Figure 4-1 Figure 4-1 shows Arnold’s demand curve for
burritos.
If the market price is $2.00, what is the consumer surplus on the second burrito?
A) $0
B) $1.00
C) $2.00
D) $4.50
Table 2-11
Table 2-11 shows the number of labor hours required to produce a digital camera and a
pound of wheat in China and South Korea.
What is China’s opportunity cost of producing one pound of wheat?
A) 0.04 units of a digital camera
B) 4 digital cameras
C) 25 digital cameras
D) 40 digital cameras
Assume you set up a sole proprietorship and your lawyer tells you that as the owner,
you could stand to lose your personal wealth if the business goes bankrupt. This means
a sole proprietorship
A) faces limited liability.
B) faces unlimited liability.
C) has little chance of succeeding.
D) is not a good type of business to set up.
Figure 21-5
“Crowding out” of firm investment as a result of a budget deficit is illustrated by the
movement from ________ in the graph above.
A) A to B
B) B to A
C) B to C
D) C to A
A perfectly competitive firm in a constant-cost industry produces 3,000 units of a good
at a total cost of $36,000. The prevailing market price is $15. What will happen to the
number of firms in the industry and to the industry’s output in the long run?
A) The number of firms and the industry’s output increase.
B) The number of firms and the industry’s output decrease.
C) The number of firms remains constant and the industry’s output increases.
D) The number of firms remains constant and the industry’s output decreases.
If the number employed is 190 million, the number unemployed is 10 million, and the
working-age population is 250 million, then the labor force participation rate is
A) 4%.
B) 5.2%.
C) 60%.
D) 76%.
E) 80%.
Table 6-7
The town of Bloomfield is well known for its basketball team. The price of basketball
game tickets is determined by market forces. Table 6-7 above shows the demand and
supply schedules for basketball games tickets. What is the numerical value of the price
elasticity of supply?
A) 1
B) greater than 0 but less than 1
C) 0
D) greater than 1
Assume that the tuna fishing industry is perfectly competitive. Which of the following
best characterizes the industry if, as demand for tuna increases, fishing boats have to go
farther into the ocean to harvest tuna?
A) a constant-cost industry
B) an increasing-cost industry
C) a decreasing-cost industry
D) a fixed-cost industry
Online companies gather personal information about the customers who shop on their
Websites and some of those companies will use the data to estimate price elasticities of
the customers. Doing this is a way that these companies might be able to charge a
higher price for a product to those customers who have a ________ price elasticity of
demand.
A) high
B) low
C) negative
D) unitary
Home Depot sells new and used doors to contractors who build new homes. Home
Depot also sells new and used doors to homeowners. Which of the following would be
counted in GDP?
A) the sale of a used door to a homeowner
B) the sale of a new door to homeowner
C) the sale of a used door to TapKon construction for installation into a new home
D) the sale of a new door to TapKon construction for installation into a new home
A successful market economy requires
A) a government-controlled banking system and government price controls.
B) well-defined property rights and an independent court system to adjudicate disputes
based on the law.
C) generous unemployment benefits and paid medical leave for everyone in the labor
force.
D) an equitable distribution of income and limits on immigration.
Why does the short-run aggregate supply curve shift to the left in the long run,
following an increase in aggregate demand?
A) Workers and firms adjust their expectations of wages and prices downward and they
accept lower wages and prices.
B) Workers and firms adjust their expectations of wages and prices downward and they
push for higher wages and prices.
C) Workers and firms adjust their expectations of wages and prices upward and they
push for higher wages and prices.
D) Workers and firms adjust their expectations of wages and prices upward and they
accept lower wages and prices.