1) An excise tax is a tax on a specific good, like gasoline.
a.True
b.False
2) Figure 21-2
The downwardsloping line on the figure represents a consumer’s budget constraint.
Refer to Figure 21-2. Which points are affordable?
a.W, X, and Y only
b.Z only
c.V, W, X, and Y only
d.V, W, X, Y, and Z
3) When a good is taxed, the tax revenue collected by the government equals the
decrease in the welfare of buyers and sellers caused by the tax.
a.True
b.False
4) Which of the following statements applies to economics, as well as to other sciences
such as physics?
a.Experiments are considered valid only when they are conducted in a laboratory.
b.Good theories do not need to be tested.
c.Real-world observations often lead to theories.
d.Economics, as well as other sciences, is concerned primarily with abstract concepts.
5) Government policies can change the costs and benefits that people face. Those
policies have the potential to
a.alter people’s behavior.
b.alter people’s decisions at the margin.
c.produce results that policymakers did not intend.
d.All of the above are correct.
6) The circular-flow diagram is an example of
a.a laboratory experiment.
b.an economic model.
c.a mathematical model.
d.All of the above are correct.
7)
The shift of the production possibilities frontier from A to B can best be described as
a.a downturn in the economy.
b.economic growth.
c.an enhancement of equality.
d.an improvement in the allocation of resources.
8) Scenario 19-2
Travis, a student at a community college, is considering what he should do for summer
employment. Two recruiters show up at his school in search of summer workers.
Recruiter A is looking for workers to help a disaster relief agency distribute food aid in
Africa. Recruiter B is looking for custodial help to clean motel rooms in a motel located
near the entrance to a famous national park.
Refer to Scenario 19-2. Travis is carefully considering the options that each recruiter
presents. On the basis of knowledge obtained in his economics class, Travis concludes
that
a.if the job in Africa has a lot of job satisfaction, the wage will be higher.
b.if the job in Africa has a lot of job satisfaction, the wage will be lower.
c.if the job cleaning motel rooms is miserable work, the wage will be lower.
d.if the job cleaning motel rooms is not miserable work, the wage will be higher.
9) Trade allows all countries to achieve greater prosperity.
a.True
b.False
10) Travis can mow a lawn in two hours or he can trim a tree in one hour. Ricardo can
mow a lawn in three hours or he can trim a tree in two hours.
a.Travis has an absolute advantage over Ricardo in trimming trees.
b.Travis has a comparative advantage over Ricardo in mowing lawns.
c.Ricardo has a comparative advantage over Travis in trimming trees.
d.All of the above are correct.
11) .
Which of the following combinations of points are both efficient and attainable for this
economy?
a.G, H
b.F, I, L
c.F, G, H, I, L
d.J, K
12) A firm has market power if it can
a.maximize profits.
b.minimize costs.
c.influence the market price of the good it sells.
d.hire as many workers as it needs at the prevailing wage rate.
13)
Between point A and point B, using the midpoint method is equal to
a. 0.71.
b. 0.85.
c. 1.18.
d. 1.40.
14) In the long run the local coffee shop incurs total costs of $625 when output is 1,250
cups of coffee and $750 when output is 1,500 cups of coffee. For this range of output,
the coffee shop exhibits
a.economies of scale.
b.constant returns to scale.
c.diseconomies of scale.
d.efficient scale.
15) Economists tend to see ticket scalping as
a.a way for a few to profit without producing anything of value.
b.an inequitable interference in the orderly process of ticket distribution.
c.a way of increasing the efficiency of ticket distribution.
d.an unproductive activity which should be made illegal everywhere.
16) Arturo’s Production Possibilities FrontierDina’s Production Possibilities
Frontier
a.True
b.False
19) Table 7-16
The following table represents the costs of five possible sellers.
Seller Cost ($)
Suppose each of the five sellers can supply at most one unit of the good. At which of
the following prices would the market quantity supplied be exactly three units?
a.$20
b.$50
c.$90
d.$120