Chapter 1: Getting Started
Q1) Self-interest
A) reflects choices that are best for society as a whole.
B) reflects choices that are best for the individual who makes them.
C) has nothing to do with determining what goods are produced.
D) occurs only when wants exceed available resources.
E) cannot be used to determine how goods are produced.
See Q1 Verified Answer
Q2) Self-interest
A) reflects choices that are best for society as a whole.
B) reflects choices that are best for the individual who makes them.
C) has nothing to do with determining what goods are produced.
D) occurs only when wants exceed available resources.
E) cannot be used to determine how goods are produced.
See Q2 Verified Answer
Q3) What does the slope of a straight line equal? How is the slope of a curved line
calculated?
See Q3 Verified Answer
Click here! To get all questions and flashcards with answers for this chapter
Chapter 12: Markets with Private Information
Q1) Health-care vouchers have been [Link] vouchers would
A) cap total expenditure on health care but do nothing to solve the problem of
uninsurance.
B) limit choice and would create long waiting times for health care service.
C) solve the problem of the doctor shortage but would not affect the problem of over
spending on health care.
D) ensure universal coverage for health care and would cap total expenditure on health
care.
E) None of the above answers is correct.
See Q1 Verified Answer
Q2) Screening
A) leads to a pooling equilibrium in the insurance market.
B) means an uninformed person passes knowledge to an informed person.
C) makes no-claim bonuses unnecessary.
D) explains why insurance companies offer low-premium, high-deductible policies and
high-premium, low-deductible policies.
E) makes the insurance market inefficient.
See Q2 Verified Answer
Q3) What role does moral hazard play in the market for health care?
See Q3 Verified Answer
Click here! To get all questions and flashcards with answers for this chapter
Page 2
Chapter 8: Taxes
Q1) Suppose the demand for specialty car license plates is perfectly inelastic and the
supply curve for specialty license plates is upward sloping.A tax is imposed on specialty
license [Link] of the following is true?
A) Drivers pay the smallest share of the tax.
B) Drivers pay none of the tax.
C) Drivers pay all of the tax.
D) The government pays all of the tax.
E) The government collects nothing in tax revenues.
See Q1 Verified Answer
Q2) The assertion that people with the same ability to pay taxes should pay the same
amount in taxes best represents the idea of
A) horizontal equity.
B) vertical equity.
C) the benefits principle of tax fairness.
D) fairness principle of taxation.
E) benefits paid principle of taxation.
See Q2 Verified Answer
Q3) What is the difference in the tax incidence between imposing the Social Security tax
on workers and imposing the same tax on employers?
See Q3 Verified Answer
Click here! To get all questions and flashcards with answers for this chapter
Page 3
Chapter 17: Monopolistic Competition
Q1) The above figure represents a restaurant operating in monopolistic competition.
[Link] is the profit-maximizing level of output?
[Link] price will the firm charge?
[Link] is the firm's profit (or loss)?
[Link] this a long-run equilibrium? Why or why not?
[Link] this firm producing its efficient scale of output?
See Q1 Verified Answer
Q2) A firm in monopolistic competition makes its decisions on quantity and price by
A) taking price as given from the market and producing where MR = MC.
B) taking both price and quantity as given from the market.
C) producing where MR = MC and setting the price for this quantity from the demand
curve.
D) taking quantity as given from the market and setting the price for this quantity from
the demand curve.
E) producing where MR = MC and setting the price so that P = MR = MC.
See Q2 Verified Answer
Q3) Which of the following is the best example of a differentiated product?
A) beets in the local supermarket
B) diamonds
C) airlines
D) running shoes
E) electricity
See Q3 Verified Answer
Page 4
Click here! To get all questions and flashcards with answers for this chapter
Chapter 4: Demand and Supply
Q1) The initial equilibrium price in the market for Web pages is $200 per page and 1000
Web pages are created in a [Link] new Web design firms now enter the [Link]
a result,
A) the supply of Web pages increases and the price falls.
B) the supply curve of Web pages shifts leftward and the price falls.
C) the demand for Web pages increases and the price rises.
D) the supply of web pages increase and the price falls, which then increases the
demand for Web pages and the demand curve shifts rightward.
E) the demand for Web pages increases and the price falls.
See Q1 Verified Answer
Q2) The demand for cat food decreases while the supply [Link] equilibrium price
of cat food ________,and the equilibrium quantity ________.
A) does not change; increases
B) rises; decreases
C) falls; perhaps changes but we can't say if it increases, decreases, or stays the same
D) rises; perhaps changes but we can't say if it increases, decreases, or stays the same
E) falls; increases
See Q2 Verified Answer
Q3) What leads to a decrease in the quantity demanded of a good or service?
See Q3 Verified Answer
Click here! To get all questions and flashcards with answers for this chapter
Page 5
Chapter 19: Markets for Factors of Production
Q1) If the supply of a factor is perfectly inelastic,then
A) no more than the existing quantity can be supplied.
