1) Becky is a single mother of two young children who spend their days at a daycare
center while Becky goes to work. The daycare center closes at 5:30. If parents do not
pick up their children at or before 5:30, the daycare center charges a late fee of $5 per
child for every 10 minutes the parent is late.
Due to traffic, Becky expects to be 20 minutes late to pick up her children. How much
would she be willing to pay for a variable toll road that would get her to the daycare
center on time?
a.any price less than $5
b.any price less than $10
c.any price less than $20
d.Becky would not be willing to pay out of pocket to avoid traffic.
2) If the price elasticity of supply is zero, then
a.supply is more elastic than it is in any other case.
b.the supply curve is horizontal.
c.the quantity supplied is the same, regardless of price.
d.a change in demand will cause a relatively small change in the equilibrium price.
3) Table 22-14
Amy, Beth, and Connie are on a hiring committee. They have interviewed 3 candidates
identified by their last names and are going to vote on which one is hired.
Refer to Table 22-14. Which results for pairwise voting are correct?
a.In a vote between Adams and Campbell, and then a vote between the winner and
Brown, Adams wins.
b.In a vote between Brown and Campbell, and then a vote between the winner and
Adams, Adams wins.
c.Both A and B are correct.
d.Neither A nor B is correct.
4) Despite continued growth in average income since the early 1970s, the poverty rate
has not declined below the level reached in 1973 .
a.True
b.False
5) Figure 18-9
Refer to Figure 18-9. If the marginal product of labor falls and the price of apples
remains unchanged,
(i)the value of the marginal product of labor will fall.
(ii)thequantityoflabordemandedwillincreaseaboveL
1
.
(iii)the labor supply curve will remain unchanged.
a.(i) and (ii) only
b.(ii) and (iii) only
c.(i) and (iii) only
d.(i), (ii), and (iii)
6) Table 12-9
United States Income Tax Rates for a Single Individual, 2012 and 2013.
Bill is a single person whose taxable income is $35,000 a year. What happened to his
average tax rate between 2012 and 2013?
a.It increased.
b.It decreased.
c.It did not change.
d.We do not have enough information to answer this question.
7) Arrow’s impossibility theorem states that the majority rule fails to produce transitive
preferences for society.
a.True
b.False
8) Consider the town of Springfield with only three residents, Sophia, Amber, and
Cedric. The three residents are trying to determine how large, in acres, they should
build the public park. The table below shows each resident’s willingness to pay for each
acre of the park.
Suppose the cost to build the park is $24 per acre and that the residents have agreed to
split the cost of building the park equally. If the residents vote to determine the size of
park to build, basing their decision solely on their own willingness to pay (and trying to
maximize their own surplus), what is the largest park size for which the majority of
residents would vote “yes?”
a.0 acres
b.1 acre
c.2 acres
d.3 acres
9) For profit-maximizing, competitive firms, the demand curve for each factor of
production equals the value of the marginal product of that factor.
a.True
b.False
10) In the short run, a firm operating in a competitive industry will produce the quantity
of output where price equals marginal cost as long as the
a.price is less than average total cost.
b.marginal revenue exceeds the marginal cost.
c.price is greater than average variable cost.
d.price is greater than average fixed cost but less than average variable cost.
11) Table 7-7
You have an extra ticket to the Midwest Regional Sweet 16 game in the men’s NCAA
basketball tournament. The table shows the willingness to pay of the four potential
buyers in the market for a ticket to the game. You hold an auction to sell the ticket. Who
makes the winning bid, and what does he offer to pay for the ticket?
a.Michael; $501
b.Michael; more than $400 but less than or equal to $500
c.Earvin; $400
d.Earvin; more than $350 but less than or equal to $400
12) Assume the supply curve for diapers is a typical, upward-sloping straight line, and
the demand curve for diapers is a typical, downward-sloping straight line. Suppose the
equilibrium quantity in the market for diapers is 1,000 per month when there is no tax.
Then a tax of $0.50 per diaper is imposed. The effective price paid by buyers increases
from
$1.50 to $1.90 and the effective price received by sellers falls from $1.50 to $1.40. The
government’s tax revenue amounts to $475 per month. Which of the following
statements is correct?
a.After the tax is imposed, the equilibrium quantity of diapers is 900 per month.
b.The demand for diapers is more elastic than the supply of diapers.
c.The deadweight loss of the tax is $12.50.
d.The tax causes a decrease in consumer surplus of $380.