Archives: Quiz

As presented in the textbook, research by some economists has shown that even when there is no difference between options provided to people a. the way in which the options are framed has no impact on the outcome (i.e. there […]

The firm’s factor demand curve is the a. MRP curve if the firm is a price taker (perfectly competitive firm). b. MFC curve if the firm is a price taker (perfectly competitive firm). c. VMP curve if the firm is […]

A French firm sells its good at a lower price in England than in France. It follows that the French firm is necessarily a. dumping. b. saving domestic jobs. c. being subsidized by the French government. d. part of an […]

Refer to Situation 22-2. How many widgets is Alejandro producing? a. 10 b. 15 c. 20 d. 25 e. There is not enough information to answer the question. A shift of the supply curve for farm products to the right […]

Refer to Exhibit 21-1. The marginal utility of the fourth plum is Exhibit 21-1 a. 8 utils. b. 2 utils. c. 10 utils. d. 13.5 utils. e. 50 utils. Suppose that on Monday, a Big Mac cost $3.00 in the […]

Which of the following statements is false? a. The Treasury bond information published under the column heading “Yield” is based on the ask price of the bond. b. The Treasury bond information published under the column heading “Yield” is based […]

Which of the following is not a necessary condition for price discrimination to hold? a. The seller must be a price searcher. b. The seller must be able to distinguish between customers willing to pay different prices. c. It must […]

On an aggregate level, free trade produces a net __________ and restricted trade produces a net __________. a. loss; loss also b. benefit; benefit also c. benefit; loss d. loss; benefit Opportunity cost is the __________ alternative forfeited when a […]

A line is parallel to the horizontal axis. The slope of the line is a. infinite. b. indicative of an inverse relationship between two variables. c. indicative of a direct relationship between two variables. d. zero. e. b and d […]

The face value of a bond is a. the dollar amount that a person would receive if he or she were to sell the bond. b. the dollar amount that a person would receive if he or she were to […]

Refer to Exhibit 31-1. If the exhibit represents a negative externality situation, the net social cost of expanding output from Q2 to Q1 is the area of Exhibit 31-1 a. ABC. b. BEA. c. Q2BAQ1. d. Q2EAQ1. If supply is […]

Which of the following statements is true? a. Concentration ratios take into account competition from substitute goods. b. The four-firm concentration ratio is likely to be larger than the eight-firm concentration ratio. c. There are assumed to be insignificant barriers […]

Refer to Exhibit 3-4. At a price of $2 _______________ units will be exchanged. Exhibit 3-4 a. 5 b. 10 c. 15 d. 20 If the four-firm concentration ratio is 100 percent, this means that the a. top four firms […]

The national defense argumenthas been used in the past to justify trade restrictions by firms in the peanut industry and the pottery industry. a. True b. False There are two universities, A and B, in a city. Tuition rises at […]

The actions of speculators make the speculators better off, but they necessarily make the rest of society worse off. a. True b. False George is a gift giver and Roger is a gift recipient.George has Roger in his utility function, […]

Refer to Exhibit 39-1. Given the target price PT, what is the quantity supplied? Exhibit 39-1 a. Q1 b. Q2 c. Q3 d. Q3 – Q1 A bear market is one in which prices are expected to rise. a. True […]

An increase in the price of good B caused an increase in the demand for good C. This indicates that goods B and C are a. complements. b. substitutes. c. neither substitutes nor complements. d. normal goods. The Gini coefficients […]

The profit-maximizing natural monopoly will a. set price equal to marginal cost. b. produce the quantity of output at which MR = MC. c. charge the highest price per unit for the quantity of output it chooses to produce. d. […]

Most states have instituted mandatory seatbelt laws to reduce traffic fatalities. An economist may point out that an unintended effect of these laws is a. an increase in the price of automobiles, further reducing fatalities. b. an increase in driving […]

Refer to Exhibit 4-3. If P1 is a price ceiling, the highest price for good Y, which is tied (a tie-in sale) to good X, is Exhibit 4-3 a. P1. b. P2. c. P3. d. P3 – P1. e. P1 […]

It has been suggested by some economists that rent seeking activity often occurs within families, particularly when an inheritance is involved. a. True b. False Refer to Exhibit 29-2.This graph depicts the Lorenz curve for two countries, country 1 (Lorenz […]

Refer to Exhibit 24-10. The profit-maximizing single-price monopolist will produce which quantity of output? Exhibit 24-10 a. Q2 b. Q1 c. Q3 d. Q4 e. none of the above Resource X is necessary to the production of good Y. If […]

Refer to Exhibit 2-6.Which graph depicts the result of a decrease in the unemployment rate? Exhibit 2-6 a. (1) b. (2) c. (3) d. (4) e. none of the above The foreign exchange market is the market where a. goods […]

If 1 percent inflation rather than zero percent inflation is expected by both the suppliers and demanders of loanable funds, then the nominal interest rate will a. fall, ceteris paribus. b. remain constant. c. rise. d. rise, ceteris paribus. The […]

Refer to Exhibit 23-2. For the firm that faces the demand curve in the exhibit, Exhibit 23-2 a. marginal revenue is constant. b. price equals marginal revenue. c. if the firm maximizes profits, it produces the quantity of output at […]

