Exhibit 7-5
In Exhibit 7-5, what are variable costs at 15 units of output?
a. $30
b. $10
c. $1
d. $20
e. it is impossible to calculate variable cost unless we know the daily wage
Exhibit 9-4
What is the profit-maximizing or loss-minimizing output for the monopolist represented
in Exhibit 9-4, assuming it does not price discriminate?
a. 0 units
b. 2 units
c. 3 units
d. 4 units
e. 5 units
A removal or depletion tax on an open-access resource increases the marginal private
cost of using the resource by
a. zero
b. the amount of the tax
c. the marginal product of the resource
d. the average private cost of using the resource
e. the average social cost of using the resource
Which of the following is an example of a producer taking advantage of economies of
scope?
a. A farmer buys more land so he can produce more soybeans.
b. GM closes a Chevy truck plant in response to a decline in the demand for trucks.
c. Disney World stays open later to serve more customers per day.
d. A dairy farmer produces cow’s milk and butter.
e. A mouthwash firm expands production by improving management efficiency.
Technological change is decreasing competition in the market for media.
a. True
b. False
Exhibit 9-1
In Exhibit 9-1, total revenue from selling 5 units is
a. $20
b. $140
c. $100
d. $10
e. $5
Individuals serving on the boards of directors of competing firms is called
a. interlocking directorates
b. tying contracts
c. the rule of reason
d. exclusive dealing
e. predatory pricing
Utility is
a. the sense of pleasure or satisfaction derived from consuming goods and services
b. the cost of acquiring goods and services
c. the profit consumers earn from consuming goods and services
d. the monetary value to consumers of goods and services
e. the desire to consume goods and services
A medium of exchange must be
a. approved by the government
b. socially acceptable in exchange for goods and services
c. easy to reproduce
d. used to eliminate specialization and the division of labor
e. used when a system of barter exists
It is not likely that the costly special-interest farm price supports will be replaced by
more efficient direct transfer payments because
a. farming would cease
b. such a proposal would attract public attention and threaten the survival of the
program
c. the private gains from price supports exceed the costs to society
d. a direct transfer program would require too much paperwork
e. consumers favor the current legislation
The main source of revenue for the U.S. federal government is
a. personal income taxes
b. corporate income taxes
c. sales taxes
d. borrowing on financial markets
e. revenue from the sale of government goods and services
Exhibit 11-6
In Exhibit 11-6, opportunity cost in equilibrium is represented by area
a. 0deh
b. gfeh
c. dcf
d. bed
e. bed + 0deh
If the value of the price elasticity of demand is -0.2, this means that a
a. 20 percent decrease in price causes a 1 percent increase in quantity demanded
b. 0.2 percent decrease in price causes a 1 percent increase in quantity demanded
c. 5 percent decrease in price causes a 1 percent increase in quantity demanded
d. 0.2 percent decrease in price causes a 0.2 percent increase in quantity demanded
e. 100 percent decrease in price causes a 200 percent increase in quantity demanded
In the late nineteenth century, technological improvements and cheaper transportation
in the United States led to
a. a decrease in minimum efficient scale in many industries
b. an increase in minimum efficient scale in many industries
c. an overall reduction in productive efficiency
d. a narrowing of markets
e. price increases in many industries
One problem with rent controls is that policy makers often ignore its secondary effects.
a. True
b. False
A wealthy Japanese executive decides to buy a large amount of U.S. assets. This would
contribute to
a. a deficit in the U.S. current account
b. a deficit in the U.S. capital account
c. a surplus in the U.S. current account
d. a surplus in the U.S. capital account
e. a deficit in the total balance of payments
Exhibit 5-5
In Exhibit 5-5, what is the total revenue to the right of point a?
a. less than $50, if demand is price inelastic
b. less than $50, if demand is price elastic
c. $50
d. more than $50, if demand is price inelastic
e. not enough information to tell
Which of the following is not a typical goal of bureaucrats?
a. increasing the size of their bureaus
b. gaining prestige
c. increasing the size of their staffs
d. increasing their bureaus’ budgets
e. achieving greater efficiency
Suppose a company that produces furniture wax branches out into producing a dusting
product like Lemon-Dust-Away. If this expansion is efficient, the company must
a. benefit from vertical integration
b. benefit from horizontal integration
c. experience economies of scale
d. experience economies of scope
e. have no transaction costs
Attempts by special-interest groups to gain favorable treatment from government are
called
a. utility maximizing
b. profit seeking
c. rent seeking
d. profit maximizing
e. rent minimizing
Exhibit 14-2
In Exhibit 14-2, the marginal benefit curve reflects
a. the fact that as consumers become more familiar with a market, additional
information yields less and less improvement in product quality or value
b. the opportunity cost of the consumer’s time
c. the fact that greater and greater distances must be covered to acquire a marginal piece
of information
d. the fact that the cost of gathering information diminishes as more is gathered
e. the fact that there is much common knowledge about consumption
Exhibit 7-5
In Exhibit 7-5, what is the marginal cost of the 15th unit of output?
a. $30
b. $10
c. $1
d. $20
e. it is impossible to calculate marginal cost unless we know the daily wage
Over a typical month, Ying Liao will balance spending time on meals, work,
entertainment, study, sleep, and so on by ensuring that there is equality among the
marginal
a. factor costs of each market work activity
b. products of each market work activity
c. revenues from each of the products sold
d. wages of each hour worked
e. expected net utilities of each activity
Jobs that pay higher salaries must be riskier than lower-paying professions.
a. True
b. False
Exhibit 11-1
Condider Exibit 11-1. Each of the panels depict the supply and demand conditions in a
resource market. In panel (e) how much economic rent do the resources earn?
a. $0
b. $250
c. $500
d. $750
e. $1000
An exchange rate is the price of one commodity (e.g., corn) measured in terms of
another commodity (e.g., wheat).
a. True
b. False
A major U.S. motive for negotiating a free-trade agreement with Mexico was
a. to gain increased access to Mexico’s huge oil reserves
b. to achieve ultimately political union with Mexico
c. as a stepping-stone to the formation of a free-trade bloc in the whole Western
Hemisphere
d. to appease Canada
e. to appease GATT
Each point on a production possibilities frontier requires full employment of resources.
a. True
b. False
A Midwestern wheat farmer faces a horizontal demand curve because
a. it is so large relative to the market as a whole that it has no impact on market price
b. it is so small relative to the market as a whole that it has no impact on market price
c. it produces a good for which there are no substitutes
d. it produces a good for which there are no complements
e. it produces a good that no other firm in the industry produces
To be effective, an import quota must
a. reduce the price and increase the quantity of imports
b. set the price of the imported good higher than the domestic equilibrium price
c. restrict imports to less than would be imported under free trade
d. restrict imports to less than exports in trade with that particular country
e. be directed at the product of a specific country
Exhibit 20-4
Which of the following is represented by Exhibit 20-4?
a. An increase in the Canadian demand for Swiss francs.
b. An increase in the Swiss demand for Canadian dollars.
c. Canadian exports to Switzerland decrease.
d. The Swiss franc is devalued.
e. The Swiss franc depreciates.