The benefits principle states that the users of a service should pay for that service.
a. True
b. False
Wages in American industry are very high because of wage laws.
a. True
b. False
The key difference between oligopoly and other market structures is the
interdependence among producers.
a. True
b. False
“Plowback” is a preferred source of financing a corporation because
a. it is fairly easy, compared to issuing stocks.
b. it is not subject to double taxation.
c. selling bonds involves the high cost of money.
d. stock markets are subject to random walks.
In recent decades, other countries have:
a. caught up to the U.S. in several important economic arenas
b. surpassed the U.S. in several important economic arenas
c. both of the above are true
Is it possible for a country to have an absolute disadvantage and a comparative
advantage in the production of a good?
a. No, these are incompatible on theoretical grounds.
b. No, theory prevents it, but some economists claim it could occur.
c. Yes, this situation can occur.
d. Yes, in theory, although not in reality.
Which of the following is the most closed economy?.
a. Germany
b. Canada
c. Mexico
d. the United States
Any increase in efficiency increases only profits of producers, with no increase in
output.
a. True
b. False
The excess capacity theorem implies that
a. consumers would be better off if some monopolistically competitive firms left their
markets.
b. consumers would be better off with more standardization of products.
c. monopolistic competition benefits society by eliminating excess capacity in
production.
d. monopolistic competition wastes some of society’s resources but the elimination of
this waste does not necessarily benefit consumers.
The notion of opportunity cost can be represented graphically by the
a. area inside the production possibilities frontier.
b. slope of the production possibilities frontier.
c. vertical distance from the horizontal axis to the production possibilities frontier.
d. horizontal distance from the vertical axis to the production possibilities frontier.
e. sum of the horizontal and vertical distances to the production possibilities frontier.
The slope of a downward-sloping straight line can be calculated as the distance from
the
a. horizontal intercept of the line to the origin divided by the distance from the origin to
the vertical intercept of the line.
b. origin to the horizontal intercept of the line minus the distance from the origin to the
vertical intercept of the line.
c. vertical intercept of the line to the origin divided by the distance from the origin to
the horizontal intercept of the line.
d. vertical intercept of the line to the origin minus the distance from the origin to the
horizontal intercept of the line.
The incidence of a payroll tax
a. depends upon whether it is levied on the employer or employee.
b. is the same whether it is levied on the employer or the employee.
c. is more heavily on the employee as demand for labor becomes more elastic.
d. is more heavily on the employer as demand for labor becomes less elastic.
The South African diamond production monopoly is an example of monopoly through
a. “patent power.”
b. legal restriction.
c. control of scarce resources.
d. large sunk costs.
Recently, Chrysler bonds with a face value of 100 closed at 103. The coupon rate was
12.75. The current yield on these bonds was
a. 103 percent.
b. 3 percent.
c. 12.75 percent.
d. less than 12.75 percent.
In 2012, approximately what income level was the cut-off point for defining a family as
“rich”?
a. $72,000
b. $104,000
c. $143,000
d. $195,000
Oligopolistic firms never collude because they have almost no incentive to do so.
a. True
b. False
The number of Compact Discs purchased by a consumer depends on the price of the
discs as well as the prices of all other goods purchased.
a. True
b. False
The demand for labor is a derived demand.
a. True
b. False
A voluntary exchange of products means that
a. if one nation gains from a swap, the other nation must necessarily lose.
b. each country must do its best to act to the disadvantage of its trading partners.
c. both parties must gain (or expect to gain) from the transaction.
d. both parties must lose owing to the transaction costs involved.