1) Figure 21-2
The downwardsloping line on the figure represents a consumer’s budget constraint.
Refer to Figure 21-2. If the consumer’s income is $100, then what is the price of an
apple?
a. $0.50
b. $0.75
c. $1.00
d. $1.25
2) Table 17-14
This table shows a game played between two players, A and B. The payoffs in the table
are shown as (Payoff to A, Payoff to B).
Refer to Table 17-14. If player A chooses his/her best strategy, player B should
a.choose left and earn a payoff of 4.
b.choose left and earn a payoff of 6.
c.choose right and earn a payoff of 2.
d.choose right and earn a payoff of 0.
3) Table 10-4
The social cost of the 2nd unit of output that is produced is
a. $7.
b.$23.
c.$30.
d.$38.
4) The prisoners’ dilemma provides insights into the
a.difficulty of maintaining cooperation.
b.benefits of avoiding cooperation.
c.benefits of government ownership of monopoly.
d.ease with which oligopoly firms maintain high prices.
5) The average-total-cost curve is unaffected by diminishing marginal product.
a.True
b.False
6) Which of the following statements is correct?
a.Differences in human capital may explain differences in wages between blacks and
whites.
b.Racial discrimination is the strongest explanation for differences in wages between
blacks and whites.
c.Gender discrimination is the strongest explanation for differences in wages between
blacks and whites.
d.None of the above statements is correct.
7) A macroeconomist € as opposed to a microeconomist € might study the effect of
a.changes in the money supply on the inflation rate.
b.an increase in the gas tax on fuel consumption.
c.a technological advance on the natural gas industry.
d.a hurricane on prices in the orange industry.
8) Figure 8-12
Suppose a $3 per-unit tax is placed on this good. The per-unit burden of the tax on
sellers is
a. $1.
b.$2.
c.$3.
d.$4.
9) Figure 15-5
A profit-maximizing monopoly’s total revenue is equal to
a.P1 x Q1.
b.P2 x Q3.
c.P3 x Q4.
d.(P2-P4) x Q3.
10) Scenario 15-10
Vincent operates a scenic tour business in Boston. He has one bus which can fit 50
people per tour and each tour lasts 2 hours. His total cost of operating one tour is fixed
at $450. Vincent’s cost is not reduced if he runs a tour with a partially full bus. While
his cost is the same for all tours, Vincent charges each passenger his/her willingness to
pay: adults $18 per trip, children $10 per trip, and senior citizens $12 per trip. At those
rates, on a typical day Vincent’s demand is:
Assume that Vincent’s customers are always available for the tour¾ therefore, he can
fill his bus for each tour as long as there is sufficient total demand for the day.
Vincent is considering changing his pricing strategy. Which of the following options
results in the highest profit per day?
a.Charge a single price of $10 to all passengers.
b.Charge a single price of $12 to all passengers.
c.Charge a single price of $18 to all passengers.
d.Continue charging each buyer his/her willingness to pay.
11) Table 14-6
The following table presents cost and revenue information for a firm operating in a
competitive industry.
What is the total revenue from selling 7 units?
a. $120
b. $490
c. $562
d. $840
12) Scenario 8-2
Roland mows Karla’s lawn for $25. Roland’s opportunity cost of mowing Karla’s lawn
is $20, and Karla’s willingness to pay Roland to mow her lawn is $28.
If Karla hires Roland to mow her lawn, Karla’s consumer surplus is
a.$3.
b.$5.
c.$8.
d.$25.
13) Figure 21-25
The figure pertains to a particular consumer. On the axes, X represents the quantity of
good X and Y represents the quantity of good Y.
Refer to Figure 21-25. Suppose the price of good X is $10, the price of good Y is $5,
and the consumer’s income is $210. Then the consumer’s optimal choice is represented
by a point on which curve?
a.I1
b.I2
c.I3
d.I4
14) Governments that chose to make endangered elephants private goods have met with
more success protecting elephants than governments that chose to make killing
elephants illegal.
a.True
b.False