1) Which of the following countries has the largest tax burden?
a.Mexico
b.Canada
c.United States
d.Denmark
2) Lisa’s Production Possibilities FrontierBryce’s Production Possibilities Frontier
s opportunity costs of operating his new business?
a. $25,000
b. $75,000
c. $100,000
d. $175,000
5) The opportunity cost of moving from point A to point D
is 10 dishwashers.
a.True
b.False
6) Which of the following would both make a worker’s wage higher than otherwise?
a.the work is safe, the employer pays an efficiency wage
b.the work is safe, the employer does not pay an efficiency wage
c.the work is dangerous, the employer pays an efficiency wage
d.the work is dangerous, the employer does not pay and efficiency wage
7) Which of the following statements is not correct?
a.A seller would be eager to sell her product at a price higher than her cost.
b.A seller would refuse to sell her product at a price lower than her cost.
c.A seller would be indifferent about selling her product at a price equal to her cost.
d.Since sellers cannot set the price for their product, they must be willing to sell their
product at any price.
8) Figure 15-17
Which of the following areas represents
the profit earned by this profit-maximizing monopolist?
a.BCFE
b.ABE
c.EFG
d.CFIH
9) Table 10-6
The following table shows the total costs for each of four firms (A, B, C, and D) to
eliminate units of pollution from their production processes. For example, for Firm A to
eliminate one unit of pollution, it would cost $46, and for Firm A to eliminate two units
of pollution, it would cost a total of $103.
If the government charged a fee of $85 per unit of pollution, how many units of
pollution would the firms eliminate altogether?
a.10
b.12
c.14
d.16
10) The U.S. federal government finances budget deficits by
a.selling stock, much like a corporation.
b.printing additional currency.
c.borrowing from the public.
d.raising property taxes.
11) When a competitive firm maximizes profit, it will hire workers up to the point
where the
a.marginal product of labor is equal to the product price.
b.marginal product of labor is equal to the wage.
c.value of the marginal product of labor is equal to the product price.
d.value of the marginal product of labor is equal to the wage.
12) In the United States from 1935 to 2011 the share of total income earned by the
bottom fifth of income earners rose and then fell.
a.True
b.False
13) The ownership of human capital
a.is typically embodied in related physical capital.
b.may be subject to government restrictions on transferability.
c.is not easily transferable.
d.All of the above are correct.
14) Figure 8-2
The vertical distance between points A and B represents a tax in the market.
The amount of deadweight loss as a result of the tax is
a. $2.50.
b. $5.
c. $7.50.
d. $10.
15) The deadweight loss of a tax rises even more rapidly than the size of the tax.
a.True
b.False
16) When the government attempts to improve equality in an economy the result is
often
a.an increase in overall output in the economy.
b.additional government revenue since overall income will increase.
c.a reduction in equality.
d.a reduction in efficiency.
17) Table 15-18
A monopolist faces the following demand curve:
Suppose marginal cost is constant at $8 per unit.
When the price effect on revenue is greater than the output effect, marginal revenue is
a.positive. This occurs with the 3rd unit of output.
b.positive. This occurs with the 4th unit of output.
c.negative. This occurs with the 5th unit of output.
d.negative. This occurs with the 6th unit of output.
18) The broken window fallacy states that when a window breaks and someone spends
money to repair it, they have created new economic activity that would not have
otherwise taken place.
a.True
b.False