The U.S. dollar currently serves as the “unit of account” of major global products.
a. True
b. False
When income rises for the buyers of good X, the ____________ curve for good X will
shift ________________.
a. demand; rightward
b. demand; leftward
c. supply; rightward
d. supply; leftward
e. This question cannot be answered unless we know whether good X is a normal good,
a neutral good, or an inferior good.
Suppose Congress passes a law that states that the federal government will pay $100 to
any American citizen who can pass a (reasonably simple) current political events test. It
follows that
a. this raises the benefits of being rationally ignorant.
b. this raises the benefits of becoming informed and therefore will lower the degree of
rational ignorance in society.
c. this raises the costs of being rationally ignorant.
d. b and c
e. none of the above
A perfectly competitive firm that wants to maximize profits or minimize losses will
produce in the short run as long as
a. customers are buying its product.
b. price is above average variable cost.
c. price is above marginal revenue.
d. average variable cost is above price.
e. average total cost is above price.
The existence of a third party in the medical care market separates the buying of
medical care from the paying for medical care.
a. True
b. False
Price serves as a
a. rationing device.
b. transmitter of information.
c. means of determining who gets what of the available limited resources and goods.
d. a and b
e. all of the above
The answer is: “It allows the inhabitants of a country to consume at a level beyond its
production possibilities frontier.” What is the question?
a. What do newly discovered resources do?
b. What does technology do?
c. What does specialization and international trade do?
d. What does specialization do?
e. a and b
If the U.S. government imposes a more restrictive import quota on Japanese video
gaming systems, the ____________ curve for Japanese video gaming systems in the
U.S. will shift ___________.
a. supply; leftward
b. supply; rightward
c. demand; leftward
d. demand; rightward
Jim Smith made his fortune by buying and selling real estate. Which of the following
theories on the source of profits best describes the reason behind his success?
a. Uncertainty is a source of profits.
b. Profit is the reward for alertness to arbitrage opportunities.
c. Profit is the return to the entrepreneur as innovator.
d. Land is always a source of economic rent and profit.
e. If one works hard enough, one will be rewarded.
Price discrimination was deemed illegal by the
a. Sherman Act.
b. Wheeler-Lea Act.
c. Clayton Act.
d. Federal Trade Commission Act.
e. none of the above
Producers’ surplus is the difference between the price
a. sellers receive for a good and the maximum price they would have paid for the good.
b. sellers receive for a good and the minimum price for which they could have sold the
good.
c. buyers pay for a good and the maximum price they would have paid for the good.
d. buyers pay for a good and the minimum price for which they would have sold the
good.
Refer to Exhibit 34-2. The U.S. demand and supply for a good are shown. Under a
policy of free trade, the world price is PW. At this price, producers’ surplus equals the
area of
Exhibit 34-2
a. PNBDPW.
b. DBC.
c. PWCBPN.
d. PWDE.
Refer to Exhibit 24-4.What dollar amounts go in blanks (K), (L), (M), and (N),
respectively?
Exhibit 24-4
a. $90; $80; $53.33; and $60
b. $90; $70; $50; and $30
c. $133; $45; $35; and $25
d. $0; $90; $160; and $210
Refer to Exhibit 4-7. How many unskilled workers do firms want to employ at the
minimum wage?
Exhibit 4-7
a. N2
b. N1
c. N3
d. N1 + N3
Refer to Exhibit 37-1, where the higher the number, the better the position for the
person to whom the number is connected.Jaden and Karen have entered into an
agreement and are currently in box 1.There is no enforcer to their agreement.Jaden and
Karen are likely to
Exhibit 37-1
a. remain in box 1.
b. move to box 2, because this box is better for Jaden.
c. move to box 3, because this box is better for Karen.
d. move to box 4.
e. There is not enough information to answer the question.
Third-degree price discrimination is discrimination among
a. units.
b. quantities.
c. buyers.
d. prices.
Differences in income result from differences in
a. innate abilities and attributes.
b. education and other training.
c. attitudes toward risk.
d. a and b
e. a, b, and c