Archives: Quiz

Which of the following would NOT be considered a macroeconomic topic? a. the reasons for a decline in the price of crude oil b. the cause of a downturn in the economy c. the effect of the government budget deficit […]

Generally, negative externalities result in a. too much of a good being produced. b. the socially optimal output of a good being produced. c. too little of a good being produced. d. either a or c e. any of the […]

The Federal Trade Commission Act of 1914 a. made interlocking directorates illegal. b. set up the Federal Trade Commission (FTC) to deal with “unfair methods of competition.” c. made monopolization of trade a misdemeanor. d. prohibited suppliers from offering special […]

If a negative externality exists, then there is a __________ when society produces the market output instead of the socially optimal output. This exists because the __________ to sellers and third parties are __________ the __________ derived by buyers. a. […]

Exhibit 24-8 Assuming that total fixed costs are $80, the average variable cost of producing 5 units of output is a. $34.40. b. $50.40. c. $10.67. d. $38.67. e. There is not enough information given to answer this question. A […]

Exhibit 3-6 If D1 is the relevant demand curve, a decrease in the price of good X may cause a. demand to shift from D1 to D2. b. demand to shift from D1 to D3. c. a movement along D1 […]

Within the production possibilities frontier (PPF) framework, choice is depicted by the a. PPF itself. b. PPF being bowed outward. c. need to select among the points making up the PPF. d. straight-line PPF. Jaime has an old car that […]

Unions are interested in increasing the productivity of their members because as their productivity rises, the __________ their labor __________ and their wages __________. a. demand for; falls; rise. b. demand for; rises; rise. c. supply of; rises; rise. d. […]

Situation 32-1 In the early 1980s, the U.S. automobile industry managed to influence the government to negotiate a voluntary export restraint agreement with Japan that was in effect from 1981 until 1985. The predictable result was an average increase in […]

One example of an optimal currency area is the states within the United States. a. True b. False Exhibit 28-10 If the firm in the exhibit is a monopsony, then the curve represented by the number 1 is its a. […]

Variables X and Y are independent of each other. If we plot X on the horizontal axis and Y on the vertical axis, the line that connects combinations of X and Y in a two-variable diagram is a. parallel to […]

Marginal productivity theory implies that a worker will be paid an amount a. equal to his or her contribution to the productive process. b. less than his or her contribution to the productive process. c. greater than his or her […]

Maximizing total revenue turns out to be the same as maximizing profit only when a. average fixed cost declines continually as output rises. b. a firm has no fixed costs. c. a firm has no variable costs. d. a firm […]

Assume a decreasing-cost industry that is initially in long-run competitive equilibrium. A decrease in demand will cause a(n) __________ in prices and profits, and as a result, firms will __________ the industry, causing the market supply curve to shift __________,which, […]

If total revenue rises as a result of a decrease in the price of a given good, it follows that demand is a. inelastic. b. perfectly inelastic. c. elastic. d. unit elastic. e. none of the above Union training programs […]

When a decision is made based on a simple majority vote it is possible for the total benefits to the community of this decision to be less than the total costs to the community of this decision. a. True b. […]

At a price for which the quantity supplied exceeds the quantity demanded, a __________ is experienced, which pushes the price __________ toward its equilibrium value. a. surplus; downward b. surplus; upward c. shortage; downward d. shortage; upward Exhibit 28-4 If […]

The slope of a (nonlinear) curve varies from one point to another. a. True b. False Exhibit 29-3 The Gini coefficient for the income distribution of the country depicted in the exhibit is a. a number less than 0. b. […]

Exhibit 34-7 Assume that the current price of good X is $25 (which includes a $10 tariff on imports of good X).Americans purchase ______ units of good X from U.S. producers and import _______ units of good X from abroad. […]

In general, all markets equilibrate at the same speed. a. True b. False Which of the following statements is true? a. In the short run, there are no fixed costs, only variable costs. b. In the short run, there are […]

Which of the following statements is true? a. A major corporation would tend to pay a higher interest rate for a $10,000 loan than a single parent working for a fast food restaurant. b. The more risky the loan, the […]

Suppose you are eating buffalo wings at a local happy hour. The total utils from doing so after the fourth, fifth, sixth, and seventh wings are 30, 50, 65, 72, respectively. In this situation we have __________ marginal utility, which […]

Which of the following statements is true? a. The less you have of any one good, the less you would be willing to pay for one more unit of it. b. The less you have of any one good, the […]

Economists generally agree that land rents are a. price determining, not price determined. b. price determined, not price determining. c. too high. d. too low. e. Economists generally do not agree on anything. The demand curve facing a firm in […]

The marginal productivity theory states that a. as variable inputs are added to a fixed quantity of other inputs eventually the additional output produced by each additional variable input will decrease. b. inputs will be used most efficiently when the […]

