1) Figure 18-9
Refer to Figure 18-9. If the apple pickers start working fewer hours because they are
taking more vacation time, the equilibrium wage will
a.fall below w1 due to a shift in demand.
b.fall below w1 due to a shift in supply.
c.rise above w1 due to a shift in demand.
d.rise above w1 due to a shift in supply.
2) Too few resources are devoted to the creation of knowledge because profit-seeking
firms
a.undervalue knowledge in their pursuit of revenues.
b.overuse their patents.
c.tend to free-ride on the knowledge that others have developed.
d.tend to rely on existing employee knowledge.
3) Which of the following statements is correct?
a.Firms in monopolistic competition and monopoly can earn economic profits in both
the short run and the long run.
b.Both perfectly competitive and monopolistically competitive firms charge a price
equal to marginal cost.
c.Firms in perfect competition, monopolistic competition, and monopoly maximize
profits by producing where marginal revenue equals marginal cost.
d.Both perfectly competitive and monopolistically competitive firms produce the
welfare-maximizing level of output.
4) Figure 21-5
Refer to Figure 21-5. In graph (b), if income is equal to $420, then the price of good X
is
a. $1.
b.$3.
c.$10.
d.$30.
5) Figure 7-26
Refer to Figure 7-26. At the equilibrium price, total surplus is
a. $600.
b. $1,200.
c. $1,500.
d. $1,800.
6) Table 22-20
The table below shows the preferred city budget (in millions) for in the city of
Springfield.
Refer to Table 22-20. In an election, each voter will select the budget closest to his or
her most preferred budget. In which of the following cases does a budget of $22 win?
a.$22 versus $10, and $22 versus $40
b.$22 versus $10, but not $22 versus $40
c.$22 versus $40, but not $22 versus $10
d.Neither $22 versus $10 nor $22 versus $40
7) Which of the three supply curves represents the most elastic supply?
a.supply curve A
b.supply curve B
c.supply curve C
d.There is no difference in the elasticity of the three supply curves.
8) In the United States approximately 80 percent of millionaires did not inherit their
wealth. This illustrates the
a.amount of transitory income in the United States.
b.effectiveness of government anti-poverty programs in the United States.
c.great economic mobility in the United States.
d.level of permanent income in the United States.
9) In what sense do externalities cause the €invisible hand€ of the marketplace to fail?
a.Externalities lead to government intervention in markets, which exacerbates the
problems associated with externalities.
b.Externalities result in prices that are too high for many consumers to pay.
c.Markets fail to produce the maximum total benefit to society when positive or
negative externalities are present.
d.Markets produce too little of a good when positive or negative externalities are
present.
10) Competitive firms hire workers until the additional benefit they receive from the
last worker hired is equal to
(i)the additional cost of that worker.
(ii)the wage paid to that worker.
(iii)the marginal product of that worker.
a.(i) only
b.(iii) only
c.(i) and (ii) only
d.(ii) and (iii) only