The longer the period of time consumers have to adjust to price changes, the
__________ the __________ elasticity of demand.
a. lower, price
b. lower, income
c. higher, price
d. higher, income
The demand for farm goods is income inelastic if the percentage change in quantity
demanded is __________ the percentage change in __________.
a. greater than; income
b. equal to; income
c. less than; income
d. greater than; revenue
e. less than; revenue
Total utility for all five oranges is
a. 70 utils.
b. 12 utils.
c. 68 utils.
d. 80 utils.
e. 40 utils.
The strongest case for government with respect to a negative externality is that
government needs to set the
a. subsidy equal to the marginal private benefits.
b. tax equal to the marginal external costs plus $1.
c. tax slightly below the marginal external costs.
d. tax equal to the marginal external costs.
e. subsidy equal to the marginal social benefits.
When the official dollar price of a foreign currency is set below its equilibrium level,
the dollar
a. has been appreciated.
b. is overvalued.
c. is undervalued.
d. is devalued.
e. is revalued.
Which of the following is an illustration of the law of increasing opportunity costs?
a. As more cars are produced, the opportunity cost of each additional car is greater than
for the preceding unit.
b. As more cars are produced, the opportunity cost of each additional car is less than for
the preceding unit.
c. As more cars are produced, the opportunity cost of each additional car is the same as
for the preceding unit.
d. People pay lower prices for cars the higher the costs of producing cars.
Which of the following is true at the level of output which maximizes profits for a
perfectly price-discriminating monopolist?
a. P > MC.
b. P < ATC.
c. P < MC.
d. a and b
e. none of the above
Exhibit 39-3
If P3 is a target price, the total deficiency payment that government makes to farmers is
a. P2 x Q3.
b. P3 x Q3.
c. (P3 – P1) x Q1.
d. (P3 – P1) x Q2.
e. (P3 – P2) x Q3.
Exhibit 20-5
For graph (3), if the seller of X raises the price from $1.50 to $2.00, the total revenue
the seller receives will
a. decrease by $30.
b. increase by $30.
c. decrease by $5.
d. not change.
Scarcity is defined as the condition in which
a. both wants and resources are limited.
b. wants are finite and resources infinite.
c. both wants and resources are infinite.
d. wants are infinite and resources finite.
If income rises, the budget constraint
a. moves inward toward the origin.
b. moves outward away from the origin.
c. does not move.
d. moves farther down the vertical axis.
Farmers as a group generally prefer bad weather to good weather because bad weather
shifts the demand curve for their product rightward and raises the price of their product.
a. True
b. False
If the coupon payment on a bond is $140 and the coupon rate is 5%, then what is the
price value of the bond?
a. $2,800
b. $147
c. $254.40
d. $5,000
e. There is not enough information provided to answer this question.
Exhibit 32-2
Two candidates are competing for an electorate consisting of 9 voters labeled A-I
shown positioned with respect to their ideological stands on issues. The median voter
theory would predict that candidates will assume the ideological position(s)
a. of voter A.
b. halfway between that of voter G and that of voter A.
c. of voter C.
d. of voter B.
e. of voter G and voter I, respectively.