1) Some economists suggest that increased international trade with countries that have a
greater proportion of unskilled workers has led to an expanding wage gap between
high-skill and low-skill workers in the United States.
a.True
b.False
2) Figure 10-2. The graph depicts the market for plastic.
The private value of the 200th unit of plastic exceeds the social cost of the 200th unit of
plastic by
a.$4.
b.$8.
c.$12.
d.$16.
3) Figure 15-20
The deadweight loss caused by a profit-maximizing monopoly amounts to
a. $225.
b. $450.
c. $900.
d. $1,350.
4) If the for two goods is negative, then the two goods are complements.
a.True
b.False
5) Trade with any nation can be mutually beneficial.
a.True
b.False
6) Which of the following is not a characteristic of a monopoly?
a.barriers to entry
b.one seller
c.one buyer
d.a product without close substitutes
7) The law of demand states that, other things equal, an increase in
a.price causes quantity demanded to increase.
b.price causes quantity demanded to decrease.
c.quantity demanded causes price to increase.
d.quantity demanded causes price to decrease.
8) Table 15-12
The following table provides information on the price, quantity, and average total cost
for a monopoly.
At what price will the firm maximize its profit?
a.$1
b.$2
c.$3
d.$4
9) Table 15-2
Tanya has the following demand curve for selling taffy. Assume that Tanya has a
marginal cost of $3 per unit.
What is Tanya’s profit-maximizing level of output?
a.1
b.2
c.3
d.4
10) What are the two effects of a change in a price that a consumer experiences?
a.the income effect and the budget effect
b.the complement effect and the substitute effect
c.the price effect and the preference effect
d.the income effect and the substitution effect