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1) People can be prevented from using a good if the good is
a.a private good or a club good.
b.a private good or a common resource.
c.a public good or a common resource.
d.a private good or a public good.
2) For a firm in a competitive market, an increase in the quantity produced by the firm
will result in
a.a decrease in the product's market price.
b.an increase in the product's market price.
c.no change in the product's market price.
d.either an increase or no change in the product's market price depending on the
number of firms in the market.
3) One solution to the "Tragedy of the Commons" is to turn the common resource into a
private good.
a.True
b.False
4) During the holiday season, high-end retailers frequently place a high price on
merchandise on weekends and discount the price during the week. They do this because
they believe that two groups of customers exist: shoppers with little free time and
bargain hunters. Bargain hunters have time to shop around and frequently shop during
the week. What do economists call this price strategy used by high-end retailers?
a.oligopoly
b.price discrimination
c.compensating differential
d.in-kind transfers
5) PlayStations and PlayStation games are complementary goods. A technological
advance in the production of PlayStations will
a.increase consumer surplus in the market for PlayStations and decrease producer
surplus in the market for PlayStation games.
b.increase consumer surplus in the market for PlayStations and increase producer
surplus in the market for PlayStation games.
c.decrease consumer surplus in the market for PlayStations and increase producer
surplus in the market for PlayStation games.
d.decrease consumer surplus in the market for PlayStations and decrease producer
surplus in the market for PlayStation games.
6) The marginal-cost curve intersects the average-fixed-cost curve at the minimum of
marginal cost.
a.True
b.False
7)
The movement from point A to point B on the graph is caused by
a.a decrease in the price of the good.
b.an increase in the price of the good.
c.an advance in production technology.
d.a decrease in input prices.
8) Figure 21-17
Refer to Figure 21-17. When the price of X is $40, the price of Y is $40, and income is
$160, Paul's optimal choice is point B. Then Paul's income increases to $320, and his
optimal choice is point E. For Paul,
a.good X is a normal good, and good Y is an inferior good.
b.good X is an inferior good, and good Y is a normal good.
c.both good X and good Y are normal goods.
d.good Y is a normal good; good X is neither a normal nor an inferior good.
9) The law of demand is true for most goods in the economy.
a.True
b.False
10) A competitive market is one in which there
a.is only one seller, but there are many buyers.
b.are many sellers, and each seller has the ability to set the price of his product.
c.are many sellers, and they compete with one another in such a way that some sellers
are always being forced out of the market.
d.are so many buyers and so many sellers that each has a negligible impact on the price
of the product.
11) If the for a good is 0.4, then which of the following events is consistent with a 2
percent decrease in the quantity of the good demanded?
a.a 0.8 percent increase in the price of the good
b.a 2.4 percent increase in the price of the good
c.a 5 percent increase in the price of the good
d.a 8 percent increase in the price of the good
12) Suppose an increase in the price of rubber coincides with an advance in the
technology of tire production. As a result of these two events, the demand for tires
a.decreases, and the supply of tires increases.
b.is unaffected, and the supply of tires decreases.
c.is unaffected, and the supply of tires increases.
d.None of the above is necessarily correct.
