1) A good is excludable if
a.one person’s use of the good diminishes another person’s enjoyment of it.
b.the government can regulate its availability.
c.it is not a normal good.
d.people can be prevented from using it.
2) When negative externalities are present in a market,
a.producers will be affected but consumers will not.
b.producers will supply too much of the product.
c.demand will be too high.
d.the market will still maximize total benefits.
3) A budget deficit
a.occurs when government receipts are less than spending.
b.occurs when government spending is less than receipts.
c.occurs when government receipts are equal to spending.
d.is the accumulation of years of government overspending.
4) Figure 20-3
Refer to Figure 20-3. Which of the following is consistent with the data reported in the
figure?
a.Policies to reduce elderly (65 years and older) poverty rates since 1959 seem to have
been effective.
b.The age group suffering the highest poverty rate in recent years has been 18 to 64
year olds.
c.Policies to reduce youth (under 18 years) poverty rates since 1959 seem to have been
effective.
d.All of the above are correct.
5) Some discriminatory hiring practices can be expected, even if markets are
competitive, as a result of
a.unrestricted entry and exit in markets.
b.lower costs of hiring.
c.a perfectly elastic market demand.
d.customer preferences.
6) The study of how the allocation of resources affects economic well-being is called
a.consumer economics.
b.macroeconomics.
c.willingness-to-pay economics.
d.welfare economics.
7) Panel (a)
Panel (b)
Panel (c)
Panel (d)
Which of the four panels represents the market for peanut butter after a major hurricane
hits the peanut-growing south?
a.Panel (a)
b.Panel (b)
c.Panel (c)
d.Panel (d)
8) Figure 8-6
The vertical distance between points A and B represents a tax in the market.
Without a tax, the equilibrium price and quantity are
a. $16 and 300
b. $10 and 600
c. $10 and 300.
d. $6 and 300
9) Assume that Andrea and Paul can switch between producing wheat and producing
beef at a constant rate.
Which of the following combinations of wheat and beef could Andrea produce in one
8-hour day?
a.16 bushels of wheat and 32 pounds of beef
b.9 bushels of wheat and 25 pounds of beef
c.7 bushels of wheat and 15 pounds of beef
d.10 bushels of wheat and 13 pounds of beef
10) Suppose the price of good X falls and the consumption of good X increases. From
this we can infer that X is a(n)
(i)normal good.
(ii)inferior good.
(iii)Giffen good.
a.(i) only
b.(i) or (ii) only
c.(iii) only
d.(ii) or (iii) only
11) The resources that a taxpayer devotes to complying with the tax laws are a type of
a.consumption tax.
b.value-added tax.
c.deadweight loss.
d.producer surplus.
12) For any competitive market, the supply curve is closely related to the
a.preferences of consumers who purchase products in that market.
b.income tax rates of consumers in that market.
c.firms‘ costs of production in that market.
d.interest rates on government bonds.