If people begin to favor science fiction novels to a greater degree than previously, the
demand curve for science fiction novels
a. shifts rightward.
b. shifts leftward.
c. stays constant.
d. can shift either rightward or leftward.
Refer to Exhibit 3-15. In Exhibit 3-15,
Exhibit 3-15
a. there is a shortage of doctors at fee F1.
b. there is a surplus of doctors at fee F1.
c. Q3 doctors are employed at fee F1.
d. Q2 doctors are employed at fee F1.
e. both a and c
Refer to Exhibit 26-5. If the natural monopoly firm is guaranteed a normal profit
(nothing more and nothing less) then it will produce __________ quantity of output and
charge a price of __________ per unit.
Exhibit 26-5
a. Q1; P3
b. Q1; P2
c. Q2; P3
d. Q3; P2
e. none of the above
A single-price monopolist sets its price for good X at $75 and is selling more than one
unit of good X. Which of the following must be true?
a. The average cost of that unit must be $75.
b. The marginal cost of that unit must be $75.
c. The marginal revenue of that unit must be $75.
d. The marginal revenue of that unit must be less than $75.
Smith, who has $10,000, receives an extra dollar, as does Jones, who has $100,000.
Smith receives more utility from the extra dollar than does Jones. This is an example of
a. an interpersonal utility comparison.
b. the law of diminishing marginal utility.
c. the diamond-water paradox.
d. a and b
Which of the following is not consistent with the view of labor unions as a collective
voice?
a. Unions reduce job exiting.
b. Labor productivity declines as a result of labor unions
c. The worker turnover rate is reduced by labor unions.
d. Workers feel more secure in their jobs as a result of labor unions.
Suppose a sailboat factory and a fishing boat factory exist in the same town. Employees
at both factories have the same skills and are initially paid the same wage rate. If the
sailboat manufacturer increases the hourly wage paid to his employees, then the
a. demand for sailboats will increase, and the supply will decrease.
b. quantity supplied of labor at the sailboat factory will increase.
c. supply of labor at the fishing boat factory will increase.
d. b and c
e. a and c
When universities charge students less than the equilibrium tuition for admission, they
have to impose some nonprice-rationing device.
a. True
b. False
Refer to Exhibit 26-4. The profits of an unregulated natural monopoly that becomes
regulated on the basis of marginal-cost pricing would
Exhibit 26-40
a. increase substantially.
b. decrease substantially, but remain positive.
c. be brought down to zero.
d. become negative.
In a monopsony model of the labor market, as more labor is hired, the marginal factor
cost of labor
a. decreases.
b. becomes zero.
c. remains constant.
d. increases.
e. becomes identical to the wage rate.
“Tying contracts” are
a. agreements between unions and businesses such that when a labor contract is signed,
the union and the firm are bound by its terms.
b. selling to a retailer on the condition that the retailer not resell the product to another
business.
c. selling to a retailer on the condition that the retailer not carry any rival products.
d. arrangements whereby the sale of one product is dependent on the purchase of some
other product.
If a perfectly competitive firm and a monopolistic competitor in long run equilibrium
face the same demand and cost curves, then the competitive firm will produce a
a. greater output and charge a lower price than the monopolistic competitor.
b. greater output, but charge the same price as the monopolistic competitor.
c. greater output and charge a higher price than the monopolistic competitor.
d. smaller output and charge a lower price than the monopolistic competitor.
e. smaller output and charge a higher price than the monopolistic competitor.
Refer to Exhibit 28-l. Four demand curves for labor are displayed: D1, D2, D3, and
D4.Which provides the least pronounced wage-employment tradeoff?
Exhibit 28-1
a. D1
b. D2
c. D3
d. D4
Suppose wages for construction workers are higher in Hawaii than in Florida. This
could be because the
a. moving costs between Florida and Hawaii are so high that construction workers in
Florida do not relocate to Hawaii.
b. product price of what construction workers in Hawaii produce is higher than the
product price of what construction workers in Florida produce and the moving costs
between Florida and Hawaii are zero.
c. moving costs between Florida and Hawaii are zero.
d. marginal physical product of construction workers in Hawaii is higher than the
marginal physical product of construction workers in Florida and the moving costs
between Florida and Hawaii are zero.
e. b and d
The more dollars that must be given up to buy one British pound, the __________
American goods are for the British and the __________ American goods the British
will buy; thus __________ dollars will be demanded.
a. more expensive; fewer, more
b. less expensive; more, more
c. more expensive; fewer, fewer
d. less expensive; fewer, more
e. none of the above
Given that the demand for unskilled labor curve is downward-sloping, an unintended
effect of raising the minimum wage is that some people who worked at the lower wage
will lose their jobs at the higher wage.
a. True
b. False
If there are five firms in an industry and the market shares of the firms are 40 percent,
22 percent, 20 percent, 16 percent and 2 percent.The four-firm concentration ratio for
this industry is __________________ percent and the Herfindahl Index is
________________.
a. 90; 3,300
b. 98; 2,506
c. 98; 2,744
d. 86; 9,216
e. This cannot be determined from the data given.
In general, in a given rich country the ______________ the opportunity cost for a
woman of having and raising a child, the _____________ children she will have.
a. higher; fewer
b. higher; more
c. lower; fewer
d. lower; more
e. a and d
Total industry sales are $750 million. The four largest firms have sales of $256 million,
$120 million, $78 million, and $42 million. The industry’s four-firm concentration ratio
is
a. 0.66.
b. 0.69.
c. 0.39.
d. 0.14.
For a product price taker, VMP equals MR.
a. True
b. False
Refer to Exhibit 25-7. Total fixed costs are equal to
a. $0.
b. $10.
c. $60.
d. $40.
e. There is not enough information given to answer the question.
Refer to Exhibit 25-3. Total revenue of this profit maximizing monopolistic competitor
is represented by the area
Exhibit 25-3
a. 0P1AQ2.
b. 0P5EQ2.
c. P3P1AC.
d. 0P4DQ3.
Something that provides utility is called a
a. good.
b. bad.
c. want.
d. need.
e. a and d