Archives: Quiz

1) When a single person (or small group) has the ability to influence market prices, there is a.competition. b.market power. c.an externality. d.a lack of property rights. 2) Scenario 8-1 Erin would be willing to pay as much as $100 […]

1) If macaroni and cheese is an inferior good, what would happen to the equilibrium price and quantity of macaroni and cheese if consumers’ incomes rise? a.Both the equilibrium price and quantity would increase. b.Both the equilibrium price and quantity […]

1) A firm is currently producing 100 units of output per day. The manager reports to the owner that producing the 100th unit costs the firm $5. The firm can sell the 100th unit for $4.75. The firm should continue […]

1) A tax on insulin is likely to cause a very large deadweight loss to society. a.True b.False 2) Trevor’s Tire Company produced and sold 500 tires. The average cost of production per tire was $50. Each tire sold for […]

1) When the nation of Duxembourg allows trade and becomes an importer of software, a.residents of Duxembourg who produce software become worse off; residents of Duxembourg who buy software become better off; and the economic well-being of Duxembourg rises. b.residents […]

1) Ellie and Brendan both produce apple pies and vanilla ice cream. If Ellie’s opportunity cost of one apple pie is 1/2 gallon of ice cream and Brendan’s opportunity cost of one apple pie is 1/4 gallon of ice cream, […]

1) Evidence from experiments in which real people play the ultimatum game supports the idea that people care about fairness as well as about maximization of their personal wealth. a.True b.False 2) Which of the following is not a characteristic […]

1) Scenario 20-2 The government is proposing switching from a progressive tax system, in which families pay 15% of the first $40,000 earned, 30% of the next $40,000 earned, and 45% of any income over $80,000 to a tax system […]

1) Which of the following events would bring about a change in the value of the marginal product of labor? a.technological progress that alters the amount a worker can produce b.a change in the marginal product of labor c.a change […]

1) President Gerald Ford referred to inflation as a.a blight on our nation’s economy. b.a necessary evil to combat high unemployment. c.public enemy number one. d.a fly in the ointment. 2) The price elasticity of supply measures how responsive a.equilibrium […]

1) Scenario 18-3 Sam has two jobs, one for the winter and one for the summer. In the winter, he works as a lift attendant at a ski resort where he earns $13 per hour. During the summer, he drives […]

1) The most important tax in the U.S. economy is the tax on corporations’ profits. a.True b.False 2) Which of these instances would constitute labor-market discrimination? Henry receives a higher wage than Ryan. Henry and Ryan are identical in all […]

1) Table 22-14 Amy, Beth, and Connie are on a hiring committee. They have interviewed 3 candidates identified by their last names and are going to vote on which one is hired. Refer to Table 22-14. Which of the following […]

1) If the price falls from point A to point B, total revenue a.increases, and demand is price elastic. b.decreases, and demand is price elastic. c.increases, and demand is price inelastic. d.decreases, and demand is price inelastic. 2) Suppose a […]

1) Table 22-21 The following table shows the number of voters preferring various amounts of spending to develop a river to make it more attractive for canoeing and kayaking. Refer to Table 22-21. What is the preferred spending amount of […]

1) Food and clothing tend to have a.small income elasticities because consumers, regardless of their incomes, choose to buy relatively constant quantities of these goods. b.small income elasticities because consumers buy proportionately more of both goods at higher income levels […]

1) Suppose an influenza pandemic were to significantly decrease the population of a country. We would predict a decrease in the marginal product of land in that country. a.True b.False 2) Which of the following illustrates the concept of a […]

1) Figure 8-14 Which of the following combinations will minimize the deadweight loss from a tax? a.supply 1 and demand 1 b.supply 2 and demand 2 c.supply 1 and demand 2 d.supply 2 and demand 1 2) Tax incidence refers […]

1) Table 10-5 The following table shows the marginal costs for each of four firms (A, B, C, and D) to eliminate units of pollution from their production processes. For example, for Firm A to eliminate one unit of pollution, […]

1) Suppose that a worker can produce 100 units of output in 7 hours. In the 8th hour, he can produce 12 units of output. The worker can produce 112 units of output in 8 hours. a.True b.False 2) Table […]

1) Which of the following is not correct? a.The slope of a line will be a small positive number for a fairly flat upward-sloping line. b.The slope of a line will be a large positive number for a steep upward-sloping […]

1) Figure 15-9 The monopolist’s maximum profit a. is $1,600. b. is $2,000. c. is $2,500. d. cannot be determined from the diagram. 2) The characteristics of jobs and workers affect a.labor supply. b.labor demand. c.equilibrium wages. d.All of the […]

1) Scenario 9-1 The before-trade domestic price of peaches in the United States is $40 per bushel. The world price of peaches is $52 per bushel. The U.S. is a price-taker in the market for peaches. If trade in peaches […]

1) In the long run, a competitive market with 1,000 identical firms will experience an equilibrium price equal to the minimum of each firm‘s average total cost. a.True b.False 2) What must be given up to obtain an item is […]

1) For a profit-maximizing monopolistically competitive firm, marginal revenue equals marginal cost in a.the short run but not in the long run. b.the long run but not in the short run. c.both the short run and the long run. d.neither […]

1) Uzbekistan’s Production Possibilities FrontierAzerbaijan’s Production Possibilities Frontier Sup pose Azerbaijan is willing to trade 3 nails to Uzbekistan for every bolt that Uzbekistan makes and sends to Azerbaijan. Which of the following combinations of bolts and nails could Uzbekistan […]

