1) If the price of natural gas rises, when is the likely to be the highest?
a.immediately after the price increase
b.one month after the price increase
c.three months after the price increase
d.one year after the price increase
2) A Giffen good is a good for which
a.a decrease in the price decreases the quantity demanded.
b.the substitution effect outweighs the income effect.
c.an increase in the price decreases the quantity demanded.
d.Both a) and b) are correct.
3) A market economy cannot produce a socially desirable outcome because individuals
are motivated by their own selfish interests.
a.True
b.False
4) The following table contains some production possibilities for an economy for a
given year:
If the production possibilities frontier is bowed outward, then ? could be
a. 6000.
b. 5500.
c. 5000.
d. 4500.
5) Which of the following is the most important contributor to human capital?
a.education
b.effort
c.chance
d.physical strength
6) When a country that imports a particular good imposes an import quota on that good,
a.consumer surplus increases and total surplus increases in the market for that good.
b.consumer surplus increases and total surplus decreases in the market for that good.
c.consumer surplus decreases and total surplus increases in the market for that good.
d.consumer surplus decreases and total surplus decreases in the market for that good.
7) The following table contains a supply schedule for a good.
If the law of supply applies to this good, then Q1 could be
a.0
b.50
c.100
d.150
8) Canada’s Production Possibilities FrontierMexico’s Production Possibilities
Frontier
If Canada and Mexico switch from each country dividing its time equally between the
production of Good X and Good Y to each country spending all of its time producing
the good in which it has a comparative advantage, then total production of Good Y will
increase by
a.3 units.
b.6 units.
c.9 units.
d.12 units.
9) Figure 9-7. The figure applies to the nation of Wales and the good is cheese.
The equilibrium price and the equilibrium quantity of cheese in Wales before trade are
a.P1 and Q2.
b.P1 and Q1.
c.P0 and Q0.
d.P0 and Q1.
10) Table 7-16
The following table represents the costs of five possible sellers.
Seller Cost ($)
If each producer has one unit available for sale, and if the market equilibrium price is
$80 per unit, how much is the total producer surplus in this market?
a.$90
b.$110
c.$130
d.$140