1) Panel (a)
Panel (b)
The graphs show the demand for cigarettes. In Panel (a), the arrows are consistent with
which of the following events?
a.The price of marijuana, a complement to cigarettes, increased.
b.Mandatory health warnings were placed on cigarette packages.
c.Several foreign countries banned U.S. cigarettes in their countries.
d.A tax was placed on cigarettes.
2) Table 18-3
Refer to Table 18-3. Which firm’s production function exhibits positive but
diminishing marginal product?
a.Firm A
b.Firm B
c.Firm C
d.Firm D
3) In the long run, a monopolistically competitive firm produces a quantity that is
a.equal to the efficient scale.
b.less than the efficient scale.
c.greater than the efficient scale.
d.consistent with diseconomies of scale.
4) Figure 7-30
Refer to Figure 7-30. If the market equilibrium price is $120, how much is total
consumer surplus?
5) Suppose the price elasticity of supply for cheese is 0.6 in the short run and 1.4 in the
long run. If an increase in the demand for cheese causes the price of cheese to increase
by 15%, then the quantity supplied of cheese will increase by
a.0.4% in the short run and 4.6% in the long run.
b.1.7% in the short run and 0.7% in the long run.
c.9% in the short run and 21% in the long run.
d.25% in the short run and 10.7% in the long run.
6) Figure 18-9
Refer to Figure 18-9. If the price of apples increases, the
a.demand for apple pickers will shift to the left.
b.demand for apple pickers will shift to the right.
c.supply of apple pickers will shift to the left.
d.supply of apple pickers will shift to the right.
7) Figure 13-2
If the figure represented production at a cookie factory, the factory would be
experiencing
a.diminishing marginal product of workers.
b.diminishing marginal cost of cookie production.
c.decreasing cost of cookie production.
d.decreasing output of cookies.
8) In the United States, labor earnings are about what percent of total income?
a.75 percent
b.70 percent
c.67 percent
d.50 percent
9) A movement upward and to the right along a supply curve is called a(n)
a.increase in supply.
b.decrease in supply.
c.decrease in quantity supplied.
d.increase in quantity supplied.
10) We observe a profit-maximizing firm hiring its 75th employee. It is possible to infer
that, when 74 employees are hired, the
a.wage exceeds the value of the marginal product of labor.
b.value of the marginal product of labor exceeds the wage.
c.marginal product of labor is increasing.
d.firm is attempting to increase its market share.
11) Table 18-7
Refer to Table 18-7. What is the value of the cell labeled GG?
a.$400
b.$100
c.$0
d.-$100
12) Without free trade, the domestic price of a good must be equal to the world price of
a good.
a.True
b.False
13) One possible solution to the problem of protecting a common resource is to convert
that resource to a private good.
a.True
b.False
14) A profit-maximizing, competitive firm will always hire an additional worker when
the additional worker makes a positive contribution to
a.total revenue.
b.total profit.
c.the value of the marginal product of labor.
d.marginal revenue.
15) Figure 19-6
Refer to Figure 19-6. Given demand, D1, and supply, S1, how much more do workers
earn per hour if the supply curve shifts to S2?
16) Figure 7-32
Refer to Figure 7-32. At what price will total surplus be maximized in this market?
17)
Using the midpoint method, what is the price elasticity of supply between $15 and $25?
18) Table 7-20
Refer to Table 7-20. How much is total consumer surplus at the equilibrium price in this
market?
19)
20) The United States federal government has a large budget deficit. Long-term
projections suggest that under current law, taxes, as a percentage of GDP, willand
government spending, as a percentage of GDP, will
__________.
21) Comparing firms in perfectly competitive markets to monopoly firms, which results
in a deadweight loss?
22) In many countries, the government chooses to “internalize” the monopoly by
owning monopoly providers of goods and services. (In some cases these firms are
“nationalized,” and the government actually buys or confiscates firms that operate in
monopoly markets). What would be the advantages and disadvantages of such an
approach to ensure that the “best interest of society” is promoted in these markets?
Explain your answer.