Archives: Quiz

1) An entrepreneur’s motivation to start a business arises from a.an innate love for the type of business that he or she starts. b.a desire to earn a profit. c.an altruistic desire to provide the world with a good product. […]

1) Scenario 8-2 Roland mows Karla’s lawn for $25. Roland’s opportunity cost of mowing Karla’s lawn is $20, and Karla’s willingness to pay Roland to mow her lawn is $28. Assume Roland is required to pay a tax of $10 […]

1) Suppose the figure shows the market demand for laptop computers. Suppose the price of wireless printers, a complementary good, decreases. Which of the following changes would occur? a.a movement along D2 from point A to point B b.a movement […]

1) If nations such as Germany, Japan, and the United States prohibited international trade in automobiles, a likely effect would be that a.the price effect would become a more significant consideration for each firm that makes automobiles. b.the excess of […]

1) Along which of the supply curves does quantity supplied move proportionately more than the price? a.along supply curve B only b.along supply curves B and C c.along all three supply curves d.None. Quantity supplied moves proportionately less than the […]

1) Two goods are substitutes when a decrease in the price of one good a.decreases the demand for the other good. b.decreases the quantity demanded of the other good. c.increases the demand for the other good. d.increases the quantity demanded […]

1) Scenario 14-3 Suppose a certain competitive firm is producing Q=500 units of output. The marginal cost of the 500th unit is $17, and the average total cost of producing 500 units is $12. The firm sells its output for […]

1) Productivity is defined as the quantity of goods and services produced from each unit of labor input. a.True b.False 2) The following table shows the number of cases of water each seller is willing to sell at the prices […]

1) The broken window fallacy a.explains why inflation is so high. b.is a justification for the government to print more money. c.is illustrated when a government program is justified not on its merits but on the number of jobs it […]

1) For economists, conducting experiments is often difficult and sometimes impossible. a.True b.False 2) Which of the following events must cause equilibrium quantity to fall? a.demand increases and supply decreases b.demand and supply both decrease c.demand decreases and supply increases […]

1) This economy cannot produce at which point(s)? a.L, M b.N, O, P, Q c.N, O, P d.Q 2) The difference between economic profit and accounting profit is that economic profit is calculated based on both implicit and explicit costs […]

1) The goal of requiring licenses for hunting and fishing is a.to reduce the use of a common resource. b.to ensure that the people hunting and fishing are qualified. c.to generate revenue for the government. d.to monitor compliance with federal […]

1) Figure 8-22 Suppose the government changed the per-unit tax on this good from $3.00 to $1.50. Compared to the original tax rate, this lower tax rate would a.increase tax revenue and increase the deadweight loss from the tax. b.increase […]

1) Table 18-7 Refer to Table 18-7. It is apparent from this table that increasing marginal product a.occurs only after the first worker is hired. b.occurs only after the second worker is hired. c.occurs only after the third worker is […]

1) Since World War II, GATT has been responsible for reducing the average tariff among member countries from about a.40 percent to about 5 percent. b.40 percent to about 20 percent. c.80 percent to about 20 percent. d.20 percent to […]

1) Other things equal, a particular job will likely pay a higher wage if it involves a.danger to the worker. b.personal enjoyment for the worker. c.intellectual stimulation for the worker. d.All of the above are correct. 2) Increases in productivity […]

1) Refer to Figure 9-23. With free trade, the domestic price and domestic quantity demanded are a.$90 and 5. b.$90 and 10. c.$120 and 5. d.$120 and 18. 2) Figure 21-23 Refer to Figure 21-23. When the price of X […]

1) Table 7-6 For each of three potential buyers of apples, the table displays the willingness to pay for the first three apples of the day. Assume Xavier, Yadier, and Zavi are the only three buyers of apples, and only […]

1) Suppose that policymakers are considering placing a tax on either of two markets. In Market A, the tax will have a significant effect on the price consumers pay, but it will not affect equilibrium quantity very much. In Market […]

1) Scenario 20-6 Zooey is a single mother of two young children whose husband died in a tragic car accident. She earns $20,000 per year working as a cashier at a grocery store. The government uses a negative income tax […]

1) When a country has a comparative advantage in producing a certain good, a.the country should import that good. b.the country should produce just enough of that good for its own consumption. c.the country’s opportunity cost of that good is […]

1) Scenario 17-2. Imagine that two oil companies, BQ and Exxoff, own adjacent oil fields. Under the fields is a common pool of oil worth $144 million. Drilling a well to recover oil costs $5 million per well. If each […]

1) Scenario 18-6 Rocchetta Industries manufactures and supplies bottled water in Mexico. As a result of a contamination of water supplies at many of Mexico’s resort communities, the demand for bottled water has increased. Refer to Scenario 18-6. When the […]

1) What is the equilibrium price in this market? a.$8 b.$12 c.$16 d.$20 2) What percent of families are poor for eight or more years? a.more than 20 percent b.between 15 and 20 percent c.approximately 10 percent d.less than 3 […]

1) What is the difference between a “change in supply” and a “change in quantity supplied?” Graph your answer. a.For each of the following changes, determine whether there will be a change in quantity supplied or a change in supply. […]

