Archives: Quiz

1) When John F. Kennedy said, “A rising tide lifts all boats,” to what was he referring? a.With government intervention, all citizens receive a greater allocation of resources. b.With market forces working independently, everyone receives an equitable share of resources. […]

1) Economists refer to the inputs that firms use to produce goods and services as a.derived factors. b.derived resources. c.factors of production. d.instruments of revenue. 2) Table 22-15 Diane, Henry, and Linda are voting for who to promote. They can […]

1) Which of the following would cause the demand curve to shift from Demand A to Demand B in the market for golf balls in the United States? a.a decrease in the price of golf balls b.an increase in the […]

1) Table 13-20 Listed in the table are the long-run total costs for three different firms. Refer to Table 13-20. Firm C is experiencing diseconomies of scale. a.True b.False 2) Figure 18-7 Refer to Figure 18-7. Assume W1 = $15 […]

1) Critics of markets that are characterized by firms that sell brand name products argue that brand names encourage consumers to pay more for branded products that a.have elastic demand curves. b.are very different from generic products. c.are indistinguishable from […]

1) Figure 20-3 Refer to Figure 20-3. Which of the following best describes the poverty rates by age from 1965 to 2011? a.The poverty rates by age have declined for all age groups. b.The percentage of people living in poverty […]

1) Which of the following factors does not affect the value of a worker’s marginal product? a.discrimination against a particular group of workers by a firm’s customers b.a worker’s level of disposable income c.a worker’s level of human capital d.compensating […]

1) Table 18-9 The following table shows the production function for a particular business. The numbers represent the various labor and output combinations the firm may choose for its output on a daily basis. Refer to Table 18-9. Suppose this […]

1) Externalities are a.side effects passed on to a party other than the buyers and sellers in the market. b.side effects of government intervention in markets. c.external forces that cause the price of a good to be higher than it […]

1) Alice and Betty’s Production Possibilities in one 8hour day. Alice’s Production Possibilities FrontierBetty’s Production Possibilities Frontier a.Alice’s opportunity cost of 1 pizza is 1/2 of a pitcher of lemonade and Betty’s opportunity cost of 1 pizza is 2/3 of […]

1) If a production function shows declining marginal product of an input as the quantity of the input increases, then the production function exhibits a.diminishing profitability. b.increasing returns to scale. c.increasing marginal product. d.decreasing marginal product. 2) If the signaling […]

1) A tax on an imported good is called a. 2) An externality arises when a person engages in an activity that influences the well-being of a.buyers in the market for that activity and yet neither pays nor receives any […]

1) An example of a transitory change in income is the a.annual cost of living adjustment to your salary. b.increase in income that results from a job promotion linked to your education. c.increase in income of California orange growers that […]

1) Firms that operate in perfectly competitive markets try to a.maximize revenues. b.maximize profits. c.equate marginal revenue with average total cost. d.All of the above are correct. 2) Scenario 9-1 The before-trade domestic price of peaches in the United States […]

1) Customers who purchase an audio CD from Sally’s Sounds are charged 20% more than customers who purchase the audio CD from the Sally’s Sounds website. This is an example of a.perfect price discrimination. b.price discrimination. c.deadweight loss. d.socially inefficient […]

1) Kyle is planning to take a roadtrip. After he makes his plans, he has to make some unexpected auto repairs. Also, he sees the price of gas has gone up. Which of these two events should Kyle consider in […]

1) Measures of elasticity enhance our ability to study the magnitudes of changes in quantities in response to changes in prices or income. a.True b.False 2) Relationship Between Years of Education and Annual Income The graph above is a a.bar […]

1) The notion that similar taxpayers should pay similar amounts of taxes is known as a.vertical equity. b.the benefits principle. c.horizontal equity. d.taxpayer efficiency. 2) Table 12-8 The following table presents the total tax liability for an unmarried taxpayer under […]

1) An increase in quantity demanded a.results in a movement downward and to the right along a demand curve. b.results in a movement upward and to the left along a demand curve. c.shifts the demand curve to the left. d.shifts […]

1) If all of the firms in an oligopoly successfully collude and form a cartel, then total profit for the cartel is equal to what it would be if the market were a monopoly. a.True b.False 2) Devin works as […]

1) Scenario 12-1 Ken places a $20 value on a cigar, and Mark places a $17 value on it. The equilibrium price for this brand of cigar is $15. Suppose the government levies a tax of $1 on each cigar, […]

1) Refer to Figure 9-15. With the tariff, the quantity of saddles imported is a.Q3 – Q1. b.Q3 – Q2. c.Q4 – Q1. d.Q4 – Q2. 2) Table 13-6 Wooden Chair Factory Assume the Wooden Chair Factory currently employs 2 […]

1) The typical state spends the most on a.education. b.Medicare and Social Security. c.highways. d.defense. 2) If men, on average, earn 20 percent more than women in a particular occupation, a.this is clear evidence of discrimination. b.some of this differential […]

1) In the transition from the short run to the long run, the number of firms in a competitive industry is a.fixed. b.increasing at a constant rate. c.decreasing. d.able to adjust to market conditions. 2) If employers are profit-maximizers, then […]

1) If a small country imposes a tariff on an imported good, domestic sellers will gain producer surplus, the government will gain tariff revenue, and domestic consumers will gain consumer surplus. a.True b.False 2) Monopoly pricing prevents some mutually beneficial […]

