1) Refer to Figure 9-15. With the tariff, the quantity of saddles imported is
a.Q3 – Q1.
b.Q3 – Q2.
c.Q4 – Q1.
d.Q4 – Q2.
2) Table 13-6
Wooden Chair Factory
Assume the Wooden Chair Factory currently employs 2 workers. What is the marginal
product of labor when the factory adds a 3rd worker?
a.5 chairs per hour
b.10 chairs per hour
c.20 chairs per hour
d.25 chairs per hour
3) You know an economist has crossed the line from scientist to policy adviser when he
or she
a.claims that the problem at hand is widely misunderstood by non-economists.
b.talks about the evidence.
c.makes normative statements.
d.makes a claim about how the world is.
4) Figure 15-4
If the monopoly firm is currently producing Q3 units of output, then a decrease in
output will necessarily cause profit to
a.remain unchanged.
b.decrease.
c.increase as long as the new level of output is at least Q2.
d.increase as long as the new level of output is at least Q1.
5) Suppose the country of Mankiwland has a new king, King Gregory. For the purpose
of efficiency King Gregory’s chief economic advisor would encourage him to design his
country’s tax system to minimize
(i)deadweight losses from taxes.
(ii)administrative burdens from taxes.
(iii)the tax payments themselves.
(iv)government expenditures to correct for market failures.
a.(i) only
b.(i) and (ii) only
c.(iii) and (iv) only
d.(i), (ii), (iii), and (iv)
6) Figure 7-13
If the equilibrium price rises from $60 to $120, what is the additional producer surplus
to initial producers in the market?
a. $1,200
b. $2,400
c. $3,600
d. $4,800
7) Vertical equity and horizontal equity are associated with
a.the benefits principle of taxation.
b.the ability-to-pay principle of taxation.
c.taxes that have no deadweight losses.
d.falling marginal tax rates.
8) Which of these activities will most likely result in an external benefit?
a.Ted purchases a dilapidated house and cleans up the yard and exterior of the house.
b.Tim purchases an iPhone and downloads new apps.
c.Terri purchases a new SUV and drives it to work every day.
d.Thomas purchases a suit and wears it on his interviews.
9) U.S. laws requiring that drivers wear seat belts have resulted in
a.a reduction in both driver deaths and pedestrian deaths.
b.fewer accidents and fewer deaths per accident.
c.fewer driver deaths, fewer accidents and fewer pedestrian deaths.
d.little change in the number of driver deaths, but more accidents and more pedestrian
deaths.
10) Jack and Diane each buy pizza and paperback novels. Pizza costs $3 per slice, and
paperback novels cost $5 each. Jack has a budget of $30, and Diane has a budget of $15
to spend on pizza and paperback novels. Which consumer(s) can afford to purchase 5
slices of pizza and 3 paperback novels?
a.Jack only
b.Diane only
c.both Jack and Diane
d.neither Jack nor Diane
11) Which of the following should be held constant when calculating an income
elasticity of demand?
a.the quantity of the good demanded
b.the price of the good
c.income
d.All of the above should be held constant.
12) Mr. Rogers sells colored pencils. The colored-pencil industry is competitive. Mr.
Rogers hires a business consultant to analyze his company‘s financial records. The
consultant recommends that Mr. Rogers increase his production.
The consultant must have concluded that Mr. Roger‘s
a.total revenues equal his total economic costs.
b.marginal revenue exceeds his total cost.
c.marginal revenue exceeds his marginal cost.
d.marginal cost exceeds his marginal revenue.
13) A study that compares the costs and benefits to society of providing a public good is
called externality analysis.
a.True
b.False
14) Scenario 15-4
Suppose a monopolist has a demand curve that can be expressed as P=90-Q. The
monopolist’s marginal revenue curve can be expressed as MR=90-2Q. The monopolist
has constant marginal costs and average total costs of $10.
The profit-maximizing monopolist will charge a price of
a. $50.
b.$40.
c.$20.
d.$10.
15) Panel (a)
Panel (a) shows which of the following?
a.an increase in demand and an increase in quantity supplied
b.an increase in demand and an increase in supply
c.an increase in quantity demanded and an increase in quantity supplied
d.an increase in quantity demanded and an increase in supply
16) Scenario 19-1
Ferris B., a student at a community college, is considering what he should do for
summer employment. Two recruiters show up at his school in search of summer
workers. Recruiter A is looking for lifeguards to patrol the beach at an exclusive island
resort in the Caribbean. Recruiter B is looking for workers to staff positions at a
summer youth camp.
Refer to Scenario 19-1. Ferris is carefully considering the options that each recruiter
presents. On the basis of knowledge obtained in his economics class, Ferris concludes
that
a.wages are unlikely to be affected by job requirements.
b.since the lifeguard job would expose him to a threat of skin cancer, the wage will be
low.
c.if the lifeguard job has a requirement for special training or certification, the wage
offer will be higher than otherwise.
d.if the lifeguard job also requires a willingness to clean public restrooms, the wage
offer will be lower than otherwise.
17) Negative externalities lead markets to produce
a.greater than efficient output levels and positive externalities lead markets to produce
smaller than efficient output levels.
b.smaller than efficient output levels and positive externalities lead markets to produce
greater than efficient output levels.
c.greater than efficient output levels and positive externalities lead markets to produce
efficient output levels.
d.efficient output levels and positive externalities lead markets to produce greater than
efficient output levels.