1) The signaling theory of education is most similar to the a.human capital theory of education. b.discrimination theory of advertising. c.signaling theory of advertising. d.efficiency wage theory of labor economics. 2) One reason why better-looking workers may have higher earnings […]

1) Alice and Betty’s Production Possibilities in one 8hour day. Alice’s Production Possibilities FrontierBetty’s Production Possibilities Frontier d.All of the above are correct. 3) Figure 18-2 The figure below shows the production function for a particular firm. Refer to Figure […]

1) Refer to Figure 9-17. When comparing no trade to free trade, the gains from trade amount to a. $400. b. $600. c. $750. d. $1,000. 2) When two variables move in the same direction, the curve relating them is […]

1) One advantage market economies have over centrally-planned economies is that market economies a.provide an equal distribution of goods and services to households. b.establish a significant role for government in the allocation of resources. c.solve the problem of scarcity. d.are […]

1) Figure 21-2 The downwardsloping line on the figure represents a consumer’s budget constraint. Refer to Figure 21-2. If the consumer’s income is $100, then what is the price of an apple? a. $0.50 b. $0.75 c. $1.00 d. $1.25 […]

1) Many charities like the Sierra Club are established to deal with externalities. a.True b.False 2) The circular-flow diagram a.is an economic model. b.incorporates two types of decision makers: households and firms. c.represents the flows of inputs, outputs, and dollars. […]

1) A good is excludable if a.one person’s use of the good diminishes another person’s enjoyment of it. b.the government can regulate its availability. c.it is not a normal good. d.people can be prevented from using it. 2) When negative […]

1) Suppose that a country that has a high level of output per person agrees to trade with a country that has a low level of output per person. Which country can benefit? a.only the one with a low level […]

1) If the for a good is 0.3, then a 20 percent decrease in price results in a a.0.015 percent increase in the quantity demanded. b.0.6 percent increase in the quantity demanded. c.6 percent increase in the quantity demanded. d.66 […]

1) One theory of advertising suggests that a.advertising is more effective for industrial products than consumer products. b.the content of advertising may be irrelevant to product success in the market. c.regulations limiting advertising benefit consumers, but not producers. d.television advertising […]

1) Suppose that everyone prefers to live in a society without poverty. Further suppose that some private charities are successful in reducing poverty. People who do not contribute to the charities a.receive no external benefit from private antipoverty programs. b.decrease […]

1) Germany should specialize in the production of a.boats and import cars. b.cars and import boats. c.both goods and import neither good. d.neither good and import both goods. 2) Which of the following would cause price to increase? a.an increase […]

1) Figure 21-23 Refer to Figure 21-23. When the price of X is $80, the price of Y is $20, and the consumer’s income is $160, the consumer’s optimal choice is D. Then the price of X decreases to $20. […]

1) Consumer surplus is the amount a buyer is willing to pay for a good minus the amount the buyer actually has to pay for it. a.True b.False 2) The wage difference between jobs that require education and those that […]

1) Table 17-4 The table shows the town of Mauston’s demand schedule for gasoline. For simplicity, assume the town’s gasoline seller(s) incur no costs in selling gasoline. Refer to Table 17-4. If the market for gasoline in Mauston is perfectly […]

1) Dog owners do not bear the full cost of the noise their barking dogs create and often take too few precautions to prevent their dogs from barking. Local governments address this problem by a.making it illegal to “disturb the […]

1) A society consists of three individuals: Sam, Tristan, and Ulyana. In terms of income and utility, Sam is currently best-off, Tristan ranks in the middle, and Ulyana is worst-off. Which of the following statements is correct? a.Utilitarianism suggests that […]

1) Refer to Scenario 9-2. Suppose the world price of cardboard is $45 and international trade is allowed. Then Boxland’s consumers demand a.110 tons of cardboard and Boxland’s producers supply 75 tons of cardboard. b.110 tons of cardboard and Boxland’s […]

1) Scenario 13-9 Ellie has been working for an engineering firm and earning an annual salary of $80,000. She decides to open her own engineering business. Her annual expenses will include $15,000 for office rent, $3,000 for equipment rental, $1,000 […]

1) For competitive firms, the curve that represents the value of marginal product of labor is the same as the demand for labor curve. a.True b.False 2) If one producer has the absolute advantage in the production of all goods, […]

1) When a firm is making a profit-maximizing production decision, which of the following principles of economics is likely to be most important to the firm’s decision? a.The cost of something is what you give up to get it. b.A […]

1) Monopolistic competition is characterized by a few sellers offering similar products, whereas oligopoly is characterized by many sellers offering differentiated products. a.True b.False 2) When market conditions in a competitive industry are such that firms cannot cover their total […]

1) In this market, equilibrium price and quantity, respectively, are a.$10 and 30 units. b.$10 and 50 units. c.$10 and 70 units. d.$4 and 50 units. 2) Buyers and sellers who have no influence on market price are referred to […]

1) Market failure associated with the free-rider problem is a result of a.a problem associated with pollution. b.benefits that accrue to those who don’t pay. c.losses that accrue to providers of the product. d.market power. 2) Figure 16-4 What price […]

1) In the circular-flow diagram, which of the following items flows from firms to households through the markets for goods and services? a.goods and services b.dollars paid to land, labor, and capital c.dollars spent on goods and services d.wages, rent, […]