1) A paper plant produces water pollution during the production process. If the government forces the plant to internalize the negative externality, then the a.supply curve for paper would shift to the right. b.supply curve for paper would shift to […]

1) In the markets for goods and services in the circular-flow diagram, a.households provide firms with savings for investment. b.households provide firms with labor, land, and capital. c.firms provide households with output. d.firms provide households with profit. 2) Negative externalities […]

1) Which of the following require firms to pay to pollute? (i)corrective taxes (ii)tradable pollution permits (iii)pollution regulations a.(i) only b.both (i) and (ii) c.(iii) only d.both (ii) and (iii) 2) In the long run, a firm will exit a […]

1) Figure 21-5 Refer to Figure 21-5. In graph (b), what is the price of good X relative to the price of good Y (i.e., Px/Py)? a. 1/3 b.1 c.3 d.10 2) If rectangle D is larger than rectangle A, […]

1) Figure 14-2 Suppose a firm operating in a competitive market has the following cost curves: Which of the four prices corresponds to a firm earning negative economic profits in the short run but trying to remain open? a.Pa b.Pb […]

1) Assume that Aruba and Iceland can switch between producing coolers and producing radios at a constant rate. Which of the following combinations of coolers and radios could Aruba produce in one 40- hour week? a.3 coolers and 7 radios […]

1) Becky is a single mother of two young children who spend their days at a daycare center while Becky goes to work. The daycare center closes at 5:30. If parents do not pick up their children at or before […]

1) Which of the following statements is correct regarding a firm‘s decision-making? a.The decision to shut down and the decision to exit are both short-run decisions. b.The decision to shut down and the decision to exit are both long-run decisions. […]

1) Which of the following statements is (are) correct? a.Relative to some other scientists, economists find it more difficult to conduct experiments. b.Theory and observation are important in economics as well as in other sciences. c.To obtain data, economists often […]

1) Table 22-20 The table below shows the preferred city budget (in millions) for in the city of Springfield. Refer to Table 22-20. In an election, each voter will select the budget closest to his or her most preferred budget. […]

1) If the government imposes a binding price floor in a market, then the consumer surplus in that market will increase. a.True b.False 2) Under which of the following scenarios would a park be considered a club good? a.Visitors to […]

1) The supply curve for stand up paddle boards a.shifts when the price of stand up paddle boards changes because the price of stand up paddle boards is measured on the vertical axis of the graph. b.shifts when the price […]

1) Above-equilibrium wages caused by efficiency wages will most likely result in a.a shortage of labor. b.increased unemployment. c.compensating wage differentials. d.an decrease in the quantity of labor supplied. 2) Most studies have found that tobacco and marijuana are substitutes […]

1) In a market, the price of any good adjusts until quantity demanded equals quantity supplied. a.True b.False 2) When leisure is a normal good, the income effect from a decrease in wages is evident in a.a desire to consume […]

1) Which of the following allows you to provide information about the relationship between two variables? a.coordinate system. b.pie chart c.bar graph d.time-series graph 2) Figure 21-9 Refer to Figure 21-9. If the consumer has $600 in income, what is […]

1) Figure 10-19 Note that the lines labeled €Demand€ and €Social Value€are parallel. Also, the slopes of the lines on the graph reflect the following facts: (1) Private value and social value decrease by $1.00 with each additional unit of […]

1) A likely example of substitute goods for most people would be a.tables and chairs. b.bicycles and helmets. c.apple juice and orange juice. d.coffee and sugar. 2) Table 12-10 If Jace has $33,000 in taxable income, his marginal tax rate […]

1) If the demand for light bulbs increases, producer surplus in the market for light bulbs a.increases. b.decreases. c.remains the same. d.may increase, decrease, or remain the same. 2) Which of the following conditions is characteristic of a monopolistically competitive […]

1) Consider the market for capital equipment. Suppose the value of the marginal product of capital equipment increases. Holding all else constant, the equilibrium rental price of capital equipment will a.increase. b.decrease. c.not change. d.It is not possible to determine […]

1) If a firm notices that its average revenue equals the current market price, that firm must be participating in a competitive market. a.True b.False 2) Karen’s cat causes Danny to sneeze. Karen values her cat’s companionship at $300 per […]

1) Average variable cost is equal to total variable cost divided by quantity of output. a.True b.False 2) For a typical firm, fixed costs increase in direct proportion to the increases in output. a.True b.False Answer: False 3) Figure 14-13 […]

1) Labor unions will raise the quantity of labor demanded. a.True b.False 2) Table 16-2 The following table shows the total output produced by the top six firms as well as the total industry output for each industry. What is […]

1) According to the Coase theorem, in the presence of externalities a.private parties can bargain to reach an efficient outcome. b.government assistance is necessary to reach an efficient outcome. c.the assignment of legal rights can prevent externalities. d.the initial distribution […]

1) Of the total income earned in the U.S. economy, approximately a.33 percent is earned by workers, and 67 percent is earned by landowners. b.50 percent is earned by workers, 25 percent is earned by landowners, and 25 percent is […]

1) Which of the following is correct? a.The word economy comes from the Greek word for rational thinker. b.Economists study the management of scarce resources. c.Because economists believe that people pursue their best interests, they are not interested in how […]