As a determinant of a person’s income, luck is more important in the __________ run,
as continuous reoccurrences of one kind of luck are __________.
a. short; likely
b. short; unlikely
c. long; likely
d. long; unlikely
A Broadway play company can only charge one price for tickets to a given performance
of its play.The company manager notices that the company earns greater total revenue
when they charge a higher ticket price and its theater is three-quarters full than when
they charge a lower ticket price and the theater is completely full. It follows that
demand for this play is
a. elastic.
b. unit elastic.
c. perfectly inelastic.
d. perfectly elastic.
e. inelastic.
The price of good B has a pattern such that P = $20 on Monday through Thursday of
every week, and P = $25 on Fridays.If speculators begin participating in the market for
good B, their actions will likely lead to a(n) ______________ in the price of good B on
Monday through Thursday and a(n) _______________ in the price of good B on Friday.
a. increase; increase
b. increase; decrease
c. decrease; increase
d. decrease; decrease
Which of the following statements is true?
a. As a consequence of the monopoly firm producing the quantity of output at which
price equals marginal cost, it is resource allocative efficient.
b. As a consequence of the perfectly competitive firm producing the quantity of output
at which price equals marginal cost, it is resource allocative efficient.
c. a and b
d. none of the above
Demand for a food item increases by more than the supply of the food item. One thing
for certain is that
a. the price of the food item rises.
b. income elasticity of demand (for the food item) is greater than 1.
c. the supply curve is price elastic.
d. real income rises as a result.
e. none of the above
Suppose that on Monday, a Big Mac cost $3.00 in the United States and 310 Japanese
yen in Japan. On Monday, the exchange rate was $1 = 85 yen. According to the
purchasing power parity theory, the yen was __________ by approximately
__________ percent.
a. overvalued; 22
b. undervalued; 40
c. overvalued; 29
d. undervalued; 22
e. overvalued; 18
Two candidates, Smith and Jones, are running for the same political office. Last night
they were in a debate. It is generally accepted that Smith is perceived more to the left
after the debate than before the debate. This is bad news for Jones if before the debate
Smith was perceived
a. too far right.
b. too far left.
c. as being in the middle of the political spectrum.
d. b or c
e. none of the above
Exhibit 24-8
A profit-maximizing single-price monopolist will produce which quantity of output?
a. 3 units
b. 4 units
c. 5 units
d. 6 units
e. There is not enough information given to answer this question.
The price of a foodstuff falls and the total revenue (received by farmers for selling the
foodstuff) rises. What could explain this?
a. Increased supply and elastic demand.
b. Real income rises and the foodstuff is an inferior good.
c. Real income rises and the foodstuff is a normal good.
d. Increased supply and inelastic demand.
e. none of the above
In the long run, if inputs are increased by 10 percent and output increases by 20 percent,
then __________ are said to exist.
a. economies of scale
b. constant returns to scale
c. diseconomies of scale
d. diminishing marginal returns
Which of the following is a microeconomics topic?
a. the study of how prices are determined in the computer industry
b. the study of unemployment in the economy
c. the study of how changes in the nation’s money supply affect the nation’s output
d. a and c
e. b and c
If the purchase and sale of a currently illegal drug (for example, marijuana) were
decriminalized, economists would expect
a. an increase in demand and supply of this drug.
b. an increase in demand and a decrease in supply of this drug.
c. a decrease in demand and an increase in supply of this drug.
d. a decrease in demand and supply of this drug.
As the price of good Z falls, the quantity demanded of good Z rises, but the quantity
supplied of good Z does not change.Based upon this information we can conclude that
the demand curve for good Z is ________________ and the supply curve for good Z is
________________.
a. downward sloping; upward sloping
b. upward sloping; downward sloping
c. upward sloping; vertical
d. downward sloping; vertical
e. vertical; downward sloping