Which of the following describes how output changes in the short run? Because of
specialization and the division of labor, as more workers are hired
A) output will first increase at an increasing rate, then output will increase at a
decreasing rate.
B) output will first decrease at an increasing rate, then increase at a decreasing rate.
C) the marginal product of labor will first decrease, then increase at a decreasing rate.
D) the marginal product of labor will first be negative and then will be positive.
If GDP calculations included measurements of pollution and environmental damage,
GDP values would most likely be
A) greater than their values without these measurements.
B) less than their values without these measurements.
C) unchanged from their values without these measurements.
D) meaningless, since GDP values without these measurements would no longer be of
value.
Most economists believe that a small amount of the gap between the wages of white
males and the wages of other groups is due to discrimination. Which of the following
factors is not another factor that explains part of this gap?
A) differences in education
B) geographic location
C) differences in experience
D) differing preferences for jobs
Stan owns a software design business. He does not have time to expand his office space
or redesign the layout of his office. He can increase the amount of work he does by
working more hours, asking his current employees to work more hours, or hiring more
employees. The relationship between Stan’s inputs and the maximum output his firm
can produce is called his
A) long-run production function.
B) production possibilities frontier.
C) short-run production function.
D) cost function.
Table 17-4
Table 17-4 lists data for the production of Apple iPods. Apple is assumed to be a price
maker, so to increase its sales of iPods the firm must lower its price. MPL and MRPL
refer to the marginal product of labor and the marginal revenue product of labor,
respectively. What are the price and quantity of workers that result in the maximum
amount of profit Apple would earn from selling iPods?
A) $140; 2
B) $160; 2
C) $140; 3
D) $180; 1
Assume that production from an electric utility caused acid rain. If the government
imposed a tax on the utility equal to the cost of the acid rain, the government’s action
would
A) externalize the externality.
B) result in a marginal social benefit greater than the marginal cost of the electricity.
C) be an example of supply side economic policy.
D) internalize the externality.
A change in all of the following variables will change the market demand for a product
except
A) the price of the product.
B) population and demographics.
C) income.
D) tastes.
A firm using a two-part tariff can produce the economically efficient outcome by
A) making the fixed-fee portion of the price as low as possible.
B) setting the per-unit portion of the price equal to the marginal cost of production.
C) setting the per-unit portion of the price equal to the average cost of production.
D) setting the fixed-fee portion of the price at some proportion to the fixed cost of
production.
Suppose your expenses for this term are as follows: tuition: $5,000, room and board:
$3,000, books and other educational supplies: $500. Further, during the term, you can
only work part-time and earn $4,000 instead of your full-time salary of $10,000. What
is the opportunity cost of going to college this term, assuming that your room and board
expenses would be the same even if you did not go to college?
A) $5,500
B) $8,500
C) $11,500
D) $14,500
Sarita can bake either a combination of 25 cakes and 15 pies or a combination of 10
cakes and 20 pies. If she now bakes 10 cakes and 20 pies, what is the opportunity cost
of baking an additional 15 cakes?
A) 5 pies
B) 10 pies
C) 15 pies
D) 20 pies
Companies in the sharing economy, such as Airbnb and Uber, have the potential to
increase consumer surplus and decrease deadweight loss. This would occur by
________ the equilibrium price in their market, and by doing so ________ efficiency.
A) lowering; decreasing
B) lowering; increasing
C) raising; decreasing
D) raising; increasing
Consumers maximize total utility within their budget constraint by
A) buying the cheapest goods they can find.
B) buying whatever they like the best.
C) buying the goods with the largest marginal utility per dollar spent.
D) spending the same dollar amount for each good.