1) Congress relies on economists at the Congressional Budget Office to
a.enforce the nation’s antitrust laws.
b.set the nation’s monetary policy.
c.provide evidence that incumbent members of Congress are performing well in their
jobs.
d.provide independent evaluations of policy proposals.
2) Figure 15-1
The shape of the average total cost curve in the figure suggests an opportunity for a
profit- maximizing monopolist to take advantage of
a.economies of scale.
b.diseconomies of scale.
c.diminishing marginal product.
d.increasing marginal cost.
3) Which of the following is an example of a compensating differential?
a.paying workers with more years of experience higher wages than workers with fewer
years of experience, all else equal
b.paying workers who work on the day shift lower wages than workers who work the
night shift, all else equal
c.paying accountants who have passed the Certified Public Accountant exam higher
wages than accountants who have not passed it, all else equal
d.All of the above are examples of compensating differentials.
4) Assume, for England, that the domestic price of wine without international trade is
higher than the world price of wine. This suggests that, in the production of wine,
a.England has a comparative advantage over other countries and England will export
wine.
b.England has a comparative advantage over other countries and England will import
wine.
c.other countries have a comparative advantage over England and England will export
wine.
d.other countries have a comparative advantage over England and England will import
wine.
5) The size of the deadweight loss generated from a tax is affected by the
a.elasticities of both supply and demand.
b.elasticity of demand only.
c.elasticity of supply only.
d.total revenue collected by the government.
6) Scenario 22-4
Three members of the DiCarlo family, Vinny, Maria, and Franki, are choosing the
entree for a large family reunion. Their options are: spaghetti, ravioli, lasagne, and
pizza. Vinny prefers spaghetti over lasagne, lasagne over ravioli, and ravioli over pizza.
Maria prefers ravioli over spaghetti, spaghetti over pizza, and pizza over lasagne.
Frankie prefers pizza over ravioli, ravioli over lasagne, and lasagne over spaghetti.
Refer to Scenario 22-4. Vinny recommends using a vote by majority rule and wants to
be sure that his first choice becomes the winner. Which order should he should propose
to use for pairwise voting to ensure his desired outcome?
a.first choosing between ravioli and spaghetti, then choosing between the winner of the
first vote and pizza, and finally choosing between the winner of the second vote and
lasagne
b.first choosing between pizza and spaghetti, then choosing between the winner of the
first vote and lasagne, and finally choosing between the winner of the second vote and
ravioli
c.first choosing between lasagne and pizza, then choosing between the winner of the
first vote and ravioli, and finally choosing between the winner of the second vote and
spaghetti
d.None of the proposed voting orders will result in Vinny’s first choice winning the
vote.
7)
Using the midpoint method, what is the price elasticity of supply between points A and
B? a. 2.33
b.1.0
c.0.43
d.0.1
8) Figure 21-25
The figure pertains to a particular consumer. On the axes, X represents the quantity of
good X and Y represents the quantity of good Y.
Refer to Figure 21-25. The four curves that are drawn on the figure are
a.indifference curves.
b.budget constraints.
c.demand curves.
d.income curves.
9) When a production possibilities frontier is bowed outward, the opportunity cost of
the first good in terms of the second good increases as more of the second good is
produced.
a.True
b.False
10) Education raises wages because the demanders of labor
a.are willing to pay more for highly educated workers who have higher marginal
products and the suppliers of labor are willing to pay the cost of becoming educated
only if they are rewarded.
b.are willing to pay the cost of becoming educated only if they are rewarded and the
suppliers of labor are willing to pay more for highly educated workers who have higher
marginal products.
c.require fewer workers if they are highly educated.
d.None of the above is correct.
11) The equilibrium price and quantity, respectively, are
a.$2 and 50 units.
b.$6 and 30 units.
c.$6 and 60 units.
d.$12 and 30 units.
12) In 2009, the top 1 percent of income earners
a.made about 13 percent of all income.
b.paid about 22 percent of all taxes.
c.made over 2.5 times the percentage of all income earned by the lowest quintile.
d.All of the above are correct.