DeShawn’s Detailing is a service that details cars at the customers’ homes or places of
work. DeShawn’s cost for a basic detailing package is $40, and he charges $75 for this
service. For a total price of $90, DeShawn will also detail the car’s engine, a service that
adds an additional $20 to the total cost of the package. What is DeShawn’s marginal
benefit if he sells a basic detailing package?
A) $35
B) $75
C) He makes a marginal loss of $15, not a marginal benefit.
D) The marginal benefit cannot be determined.
Table 4-6
The table above lists the marginal cost of polo shirts by Marko’s, a firm that specializes
in producing men’s clothing. If the market price of Marko’s polo shirts is $30, producer
surplus is
A) $0.
B) $16.
C) $52.
D) $68.
Assume that the demand curve for MP3 players shifts to the right and the supply curve
for MP3 players shift to the left, but the supply curve shifts more than the demand
curve. As a result
A) both the equilibrium price and quantity of MP3 players will decrease.
B) the equilibrium price of MP3 players will decrease; the equilibrium quantity will
increase.
C) the equilibrium price of MP3 players may increase or decrease; the equilibrium
quantity will decrease.
D) the equilibrium price of MP3 players will increase; the equilibrium quantity will
decrease.
What is the largest component of spending in the United States?
A) consumption spending
B) investment spending
C) government spending
D) net investment spending
In a closed economy, which of the following components of GDP is not included?
A) investment
B) government spending
C) net exports
D) consumption
Suppose the U.S. government encouraged consumers to trade in their old automobiles
for more efficient, new models by paying up to $5,000 for the old automobiles. These
consumers would be exemplifying the economic idea that
A) people are rational.
B) people respond to economic incentives.
C) optimal decisions are made at the margin.
D) equity is more important than efficiency.
Figure 16-8
In the graph above, suppose the economy in Year 1 is at point A and expected in Year 2
to be at point B. Which of the following policies could the Congress and the president
use to move the economy to point C?
A) increase government purchases
B) decrease government purchases
C) increase income taxes
D) sell Treasury bills
Policies that mandate the installation of specific pollution control devices are called
A) command-and-control policies.
B) benefit policies.
C) welfare policies.
D) incentive policies.
Figure 18-1
Suppose that the U.S. government deficit decreases, causing interest rates in the United
States to fall relative to those in the European Union. Assuming all else remains
constant, how would this be represented?
A) Supply would decrease, demand would decrease and the economy moves from B to
C to D.
B) Supply would increase, demand would decrease and the economy moves from C to
B to A.
C) Supply would decrease, demand would increase and the economy moves from A to
D to C.
D) Supply would increase, demand would increase and the economy moves from D to
A to B.
Suppose favorable weather resulted in a bumper crop of oranges in Florida. In the
market for oranges,
A) the supply curve shifted to the right, resulting in a decrease in the equilibrium price.
B) the supply curve shifted to the right, resulting in an increase in the equilibrium price.
C) the demand curve shifted to the left, resulting in a decrease in the equilibrium price.
D) the demand curve shifted to the right, resulting in an increase in the equilibrium
price.
Table 2-16
Table 2-16 shows the number of labor hours required to produce a cell phone and a
board foot of lumber in Estonia and Finland. What is Finland’s opportunity cost of
producing one board foot of lumber?
A) 0.25 cell phones
B) 4 cell phones
C) 12 cell phones
D) 16 cell phones