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Which of the following best expresses the attitude toward competition of a firm
engaged in tacit collusion with its rivals?
a. A rolling stone gathers no moss.
b. Waste not, want not.
c. Do unto others as you would have them do unto you.
d. Ask, and ye shall receive.
Average revenue is equal to
a. TR/Q.
b. (P × Q)/P.
c. TR × Q
d. All of the above are correct.
Airline deregulation has led to: (i) lower prices; (ii) a deterioration of service to isolated
communities.
a. i and ii
b. i but not ii
c. ii but not i
d. neither i nor ii
Which of the following is the best definition of openness?
a. The average of imports expressed as a share of GDP.
b. The average of goods traded in markets expressed as a share of GDP.
c. The average of imports and exports expressed as a share of GDP.
d. The average trade balance expressed as a share of GDP.
e. The average of exports expressed as a share of GDP.
Most collective bargaining situations lead to strikes.
a. True
b. False
Figure 1-1
The slope of the line in Figure 1-1 is
a. 0,5
b. 2,0
c. −0,5
d. −2,0,
Rent-seeking behavior refers to
a. the offering of goods on a for-rent rather than for-sale basis.
b. profit maximization by producers.
c. unproductive activity in the pursuit of economic profit.
d. illegal manipulation of prices.
Under perfect competition, firms are relatively ignorant of the actions of their
competitors.
a. True
b. False
For most welfare recipients, the negative income tax plan would increase incentives to
work.
a. True
b. False
Which of the following is a good example of efficient specialization and voluntary
exchange?
a. A college professor hires someone to rototill a garden for spring planting.
b. A college professor works on the engine of a car for a neighbor who is a mechanic.
c. A lawyer decides to babysit his young child and agrees to do so for others for cash.
d. A physician agrees to help a neighbor work on her income tax return in exchange for
her bookkeeping services.
The nationality of a company and a product is easily determined.
a. True
b. False
Market economies are not constrained by scarcity; only planned economies have that
problem.
a. True
b. False
A firm's AC will eventually begin to rise because
a. managers' salaries rise with output.
b. bottlenecks may be reached for some inputs.
c. MFC begins to rise near capacity.
d. the range of negative returns is reached.
Along the inelastic portion of a demand curve, the
a. change in price will always be less than the change in quantity demanded.
b. percentage change in price will be less than the percentage change in quantity
demanded.
c. change in price will always be more than the change in quantity demanded.
d. percentage change in price will be more than the percentage change in quantity
demanded.
Elasticity of demand equals the ratio of the percentage change in the price of a good to
the percentage change in the quantity demanded.
a. True
b. False
Production indifference curves generally have a positive slope.
a. True
b. False
Efficiency in output requires which of the following?
a. MC = MRP.
b. MC = MFC.
c. MC = MU.
d. MC = AVC.
Figure 5-12
In Figure 5-12, the move in the consumer equilibrium from A to B shows that
a. beer is an inferior good, but wine is a normal good.
b. wine is an inferior good, but beer is a normal good.
c. both beer and wine are normal goods.
d. both beer and wine are inferior goods.
The main instrument of control of public monopolies is the regulatory agency.
a. True
b. False
A monopolist will maximize profits by producing a quantity specified by setting
marginal revenue equal to marginal cost.
a. True
b. False
Profits account for about 30 cents out of each dollar spent on goods in the United
States.
a. True
b. False
If MU = MC = P, an economist can judge with certainty that the distribution of output is
a. fair.
b. equal.
c. unbiased.
d. efficient.
Interest is the payment for the use of funds.
a. True
b. False
