In a perfectly competitive market the term “price taker” applies to
A) sellers and buyers.
B) firms but not buyers.
C) buyers but not sellers.
D) only the smallest sellers and buyers.
A firm’s net worth is calculated as
A) the difference between a firm’s revenues and explicit costs.
B) the difference between a firm’s revenues and implicit costs.
C) the difference between a firm’s assets and liabilities.
D) the difference between a firm’s liabilities and outstanding equities.
Figure 2-14
Which two arrows in the diagram depict the following transaction: Dorian Gray hires
“Wild Oscar,” a professional portrait artist, to paint his picture.
A) J and M
B) K and G
C) K and M
D) J and G
Figure 16-9
Given that the economy has moved from A to B in the graph above, which of the
following would the appropriate fiscal policy to achieve potential GDP?
A) increase taxes
B) increase government spending
C) decrease the money supply
D) increase interest rates
The attainable production points on a production possibility curve are
A) the horizontal and vertical intercepts.
B) the points along the production possibilities frontier.
C) the points outside the area enclosed by the production possibilities frontier.
D) the points along and inside the production possibility frontier.
________ is the ease with which a financial security can be exchanged for money.
A) Risk
B) The face value
C) Liquidity
D) The rate of return
Figure 17-2
Suppose the economy is at point C in the figure above. If workers adjust their
expectations of inflation, which of the following will be true?
A) The short-run Phillips curve will shift to the right.
B) The short-run Phillips curve will shift to the left.
C) The economy will move from C to A.
D) Workers and firms expect inflation to be 1%.
E) The natural rate of unemployment is 6%.
Article Summary. According to the Department of Agriculture, net farm income
will grow to a record high of $120.6 billion in 2013, up from the previous high
mark in 2011 and after adjusting for inflation, its second highest level since 1973.
Net cash income, however, is expected to fall by 10 percent due to unsold
inventories. Exports of chickens and milk are expected to rise by 3 percent and 17
percent, respectively. Source: Ros Krasny, “Farm income poised for record 2013:
USDA,” Reuters, August 27, 2013.
All else equal, the increase in demand for chicken and milk exports will ________ the
market prices for these exports and ________ economic profit in these markets.
A) increase; decrease
B) decrease; increase
C) increase; increase
D) decrease; decrease
Which of the following is not a way by which price discriminating firms can segment a
market?
A) on the basis of time of purchase, for example long-distance calling
B) by requiring an advance purchase, for example air tickets
C) on basis of the buyer’s location, for example requiring out-of-state students to pay
higher tuition
D) on the basis of the supplier’s marginal cost of production, for example requiring
customers to pay a premium for customizing options
Jill Johnson owns a pizzeria. She currently produces 10,000 pizzas per month at a total
cost of $500. If she produced one more pizza her total cost rises to $500.11. What does
this tell us about Jill’s marginal cost of producing pizzas?
A) The marginal cost of producing pizzas is constant.
B) The marginal cost of producing pizzas is falling.
C) The marginal cost of producing pizzas is rising.
D) The marginal cost of producing pizzas cannot be determined without more
information.
A demand curve shows
A) the willingness of consumers to buy a product at different prices.
B) the willingness of consumers to substitute one product for another product.
C) the relationship between the price of a product and the demand for the product.
D) the relationship between the price of a product and the total benefit consumers
receive from the product.
The largest source of revenue for the federal government of the United States is from
A) tariffs collected on imported goods.
B) property taxes imposed on private property.
C) sales taxes on items purchased for consumption.
D) individual income taxes.
If the price of prime rib falls, the income effect due to the price change will cause
A) an increase in the demand for prime rib.
B) an increase in the demand for flank steak, a substitute for prime rib.
C) an increase in the quantity demanded of prime rib.
D) an increase in the quantity supplied of prime rib.
A patent or copyright is a barrier to entry based on
A) ownership of a key necessary raw material.
B) large economies of scale as output increases.
C) government action to protect a producer.
D) widespread network externalities.
Use the following graph to answer the following questions.
a. If the wage rate and the rental
price of machines are both $50 and total cost is $800, is the cost-minimizing point A, B,
or C?
b. If the wage rate is $40, the rental price of equipment is $120, and total cost is $1,200,
is the cost-minimizing point A, B, or C?
c. If the wage rate is $60, the rental price of equipment is $90, and total cost is $1,800,
is the cost-minimizing point A, B, or C?
Figure 11-2
Based on the per-worker production function above, if the economy raises capital per
hour worked from $35,000 to $40,000, by how much will real GDP per hour worked
increase?
A) $150
B) $1,850
C) $2,000
D) $5,000
A tax imposed by a government on imports of a good into a country is called
A) an import levy.
B) an import fine.
C) a tariff.
D) an import quota.
In a small European country, it is estimated that a $10,000 increase in capital per hour
worked will increase real GDP per hour worked by $300. Based on this information,
what is the slope of the per-worker production function in this range?
A) 0.03
B) 3.3
C) 33.3
D) 333