1) If soybean farmers know that the demand for soybeans is inelastic, in order to
increase their total revenues they should
a.use more fertilizers and weed killers to increase their yields.
b.plant additional acres to increase their output.
c.reduce the number of acres they plant to decrease their output.
d.Both a and b are correct.
2) Which of the following pairs illustrates the two extreme examples of market
structures?
a.competition and oligopoly
b.competition and monopoly
c.monopoly and monopolistic competition
d.oligopoly and monopolistic competition
3) The things that must be forgone to acquire a good are called
a.implicit costs.
b.opportunity costs.
c.explicit costs.
d.accounting costs.
4) Assume that Antigua and Barbuda each has 60 minutes available. If each island
spends all its time producing the good in which it has a comparative advantage, then
total production is
a.4 towels and 3 umbrellas.
b.5 towels and 6 umbrellas.
c.8 towels and 10 umbrellas.
d.9 towels and 9 umbrellas.
5) If a t-shirt manufacturer supplies 1,000 t-shirts per week when the price of t-shirts is
$10 and supplies 1,200 t-shirts per week when the price of t-shirts is $12, the price
elasticity of supply is 2.
a.True
b.False
6) The phenomenon of scarcity stems from the fact that
a.most economies’ production methods are not very good.
b.in most economies, wealthy people consume disproportionate quantities of goods and
services.
c.governments restrict production of too many goods and services.
d.resources are limited.
7) Table 12-9
United States Income Tax Rates for a Single Individual, 2012 and 2013.
Jake is a single person whose taxable income is $20,000 a year. What happened to his
average tax rate between 2012 and 2013?
a.It increased.
b.It decreased.
c.It did not change.
d.We do not have enough information to answer this question.
8) Why do major-league baseball players get paid more than minor-league players?
a.Major-league players are better athletes.
b.The higher wage reflects a compensating differential.
c.Playing in the major leagues in more pleasant then playing in the minor leagues.
d.The higher wage is often due to educational discrepancies.
9) In American politics, we often observe that during a campaign, the Democratic and
Republican positions on many issues are similar, which illustrates
a.Arrow’s impossibility theorem.
b.the Condorcet paradox.
c.a Borda count.
d.the median voter theorem.
10) John owns a number of hot dog stands in New York City. He hires workers to sell
hot dogs at his stands. Which of the following events will lead to a decrease in John’s
demand for hot dog vendors?
a.Hollywood glamorization of a new movie about a hot dog vendor leads hundreds of
high-school students in New York City to apply for a job at John’s.
b.The price of hot dogs falls.
c.The local hot dog vendors form a union increasing hot dog vendor wages.
d.The demand curve for hot dogs shifts to the right.
11) Beef is a normal good. You observe that both the equilibrium price and quantity of
beef have fallen over time. Which of the following explanations would be most
consistent with this observation?
a.Consumers have experienced an increase in income, and beef-production technology
has improved.
b.The price of chicken has risen, and the price of steak sauce has fallen.
c.New medical evidence has been released that indicates a negative correlation between
a person’s beef consumption and life expectancy.
d.The demand curve for beef must be positively sloped.