Archives: Quiz

1) Suppose the point (Q = 3,400, P = $20) is the midpoint on a certain downward-sloping, linear demand curve. Then a.a decrease in price from $18 to $16 will increase total revenue. b.a decrease in price from $24 to […]

1) Scenario 13-4 Suppose that Abdul opens a coffee shop. He receives a loan from a bank for $100,000. He withdraws $50,000 from his personal savings account. The interest rate on the loan is 8%, and the interest rate on […]

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

1) If a worker respond to an increase in the opportunity cost of leisure by taking more leisure, then her labor supply curve is a.upward sloping. b.backward sloping. c.horizontal. d.vertical. 2) Scenario 18-7 Suppose the following events occur in the […]

1) Which of the following is an important cause of inflation in an economy? a.increases in productivity in the economy b.the influence of positive externalities on the economy c.lack of property rights in the economy d.growth in the quantity of […]

1) The circular flow model is not used anymore because it fails to perfectly replicate real world situations. a.True b.False 2) Ensuring that Social Security is financially sound for future generations is an important use of taxpayer dollars is an […]

1) Table 16-4 This table shows the demand schedule, marginal cost, and average total cost for a monopolistically competitive firm. If the government forces this firm to produce at its efficient output level, how much profit will this firm earn? […]

1) The Condorcet paradox shows that a.allocations of resources based on majority rule are always inefficient. b.problems in counting votes can negate legitimate democratic outcomes. c.the order on which things are voted can affect the result. d.transitive preferences are inconsistent […]

1) In 2011, the poverty line for a family of four in the U.S. was a.$60,974. b.$23,021. c.$20,988. d.$17,642. 2) Suppose a monopolist charges a price of $27 for its product and sells 10 units at that price. At 10 […]

1) An increase in the value of the marginal product of labor has the effect of increasing the a.demand for labor. b.wage. c.quantity of labor employed. d.All of the above are correct. 2) Scenario 20-5 Suppose the government implemented a […]

1) When small changes in price lead to infinite changes in quantity demanded, demand is perfectly a.elastic, and the demand curve will be horizontal. b.inelastic, and the demand curve will be horizontal. c.elastic, and the demand curve will be vertical. […]

1) If a market is in equilibrium, then it is impossible for a social planner to raise economic welfare by increasing or decreasing the quantity of the good. a.True b.False 2) Which of the following events must cause equilibrium quantity […]

1) Table 17-5 The information in the table below shows the total demand for premium-channel digital cable TV subscriptions in a small urban market. Assume that each digital cable TV operator pays a fixed cost of $200,000 (per year) to […]

1) An excise tax is a tax on a specific good, like gasoline. a.True b.False 2) Figure 21-2 The downwardsloping line on the figure represents a consumer’s budget constraint. Refer to Figure 21-2. Which points are affordable? a.W, X, and […]

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

1) Utility measures the a.income a consumer receives from consuming a bundle of goods. b.satisfaction a consumer receives from consuming a bundle of goods. c.satisfaction a consumer places on her budget constraint. d.All of the above are correct. 2) Efficient […]

1) The income effect of a price change is the change in consumption that results from the movement to a new indifference curve. a.True b.False 2) All else equal, an increase in demand will cause an increase in producer surplus. […]

1) If a competitive firm is currently producing a level of output at which marginal revenue exceeds marginal cost, then a.a one-unit increase in output will increase the firm‘s profit. b.a one-unit decrease in output will increase the firm‘s profit. […]

1) Graphs such as bar graphs and pie charts are limited in that they a.can only show variables that are positively related. b.can only show variables that have a negative correlation. c.provide information on only one variable. d.provide information on […]

1) University researchers create a positive externality because what they discover in their research labs can easily be learned by others who haven’t contributed to the research costs. What could the federal government do to equate the equilibrium quantity of […]

1) Which of the following is an example of a welfare program? a.Temporary Assistance for Needy Families (TANF). b.Capital Gains Tax (CGT). c.Life Cycle Transfers (LCT). d.North American Free Trade Agreement (NAFTA). 2) along a linear, downward-sloping demand curve decreases […]

1) Some economists suggest that increased international trade with countries that have a greater proportion of unskilled workers has led to an expanding wage gap between high-skill and low-skill workers in the United States. a.True b.False 2) Figure 10-2. The […]

1) Scenario 17-3. Consider two countries, Kinglandia and Rovinastan, that are engaged in an arms race. Each country must decide whether to build new weapons or to disarm existing weapons. Each country prefers to have more arms than the other […]

1) In a December 2007 New York Times column Paul Krugman argued in favor of a.protectionism based on the national-security argument. b.protectionism based on the infant-industry argument. c.protectionism based on the unfair-competition argument. d.keeping world markets relatively open. 2) Figure […]

1) Figure 20-2 Refer to Figure 20-2. Which of the following is consistent with the data reported in the figure? a.The female poverty rate is higher for all age groups than the male poverty rate. b.The disparity between male and […]

