Archives: Quiz

1) What will happen to the equilibrium price and quantity of traditional camera film if traditional cameras become more expensive, digital cameras become cheaper, the cost of the resources needed to manufacture traditional film falls, and more firms decide to […]

1) Economists disagree on whether labor taxes cause small or large deadweight losses. This disagreement arises primarily because economists hold different views about a.the size of labor taxes. b.the importance of labor taxes imposed by the federal government relative to […]

1) Most firms have a.no monopoly pricing power. b.some monopoly pricing power. c.absolute monopoly pricing power. d.the ability to earn monopoly profits. 2) Table 20-3 The Distribution of Income in Edgerton Refer to Table 20-3. According to the table, what […]

1) Zelzar has decided to end its policy of not trading with the rest of the world. When it ends its trade restrictions, it discovers that it is importing incense, exporting steel, and neither importing nor exporting rugs. Which groups […]

1) While pollution regulations yield the benefit of a cleaner environment and the improved health that comes with it, the regulations come at the cost of reducing the incomes of the regulated firms’ owners, workers, and customers. This statement illustrates […]

1) In deciding whether a good is a public good, one must determine the a.incomes of those who benefit from the good. b.value of the external benefits that accrue to resource owners. c.excludability of the good. d.All of the above […]

1) If four firms comprise the entire golf club industry, the market would be a.competitive. b.characterized by interdependence of firms. c.a duopoly. d.a monopoly. 2) In the signaling theory of education, a.schooling itself does not lead to more productive workers. […]

1) A tax on a good causes the size of the market to increase. a.True b.False 2) Which of the following contributes to the projected rise in government spending on Social Security and Medicare as a percentage of GDP? a.increasing […]

1) The federal healthcare spending program that specifically targets the poor is called a.Medicaid. b.Medicare. c.National Institutes of Health. d.Blue Cross/Blue Shield. 2) Which of the following is not an example of a barrier to entry? a.Mighty Mitch’s Mining Company […]

1) Approximately how much of the income in the United States is earned by workers in the form of wages and fringe benefits? a.25 percent b.50 percent c.67 percent d.90 percent 2) Suppose demand is perfectly elastic, and the supply […]

1) Scenario 20-5 Suppose the government implemented a negative income tax and used the following formula to compute a family’s tax liability: Taxes owed = (1/4 of income) – $10,000 Refer to Scenario 20-5. A family earning $70,000 before taxes […]

1) A statement describing how the world should be a.is a normative statement. b.is a positive statement. c.would only be made by an economist speaking as a scientist. d.would only be made by an economist employed by the government. 2) […]

1) Hosne’s Production Possibilities FrontierMerve’s Production Possibilities Frontier If Hosne and Merve both spend all of their time making wallets, then total production is a.7 wallets. b.8 wallets. c.14 wallets. d.28 wallets. 2) The president of the United States receives […]

1) In this market for sunscreen, there is a decrease in the price of zinc oxide, an input into sunscreen, and more producers enter the market. The equilibrium price a.increases and the equilibrium quantity decreases. b.decreases and the equilibrium quantity […]

1) Simply asking people how much they value a highway is not a reliable way of measuring the benefits and costs because a.those who stand to gain have an incentive to tell the truth. b.those who stand to lose have […]

1) Suppose that the federal government is concerned about obesity in the United States. Congress is considering two plans. One would require “junk food” producers to include warning labels on all junk food. The other would impose a tax on […]

1) Scenario 15-3 A monopoly firm maximizes its profit by producing Q = 500 units of output. At that level of output, its marginal revenue is $30, its average revenue is $60, and its average total cost is $34. At […]

1) A decrease in a consumer’s income a.increases the slope of the consumer’s budget constraint. b.has no effect on the consumer’s budget constraint. c.decreases the slope of the consumer’s budget constraint. d.has no effect on the slope of the consumer’s […]

1) When a country abandons a no-trade policy, adopts a free-trade policy, and becomes an exporter of a particular good, a.producer surplus increases and total surplus increases in the market for that good. b.producer surplus increases and total surplus decreases […]

1) Table 22-17 Voter Type Refer to Table 22-17. The table shows the preferences of three types of voters over three possible outcomes: A, B, and C. In addition, the table shows the percentage of voters of each type. Based […]

1) In which of the following tax systems do taxes increase as income increases? a.both proportional and progressive b.proportional but not progressive c.progressive but not proportional d.neither proportional nor progressive 2) Figure 9-2 The figure illustrates the market for calculators […]

1) Table 13-3 The marginal product of the second worker is a.90 units. b.85 units. c.80 units. d.20 units. 2) Scenario 14-4 The information below applies to a competitive firm that sells its output for $40 per unit. – When […]

1) Which of the following is not a difference between monopolies and perfectly competitive markets? a.Monopolies can earn profits in the long run while perfectly competitive firms break even. b.Monopolies charge a price higher than marginal cost while perfectly competitive […]

1) Which of the following industries is most likely to exhibit the characteristic of free entry? a.electricity b.satellite radio c.mineral mining d.tennis shoes 2) A study conducted by economists Marianne Bertrand and Sendhil Mullainathan found evidence of labor-market discrimination based […]