B) the supply curve is horizontal.
C) sellers will provide whatever quantity is demanded at the going price.
D) a rise in price results in no quantity being supplied.
E) a fall in price results in no quantity being supplied.
See Q1 Verified Answer
Q2) Why might an individual decrease the quantity of labor he or she supplies when the
wage rate increases? Briefly explain your answer.
See Q2 Verified Answer
Q3) What factors other than the wage rate influence the demand for labor? How is
demand affected by changes in these factors?
See Q3 Verified Answer
Click here! To get all questions and flashcards with answers for this chapter
Page 6
Chapter 3: The Economic Problem
Q1) Explain why specialization and trade increases a country's overall level of
consumption.
See Q1 Verified Answer
Q2) The table above shows a nation's production possibilities [Link] the nation
chooses to increase the production of robots from 2 to 3 and it is on its PPF,it will have to
forgo ________ pizzas.
A) 37
B) 34
C) 3
D) 35.5
E) None of the above answers is correct.
See Q2 Verified Answer
Q3) The United States can use all of its resources to produce 50 computers or 4,000
[Link] that at world market prices,one computer exchanges for 100
[Link] how the United States can gain from trade.
See Q3 Verified Answer
Click here! To get all questions and flashcards with answers for this chapter
Page 7
Chapter 14: Production and Cost
Q1) The table above shows the total product schedule for The X [Link]
marginal returns occur with the ________ worker because ________.
A) 5th; the marginal product of labor for the 5th worker is less than the marginal product
of the 4th worker
B) 5th; the average product of labor is also declining
C) 4th; output reaches is maximum
D) 6th; output starts to decline
E) 6th; the marginal product of labor is greater than the average product of labor
See Q1 Verified Answer
Q2) The average total cost curve is [Link] the quantity of output where average
total cost is at its minimum,is the marginal cost curve above the average total cost
curve,below the average total cost curve,or intersecting the average total cost curve?
See Q2 Verified Answer
Q3) Economies of scale and diseconomies of scale explain
A) cost behavior in the short run.
B) profit maximization in the long run.
C) the U-shape of the long-run average cost curve.
D) the U-shape of the short-run average total cost curve.
E) the U-shape of the marginal cost curves.
See Q3 Verified Answer
Click here! To get all questions and flashcards with answers for this chapter
Page 8
Chapter 6: Efficiency and Fairness of Markets
Q1) A public good
A) is a good that is usually consumed in public, such as a restaurant meal.
B) is a good people can consume even if they do not pay for it.
C) is a good produced by government.
D) results in an efficient allocation of resources.
E) is a good for which people are willing to pay a very high price.
See Q1 Verified Answer
Q2) A public good
A) is a good that is usually consumed in public, such as a restaurant meal.
B) is a good people can consume even if they do not pay for it.
C) is a good produced by government.
D) results in an efficient allocation of resources.
E) is a good for which people are willing to pay a very high price.
See Q2 Verified Answer
Q3) The figure above shows Kaley's marginal benefit from swimming with manatees and
Scott's marginal cost of providing manatee swimming [Link] Scott offers two swim tours
per week,he incurs a marginal cost of
A) more than $30.
B) $30.
C) $20.
D) $10.
E) $2.
See Q3 Verified Answer
Page 9
Click here! To get all questions and flashcards with answers for this chapter
Chapter 20: Economic Inequality
Q1) Looking at wage differentials between white women and white men in the United
States since 2000,we see that the amount of the difference
A) has not changed.
B) has increased.
C) has decreased.
D) at first increased but in the last decade it decreased.
E) at first decreased but in the last decade it increased.
See Q1 Verified Answer
Q2) Which of the following is (are)a difference between high-skilled workers and
low-skilled workers?
[Link]-skilled workers have a higher value of marginal product.
[Link]-skilled workers have incurred lower opportunity costs to acquire their skills.
[Link] demand for high-skilled workers exceeds that for low-skilled workers.
A) i only
B) ii and iii
C) i and ii
D) i and iii
E) i, ii, and iii
See Q2 Verified Answer
Q3) What is the difference between wealth and income?
See Q3 Verified Answer
Click here! To get all questions and flashcards with answers for this chapter
Page 10
Chapter 15: Perfect Competition
Q1) A firm that is a price taker faces
A) an elastic supply curve.
B) an inelastic supply curve.
C) a perfectly elastic demand curve.
D) a perfectly inelastic demand curve.
E) an elastic but not perfectly elastic demand curve.
See Q1 Verified Answer
Q2) Pineapple growing is a perfectly competitive [Link] does the market demand
curve for pineapples compare to the demand curve for an individual pineapple grower?
See Q2 Verified Answer
Q3) Does a perfectly competitive producer have any incentive to lower its price so it is
below the current market price? Explain your answer
See Q3 Verified Answer
Click here! To get all questions and flashcards with answers for this chapter
Page 11