Ari is currently consuming 10 hot dogs and 8 hamburgers per week. The last hot dog she consumed yielded 20 utils while the last hamburger she ate gave her 25 utils. If hot dogs cost $2 and hamburgers cost $2.50, […]

Refer to Exhibit 2-5. The opportunity cost of moving from point D to point C is Exhibit 2-5 a. 5,000 televisions. b. 5,000 fax machines. c. 10,000 televisions. d. 10,000 fax machines. Refer to Exhibit 34-8. Assume that the current […]

For a monopoly firm, price is __________ marginal revenue, and for a monopolistic competitive firm, price is __________ marginal revenue. a. less than; equal to b. greater than; equal to c. greater than; less than d. greater than; greater than […]

Refer to Exhibit 3-3. A shift in demand from D1 to D2 can NOT occur from a change in the Exhibit 3-3 Good Y a. population. b. price of a substitute for good Y. c. average income of good Y […]

To lower the elasticity of demand for labor, a labor union might attempt to a. decrease the availability of substitutes for the products union workers produce. b. increase the availability of substitutes for the products union workers produce. c. increase […]

A put option is a contract a. that gives the owner the right, but not the obligation, to buy shares of a stock at a specified price within the time limits of the contract. b. that gives the owner the […]

At the quantity of output for which total revenue equals total cost, a. economic profit is zero. b. cost is minimized. c. cost is maximized. d. quantity is minimized. e. profit is maximized. Here are three things you could do […]

Which of the following exchange rates between the dollar and the peso would an American buyer of Mexican goods most prefer? a. $0.10 = 1 peso b. $0.08 = 1 peso c. $0.06 = 1 peso d. $0.04 = 1 […]

A company has an obligation to provide highly detailed information on its financial statements. Just in time systems can be used by both manufacturing and merchandising companies. Answer: TRUE To avoid the appearance that a joint product is incurring losses, […]

Municipal bonds a. are issued by state and local governments. b. pay interest that is fully taxable. c. are issued by corporations. d. are issued by the federal government. Refer to Exhibit 22-13.What dollar amounts go in blanks (T) and […]

If it is assumed that people vote for the candidate who comes closer to matching their own views, then a. candidates will label themselves as right-wingers. b. candidates will label themselves as left-wingers. c. candidates will label their opponents as […]

The longer the period of time allowed for the producer of a good to adjust to a change in the price of the good, the ____________ the price elasticity of supply will be.This statement assumes that the quantity supplied __________ […]

The change in the price of a foodstuff will be greater, a. the smaller the change in the supply of the foodstuff. b. the greater the change in the supply of the foodstuff and the more inelastic the demand curve […]

If for good Z income elasticity is greater than 1, then demand for good Z is income __________, and good Z is a(n) __________ good. a. inelastic; normal b. inelastic; inferior c. elastic; normal d. elastic; inferior e. unit elastic; […]

Approximately how much is $25,000 to be received a year from now worth today at an interest rate of 6 percent? a. $26,500 b. $85,556 c. $23,585 d. $20,385 When a professor announces to the class that she will grade […]

The quantity supplied of land is constant regardless of price. Suppose a tax is imposed on the rental price of land. Who will pay the greater share of such a tax? a. The buyers will pay the entire share. b. […]

Which of the following statements is false? a. There are more poor white persons than there are poor African-American persons. b. People are more likely to be poor when they are young than at any other time. c. Families headed […]

The U.S. dollar currently serves as the “unit of account” of major global products. a. True b. False When income rises for the buyers of good X, the ____________ curve for good X will shift ________________. a. demand; rightward b. […]

As firms exit an industry, the industry supply curve shifts __________ and the equilibrium price __________ until long-run competitive equilibrium is established and the surviving firms are earning __________ economic profits. a. leftward; rises; zero b. leftward; falls; positive c. […]

Refer to Situation 22-4.What are Joe’s explicit costs? a. $125,000 b. $175,000 c. $35,000 d. $200,000 e. $50,000 Which of the following is an illustration of the law of increasing opportunity costs? a. As more cars are produced, the opportunity […]

If Japanese real interest rates fall relative to real interest rates in the U.S., the yen will likely appreciate and the dollar will likely depreciate. a. True b. False If the Japanese yen trades at $1 = 98 yen, a […]

Which of the following statements is true? a. Treasury bills mature in 2 to 10 years. b. Treasury notes mature in 13 or 26 weeks. c. Treasury bills, notes, and bonds are considered to be very safe investments. d. Municipal […]

One point on a market supply curve represents $4 and 100 units quantity supplied. If there are three suppliers, and at a price of $4 one of the suppliers supplies 23 units, then which of the following combinations of price […]

George earns $500,000 playing baseball for team X. His next best alternative to playing baseball is to own a fast-food restaurant, for which he would earn $100,000 a year. His next best alternative to playing baseball for team X is […]

According to the text, farming today in the U.S. is __________ productive compared to a century ago, resulting in there being __________ farmers today than at the turn of the previous century. a. about as; fewer b. about as; more […]