Archives: Quiz

If a U.S. company operates within a competitive environment and chooses to offshore part of its production process, the resulting change in the firm’s costs should shift the ______________ curve for its product ___________________, thus _____________ the price of the […]

Which of the following is a major import for the United States? a. corn b. soybeans c. coal d. fish e. none of the above When the government _____________ mortgage lending standards, the indirect result is likely to be _____________ […]

Total industry sales are $750 million. The four largest firms have sales of $256 million, $120 million, $78 million, and $42 million. The industry’s four-firm concentration ratio is a. 0.66. b. 0.69. c. 0.39. d. 0.14. The excludability versus nonexcludability […]

A price floor creates a situation in which one party wins and another party loses, and the gains for the winner are equal to the losses for the loser. a. True b. False Exhibit 22-12 above. The numbers that go […]

If the LRATC curve is falling, then a. the law of diminishing marginal returns is operating. b. economies of scale are present. c. constant returns to scale are present. d. diseconomies of scale are present. Points inside (below) the production […]

If the demand for a particular farm product is inelastic between price P1 and P2 (where P2 > P1), farmers as a group would want to sell their product at the a. higher price, but an individual farmer would rather […]

One of the objectives of the health-care reform bills passed in March 2010 was to bring _____________ people into the pool of insured persons so that insurance policies would become ________________.However, provisions in the bill are likely to make the […]

If patients were allowed to sue their HMO, we would expect a. the demand curve for health care services provided by the HMO to shift to the left and the price of HMO-provided health care coverage to fall. b. the […]

What value goes in blank (B)? a. 27 b. 38 c. 40 d. 35 e. There is not enough information to answer this question. Unlike in the 1930’s, farmers today can insure themselves against price swings that would impact them […]

Exhibit 20-3 When price decreases from $4.50 to $3.50, the price elasticity of demand is a. 0.4375. b. 0.50. c. 1.0. d. 2.00. e. 2.86. During the twentieth century, the U.S. farm sector experienced a. large increases in its ability […]

When a monopolist can perfectly price discriminate, it follows that a. price equals marginal revenue. b. price equals marginal cost at the quantity of output it chooses to produce. c. the monopolist is resource-allocative efficient. d. b and c e. […]

The average-marginal rule states: a. when the marginal magnitude is rising, the average magnitude must also be rising. b. when the marginal magnitude is falling, the average magnitude must also be falling. c. when the marginal magnitude is below the […]

Which of the following statements is false? a. The monopolist has the ability to control to some degree the price of the product it sells. b. The monopolist faces a downward-sloping demand curve. c. The monopolist is a price taker. […]

A stock with a price-earnings ratio of 11.2 means that the stock is selling for a closing share price that is 11.2 times its latest available net earnings per share. a. True b. False The producer of good X is […]

People sometimes act differently in different settings.An economist is likely to explain this by saying a. the benefits and costs of certain behaviors can be different in different settings. b. people are hard to figure out. c. people behave as […]

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 […]

A price searcher is a. a person who actively seeks out the best price for a product that he or she wishes to buy. b. a firm that seeks out buyers who are willing to pay the price that the […]

Between 1910 and today, the number of farmers in the United States _____________ dramatically as a result of ___________________ in farming in the twentieth century. a. dropped; technological improvements b. rose; technological improvements c. dropped; technological declines d. rose; technological […]

Exhibit 2-6 Which graph depicts society’s choice to produce more of good X and less of good Y? a. (1) b. (2) c. (3) d. (4) e. none of the above The higher the opportunity cost of doing something, the […]

Exhibit 25-10 Suppose that the letter grade earned on a test for each student in a class depends upon how well he/she does relative to other students in the class.This exhibit shows a prisoner’s dilemma setting for two representative students […]

When the government enacts policies that lead to lower mortgage lending standards and lower interest rates, their actions can indirectly lead to higher home prices. a. True b. False The difference between artificial rents and real rents is that a. […]

Hank goes to a Korean restaurant for the first time and he has no prior knowledge ofKorean. He orders the Daenjang Chigae prepared medium hot and hopes for the best. Here an information __________ is __________ a market outcome. a. […]

If all firms in an industry sell their product for the same price it is a result of a. collusion. b. perfect competition. c. a government law that specifies all firms must charge the same price. d. a or b […]

One can determine producers’ surplus if the minimum selling price and the _____________ are known. a. price received b. price paid c. tax paid d. tax received e. a and c Exhibit 2-5 The opportunity cost of moving from point […]

In a simple majority vote on a public project, a. the project will never be undertaken if the costs exceed the benefits. b. the project may be undertaken even though the total costs exceed the total benefits. c. the intensity […]

