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1) Table 13-16
Listed in the table are the long-run total costs for three different firms.
Which firm is experiencing diseconomies of scale?
a.Firm A only
b.Firm B only
c.Firm C only
d.Firm A and Firm B only
2) At what price would there be an excess supply
of 200 units of the good?
a.$15
b.$20
c.$30
d.$35
3) The deadweight loss associated with a tax on a commodity is generated by
a.the consumers who still choose to consume the commodity but pay a higher price that
reflects the tax.
b.the consumers who choose to not consume the commodity that is taxed.
c.all citizens who are able to use services provided by government.
d.the consumers who are unable to avoid paying the tax.
4) If the demand for a product increases, then we would expect equilibrium price
a.to increase and equilibrium quantity to decrease.
b.to decrease and equilibrium quantity to increase.
c.and equilibrium quantity both to increase.
d.and equilibrium quantity both to decrease.
5) Figure 7-26
Refer to Figure 7-26. If the government imposes a price floor of $90 in this market,
then consumer surplus will be
a. $225.
b. $450.
c. $975.
d. $1,350
6) Which of the following would increase in response to a increase in the price of
ironing boards?
a.the quantity of irons demanded at each possible price of irons
b.the equilibrium quantity of irons
c.the equilibrium price of irons
d.None of the above is correct.
7) What causes the labor demand curve to shift?
(i)changes in productivity
(ii)changes in wages
(iii)changes in output prices
a.(i) and (ii)
b.(ii) and (iii)
c.(i) and (iii)
d.All of the above are correct.
8) Supply and demand together determine the price and quantity of a good sold in a
market.
a.True
b.False
9) Figure 10-8
If the government wanted to tax or subsidize this good to achieve the socially-optimal
level of output, it would
a.introduce a subsidy of $2 per unit.
b.impose a tax of $2 per unit.
c.introduce a subsidy of $4 per unit.
d.impose a tax of $4 per unit.
10) Arrow's impossibility theorem demonstrates the impossibility of the median voter
theorem.
a.True
b.False
11) Figure 16-8
The lines in the figures below illustrate the potential effect of entry and exit in a
monopolistically competitive market on either the demand curve or the marginal cost
curve of existing firms.
Which of the diagrams illustrates the
impact of some existing firms leaving the market?
a.panel a
b.panel b
c.panel c
d.panel d
12) Welfare economics is the study of how
a.the allocation of resources affects economic well-being.
b.a price ceiling compares to a price floor.
c.the government helps poor people.
d.a consumer's optimal choice affects her demand curve.
13) Figure 8-11
The tax revenue that the government collects equals
a. .
b. .
c. .
d. .
14) Figure 8-2
The vertical distance between points A and B represents a tax in the market.
The loss of producer surplus associated with some sellers dropping out of the market as
a result of the tax is
a.$0.
b.$1.
c.$2.
d.$3.
15) When a firm operates with excess capacity, it must be in a monopolistically
competitive market.
a.True
b.False
