1) Figure 15-14
If the monopoly operates at an output
level less than Q0, then an increase in output toward (but not exceeding) Q0 would
a.raise the price and raise total surplus.
b.lower the price and raise total surplus.
c.raise the price and lower total surplus.
d.lower the price and lower total surplus.
2) Table 17-20
Nadia and Maddie are two college roommates who both prefer a clean common space
in their dorm room, but neither enjoys cleaning. The roommates must each make a
decision to either clean or not clean the dorm room’s common space. The payoff table
for this situation is provided below, where the higher a player’s payoff number, the
better off that player is. The payoffs in each cell are shown as (payoff for Nadia, payoff
for Maddie).
Refer to Table 17-20. If Nadia chooses to clean, then Maddie will
a.clean, and Maddie’s payoff will be 30.
b.not clean, and Maddie’s payoff will be 50.
c.clean, and Maddie’s payoff will be 7.
d.not clean, and Maddie’s payoff will be 10.
3) Income taxes and property taxes generate the highest tax revenue for state and local
governments.
a.True
b.False
4) Figure 15-4
The demand curve for a monopoly firm is depicted by curve
a.A.
b.B.
c.C.
d.D.
5) The following table shows the demand schedule for a particular good.
Using the midpoint method, when price rises from $8 to $12, the is a. 0.4
b.1
c.1.5
d.2.33
6) When a tax is imposed on the buyers of a good, the demand curve shifts
a.downward by the amount of the tax.
b.upward by the amount of the tax.
c.downward by less than the amount of the tax.
d.upward by more than the amount of the tax.
7) Figure 15-18
If the monopoly firm is not allowed to price discriminate, then consumer surplus
amounts to
a. $1,000.
b. $2,000.
c. $3,000.
d. $4,000.
8) Among the following situations, which one is least likely to apply to a
monopolistically competitive firm?
a.profit is positive in the short run
b.total cost exceeds total revenue in the short run
c.profit is positive in the long run
d.total revenue equals total cost in the long run
9) Refer to Figure 9-15. Producer surplus with trade and without a tariff is
a.G.
b.C + G.
c.A + C + G.
d.A + B + C + G.
10) Senator Jackson argues that replacing the federal income tax with a national sales
tax would increase the level of output. Senator Feldman objects that this policy would
benefit the rich at the expense of the poor.
a.Both senators’ arguments are primarily about equality.
b.Both senators’ arguments are primarily about efficiency.
c.Senator Jackson’s argument is primarily about equality, while Senator Feldman’s
argument is primarily about efficiency.
d.Senator Jackson’s argument is primarily about efficiency, while Senator Feldman’s
argument is primarily about equality.
11) In the early twentieth century, racial segregation of streetcars in the southern cities
was largely opposed by
a.streetcar firms.
b.government officials.
c.Federal lawyers applying the Sherman antitrust laws.
d.consumers.
12) Horizontal equity in taxation refers to the idea that people
a.in unequal conditions should be treated differently.
b.in equal conditions should pay equal taxes.
c.should be taxed according to their ability to pay.
d.should receive government benefits according to how much they have been taxed.
13)
Consider the production possibilities curve for a country that can produce sweaters,
apples (in bushels), or a combination of the two.
If this society is producing at point T,
a.there is unemployment.
b.production is efficient.
c.growth can only be achieved through an advancement in technology.
d.the opportunity cost of producing one more sweater is approximately 40 bushels of
apples.
14) How have insights from the field of psychology influenced the thinking of
economists in recent years?
15) The following table shows the number of cases of water each seller is willing to sell
at the prices listed.
Assume these are the only four suppliers in this market and the function for market
demand is QD=1000-100P, where QDis the quantity demanded and P is the price. If the
price is $6 per case, is there a shortage or surplus, and how large is the shortage or
surplus?
16) Sheryl sits on her patio and plays her guitar while her neighbors are outside. Sheryl
neither pays nor receives any compensation for playing her guitar. Under what
condition does her guitar-playing give rise to a positive externality?
17) Figure 8-25
What are the equilibrium price and equilibrium quantity in this market?
18) According to the mathematical laws that govern the relationship between average
total cost and marginal cost, where must these two curves intersect?
19) Scenario 10-2
The demand curve for restored historic buildings slopes downward and the supply
curve for restored historic buildings slopes upward. The production of the 50th restored
historic building entails the following:
♦ private cost of $800,000;
♦ private value of $650,000;
♦ social value of $800,000.
Is there an external cost associated with the restoration of the 50th historic building, or
is there an external benefit? What is the amount of that external cost or external benefit?
20) As the number of firms in an oligopoly industry increases, the market
moves closer to amarket.
21) Scenario 22-6
Shana owns a boutique that sells highend women’s clothing and accessories. Katie
works part-time at the boutique and frequently is the only employee in this small store.
Shana pays Katie a wage that is higher than the market wage for this type of job. When
the store is not full of customers, Katie diligently works on displays and cleans to keep
the store looking its best. Belinda is a customer in the store who asks Katie’s opinion on
the quality of some jeans she is considering purchasing. Katie tells her the quality is
great even though she’s had several other customers return them due to flaws. Magda is
another customer who is returning a necklace without volunteering that a gem is
missing.
Refer to Scenario 22-6. What is the name for the problem Katie creates by lying about
the quality of the jeans?
22) Scenario 9-3
Suppose domestic demand and domestic supply in a market are given by the following
equations:
With no trade allowed, what are the equilibrium price and quantity in this market?