1) Which of the following is an example of an implicit cost?
a.salaries paid to owners who work for the firm
b.interest on money borrowed to finance equipment purchases
c.cash payments for raw materials
d.foregone rent on office space owned and used by the firm
2) A decrease in quantity demanded
a.results in a movement downward and to the right along a demand curve.
b.results in a movement upward and to the left along a demand curve.
c.shifts the demand curve to the left.
d.shifts the demand curve to the right.
3) Which of these curves is the competitive firm‘s short-run supply curve?
a.the average variable cost curve above marginal cost
b.the average total cost curve above marginal cost
c.the marginal cost curve above average variable cost
d.the average fixed cost curve
4) Scenario 19-3
In the small town of Hamilton, Montana, there is a local hardware store called Eddy’s
Hardware. There are only two types of workers who apply for jobs at Eddy’s Hardware:
cowboys and farm boys. Local politicians have received numerous complaints that
Eddy’s Hardware is practicing wage discrimination against farm boys. Eddy’s Hardware
denies the complaint and says the store is only trying to maximize profit.
Refer to Scenario 19-3. Which of the following statements would strengthen the
discrimination complaint against Eddy’s Hardware?
a.Cowboys call in sick to work more often than farm boys.
b.Farm boys are more likely than cowboys to work the day shift rather than the night
shift.
c.Cowboys’ experience using hardware generally exceeds farm boys’ experience using
it.
d.On average farm boys have less experience working at the hardware store than
cowboys.
5) The diagram below pertains to the demand for turkey in the United States.
All else equal, buyers expecting turkey to be more expensive in the future would cause
a current move from
a.DA to DB.
b.DB to DA.
c.x to y.
d.y to x.
6) Normal goods have negative income elasticities of demand, while inferior goods
have positive income elasticities of demand.
a.True
b.False
7) Suppose a tax of $5 per unit is imposed on a good. The supply curve is a typical
upward-sloping straight line, and the demand curve is a typical downward-sloping
straight line. The tax decreases consumer surplus by $10,000 and decreases producer
surplus by $15,000. The deadweight loss of the tax is $2,500. The tax decreased the
equilibrium quantity of the good from
a. 6,500 to 5,500.
b. 5,500 to 4,500.
c. 5,000 to 3,000.
d. 6,000 to 4,000.
8) The income tax requires that taxpayers pay 10percent on the first $40,000 of income
and 20 percent on all income over $40,000. Emily paid $9,000 in taxes. What were her
marginal and average tax rates?
a.20 percent and 13.8 percent, respectively
b.20 percent and 15 percent, respectively
c.10 percent and 13.8 percent respectively
d.10 percent and 15 percent respectively
9) Suppose that in one hour Dewey can produce either 10 bushels of corn or 20 yards of
cloth. Dewey’s opportunity cost of producing one bushel of corn is 1/2 yard of cloth.
a.True
b.False
10) Suppose the demand for calendars increases in November. At the same time, the
price of the ink used in the production of calendars increases. In the market for
calendars, the equilibrium price rises, but the effect on the equilibrium quantity is
ambiguous.
a.True
b.False
11) Bintu’s Production Possibilities FrontierJuba’s Production Possibilities
Frontier
If Bintu and
Juba both spend all of their time making bowls, then total production is
a.2 bowls.
b.3 bowls.
c.4 bowls.
d.6 bowls.
12) The De Beers Diamond company is not worried about differentiating its product
from all other gemstones.
a.True
b.False
13) Libertarians believe that in considering economic fairness, one should primarily
consider the
a.outcome of the system.
b.process by which outcomes arise.
c.maximin criterion.
d.maximization total social utility.
14) When Matt has an income of $2,000, he consumes 30 units of good A and 50 units
of good B. After Matt’s income increases to $3,000, he consumes 25 units of good A
and 95 units of good B. Which of the following statements is correct?
a.Both goods A and B are normal goods.
b.Both goods A and B are inferior goods.
c.Good A is a normal good, and good B is an inferior good.
d.Good A is an inferior good, and good B is a normal good.
15) The market demand curve shows how the total quantity demanded of a good varies
as the income of buyers varies, while all the other factors that affect how much
consumers want to buy are held constant.
a.True
b.False
16) Table 12-9
United States Income Tax Rates for a Single Individual, 2012 and 2013.
Samantha is a single person whose taxable income is $100,000 a year. What happened
to her 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.
17) A country club usually only allows members to purchase tickets for its celebrity
golf tournament, but the club is considering allowing non-members to purchase tickets
this year. The demand and supply schedules are as follows:
If only members are allowed to purchase tickets to this year’s celebrity golf tournament,
then what will be the equilibrium price?
a.$10
b.$15
c.$20
d.$25