1) When a country that imported a particular good abandons a free-trade policy and
adopts a no-trade policy,
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.
2) Which of the following could increase the supply of labor in the market for cranberry
pickers?
(i)a change in the preferences of women toward full-time work
(ii)an increase in the output price
(iii)an increase in the wages paid to apple pickers
(iv)a decrease in the wages paid to apple pickers
a.(ii) only
b.(i), (ii), and (iv) only
c.(i) and (iv) only
d.(ii) and (iii) only
3) Suppose a certain firm is able to produce 165 units of output per day when 15
workers are hired. The firm is able to produce 181 units of output per day when 16
workers are hired, holding other inputs fixed. The marginal product of the 16th worker
is
a.10 units of output.
b.11 units of output.
c.16 units of output.
d.181 units of output.
4)
Point K represents an outcome in which
a.production is inefficient.
b.some of the economy’s resources are unemployed.
c.the economy is using all of its resources to produce hammers.
d.the economy is using all of its nails to produce hammers.
5) The demand schedule below pertains to sandwiches demanded per week.
Suppose Harry, Darby, and Jake are the only demanders of sandwiches. Also suppose
the following:
€¢ x = 2
€¢The current price of a sandwich is $5.00.
€¢The market quantity supplied of sandwiches is 10.
€¢The law of supply applies to the supply of sandwiches.
Then there is a
a.shortage of 5 sandwiches, and the price would be expected to rise from its current
level of $5.00.
b.shortage of 5 sandwiches, and the price would be expected to fall from its current
level of $5.00.
c.surplus of 5 sandwiches, and the price would be expected to rise from its current level
of $5.00.
d.surplus of 5 sandwiches, and the price would be expected to fall from its current level
of $5.00.
6) The Sherman Antitrust Act was passed in
a. 1836.
b. 1890.
c. 1914.
d. 1946.
7) Which of the following would be considered an investment in human capital?
a.education
b.a teacher’s blackboard
c.the purchase of a new computer to enhance labor productivity
d.All of the above are correct.
8) A local park filled with picnickers is
a.excludable and rival in consumption.
b.excludable and not rival in consumption.
c.not excludable and rival in consumption.
d.not excludable and not rival in consumption.
9) Lisa’s Production Possibilities FrontierBryce’s Production Possibilities Frontier
Birdhouses
At what quantity does Bill maximize profits?
a.3
b.6
c.7
d.8
12) For a particular competitive firm, the minimum value of average variable cost
(AVC) is $12 and is reached when 200 units of output are produced. For the same firm,
the minimum value of average total cost (ATC) is $15 and is reached when 230 units of
output are produced. Which of the following statements is correct?
a.In the short run, the firm will shut down if the price of its product is $11.
b.In the long run, the firm will shut down if the price of its product is $14.
c.If the price of its product is $12, then the firm‘s loss if it produces 200 units of output
is the same as its loss if
it shuts down.
d.All of the above are correct.
13) In the simple circular flow diagram, the flow of money from the markets for goods
and services to the firms is called
a.spending.
b.revenue.
c.income.
d.wages, rent, and profit.
14) Figure 16-9
The figure is drawn for a monopolistically-competitive firm.
As the figure is drawn, the firm is in
a.a short-run equilibrium but it is not in a long-run equilibrium.
b.a long-run equilibrium but it is not in a short-run equilibrium.
c.a short-run equilibrium as well as a long-run equilibrium.
d.neither a short-run equilibrium nor a long-run equilibrium.
15) Scenario 17-5
Assume that a local restaurant sells two items, salads and steaks. The restaurant’s only
two customers on a particular day are Mr. Carnivore and Ms. Leafygreens. Mr.
Carnivore is willing to pay $20 for a steak and $7 for a salad. Ms. Leafygreens is
willing to pay only $8 for a steak, but is willing to pay $12 for a salad. Assume that the
restaurant can provide each of these items at zero marginal cost.
Refer to Scenario 17-5. If the restaurant is unable to use tying, what is the
profit-maximizing price to charge for a steak?
a.$20
b.$16
c.$12
d. $8
16) Consider the market for portable air conditioners in equilibrium. A summer of
unseasonably cool weather would cause
a.both the equilibrium price and quantity to decrease.
b.both the equilibrium price and quantity to increase.
c.the equilibrium price to increase and the equilibrium quantity to decrease.
d.the equilibrium price to decrease and the equilibrium quantity to increase.
17) When one person enjoys the benefit of a tornado siren, she reduces the benefit to
others.
a.True
b.False
18) In a competitive market, the quantity of a product produced and the price of the
product are determined by
a.buyers.
b.sellers.
c.both buyers and sellers.
d.None of the above is correct.
19) The Coase theorem suggests that taxes should be enacted to alleviate the effects of
negative externalities.
a.True
b.False
20) When a tax is imposed on sellers, consumer surplus and producer surplus both
decrease.
a.True
b.False