In the U.S., health care may be expensive, but Americans enjoy the longest
life-expectancy of any nation.
a. True
b. False
Figure 11-2
In Figure 11-2, at what quantity would the monopolist maximize profit?
a. E
b. F
c. G
d. H
Taxes are either
a. regressive, proportional, or degressive.
b. regressive, proportional, or progressive.
c. degressive, proportional, or progressive.
d. regressive, progressive, or degressive.
Compared to perfect competition, monopoly
a. provides less output.
b. charges a higher price.
c. results in higher cost (inefficient) production.
d. All of the above are correct.
In the area of taxation, the trade-off between equity and efficiency
a. never occurs since efficient taxes are often the most progressive.
b. is relevant as efficient taxes are often regressive.
c. is irrelevant.
d. is relevant because efficient taxes are often progressive.
Price elasticity of demand is a numerical measure of how much quantity demanded
rises as price falls or quantity demanded falls as price rises.
a. True
b. False
Investing in risky assets in the hope of earning profits is called speculation.
a. True
b. False
The supply curve of a natural resource like oil has a positive slope because
a. the supply becomes closer to exhaustion as demand rises.
b. it becomes more costly to find and develop supplies as demand rises.
c. rents rise as output increases.
d. indirect taxes rise with output.
Economists use models in order to
a. experiment with alternative circumstances.
b. make educated guesses about real life events.
c. predict outcomes under various hypothetical conditions.
d. increase understanding of how a relationship actually works.
e. All of the above are correct.
If production involves increasing opportunity cost, then moving nearer the horizontal
axis will increase the opportunity cost of
a. the good that is shown on the horizontal axis.
b. the good that is shown on the vertical axis.
c. both of the goods shown on the axes.
d. neither of the goods shown on the axes.
A worker’s marginal revenue product depends upon his average product.
a. True
b. False
Figure 5-13
According to Figure 5-13, if the price of good X falls, a consumer making her optimal
decision will move from a point on
a. U1 to a point on U3.
b. U2 to a point on U3.
c. U1 to a point on U3.
d. U2 to a point on U1.
In the long run, a perfectly competitive industry tends to develop differentiated
products.
a. True
b. False
The difference between zero accounting profit and zero economic profit is that
a. an economic profit of zero indicates a fair rate of return because it includes
opportunity cost. opportunity cost and
b. an economic profit of zero indicates an unacceptable rate of return because it does
not include opportunity cost.
c. an economic profit of zero indicates more than a fair rate of return because it includes
opportunity cost and explicit cost..
d. an accounting profit of zero indicates a fair rate of return because it includes
opportunity cost.
The use of chlorofluorocarbons in refrigerators and air conditioners is alleged to cause
the destruction of the ozone layer that surrounds the earth. This layer protects humans
from ultraviolet radiation, which causes skin cancer. Industry has been prohibited from
using these substances in aerosol cans, but the government has been reluctant to ban
their use altogether because of the serious economic consequences. Economists analyze
such problems and refer to them as
a. issues of unfairness.
b. examples of excess abstraction.
c. externalities.
d. comparative advantage issues.
e. examples of trade-offs between output and equality.