MICRO FINAL
3. Since air pollution creates a negative externality, a. social welfare will be enhanced when some, but not all air pollution is eliminated. b. social welfare is optimal when all air pollution is eliminated. c. governments should encourage private firms to consider only private costs. d. the free market result maximizes social welfare.
A
5. 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 of property rights will determine the efficient outcome.
A
A firm operating in a monopolistically competitive market can earn economic profits in a. the short run but not in the long run. b. the long run but not in the short run. c. both the short run and the long run. d. neither the short run nor the long run.
A
A monopolistically competitive firm chooses its a. price and quantity just as a monopoly does. b. quantity but faces a horizontal demand curve just as a competitive firm does. c. price but can sell any quantity at the market price just as an oligopoly does. d. price and quantity based on the decisions of the other firms in the industry just as an oligopoly does.
A
A service station owner in Staten Island, New York, was worried that raising the price of gasoline would cause the quantity demanded to fall by so much that he would be in a worse situation than if he did not raise the price. If raising the price of gasoline would cause the owner to receive less total revenue from the sale of gasoline, the demand for gasoline is A) elastic. B) unit elastic. C) inelastic. D) perfectly inelastic.
A
Along a downward-sloping linear demand curve, A) the marginal utility from the consumption of each unit of the good falls and the total utility from consuming larger quantities increases. B) the marginal utility from the consumption of each unit of the good rises and the total utility from consuming larger quantities remain constant. C) the marginal utility from the consumption of each unit of the good and the total utility from consuming larger quantities increase. D) the marginal utility from the consumption of each unit of the good and the total utility from consuming larger quantities remain constant.
A
Assume a perfectly competitive firm is producing Q = 1,000 units of output. At Q = 1,000, the firm's marginal cost equals $20 and its average total cost equals $25. The firm sells its output for $30 per unit. To maximize its profit, the firm should a. increase its output. b. continue to produce 1,000 units. c. decrease its output but continue to produce. d. shut down.
A
Cecilia's Café operates in a monopolistically competitive market. Cecilia's is currently producing where its average total cost is minimized. In the long run we would expect Cecilia's output to a. decrease and average total cost to increase. b. decrease and average total cost to decrease. c. remain unchanged as Cecilia's is doing the best it can. d. increase and average total costs to decrease.
A
If the price of steel increases drastically, the quantity of steel demanded by the building industry will fall significantly over the long run because A) buyers of steel are more sensitive to a price change if they have more time to adjust to the price change. B) buyers of steel are less sensitive to a price change if they have more time to adjust to the price change C) profits will fall by a greater amount in the long run than in the short run. D) sales revenue in the building industry will fall sharply.
A
In July 2008, the average price of gasoline in the United States was $4.09 per gallon and consumers bought 6 percent less gasoline than they had during July 2007, when the average price was $2.96 per gallon. Based on these numbers, what was the price elasticity of demand for gasoline from July 2007 to July 2008? A) -0.18 B) -0.26 C) -3.86 D) -6.33
A
In general, game theory is the study of a. how people behave in strategic situations. b. how people behave when the possible actions of other people are irrelevant. c. oligopolistic markets. d. all types of markets, including perfectly competitive markets, monopolistic markets, and oligopolistic markets.
A
In order to derive an individualʹs demand curve for salmon, we would observe what happens to the utility-maximizing bundle when we change A) the price of the product and hold everything else constant. B) income and hold everything else constant. C) tastes and preferences and hold everything else constant. D) the price of a close substitute and hold everything else constant.
A
In which of the following product markets are we likely to observe the largest amount of advertising? a. markets with highly differentiated products b. perfectly competitive markets c. markets in which industrial products are sold d. markets in which there is very little difference between different firms' products
A
Refer to Figure 3-5. In a free market such as that depicted above, a surplus is eliminated by (https://imgur.com/a/YdXkqGg) A) a price decrease, decreasing the quantity supplied and increasing the quantity demanded. B) a price decrease, decreasing the supply and increasing the demand. C) a price increase, increasing the supply and decreasing the demand. D) a price increase, increasing the quantity supplied and decreasing the quantity demanded.
A
Refer to Figure 5. With no international trade, (https://imgur.com/a/QK4OFsS) (a) the equilibrium price is $12 and the equilibrium quantity is 300. (b) the equilibrium price is $16 and the equilibrium quantity is 200. (c) the equilibrium price is $16 and the equilibrium quantity is 300. (d) the equilibrium price is $16 and the equilibrium quantity is 450.
A
Refer to Figure 6. Assuming the country currently allows free trade, who is most likely to resist the imposition of the illustrated tariff? (https://imgur.com/a/hh8H6Vq) (a) consumer advocacy groups. (b) carnation farmers' lobby groups. (c) tulip farmers' lobby groups. (d) social welfare groups that receive government revenues from tariffs.
A
Refer to Figure 9-1. Which of the following statements is true? (https://imgur.com/a/Fr2EgZP) A) Quantities Q0 and Q1 are the utility-maximizing quantities of hoagies at two different prices of hoagies. B) Quantities Q0 and Q1 are derived independently of the utility-maximizing model. C) Quantity Q0 could be a utility-maximizing choice if the price is $5.75, but quantity Q1 may not be because we have no information on the marginal utility per dollar when price changes. D) Quantities Q0 and Q1 may not necessarily be the utility-maximizing quantities of hoagies at two different prices because we have no information on the consumerʹs budget or the price of other goods.
