For a monopoly firm, price is __________ marginal revenue, and for a monopolistic
competitive firm, price is __________ marginal revenue.
a. less than; equal to
b. greater than; equal to
c. greater than; less than
d. greater than; greater than
e. equal to; less than
Several years ago, a bookstore chain extended its closing time from 9 p.m. to 10 p.m.
Now it is considering a further extension to 11 p.m. In making this marginal decision,
the results of having gone from 9 p.m. to 10 p.m. are
a. no longer relevant to the current decision.
b. relevant if the marginal costs and benefits were unequal.
c. relevant since they are part of the calculation of total costs and benefits.
d. relevant if the marginal costs and benefits were equal.
If there is no comparative advantage in the production of either of the two goods
produced by countries 1 and 2, then
a. the benefits resulting from trade between the two countries are increased.
b. there are no gains from specialization and trade between the two countries.
c. one country must be more productive in producing all goods than the other.
d. each country should specialize in the production of a particular good.
e. none of the above
A special interest group has a good chance of redistributing (transferring) income from
others to itself if the
a. costs of the transfer are spread over a very large number of people.
b. costs of the transfer are spread over a very small number of people.
c. costs of the transfer are spread over the same number of people that comprise the
special interest group.
d. the number of members in the special interest group is greater than 100.
e. none of the above
All other things being equal, the __________ substitutes for a good, the __________
the price elasticity of demand.
a. fewer; higher
b. more; higher
c. more; lower
d. a and c
e. none of the above
An indifference curve shows all the combinations of bundles of two goods a person can
purchase given a fixed amount of income.
a. True
b. False
For the monopoly firm, its demand curve is
a. perfectly inelastic.
b. the market demand curve.
c. perfectly elastic.
d. necessarily unit elastic.
e. none of the above
Refer to Exhibit 22-13.What dollar amounts go in blanks (M) and (N), respectively?
Exhibit 22-13 Quantity of Output (Q) Total Fixed Cost (TFC) Average Fixed Cost
(AFC) Total Variable Cost
a. $200; $125
b. $120; $150
c. $230; $125
d. $150; $300
e. There is not enough information to answer this question.
Refer to Exhibit 2-9. If Alex and Adam each specialize in the good in which he has a
comparative advantage and then engage in trade, ____________________ can consume
a combination of goods that lies beyond his PPF.
Exhibit 2-9
a. Alex, but not Adam,
b. Adam, but not Alex
c. Alex and Adam
d. neither Alex nor Adam
A firm defending itself in an antitrust suit would prefer to have the market it operates in
defined broadly, rather than narrowly.
a. True
b. False
The issuer of a bond is a lender.
a. True
b. False
Refer to Exhibit 25-9. The number of sellers in a perfectly competitive market is
___________ [blank (A)], the number of sellers in a monopolistic competitive market is
____________ [blank (B)], and the number of sellers in an oligopoly is _________
[blank (C)].
Exhibit 25-9
a. many; many; few
b. many; few, few
c. few; many; many
d. few; few many
Which of the following is least likely to be an effect of scarcity?
a. rationing device
b. choice
c. opportunity cost
d. dollar price
e. utility
Refer to Exhibit 39-8. Assume that E1 represents the initial equilibrium in the market
for grain X. If all the farmers agree to restrict production and abide by the agreement,
Exhibit 39-8
a. the price of X increases.
b. the equilibrium quantity decreases.
c. total revenues increase if the demand curve is inelastic between E1 and E3.
d. all of the above
e. a and b only
Which of the following is a positive economic statement?
a. The temperature is too high today.
b. The temperature is 105 degrees today.
c. It is too hot to jog today.
d. I enjoy summer evenings when it cools off.
At a price of $9.99, Danielle buys 3 digital books per month. When the price decreases
to $7.99, Danielle buys 4 digital books per month. Jason says that Danielle’s demand for
digital books has increased. Is Jason correct?
a. Yes, Jason is correct.
b. No, Jason is incorrect. Danielle’s demand has decreased.
c. No, Jason is incorrect. Danielle’s quantity demanded has decreased, but her demand
has stayed the same.
d. No, Jason is incorrect. Danielle’s quantity demanded has increased, but her demand
has stayed the same.
e. No, Jason is incorrect. Danielle’s quantity demanded has increased and her demand
has decreased.
If the percentage change in quantity demanded is equal to the percentage change in
price for good Z,then demand for good Z is
a. inelastic.
b. unit elastic.
c. elastic.
d. perfectly elastic.
e. perfectly inelastic.
Economists state that the __________ utility a person receives from a unit of a good,
the __________ the price he or she is willing to pay for it.
a. more; lower
b. more; higher
c. less; higher
d. less; lower
e. b and d
Refer to Exhibit 2-9. For Adam, the opportunity cost of producing one unit of good A is
____________ unit(s) of good B. Exhibit 2-9
a. 3.00
b. 0.33
c. 0.75
d. 1.33
The total wage bill of a union will be maximized when the elasticity of demand for
labor is unit elastic.
a. True
b. False