1) State and local governments generate revenue from all of the following sources
except
a.sales taxes.
b.the federal government.
c.corporate income taxes.
d.customs duties.
2) Suppose a tax of $4 per unit is imposed on a good, and the tax causes the equilibrium
quantity of the good to decrease from 2,000 units to 1,700 units. The tax decreases
consumer surplus by $3,000 and decreases producer surplus by $4,400. The deadweight
loss of the tax is
a. $200.
b. $400.
c. $600.
d. $1,200.
3)
Using the midpoint method, between prices of $70 and $80, is
a. 0.33
b. 0.4
c. 1.33
d. 3
4) In the short run for a particular market, there are 5,000 firms. Each firm has a
marginal cost of $7 when it produces 200 units of output. One point on the market
supply curve is
a.quantity = 5,000; price = $7.
b.quantity = 35,000 price = $35,000.
c.quantity = 1,000,000, price = $7.
d. quantity = 1,000,000, price = $35,000.
5) Table 17-9
The table shows the demand schedule for a particular product.
Refer to Table 17-9. Suppose the market for this product is served by two firms that
have formed a cartel. If the marginal cost of production is $4 and the fixed cost is $6,
the combined profit of the cartel will be
a.$6
b.$12
c.$24
d.$32
6) Liberalism suggests that public policies should aim to
a.maximize the sum of utility of everyone in society.
b.maximize the well-being of the average person in society.
c.maximize the well-being of the worst-off person in society.
d.minimize the difference between the utility of the best-off person in the society and
the utility of the worst-off person in society.
7) Minimum wage laws result in unemployment is a normative statement, while the
minimum wage should be higher is a positive statement.
a.True
b.False
8)
Assume, for the good in question, two specific points on the demand curve are (Q =
1,000, P= $40) and (Q = 1,500, P = $30). Then which of the following scenarios is
possible?
a.Both of these points lie on the section of the demand curve from B to C.
b.The vertical intercept of the demand curve is the point (Q = 0, P = $60).
c.The horizontal intercept of the demand curve is the point (Q = 1,800, P = $0).
d.Any of these scenarios is possible.
9) Figure 10-15
The supply of pollution permits is
a.elastic and represented by line A.
b.inelastic and represented by line A.
c.elastic and represented by line F
d.inelastic and represented by line F.
10) Figure 21-26
Refer to Figure 21-26. Rhonda experiences an increase in her hourly wage. Her optimal
choice point moves from A to B. For Rhonda,
a.her labor supply curve is backward bending.
b.her labor supply curve is upward sloping.
c.leisure is a normal good.
d.both a and c are correct.
11) Which of the following is not held constant when looking at an individual’s demand
curve?
a.income
b.price
c.preferences
d.the availability of alternative goods
12) An income distribution may not give an accurate picture of the standard of living
for the poor because it does not include in-kind transfers.
a.True
b.False
13) If the market consists of Michelle and Hillary only and the price falls by $1, the
quantity demanded in the market increases by
a.2 units.
b.3 units.
c.4 units.
d.5 units.
14) If Korea is capable of producing either shoes or soccer balls or some combination
of the two, then
a.Korea should specialize in the product in which it has an absolute advantage.
b.it would be impossible for Korea to have an absolute advantage over another country
in both products.
c.it would be difficult for Korea to benefit from trade with another country if Korea is
efficient in the production of both goods.
d.Korea’s opportunity cost of shoes is the inverse of its opportunity cost of soccer balls.
15) A circular-flow diagram is a visual model of the economy.
a.True
b.False