Figure 5-2 Figure 5-2 shows a
market with a negative externality.
The marginal benefit of the last unit produced is represented by the price
A) Pa.
B) P.
C) Pc.
D) Pf.
If an airport decides to expand by building an additional passenger terminal, and in
doing so it lowers its average cost per airplane landing, then the expansion would
provide ________ to the airlines.
A) economies of scale
B) diseconomies of scale
C) higher average costs but lower total costs
D) higher marginal costs but lower total costs
In a closed economy, public saving plus private saving is equal to
A) investment.
B) taxes minus transfers.
C) the budget surplus.
D) the budget deficit.
Figure 15-6
Figure 15-6 shows the cost and
demand curves for a monopolist. The profit-maximizing output and price for the
monopolist are
A) output = 62; price = $24.
B) output = 62; price = $18.
C) output = 83; price = $22.
D) output = 104; price = $20.80.
If disposable income falls by $40 billion and consumption falls by $30 billion, then the
slope of the consumption function is
A) 1.33.
B) 0.75.
C) 0.4.
D) 0.3.
Figure 23-2
If the U.S. economy is currently at point N, which of the following could cause it to
move to point K?
A) Households expect future income to rise.
B) Household wealth falls.
C) The firm’s cash flow rises as profits rise.
D) Government expenditures increase.
Comparable worth legislation
A) will eliminate the earnings gap between men and women.
B) mandate that employers pay the same wages to workers, regardless of their gender,
for jobs that have comparable worth.
C) mandate that potential employers demonstrate that they are worth the wages they
expect to earn.
D) guide markets toward the economically efficient wage.
If real GDP per capita measured in 2009 dollars was $6,000 in 1950 and $48,000 in
2013, we would say that in the year 2013, the average American could buy ________
times as many goods and services as the average American in 1950.
A) 1/8
B) 4
C) 8
D) 12
Why are decision trees useful to managers who plan business strategies?
A) Decision trees explain the level of concentration in an industry.
B) Decision trees can be used to increase the amount of product differentiation; this
enables managers to charge higher prices for their products.
C) Decision trees provide a systematic way of thinking through the implications of a
strategy.
D) Using a decision tree always leads to a dominant strategy.
When the government runs a budget deficit, we would expect to see that
A) private saving will fall.
B) investment will fall.
C) G + TR < T.
D) public saving is positive.
Why is a dollar today more valuable than a dollar a year from now?
A) The dollar today can be immediately used to buy something.
B) A dollar a year from now will likely have less purchasing power because of inflation.
C) The unknown future is riskier than the known present.
D) all of these
Figure 5-3
The size of marginal external benefits can be determined by
A) the demand curve D2.
B) D2+ D1at each output level
C) D2– D1at each output level.
D) the demand curve D1.
Figure 5-13
Figure 5-13 illustrates the
market for gasoline before and after the government imposes a tax to bring about the
efficient level of gasoline production.
The market equilibrium price of gasoline is ________ per gallon.
A) $3.00
B) $3.75
C) $4.25
D) $5.00