1) If the consumer is willing to pay a price higher than the actual price of a product,
then the consumer will not buy the product because the consumer surplus will be
negative.
2) In the extraction of a nonrenewable resource such as coal, the mining firm faces
“user costs” which refer to the cost of digging out the coal, running the mine, and
transporting the coal.
3) “Loss aversion” helps explain why people buy insurance policies with lower
deductibles even though the policies are more expensive.
4) Economists agree that corporations always shift the corporate income tax to
consumers by raising product prices.
5) Since the mid-1950s, union membership has declined as a percentage of employed
wage and salary workers.
6) The demand curve faced by a monopolistically competitive firm is more elastic than
the monopolist’s demand curve.
7) Results of the dictator and ultimatum games reveal that people act in equally
self-interested ways, regardless of the context or rules of the game.
8) One of the advantages of being first to develop a new product is the opportunity to
develop brand-name recognition.
9) If the coefficient of income elasticity of demand is positive, the product is an inferior
good.
10) The increasing use of part-time and temporary workers can partly be blamed on the
rising health care costs to employers.
11) The demand for labor is a derived demand, whereas the demand for capital is not.
12) In repeated games, credible threats are necessary for the players to reach a Nash
equilibrium.
13) That one thing that monopolistic competition provides, which is not assured in the
other market structures, is product variety.
14) A rational consumer will try to achieve the highest indifference curve that his or her
income will allow.
15) Which of the following factors will decrease the current demand for a product?
A.An expected increase in the future price of the product
B.A decrease in the current price of a substitute product
C.A decrease in the current price of a complementary product
D.An increase in the current price of a substitute product
16) Normal profits are:
A.The profits reported by accountants on a firm’s annual financial statement
B.Identical to economic profits
C.Determined by subtracting total costs from total revenues
D.Considered an implicit cost by economists
17) A study concludes that in DVCs rising incomes must first be achieved and only then
will there be slower population growth. What view of DVC population growth would it
be supporting?
A.Traditional view
B.Peasant agriculture view
C.The will-to-develop view
D.Demographic transition view
18) Under the managed floating system of exchange rates:
A.all exchange rates vary with changes in the free-market prices of gold.
B.industrialized nations meet once each year to negotiate readjustments in their
exchange rates.
C.exchange rates are essentially flexible, but governments intervene to offset disorderly
fluctuations in rates.
D.exchange rates are adjusted at the discretion of the IMF.
19) In the U.S. balance of payments, U.S. purchases of assets abroad are a(n):
A.U.S. dollar outflow.
B.U.S. dollar inflow.
C.current account item.
D.inpayment.
20)
Refer to the diagram. Equilibrium price is:
A.e
B.d
C.c
D.b
21)
Older workers are:
A.Much more likely to migrate than younger workers because older workers have lower
moving costs
B.Much less likely to migrate than younger workers because older workers are more likely
to have children at home
C.Much more likely to migrate than younger workers because older have lower implicit
costs of migrating
D.Much more likely to migrate than younger workers because younger workers have
stronger roots and ties to the local community
22) A government-set price floor on a product:
A.Does not interfere with the rationing function of price in a market system
B.Will drive resources away from the production of the product
C.Will attract more resources towards the production of the product
D.Is intended to benefit the buyers of the product
23) Economic profits and losses:
A.are both considered by economists to be a part of production costs.
B.are essential to the reallocation of resources from less desired to more desired goods.
C.have no influence on the composition of domestic output.
D.equalize the distribution of income in the long run.
24) The goal of profit-maximizing extraction firms such as an oil company or a mining
company is to extract resources:
A.As fast as possible
B.As slowly as possible
C.When the user costs are rising
D.For the greatest stream of profit over time
25) From an economic perspective, when a consumer decides to buy more life
insurance, the consumer has most likely concluded that the:
A.Marginal cost of more insurance coverage is negative
B.Marginal benefit of more insurance coverage is greater than zero
C.Marginal benefit of more insurance coverage is greater than the marginal cost
D.Marginal cost of more insurance coverage is equal to the payment for the extra
coverage
26) When a U.S. importer buys 100,000 pairs of pants from a Hong Kong company, this
transaction will represent a:
A.Credit on the current account of the U.S. balance of payments
B.Debit on the current account of the U.S. balance of payments
C.Credit on the financial account of the U.S. balance of payments
D.Debit on the financial account of the U.S. balance of payments
27) Which of the following statements is true?
A.Nash equilibriums exist only in games with dominant strategies.
B.Dominant strategies do not exist in repeated games.
C.Collusive agreements will always break down in repeated games.
D.Games with a known ending date undermine reciprocity strategies.
28) Tomas quit his job at the Tri-City bank where he earned $50,000 a year to start his
own businesses, a bank marketing company. He estimates his entrepreneurial talent or
forgone entrepreneurial income to be $5,000 a year. He used $100,000 in savings that
earned 5 percent interest annually to finance the new business. In the first year, the firm
earned revenue of $250,000. The costs for rent, supplies, and an employees salary were
$200,000. What was the accounting profit for the new business? What was the
economic profit (or loss)? Explain your calculations for both questions.
29) What perspective do economists use to evaluate the issue of the amount of pollution
control?
30) Explain the special-interest effect.
31)
32) Evaluate the statement: Americans should be pleased with the advances in U.S.
health care because it improves the overall standard of living.
33) What are social regulation and agency examples?
34) Why do street performers face a free-rider problem? How do they try to reduce this
problem?
35) How can total course learning and studying be related to the law of diminishing
returns?