1) Which of the following events must cause equilibrium price to fall?
a.demand increases and supply decreases
b.demand and supply both decrease
c.demand decreases and supply increases
d.demand and supply both increase
2) Table 14-2
The table represents a demand curve faced by a firm in a competitive market.
For this firm, the marginal revenue from selling the 3rd unit is
a. $12.
b.$4.
c.$3.
d.$1.
3) Table 12-10
If Willie has $170,000 in taxable income, his marginal tax rate is
a. 25%.
b.28%.
c.33%.
d.35%.
4) Suppose the price elasticity of supply for soccer balls is 0.3 in the short run and 1.2
in the long run. If an increase in the demand for soccer balls causes the price of soccer
balls to increase by 20%, then the quantity supplied of soccer balls will increase by
about
a.0.67% in the short run and 0.17% in the long run.
b.3% in the short run and 1.2% in the long run.
c.6% in the short run and 24% in the long run.
d.66.7% in the short run and 16.7% in the long run.
5) In the Temporary Assistance for Needy Families program, most families
a.must have both parents in the home to qualify.
b.are female head-of-household families in which the father is absent.
c.have adult children with disabilities living at home.
d.are ineligible to receive assistance from other support programs.
6) When Monique drives to work every morning, she drives on a congested highway.
What Monique does not realize is that when she enters the highway each morning she
increases the travel time of all other drivers on the highway.
In this case, the external cost of Monique€s highway trip
a.increases the social cost above the private cost.
b.lowers the social cost below the private cost.
c.increases the social value above the private benefit.
d.decreases the social value below the private benefit.
7) Table 14-3
The table represents a demand curve faced by a firm in a competitive market.
For this firm, the marginal revenue is
a. $39.
b.$26.
c.$13.
d.$0.
8) Which of the following does not explain why data on income distribution and the
poverty rate give an incomplete picture of inequality?
a.in-kind transfers
b.economic life cycle
c.transitory income
d.All of the above contribute to an incomplete picture of inequality.
9) The production possibilities frontier shows the trade-offs that the producer faces but
does not identify the choice the producer will make.
a.True
b.False
10) Economists who attempt to explain the increasing earnings gap between skilled and
unskilled workers offer two main hypotheses:
a.one hypothesis emphasizes education, and the other emphasizes compensating
differentials.
b.one hypothesis emphasizes education, and the other international trade.
c.one hypothesis emphasizes international trade, and the other emphasizes technology.
d.one hypothesis emphasizes technology, and the other emphasizes compensating
differentials.
11) Scenario 13-10
Jessica makes photo frames. She spends $5 on the materials for each photo frame. She
can create one photo frame in an hour. She earns $10 per hour at a part-time job at the
local coffee shop. She can sell a photo frame for $30 each.
An economist would calculate the total profit for one photo frame to be
a. $10.
b.$15.
c.$20.
d.$25.
12) A tariff increases the quantity of imports and moves the market farther from its
equilibrium without trade.
a.True
b.False
13) The story of the prisoners’ dilemma contains a general lesson that applies to any
group trying to maintain cooperation among its members.
a.True
b.False