Suppose the state legislature in your state imposes a state licensing fee of $100 per year to be paid by all firms that file state tax revenue reports. This new business tax: A) increases marginal cost. B) decreases marginal cost. C) increases marginal revenue. D) decreases marginal revenue. E) none of the above ANSWER […]
Which of the following statements correctly characterizes the problem with comparing production outcomes that are stocks and flows? A) Labor usage is always a flow, which makes it difficult to compare with stock inputs like capital. B) Most capital inputs are stocks, but the returns on these investments (profits) occur as a flow. C) Most […]
The demand curve for tickets to the George Winston concert (with special guest star, Kenny G) is given as follows: Q = 200 – 0.1P At a price of $30, what is the consumer surplus from concert tickets? A) $0 B) $20 C) $2,000 D) $1,970 E) $194,045 ANSWER E
Which would not increase the productivity of labor? A) An increase in the size of the labor force B) An increase in the quality of capital C) An increase in the quantity of capital D) An increase in technology E) An increase in the efficiency of energy ANSWER A
Strategies such as public funding of schools, compensatory education, pre-school programs, affirmative action, and campaign-finance reforms focus on the existence of inequality. Indicate whether the statement is true or false ANSWER F
Which of the following is NOT true regarding monopoly? A) Monopoly is the sole producer in the market. B) Monopoly price is determined from the demand curve. C) Monopolist can charge as high a price as it likes. D) Monopoly demand curve is downward sloping. ANSWER C
When asymmetric information problems drive high quality products from a market, we refer to this situation as: A) adverse selection. B) moral hazard. C) a lemons problem. D) A and C are correct. E) B and C are correct. ANSWER D
Refer to Figure 6.1. At point C A) the marginal product of labor is greater than the average product of labor. B) the average product of labor is greater than the marginal product of labor. C) the marginal product of labor and the average product of labor are equal. D) the marginal product of labor […]
Marginal profit is negative when: A) marginal revenue is negative. B) total cost exceeds total revenue. C) output exceeds the profit-maximizing level. D) profit is negative. ANSWER C
In the game in Scenario 13.5, A) there is one equilibrium: for both to expand West. B) there is one equilibrium: for both to expand South. C) there are two equilibria: either can expand in the West, and the other expands in the South. D) there is only a mixed strategies equilibrium. E) all four […]
