1)
At which point is this economy producing its maximum possible quantity of doors?
a.R
b.S
c.T
d.U
2) Figure 21-2
The downwardsloping line on the figure represents a consumer’s budget constraint.
Refer to Figure 21-2. Which of the following statements is not correct?
a.Points W, X, and Y all cost the consumer the same amount of money.
b.Point Z is unaffordable for the consumer given his budget constraint.
c.Point V costs less than point Z.
d.Points W, X, and Y give the consumer the same level of satisfaction.
3) Table 17-5
The information in the table below shows the total demand for premium-channel digital
cable TV subscriptions in a small urban market. Assume that each digital cable TV
operator pays a fixed cost of $200,000 (per year) to provide premium digital channels in
the market area and that the marginal cost of providing the premium channel service to
a household is zero.
Refer to Table 17-5. Assume there are two profit-maximizing digital cable TV
companies operating in this market. Further assume that they are able to collude on the
quantity of subscriptions that will be sold and on the price that will be charged for
subscriptions. How much profit will each company earn?
a. $610,000
b. $550,000
c. $405,000
d. $205,000
4) Suppose that a firm operating in perfectly competitive market sells 300 units of
output at a price of $3 each. Which of the following statements is correct?
(i)Marginal revenue equals $3.
(ii)Average revenue equals $100.
(iii)Total revenue equals $300.
a.(i) only
b.(iii) only
c.(i) and (ii) only
d.(i), (ii), and (iii)
5) How did the farm population in the United States change between 1950 and today?
a.It dropped from 10 million to fewer than 3 million people.
b.It dropped from 20 million to fewer than 5 million people.
c.It dropped from 30 million to just over 6 million people.
d.It increased from 10 million to almost 13 million people.
6) Figure 14-1
Suppose that a firm in a competitive market has the following cost curves:
If the market price is $6.30, the firm will earn
a.positive economic profits in the short run.
b.negative economic profits in the short run but remain in business.
c.negative economic profits and shut down.
d.zero economic profits in the short run.
7) Table 18-11
Consider the following daily production data for MadeFromScratch, Inc.
MadeFromScratch sells cupcakes for $2 each and pays the workers a wage of $325 per
day.
Refer to Table 18-11. Suppose that the firm suffers a loss of some of their technology
such as the theft of their industrial mixers. After the theft, MadeFromScratch employees
produce fewer cupcakes than they could before because they must mix the cupcake
batter by hand rather than using the high-speed mixers. Because of this change, the
firm’s
a.demand for labor shifts right.
b.demand for labor shifts left.
c.supply of labor shifts right.
d.supply of labor shifts left.
8) The inner loop of the circular-flow diagram represents the flows of inputs and
outputs. Which of the following does not appear on the inner loop?
a.wages
b.land
c.capital
d.goods and services sold
9) Which of the following would tend to lessen the wage gap between a country’s
skilled and unskilled workers?
a.technology increases the productivity of unskilled workers more than that of skilled
workers
b.the country increases trade with countries that have a higher proportion of skilled
workers
c.both A and B
d.neither A nor B
10) Table 20-3
The Distribution of Income in Edgerton
Refer to Table 20-3. According to the table, what percent of families in Edgerton have
income levels below $44,000?
a.80 percent
b.60 percent
c.50 percent
d.40 percent
11) A profit-maximizing monopolist charges a price of $12. The intersection of the
marginal revenue and marginal cost curves occurs where output is 10 units and
marginal cost is $6. Average total cost for 10 units of output is $5. What is the
monopolist’s profit?
a. $60
b. $70
c. $100
d. $120
12) Table 12-11
If Bud has taxable income of $78,000, his average tax rate is
a. 18.7%.
b. 19.3%.
c. 20.1%.
d. 34.0%.
13) Table 14-10
Suppose that a firm in a competitive market faces the following revenues and costs:
At which level of output in the table is average variable cost equal to $6?
a.2 units
b.3 units
c.4 units
d.5 units
14)
Harvey receives his first paycheck for working as an ice cream vendor. To which of the
arrows does this transaction directly contribute?
a.B only
b.A and B
c.C only
d.C and D
15) Figure 14-2
Suppose a firm operating in a competitive market has the following cost curves:
Which of the four prices corresponds to a firm earning positive economic profits in the
short run?
a.Pa
b.Pb
c.Pc
d.Pd
16) Figure 21-18
Refer to Figure 21-18. It would be possible for the consumer to reach I2 if
a.the price of Y decreases.
b.the price of X decreases.
c.income increases.
d.All of the above would be correct.
17) Table 7-6
For each of three potential buyers of apples, the table displays the willingness to pay for
the first three apples of the day. Assume Xavier, Yadier, and Zavi are the only three
buyers of apples, and only three apples can be supplied per day.
If the market price of an apple is $1.40, then consumer surplus amounts to
a. $0.60.
b. $1.20.
c.$1.40.
d. $3.40
18) Regarding wage differences among various groups of workers – blacks and whites,
men and women, etc. – most economists believe that
a.no such differences are evident from the available data.
b.most of the differences are attributable to discrimination.
c.some of the wage differences are attributable to discrimination, but there is
disagreement about how much.
d.none of the differences are attributable to discrimination.
19) Table 18-8
Harold and Maude own a dance studio where they and their employees teach ballroom
dancing. Their company is a competitive, profit-maximizing firm. Harold and Maude’s
production function is detailed in the table below.
Refer to Table 18-8. If Harold and Maude pay their workers $80 per day and charge
$20 per dance lesson, what is the value of the marginal product of the third worker?
a.$400
b.$800
c.$1,000
d.$1,600
20) Fiona’s hourly wage increases from $8 to $10. Which of the following describes a
consequence of the increase in Fiona’s wage?
a.The opportunity cost of Fiona’s leisure time has decreased.
b.Fiona may choose to work fewer hours due to the increase in her wage.
c.If Fiona’s labor supply curve is upward sloping, she will choose to work fewer hours.
d.Both a and b are correct.