The author of the textbook defines economics as the a. science of efficiency. b. science of scarcity. c. study of markets. d. study of human activity. Marginal revenue product (MRP) is the a. additional output generated by employing an additional […]

Exhibit 34-4 The opportunity cost of one unit of good A is __________ for country 1 and __________ for country 2. a. 20B; 15B b. 2B; 1B c. 40B; 15B d. 1/2B; 1B e. 1/20B; 1/15B If society is experiencing […]

Exhibit 24-7 Let D be the demand curve facing a perfectly price-discriminating monopolist. The lowest price this monopolist will charge is a. $60. b. $45. c. $30. d. $0. A public good is a. a good that government provides to […]

Exhibit 39-2 If P1 is a price support, the quantity of wheat purchased by the government would be equal to a. Q0 – Q1. b. Q2 – Q1. c. Q2 – Q0. d. Q2. e. Q1. The author of the […]

Which of the following is true of price and marginal revenue for the first unit of output sold by a monopolist? a. Price is greater than marginal revenue. b. Price is less than marginal revenue. c. Price is equal to […]

It is impossible for a given good to be both elastic in demand and inelastic in supply. a. True b. False Exhibit 2-6 Which graph depicts the result of an increase in the number of illegal immigrants entering the country? […]

A three-word synonym for the term ceteris paribus is a. “nothing else changes.” b. “in my opinion.” c. “it is proved.” d. “under this assumption.” There is a flexible exchange rate system and only two countries in the world, the […]

The law of diminishing marginal utility says that a. the marginal utility gained by consuming equal successive units of a good will decline as the amount consumed increases. b. the more of a particular good one consumes, the greater is […]

Studies show that as real income has been rising in the United States, the per-capita demand for food has been increasing by a. much less, which means the demand for food is income inelastic. b. much more, which means the […]

You paid $25 for your ticket to the football game, only to see your favorite team losing 28-0 at the end of the first quarter. That $25 should now be regarded as a(n) __________ cost that economists say should be […]

____________________ constitute(s) perhaps the most significant barrier to entry into an oligopolistic market. a. Patent rights b. Exclusive ownership of essential resources c. Legal barriers d. Economies of scale e. Copyrights A bond purchaser bought a bond from which she […]

By looking at the different slices of a pie chart, and comparing one slice to another, it is possible to quickly estimate a. relative relationships. b. absolute relationships. c. the slope of a line. d. the slope of a curve. […]

Alexander Hamilton used the infant-industry argument to support trade restrictions. a. True b. False As the price of a product rises the product will become more elastic in demand, assuming that the demand curve for the product is a downward-sloping […]

Dan is currently consuming 10 Cokes and 5 slices of pizza per week such that the marginal utility of the tenth Coke is 12 utils and that of the fifth slice of pizza is also 12 utils. How should Dan […]

Accounting profit equals economic profit if __________ equals __________. a. explicit costs; implicit costs b. total revenue; marginal cost c. implicit costs; zero d. explicit costs; zero e. unit cost; marginal cost Which of the following statements is true? a. […]

Exhibit 34-3 The world price is PW. If a tariff is imposed, the price rises to PW + T. Because of the tariff, government collects tariff revenues equal to the area of a. 1. b. 1 + 2. c. 3. […]

Exhibit 23-9 Following an increase in market demand from D1 to D2, the firm’s profits in the short run will a. remain the same at P1 times q1. b. remain the same at zero. c. increase by less than (P2 […]

A vertical supply curve of a factor indicates that a. the demand for the factor will vary directly with the price of the factor. b. the supply of the factor is perfectly elastic. c. the factor has zero opportunity cost. […]

Unlike a monopoly, a monopolistic competitive firm in long run equilibrium is likely to produce a level of output at which a. MR = MC. b. P > MC. c. P = ATC. d. resource-allocative efficiency is achieved. In the […]

In order for a firm to earn economic profits, price must exceed average total cost. a. True b. False The national defense argument for trade protectionism holds that a. what is good for business is good for the country. b. […]

Which of the following is false? a. Even if a corporation is not currently issuing bonds, you could still buy a bond directly from the corporation. b. Bonds that are rated AAA from Standard and Poor’s have received the highest […]

The monopolistic competitor is a a. price taker. b. price searcher. c. single seller of a good with no close substitutes. d. firm that faces a horizontal demand curve. e. b and c Which of the following situations probably would […]

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. The Sherman Act of 1890 a. made […]

The closed shop was prohibited by the a. Norris-LaGuardia Act. b. Clayton Act. c. Wagner Act. d. Taft-Hartley Act. e. none of the above Exhibit 23-4 Where can you find the lowest price that will motivate the firm to produce […]

A man moves from a large city to a small town.In the small town he seems like a very different person than the person he was in the big city.For instance, he is more polite in the small town than […]