1) For which of the following goods is the income elasticity of demand likely lowest? a.water b.sapphire pendant necklaces c.filet mignon steaks d.fresh fruit 2) Daryn is raking leaves to earn money for his university’s economics club. In the first […]

1) Rational people make decisions at the margin by comparing a.average costs and benefits. b.total costs and benefits. c.additional costs and benefits. d.opportunity costs and benefits. 2) A profit-maximizing firm will shut down in the short run when a.price is […]

1) Figure 7-28 Refer to Figure 7-28. At the quantity Q3, a.the market is in equilibrium. b.consumer surplus is maximized. c.the sum of consumer surplus and producer surplus is maximized. d.the marginal value to buyers is less than the marginal […]

1) Government spending is projected to rise over the next few decades. Three of the most important reasons are spending on Social Security, Medicare, and healthcare. a.True b.False 2) Table 7-17 Both the demand curve and the supply curve are […]

1) When a production possibilities frontier is bowed outward, the opportunity cost of the second good in terms of the first good increases as more of the second good is produced. a.True b.False 2) A profit-maximizing firm in a competitive […]

1) The idea that rational employers think at the margin is central to understanding how many units of labor they choose to employ. a.True b.False 2) Supply-side economics is a term associated with the views of a.Ronald Reagan and Arthur […]

1) Along the elastic portion of a linear demand curve, total revenue rises as price rises. a.True b.False 2) Tradable pollution permits a.have prices that are set by the government. b.will be more valuable to firms that can reduce pollution […]

1) For a snow-removal business, the capital stock would include inputs such as snow blowers and shovels. a.True b.False 2) Assume that the farmer and the rancher can switch between producing pork and producing tomatoes at a constant rate. The […]

1) The discovery of a new hybrid wheat would increase the supply of wheat. As a result, wheat farmers would realize an increase in total revenue if the a.supply of wheat is elastic. b.supply of wheat is inelastic. c.demand for […]

1) Bintu’s Production Possibilities FrontierJuba’s Production Possibilities Frontier Bintu has a comparative advantage in the production of a.bowls and Juba has a comparative advantage in the production of cups. b.cups and Juba has a comparative advantage in the production of […]

1) Some states do not have a state income tax. a.True b.False 2) In the former Soviet Union, producers were paid for meeting output targets, not for selling products. Under those circumstances, what were the economic incentives for producers? a.to […]

1) A similarity between monopoly and monopolistic competition is that in both market structures a.strategic interactions among sellers are important. b.there are a small number of sellers. c.sellers are price makers rather than price takers. d.there are only a few […]

1) A positive externality a.is a benefit to the producer of the good. b.is a benefit to the consumer of the good. c.is a benefit to someone other than the producer and consumer of the good. d.results in an optimal […]

1) If duopoly firms that are not colluding were able to successfully collude, then a.price and quantity would rise. b.price and quantity would fall. c.price would rise and quantity would fall. d.price would fall and quantity would rise. 2) The […]

1) The largest budgetary expense for the federal government in 2011 was a.interest on the national debt. b.health. c.highways. d.income security. 2) Which of the following is true of minimum-wage laws? a.They affect skilled workers’ wages. b.They create above-equilibrium wages […]

1) Which of the following is correct? a.A horizontal line has an infinite slope, and a vertical line has a zero slope. b.A horizontal line has a slope of 1, and a vertical line has a slope of -1. c.A […]

1) Maxine’s Production Possibilities FrontierDaisy’s Production Possibilities Frontier Each has in mind a maximum amount that he will bid. This maximum is called a.a resistance price. b.willingness to pay. c.consumer surplus. d.producer surplus. 4) The statement that “measures of the […]

1) Congress relies on economists at the Congressional Budget Office to a.enforce the nation’s antitrust laws. b.set the nation’s monetary policy. c.provide evidence that incumbent members of Congress are performing well in their jobs. d.provide independent evaluations of policy proposals. […]

1) Scenario 13-6 Ziva is an organic lettuce farmer, but she also spends part of her day as a professional organizing consultant. As a consultant, Ziva helps people organize their houses. Due to the popularity of her home-organization services, Farmer […]

1) A central issue in the Microsoft antitrust lawsuit involved Microsoft’s integration of its Internet browser into its Windows operating system, to be sold as one unit. This practice is known as a.tying. b.predation. c.wholesale maintenance. d.retail maintenance. 2) The […]

1) If the price increases in the region of the demand curve between points A and B, we can expect total revenue to a.increase. b.stay the same. c.decrease. d.first increase, then decrease until total revenue is maximized. 2) Corrective taxes […]

1) The marginal rate of substitution is the slope of the indifference curve. a.True b.False 2) Figure 7-10 Which area represents producer surplus when the price is P1? a.BCG b.ACH c.ABGD d.DGH Answer: a 3) Suppose that Angelo and Sonia […]

1) Adam Smith used a famous example of what type of firm to illustrate economies of scale? a.Apple b.a pin factory c.a lumber mill d.a British university 2) Table 14-12 Bill’s Birdhouses What is the marginal revenue from selling the […]

1) Barb’s aunt gave her $100 for her birthday with the condition that Barb buy herself something. In deciding how to spend the money, Barb narrows her options down to four choices: Option A, Option B, Option C, and Option […]