There is currently a price ceiling in the market for transplanted kidneys, which has
helped to create a shortage of transplanted kidneys.
a. True
b. False
Positive economics is concerned with
a. value judgments.
b. cause-effect relationships.
c. observations that cannot be proved.
d. both b and c
Which of the following is not a condition of a contestable market?
a. There is easy entry into and costless exit from the market.
b. New firms entering the market can produce the product at the same cost as current
firms.
c. Firms exiting the market can easily dispose of their fixed assets by selling them
elsewhere.
d. New firms entering the market produce a higher-quality product than existing firms.
One implication of the median voter model is that a candidate is likely to label himself
__________ and his or her opponent as __________.
a. moderate; too far right or too far left (whichever makes more sense)
b. a member of one of the political wings; moderate or mainstream
c. as a member of the political right; moderate
d. as a member of the political left; moderate
e. none of the above
There are two divorce laws, A and B. Under A, it takes only one person to agree to a
divorce and the divorce is granted. Under B, it takes two persons to agree to a divorce
before it is granted. According to Coase,
a. there will be the same number of divorces under both laws if transaction costs are
zero.
b. there will be more divorces under law A.
c. there will be more divorces under law B.
d. taxes should be imposed on those parties who seek divorces.
e. subsidies should be granted to those persons who unwillingly get divorces.
The type of regulatory pricing (of a natural monopoly firm) that is consistent with
resource-allocative efficiency is __________ cost pricing.
a. average
b. sunk
c. marginal
d. fixed
e. none of the above
Which of the following is usually discussed in the case against government?
a. special interest groups and transfers
b. the unintended effects of governments actions
c. removal from the prisoner’s dilemma
d. a and b
e. none of the above
Economists use the ceteris paribus assumption primarily in order to
a. make their analyses easier for them to conduct.
b. designate what they believe is the correct relationship between two variables.
c. explain why people sometimes consume more of a good when its price rises.
d. explain why those things that come first do not necessarily cause those things that
come later.
e. designate the difference between normative and positive economics.
Exhibit 5-1
which shows supply and demand for freeway space at both 8 a.m. and 11 p.m. A toll of
P1 creates __________ at 8 a.m. and __________ at 11 p.m.
a. a shortage; a surplus
b. a surplus; a shortage
c. equilibrium; a surplus
d. a shortage; equilibrium
Attempts to determine “what is” are part of __________ economics.
a. positive
b. normative
c. positive and normative
d. neither positive nor normative
A rationing device is a method used to resolve who gets what of available goods and
resources.
a. True
b. False
For a perfectly competitive firm,
a. VMP > MRP.
b. VMP < MRP.
c. VMP = MRP.
d. There is not enough information to answer the question.
In the burglary crime model presented in the textbook, as the anguish cost of
committing a burglary rises, the prediction is that
a. more people will commit burglary.
b. the same number of people will commit burglary.
c. fewer people will commit burglary.
d. There is not enough information to answer this question.