For a price taker, market equilibrium price is $100. At 50 units, MR = MC, ATC = $80, and AVC = $70. This price taker will a. earn $100 profits if it produces 50 units of the good. b. earn […]

Moral hazard occurs when the parties on once side of the market, who have information not known to others, self select in a way that adversely affects the parties on the other side of the market. a. True b. False […]

There is currently a price ceiling in the market for transplanted kidneys, which has helped to create a shortage of transplanted kidneys. a. True b. False Positive economics is concerned with a. value judgments. b. cause-effect relationships. c. observations that […]

According to the median voter model, a candidate (in a two-person race) is more likely to label himself or herself a “middle-of-the-roader” than a conservative or liberal because a. the terms “conservative” and “liberal” are offensive to many people in […]

Exhibit 31-2 This graph represents a positive externality situation. Given this, which of the two curves, X or Y, represents marginal social benefits and why? a. Curve X, because if there is a positive externality, negative external benefits are associated […]

If a perfectly competitive firm and a monopolistic competitive firm face the same demand and cost curves, then a. the perfectly competitive firm will attain resource-allocative efficiency, but the monopolistic competitive firm will not. b. the perfectly competitive firm will […]

Candidate A says, “Health care is too expensive in the United States. We need to do something-and quickly-to develop a better, more responsive, less expensive health care system.” Candidate B, who is running against candidate A in a two-person race, […]

Evidence seems to indicate that the demand for many agricultural products a. has increased much more than supply over the years. b. is relatively elastic. c. is relatively inelastic. d. is relatively income elastic. e. b and d Which of […]

If a labor union can affect __________, it can affect its wage-employment tradeoff. a. the availability of substitutes for the product it produces b. availability of substitute factors c. the fixed costs of the firm it works for d. a […]

Exhibit 20-7 Which of the graphs shows a perfectly elastic demand curve? a. (1) b. (2) c. (3) and (4) d. none of the above Exhibit 23-8 What is the profit (loss) of firm B at the profit-maximizing (or loss-minimizing) […]

If it takes 118 Japanese yen to buy one dollar, then how many dollars does it take to buy one euro? a. $0.0085 b. $1.18 c. $0.85 d. $0.01286 e. There is not enough information to answer the question. Suppose […]

The exchange rate is $1 = 110 yen. If the price of a Japanese good is 37,500 yen, what is the approximate price of the good in dollars? a. $29.45 b. $4,125,000 c. $294.49 d. $340.91 e. none of the […]

A production possibilities frontier separates an attainable region from an unattainable region. a. True b. False Economic profit is the difference between total revenue and implicit costs. a. True b. False Answer: False Exhibit 28-10 Answer: True If the firm […]

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 […]

Pure economic rent exists only when a. opportunity costs are negative. b. opportunity costs are zero. c. opportunity costs are positive. d. explicit costs are zero. e. b and d The upward-sloping supply of loanable funds curve assumes that a. […]

Which of the following is probably not an acceptable solution to the problem of diseconomies of scale? a. reorganization b. building a larger plant c. dividing operations d. hiring new managers If the nominal interest rate is 9 percent and […]

Assuming that total fixed costs are $30, the average variable cost of producing 2 units of output is a. $35. b. $75. c. $45. d. $55. e. There is not enough information given to answer this question. When the equilibrium […]

The key behavioral assumption of the cartel theory is that oligopolists in an industry a. try to maximize sales instead of profits. b. act as if they are perfect competitors. c. act in a manner consistent with there being only […]

Suppose the production of a good results in positive externalities. If output occurs at the intersection of the marginal social benefits curve and the supply curve, then a. output will be at the socially optimal level. b. the price of […]

According to the law of demand, the higher the price of an assigned textbook, the _______________ the quantity demanded of assigned textbooks will be,ceteris paribus, and the ______________ likely students will seek out an alternative to the assigned textbook. a. […]

Exhibit 28-8 If the monopsonist could perfectly discriminate by paying each worker a different wage rate, the number of workers employed would be a. Q1. b. Q2. c. Q3. d. Q4. e. Q5. If the price elasticity of demand for […]

Exhibit 22-13 What dollar amounts go in blanks (A) and (B), respectively? a. $200; $100 b. $200; $200 c. $50; $100 d. $10; $100 e. There is not enough information to answer this question. A bond is a. a claim […]

If the student whose marginal benefits and costs of good health are noted in this table, how many units of good health should the student obtain in order to maximize her net benefits of good health? a. 2 units b. […]

Based on the income data presented for the U.S. (in your text) the Gini coefficient was around 0.45 in 2007, which is higher than it was in 1947. a. True b. False Exhibit 2-6 Which graph depicts a discovery of […]

If there is always a three-for-one tradeoff between goods X and Y, then the PPF between X and Y is a. a downward-sloping curve that is bowed outward. b. a downward-sloping curve that is bowed inward. c. a downward-sloping straight […]