1) Which of the following is a determinant of the market supply curve but not a
determinant of an individual seller’s supply?
a.production technology
b.expectations
c.input prices
d.the number of sellers
2) Suppose the cost of operating a 100 room hotel for a night is $10,000 and there are 5
empty rooms for tonight. If the marginal cost of operating one room for one night is $30
and a customer is willing to pay $60 for the night, the hotel manager should
a.rent the room because the marginal benefit exceeds the marginal cost.
b.rent the room because the marginal benefit exceeds the average cost.
c.not rent the room because the marginal benefit is less than the marginal cost.
d.not rent the room because the marginal benefit is less than the average cost.
3) Figure 7-34
Refer to Figure 7-34. Suppose there is initially a price floor set at $10 in this market. If
the government removed the price floor, by how much would total consumer surplus
increase?
4) In the circular-flow diagram, which of the following items flows from households to
firms through the markets for the factors of production?
a.goods and services
b.land, labor, and capital
c.dollars spent on goods and services
d.wages, rent, and profit
5) Table 14-1
If the firm doubles its output from 3 to 6 units, total revenue will
a.increase by less than $15.
b.increase by exactly $15.
c.increase by more than $15.
d.Total revenue cannot be determined from the information provided.
6) The supply curve for a product reflects the
a.willingness to pay of the marginal buyer.
b.quantity buyers will ultimately purchase of the product.
c.cost to sellers of producing the product.
d.seller’s profit from producing the product.
7) Which of the following statements is correct?
a.Compensating wage differentials reflect different skills of workers.
b.Discrimination by employers affects the marginal productivity of workers.
c.The signaling theory of education suggests that schooling does not affect worker
productivity.
d.The superstar phenomenon explains why more talented entertainers earn more than
less talented entertainers.
8) Selling a good at a price determined by the intersection of the demand curve and the
marginal cost curve is consistent with the
(i)socially-optimal level of output.
(ii)market solution for profit-maximizing competitive firms.
(iii)market solution for a profit-maximizing monopoly.
a.(i) and (ii) only
b.(ii) and (iii) only
c.(i) and (iii) only
d.(i), (ii), and (iii)
9) Libertarians believe that the government should enforce individual rights to ensure
that all people have the same opportunities to use their talents to achieve success.
a.True
b.False
10) Which of the following is not a finding of Cox and Alm regarding the gap between
rich and poor?
a.The gap shrinks if taxes are taken into account.
b.The gap shrinks if consumption, rather than income, is compared.
c.The gap shrinks if the number of people in the household is taken into account.
d.The gap shrinks if the state of residence is taken into account.
11)
Which points are not currently attainable but could become achievable for this economy
if there is an improvement in technology?
a.I, L
b.G, H
c.J, K
d.F, G
12) Which of the following expressions is valid for the ?
a. =.
a.marginal costs are constant as output increases.
b.long-run average total costs are decreasing as output increases.
c.long-run average total costs are increasing as output increases.
d.marginal costs are equal to average total costs for all levels of output.
16) If the size of a tax increases, tax revenue
a.increases.
b.decreases.
c.remains the same.
d.may increase, decrease, or remain the same.
17) Suppose that residents of a town are asked to vote on the best day to improve the
safety of an intersection. The three choices are: a stoplight, a 4-way stop, and a 2-way
stop. The mayor asks the residents to assign 3 points to their first choice, 2 points to
their second choice, and 1 point to their last choice. The intersection will be controlled
by the method that receives the most points. This voting scheme is called
a.Arrow’s impossibility theorem.
b.the Condorcet paradox.
c.a Borda count.
d.the median voter theorem.
18) Economists generally believe that, although there may be advantages to society
from ticket-scalping, the costs to society of this activity outweigh the benefits.
a.True
b.False
19) A tax levied on the sellers of a good shifts the
a.supply curve upward (or to the left).
b.supply curve downward (or to the right).
c.demand curve upward (or to the right).
d.demand curve downward (or to the left).
20) Bintu’s Production Possibilities FrontierJuba’s Production Possibilities
Frontier
If Bintu and
Juba each divides her time equally between making bowls and making cups, then total
production is
a.2 bowls and 6 cups.
b.3 bowls and 7 cups.
c.4 bowls and 8 cups.
d.6 bowls and 14 cups.