1) In 2011, the federal government spent 9 percent of the budget on net interest. Which of the following statements regarding net interest is correct? a.If the government pays down its debt, the amount of the budget needed for net […]

1) Suppose that Family A borrows money when its car breaks down and saves money when the wife receives a holiday bonus from her employer. Suppose that Family B borrows money to buy elaborate birthday presents for the children and […]

1) The pollution market failure is an example of the free rider problem. a.True b.False 2) A profit-maximizing firm in a competitive market is currently producing 200 units of output. It has average revenue of $9 and average total cost […]

1) Refer to Figure 9-17. Without trade, total surplus is a. $600. b. $1,200. c. $1,800. d. $2,250. 2) Suppose that in 2020 the average citizen’s federal tax bill is $11,888 per person, and total federal spending is $13,997 per […]

1) Some countries win in international trade, while other countries lose. a.True b.False 2) For a given country, comparing the world price of aluminum and the domestic price of aluminum before trade indicates whether that country’s demand for aluminum exceeds […]

1) Arturo’s Production Possibilities FrontierDina’s Production Possibilities Frontier a.her tax obligation divided by her average tax rate. b.the increase in taxes she would pay as a percentage of the rise in her income. c.her tax obligation divided by her income. […]

1) Figure 14-3 Suppose a firm operating in a competitive market has the following cost curves: The firm will earn positive economic profit if the market price is a.positive. b.$6. c.above $6. d.There is no price at which the firm […]

1) Neither public goods nor common resources are a.excludable, but only public goods are not rival in consumption. b.excludable, but only common resources are not rival in consumption. c.rival in consumption, but only public goods are not excludable. d.rival in […]

1) Consumer surplus is a.a concept that helps us make normative statements about the desirability of market outcomes. b.represented on a graph by the area below the demand curve and above the price. c.a good measure of economic welfare if […]

1) Supporters of raising the minimum wage argue that minimum-wage laws are a.a tax-free way to help the working poor. Businesses bear the burden of paying higher wages, not the government. b.better than the Earned Income Tax Credit (EITC) in […]

1) The marginal-cost curve intersects the average-total-cost curve at the minimum point of the marginal-cost curve. a.True b.False 2) In which of the following games is it clearly the case that the cooperative outcome of the game is good for […]

1) Table 7-5 For each of three potential buyers of oranges, the table displays the willingness to pay for the first three oranges of the day. Assume Allison, Bob, and Charisse are the only three buyers of oranges, and only […]

1) If the price of a good is low, a.firms would increase profit by increasing output. b.the quantity supplied of the good could be zero. c.the supply curve for the good will shift to the left. d.firms can and should […]

1) Using the midpoint method, what is the price elasticity of supply between points B and C? a. 1.67 b.1.19 c.0.84 d.0.61 2) Based on the studies of human decision making, which of the following statements is correct? a.Most people […]

1) Scenario 13-3 Kachina is a senior majoring in graphic design at Awesome University (AU). While she has been attending college, Kachina started a computer consulting business to help senior citizens learn how to use their iPads. Kachina charges $25 […]

1) Anna borrows $5,000 from a bank and withdraws $1,000 from her personal savings to start a coffee shop. The interest rate is 5 percent for both the bank loan and her personal savings. Her opportunity cost of capital is […]

1) Labor-augmenting technological advances decrease the marginal productivity of labor. a.True b.False 2) In 2011, which category represented the largest source of receipts for the U.S. federal government? a.Medicare b.Social Security c.corporate income taxes d.individual income taxes Answer: d 3) […]

1) Figure 10-9 c.buyers are to a change in production costs. d.equilibrium price is to a change in supply. 8) The theory of consumer choice most closely examines which of the following Ten Principles of Economics? a.People face trade-offs. b.Governments […]

1) If the government regulates the price that a natural monopolist can charge to be equal to the firm’s average total cost, the firm will a.earn zero profits. b.earn positive profits, causing other firms to enter the industry. c.earn negative […]

1) The national defense of the United States is not excludable because a.my enjoyment of the national defense does not diminish your enjoyment of the national defense of the United States. b.my enjoyment of the national defense does diminish your […]

1) A monopolistically competitive market is like both a competitive market and a monopoly in that firms in all three market structures a.can earn economic profits in the short run. b.can earn economic profits in the long run. c.charge a […]

1) The lack of progress in reducing the poverty rate since the early 1970s is most closely related with which of the following factors? a.increasing income inequality b.a reduction in the poverty line c.rapid economic growth d.a reduction in international […]

1) Suppose a firm in a competitive market produces and sells 8 units of output and has a marginal revenue of $8. What would be the firm‘s total revenue if it instead produced and sold 4 units of output? a.$4 […]

1) If a government could successfully achieve the maximin criterion, each member of society would have an equal income. a.True b.False 2) The following diagram shows a budget constraint for a particular consumer. If the price of X is $5, […]

1) Rational people make decisions at the margin by a.following marginal traditions. b.behaving in a random fashion. c.thinking in black-and-white terms. d.comparing marginal costs and marginal benefits. 2) When a supply curve or a demand curve shifts, the equilibrium price […]

1) In-kind transfers a.are cash payments given to the poor from the government. b.are available to citizens of all income levels, but usually only sought by the poor. c.are non-monetary items given to the poor. d.include food stamps, but not […]