the nation’s unemployment
rate down in the short run.
c. Ford Motor Company’s new advertising campaign ended up hurting General Motors’
sales.
d. The local government ought to spend more on recreational facilities.
Exhibit 23-3
What quantity of output should the profit-maximizing firm produce?
a. 41 units
b. 42 units
c. 44 units
d. 45 units
e. 46 units
Produced goods used as inputs for the production of other goods comprise the resource
known as
a. natural resources.
b. services.
c. capital.
d. entrepreneurship.
Exhibit 3-8
A shortage exists at any price below
a. $5.00.
b. $4.50.
c. $4.00.
d. $3.50.
e. $3.00.
Variables A and B are inversely related. If we plot A on the horizontal axis and B on the
vertical axis, the line that connects combinations of A and B in a two-variable diagram
is
a. parallel to the horizontal axis.
b. downward-sloping (left to right).
c. parallel to the vertical axis.
d. upward-sloping (left to right).
e. a or c
Logrolling refers to the
a. exchange of political favors by corporations.
b. need for the president to veto an entire bill when only certain parts of the bill are
objectionable.
c. exchange of votes to gain support for legislation.
d. a and b
e. none of the above