1) The federal government is concerned about the negative effects of cigarette smoking in the United States. Suppose Congress is considering two plans. One plan would limit the production of cigarettes. The other would require manufacturers to include graphic photos […]

1) A good will have a more inelastic demand, the a.greater the availability of close substitutes. b.broader the definition of the market. c.longer the period of time. d.more it is regarded as a luxury. 2) An equilibrium occurs in a […]

1) If the average cost of transporting a passenger on the train from Chicago to St. Louis is $75, it would be irrational for the railroad to allow any passenger to ride for less than $75. a.True b.False 2) In […]

1) About what percent of total world trade is accounted for by countries that belong to the World Trade Organization? a.54 percent b.72 percent c.89 percent d.97 percent 2) The United States has more income inequality than Japan, Germany, and […]

1) Table 17-6 Imagine a small town in which only two residents, Kunal and Naj, own wells that produce safe drinking water. Each week Kunal and Naj work together to decide how many gallons of water to pump, to bring […]

1) It is argued that competitive markets provide a “natural remedy” to discriminatory wage practices. Which of the following is widely recognized as a potential limit to the potency of that natural remedy? a.Governments sometimes mandate discriminatory practices. b.Some employees […]

1) Consider a small town with only three families, the Greene family, the Brown family, and the Black family. The town does not currently have any streetlights so it is very dark at night. The three families are considering putting […]

1) Which of the following is an example of an implicit cost? a.salaries paid to owners who work for the firm b.interest on money borrowed to finance equipment purchases c.cash payments for raw materials d.foregone rent on office space owned […]

1) George and Brad are waiters at a local restaurant. The female customers prefer to be seated at the tables that George waits on because they think George is better looking than Brad. If George earns more than Brad because […]

1) If the government were to impose a tax that assigned everyone the same tax liability, it would be a.a lump-sum tax. b.an equitable tax. c.supported by the poor. d.a progressive tax. 2) What is the most important factor that […]

1) Table 13-16 Listed in the table are the long-run total costs for three different firms. Which firm is experiencing diseconomies of scale? a.Firm A only b.Firm B only c.Firm C only d.Firm A and Firm B only 2) At […]

1) The opportunity cost of obtaining more of one good is shown on the production possibilities frontier as the a.amount of the other good that must be given up. b.market price of the additional amount produced. c.amount of resources that […]

1) The slope of a horizontal line is infinite, and the slope of a vertical line is zero. a.True b.False 2) Aristotle writes, “What is common to many is taken least care of, for all men have greater regard for […]

1) Perry’s Production Possibilities FrontierJordan’s Production Possibilities Frontier a.25 units of output. b.27 units of output. c.37 units of output. d.184 units of output. 6) The manufacturer of South Face sells jackets to retail stores for $120 each, and it […]

1) People can be prevented from using a good if the good is a.a private good or a club good. b.a private good or a common resource. c.a public good or a common resource. d.a private good or a public […]

1) Suppose a tax of $3 is imposed on each new garden hose that is sold, resulting in a deadweight loss of $22,500. The supply curve is a typical upward-sloping straight line, and the demand curve is a typical downward-sloping […]

1) Table 7-19 The following table shows the cost of producing a good for the only four producers in a market. Refer to Table 7-19. If these four producers bid in an auction to supply one unit to a consumer, […]

1) Which of the following countries has the largest tax burden? a.Mexico b.Canada c.United States d.Denmark 2) Lisa’s Production Possibilities FrontierBryce’s Production Possibilities Frontier s opportunity costs of operating his new business? a. $25,000 b. $75,000 c. $100,000 d. $175,000 […]

1) Assume that Japan and Korea can switch between producing cars and producing airplanes at a constant rate. Japan has an absolute advantage in the production of a.cars and a comparative advantage in the production of cars. b.cars and a […]

1) Ellen receives a raise at her current part-time job from $8 to $10 per hour. If her labor supply curve is upward sloping, she will work fewer hours after receiving the pay raise. a.True b.False 2) Consider the production […]

1) Figure 16-14 Which of the following represents the excess capacity of this firm? a.BJ b.GH c.LM d.There is no excess capacity. 2) In a monopolistically competitive market, a.there are only a few sellers. b.each firm takes the price of […]

1) Which of the following demonstrates the law of supply? a.When the price of leather belts rose, leather belt sellers increase their quantity supplied of leather belts. b.When car production technology improved, car producers increased their supply of cars. c.When […]

1) The philosopher John Rawls argued that a.people would choose a more equal distribution of income if they had to determine an economic distribution system before knowing their place in it. b.people would choose income inequality to allow the maximum […]

1) Figure 18-7 Refer to Figure 18-7. Which of the following would shift the labor supply curve from S1 to S2? a.technological progress b.a decrease in the price of the firm’s output c.a change in workers’ attitudes toward the work-leisure […]

1) Patent and copyright laws a.encourage creative activity. b.promote competition among firms. c.discourage creative activity. d.Both a and b are correct. 2) Price cannot fall so low that some sellers choose to supply a quantity of zero. a.True b.False Answer: […]