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The share of industry output sold by the top four steel producers in the country are 19%,
15%, 12%, and 9% respectively. The four-firm concentration ratio for the steel industry
is
a. 0,19
b. 0,55
c. 0,138
d. 0,65
Natural monopolies are of theoretical, but not practical interest.
a. True
b. False
In a competitive market economy, a resource in short supply will be allocated
a. so that each firm gets enough to keep producing some portion of its output.
b. according to how much each firm purchased before the shortage.
c. to those firms that can make the most profitable use of it.
d. by government fiat.
Firms are encouraged by the profit motive to use inputs efficiently.
a. True
b. False
It is true that the distribution process carried out by the price system
a. accomplishes the task more efficiently than central planners would.
b. favors the rich.
c. is superior to other rationing mechanisms because it is able to pay attention to
individual consumer preferences.
d. All of the above are true.
Which of the following ideas of Adam Smith has religious overtones?
a. comparative advantage
b. aggregate demand
c. perfect competition
d. rational expectations
e. invisible hand
Goods that are actually produced by firms are not really limited in supply, because the
firms can always produce more of them.
a. True
b. False
Figure 22-7
In Figure 22-7, AB represents the production possibilities of Pestoland and CD that of
Pastaland. Pestoland has a comparative advantage in pasta because it
a. gets more pasta from a given decline in pesto than Pastaland does.
b. gets more pesto from a given decrease in pasta production.
c. can produce more pasta than Pastaland.
d. can produce more pasta and pesto than Pastaland.
Technical superiority can be a source of entry barriers.
a. True
b. False
In Figure 5-1 from the text, if the price of pizzas is $8:
a. how many pizzas will the consumer purchase?
b. what is the payment for the optimal number of pizzas?
c. how much consumer surplus will the consumer receive?
Voluntarism as an approach to environmental problems
a. has no place at all in solving the problems.
b. is quite successful in reducing pollution.
c. is more effective than first meets the eye.
d. often has proved weak and unreliable.
The slope of a line with rise of five and run of two is positive.
a. True
b. False
A typical American family sends about _____% of its budget on services.
a. 20%
b. 32%
c. 66%
d. 70%
In 1975, New York City increased regulated taxi fares by 17,5 percent and expected taxi
revenue to increase a like amount. The taxi commission believed taxi demand was
a. unit elastic.
b. inelastic.
c. elastic.
d. perfectly inelastic.
A cartel is
a. a group of firms promoting competition.
b. most common in monopolistic competition.
c. a collusive group of firms.
d. no longer possible in our global economy.
The U.S. government uses export subsidies extensively to stimulate exports.
a. True
b. False
A cold winter will increase the quantity of heating fuel demanded at every price.
a. True
b. False
A patent
a. is given only to government owned companies.
b. is not a legal impediment to entry.
c. is a privilege granted by a state to an inventor over his invention.
d. does not give the holder a monopoly during the period it is in effect.
A tax on wages will
a. reduce labor supply since leisure becomes cheaper.
b. raise labor supply since income is reduced.
c. have an unpredictable impact on labor supply since there are both substitution and
income effects.
d. have a predictable impact since economists know substitution effects will dominate.
If society produces at a point inside the production possibilities frontier, it is
characterized by full employment of resources.
a. True
b. False
