1) The demand for computers is derived from the demand for the capital resources that
are used to produce computers.
2) Process innovation raises the firm’s total product curve and lowers its average total
cost curve.
3) The concept of consumer sovereignty refers to the situation where consumers have
the right to vote for the board of directors of large corporations.
4) If a market is defined more broadly, then the chances that firms in that market will be
found to be violating antitrust laws based on the ‘structuralist” perspective will increase.
5) The technical and scientific characteristics of an industry may be less important than
its structure in determining R&D spending and innovation.
6)
All illegal immigrants enter the U.S. and arrive here illegally.
7) If a firm pays labor $5 and receives a MPL of 10, while paying capital $100 and
receiving a MPC of 100, to lower production costs it should hire more labor and less
capital.
8)
Refer to the above graphs. (Assume that the pre-migration labor force in Country A is 100
and that it is 150 in country B.) In country A, total business income after immigration
occurs is:
A.$320M
B.$720M
C.$650M
D.$1,200M
9) Consider the following situations and decide which model of discrimination is being
exhibited: taste-for-discrimination or statistical discrimination.
(a)Health insurance is higher for smokers than for non-smokers.
(b)An employer prefers not to higher teenagers.
(c)An employer chooses a female to fill a position of secretary, because women tend to
be multi-taskers.
(d)An employer does not hire African-American workers.
10) The marginal benefit curve is:
A.upsloping because of increasing marginal opportunity costs.
B.upsloping because successive units of a specific product yield less and less extra
benefit.
C.downsloping because of increasing marginal opportunity costs.
D.downsloping because successive units of a specific product yield less and less extra
benefit.
11) Answer the question on the basis of the following data:
Refer to the given data. If the prices of labor and capital are $9 and $15 respectively, at
the profit-maximizing level of output, the firm’s total revenue will be:
A.$114.
B.$180.
C.$129.
D.$192.
12)
Refer to the tables. Suppose that technology and the quality of resources are the same in
both countries. We can conclude that:
A.Duckistan has more resources than Herbania.
B.Herbania has more resources than Duckistan.
C.Duckistan has greater opportunity costs than Herbania.
D.Prices are twice as high in Herbania as in Duckistan.
13) The next three questions refer to the information in the following table.
(a)What would price and quantity be if the market were closed to international trade?
What would the domestic and foreign quantity supplied be if it were open to
international trade and the world price was $2?
(b)If the world price was $2 and a tariff of $1 were placed on the product, what would
be the total revenues going to domestic producers, foreign producers (after-tax), and the
government? Explain.
(c)Given a world price of $2, what would be the difference in the total revenue received
by foreign producers with a $1 per unit tariff compared with a quota of 200 units?
14) Which union status allows the firm to hire nonunion workers, provided that these
workers would join the union within a specified period or lose their jobs?
A.Open shop
B.Agency shop
C.Union shop
D.Closed shop
15) In columns 1 and 2 in the following table is a demand schedule for agricultural
product A.
(a)What is the characteristic of elasticity in the price range given?
(b)By how much would the income of producers change if the amount of A produced
should increase from 1000 to 1100 bushels?
(c)If the amount of A produced were 1100 bushels and the demand for A decreased from
that shown in columns 1 and 2 to that shown in columns 1 and 3, what would happen to
the income of farmers?
(d)Assume that the government supports a price of $4.50, that the demand for A is that
shown in columns 1 and 2, and that farmers grow 1150 bushels of A. What will be the
total income of farmers at the support price? How much of this income will come from
consumers and how much from government?
16) One essential trade-off involving business risk which the market system provides is
reflected in which of the following?
A.Access to the firm’s profits and gains are open only to those who take on the business
risk of the firm
B.Those who receive guaranteed payments from the firm are also guaranteed a share of
the firm’s profits
C.Those who make bad decisions regarding risk will suffer losses; those who decide
wisely will gain profits
D.Those who bear the business risk of the firm are guaranteed to always gain profits
17) Which person would most likely be eligible to receive Medicaid? A person who:
A.Receives Medicare benefits
B.Receives Social Security benefits
C.Works in a government operated hospital
D.Qualifies for the Supplementary Security Income program
18)
Refer to the above graph. Suppose you had tastes as described by the indifference
curves above. If your income was $90, Px = 30 and Py = 10, which combination of X
and Y would maximize your utility?
A.3X and 0Y
B.0X and 9Y
C.3X and 9Y
D.1X and 6Y
19) To reduce agricultural output by a certain percent, an even larger percent reduction
in acres planted is required. Explain.
20) What are some examples of the four different market structures?
21) In the table below you will find a schedule of a firms fixed cost and variable cost.
Complete the table by computing total cost, average fixed cost, average variable cost,
average total cost, and marginal cost.
22) What are the major imports and exports of the United States?
23) Explain the Solyndra subsidy.
24) Explain the reasons for a decrease in the rate of illegal immigration in the United
States in recent years.
25) Describe the economic effects of occupational segregation on the wages of women
and minorities. How does this type of segregation affect the domestic output of the
economy?
26) What is the basic conclusion that is to be drawn from the chapter? On what two
facts is this conclusion based? What are the implications?
27) What obstacles might a group of oligopolists encounter in forming a cartel or an
informal understanding?
28) What are four general sources that contribute to uninsurable risk?