1) Table 16-2
The following table shows the total output produced by the top six firms as well as the
total industry output for each industry.
Which industry has the lowest concentration ratio?
a.Industry J
b.Industry K
c.Industry L
d.Industry M
2) Which of the following sets of preferences can not satisfy the property of
transitivity?
a.Plan A is preferred to plan D. Plan D is preferred to plan B. Plan C is preferred to plan
B.
b.Plan A is preferred to plan B. Plan B is preferred to plan C. Plan A is preferred to plan
C.
c.Plan C is preferred to plan A. Plan B is preferred to plan A. Plan C is preferred to plan
B.
d.Plan D is preferred to plan C. Plan C is preferred to plan B. Plan B is preferred to plan
D.
3) Equilibrium quantity must increase when demand
a.increases and supply does not change, when demand does not change and supply
increases, and when both demand and supply increase.
b.increases and supply does not change, when demand does not change and supply
increases, and when both demand and supply decrease.
c.decreases and supply does not change, when demand does not change and supply
decreases, and when both demand and supply increase.
d.decreases and supply does not change, when demand does not change and supply
decreases, and when both demand and supply decrease.
4) Scenario 15-5
An airline knows that there are two types of travelers: business travelers and
vacationers. For a particular flight, there are 100 business travelers who will pay $600
for a ticket while there are 50 vacationers who will pay $300 for a ticket. There are 150
seats available on the plane. Suppose the cost to the airline of providing the flight is
$20,000, which includes the cost of the pilots, flight attendants, fuel, etc.
How much additional profit can the airline earn by charging each customer their
willingness to pay relative to charging a flat price of $600 per ticket?
a. $15,000
b. $25,000
c. $40,000
d. $70,000
5) Figure 16-9
The figure is drawn for a monopolistically-competitive firm.
The firm’s maximum profit is
a. $-5,000.00.
b. $0.
c. $5,000.00.
d. $8,887.78.
6) The wage gap between skilled and unskilled worker has
a.risen; some economists argue that this is partly due to increased international trade.
b.risen; some economists argue that this is partly due to decreased international trade.
c.fallen; some economists argue that this is partly due to increased international trade.
d.fallen; some economists argue that this is partly due to decreased international trade.
7) Tying involves a firm
a.colluding with another firm to restrict output and raise prices.
b.selling two individual products together for a single price rather than selling each
product individually at separate prices.
c.temporarily cutting the price of its product to drive a competitor out of the market.
d.requiring that the firm reselling its product do so at a specified price.
8) Economists at the U.S. Department of the Treasury help design U.S. coins and paper
money.
a.True
b.False
9) The oligopoly price will be greater than marginal cost but less than the monopoly
price when
a.the oligopolists collude by jointly choosing a quantity to produce and maintaining
their agreement.
b.the oligopolists collude by jointly choosing a price to charge and maintaining their
agreement.
c.each oligopolist individually chooses a quantity to produce to maximize profit.
d.each oligopolist’s objective is minimization of average total cost, rather than
maximization of profit.
10) Table 20-1
The following table shows the distribution of income in Marysville.
Refer to Table 20-1. Seventy-five percent of all families have incomes above what
level?
a.$30,000
b.$60,000
c.$90,000
d.There is insufficient information to answer this question.
11) Figure 8-23. The figure represents the relationship between the size of a tax and the
tax revenue raised by that tax.
If the economy is at point B
on the curve, then an increase in the tax rate will
a.increase the deadweight loss of the tax and increase tax revenue.
b.increase the deadweight loss of the tax and decrease tax revenue.
c.decrease the deadweight loss of the tax and increase tax revenue.
d.decrease the deadweight loss of the tax and decrease tax revenue.
12) Scenario 21-1
Suppose the price of hot wings is $10, the price of beer is $1, and the consumer’s
income is $50. In addition, suppose the consumer’s budget constraint illustrates hot
wings on the horizontal axis and beer on the vertical axis.
Refer to Scenario 21-1. If the price of beer doubles to $2, then the
a.budget constraint intersects the vertical axis at 25 beers.
b.slope of the budget constraint rises to -2.
c.slope of the budget constraint falls to -4.
d.budget constraint shifts inward in a parallel fashion.
13) Figure 10-11
The socially optimal quantity of output is
a.240 units, since the value to the buyer of the 240th unit is equal to the cost incurred by
the seller of the 240th unit.
b.240 units, since the value to society of the 240th unit is equal to the cost incurred by
the seller of the 240th unit.
c.420 units, since the value to the buyer of the 420th unit is equal to the cost incurred by
the seller of the 420th unit.
d.420 units, since the value to society of the 420th unit is equal to the cost incurred by
the seller of the 420th unit.