1) Scenario 13-6
Ziva is an organic lettuce farmer, but she also spends part of her day as a professional
organizing consultant. As a consultant, Ziva helps people organize their houses. Due to
the popularity of her home-organization services, Farmer Ziva has more clients
requesting her services than she has time to help if she maintains her farming business.
Farmer Ziva charges $25 an hour for her home-organization services. One spring day,
Ziva spends 10 hours in her fields planting $130 worth of seeds on her farm. She
expects that the seeds she planted will yield $300 worth of lettuce.
What is the total opportunity cost of the day that Farmer Ziva spent in the field planting
lettuce?
a.$130
b.$250
c.$300
d.$380
2) In the signaling theory of education,
a.discrimination does not affect wage differentials.
b.schooling makes workers more productive in the long-run.
c.schooling makes workers more productive in the short-run.
d.the worker signals to the employer that he is a valuable employee because he was
willing to spend time to get an education.
3) As the number of firms in an oligopoly increases, the magnitude of the price effect
increases.
a.True
b.False
4) The statement “the rich get richer and the poor get poorer” is evident in the fact that
a.the earnings gap between high-skill jobs and low-skill jobs has increased over the last
several years.
b.developing countries do not pay workers the value of their marginal product.
c.developed economies export high-skill jobs to developing countries.
d.All of the above are correct.
5) The Condorcet paradox demonstrates that the result of a majority vote may be
affected by
a.moral hazard.
b.adverse selection.
c.the order of the votes.
d.All of the above are correct.
6) The maximum price that a buyer will pay for a good is called
a.consumer surplus.
b.willingness to pay.
c.equilibrium.
d.efficiency.
7) Figure 8-6
The vertical distance between points A and B represents a tax in the market.
What happens to producer surplus when the tax is imposed in this market?
a.Producer surplus falls by $600.
b.Producer surplus falls by $900.
c.Producer surplus falls by $1,800.
d.Producer surplus falls by $2,100.
8) A consumer has preferences over consumption and leisure, both of which are normal
goods. When the wage decreases, the consumer chooses to consume less leisure. For
this consumer the labor supply curve will
a.slope upward.
b.slope backward.
c.be horizontal.
d.be vertical.
9) Assume that Zimbabwe and Portugal can switch between producing toothbrushes and
producing hairbrushes at a constant rate.
Which of the following combinations of toothbrushes and hairbrushes could Zimbabwe
not produce in 120 minutes?
a.5 toothbrushes and 11 hairbrushes
b.10 toothbrushes and 9 hairbrushes
c.20 toothbrushes and 6 hairbrushes
d.30 toothbrushes and 3 hairbrushes
10) Table 22-13
A high school Spanish class and their teacher are planning to take a Spring Break trip
abroad but they have to decide where to go. They have narrowed the options to: Spain,
Mexico, Ecuador, and Costa Rica. The voters’ preferences are shown in the table below.
Refer to Table 22-13. In a pairwise election between Mexico and Ecuador and then a
second election between the winner and Costa Rica, which countries are chosen?
a.Ecuador is chosen in the in the first and second elections.
b.Ecuador is chosen in the first election and Costa Rica is chosen in the second.
c.Mexico is chosen in the first and second elections.
d.Mexico is chosen in the first election and Costa Rica is chosen in the second.