A
Suppose a firm has a monopoly on the sale of widgets and faces a downward-sloping demand curve. When selling the 100th widget, the firm will always receive a. less marginal revenue on the 100th widget than it received on the 99th widget. b. more average revenue on the 100th widget than it received on the 99th widget. c. more total revenue on the 100 widgets than it received on the first 99 widgets. d. a lower average cost per unit at 100 units output than at 99 units of output.
A
The demand for all carbonated beverages is likely to be ________ the demand for Dr. Pepper. A) less elastic than B) perfectly inelastic compared to C) more elastic than D) perfectly elastic compared to
A
The prisoners' dilemma provides insights into the a. difficulty of maintaining cooperation. b. benefits of avoiding cooperation. c. benefits of government ownership of monopoly. d. ease with which oligopoly firms maintain high prices.
A
Which of the following is evidence of a surplus of bananas? A) The price of bananas is lowered in order to increase sales. B) The quantity demanded of bananas is greater than the quantity supplied. C) The equilibrium price of bananas rises due to an increase in demand. D) Firms raise the price of bananas
A
Which of the following statements is correct? a. If the monopolist's marginal revenue is greater than its marginal cost, the monopolist can increase profit by selling more units at a lower price per unit. b. If the monopolist's marginal revenue is greater than its marginal cost, the monopolist can increase profit by selling fewer units at a higher price per unit. c. When a monopolist produces where price equals the minimum of average total cost, it earns a positive economic profit. d. If the monopolist is earning a positive economic profit, it must be producing where MR = MC.
A
This graph represents the tobacco industry. The socially optimal price and quantity are (https://imgur.com/a/UR3odoB) (a) $1.90 and 38 units, respectively. (b) $1.80 and 35 units, respectively. (c) $1.60 and 42 units, respectively. (d) $1.35 and 58 units, respectively.
B
Consider monopoly, monopolistic competition, and perfect competition. In which of these three market structures does a profit-maximizing firm charge a price that exceeds marginal cost? a. monopoly only b. monopoly and monopolistic competition only c. monopoly, monopolistic competition, and perfect competition d. The answer cannot be determined without knowing whether the market is in the long run or short run.
B
If firms in a monopolistically competitive market are earning economic profits, which of the following scenarios would best describe the change existing firms would face as the market adjusts to the long-run equilibrium? a. an increase in demand for each firm b. a decrease in demand for each firm c. a downward shift in the marginal cost curve for each firm d. an upward shift in the marginal cost curve for each firm
B
In monopolistically competitive markets, free entry and exit suggests that a. the market structure will eventually be characterized by perfect competition in the long run. b. all firms earn zero economic profits in the long run. c. some firms will be able to earn economic profits in the long run. d. some firms will be forced to incur economic losses in the long run.
B
In the long run, a monopolistically competitive firm produces a quantity that is a. equal to the efficient level. b. less than the efficient level. c. greater than the efficient level. d. consistent with diseconomies of scale.
B
Refer to Figure 2. What price will the monopolist charge? (https://imgur.com/MgRSj9b) a. A b. B c. C d. F
B
Refer to Figure 3-7. Assume that the graphs in this figure represent the demand and supply curves for womenʹs (https://imgur.com/a/s8S2XbB) clothing. Which panel best describes what happens in this market when the wages of seamstresses rise? A) Panel (a) B) Panel (b) C) Panel (c) D) Panel (d)
B
Refer to Figure 6. The amount of revenue collected by the government from the tariff is (https://imgur.com/a/hh8H6Vq) (a) $200. (b) $400. (c) $500. (d) $600.
B
Refer to Figure 7. The firm's profit-maximizing level of output is (https://imgur.com/a/GdlbI8m) a. 8 units. b. 12 units. c. 16 units. d. 24 units.
B
Refer to Figure 7. This graph represents the tobacco industry. The industry creates (https://imgur.com/a/UR3odoB) (a) positive externalities (b) negative externalities. (c) no externalities. (d) no equilibrium in the market.
B
Refer to Figure 8. What is the profit-maximizing price, quantity, and resulting profit? (https://imgur.com/a/JRaQR6I) a. P=$60, Q=20 units, profit=$200 b. P=$80, Q=20 units, profit=$200 c. P=$75, Q=25 units, profit=$100 d. P=$60, Q=40 units, profit=$0
B
Refer to Table 17-9. When this game reaches a Nash equilibrium, profits for Firm A and Firm B will be (https://imgur.com/a/VgH8c8c) a. $-5 and $-50, respectively. b. $-10 and $-10, respectively. c. $-20 and $-15, respectively. d. $-50 and $-5, respectively
B
Suppose a perfectly competitive market is comprised of firms that face identical cost curves. The firms experience an increase in demand that results in positive profits for the firms. Which of the following events are then most likely to occur? (i) New firms will enter the market. (ii) In the short run, price will rise; in the long run, price will rise further. (iii) In the long run, all firms will be producing at their efficient output level. a. (i) and (ii) only b. (i) and (iii) only c. (ii) and (iii) only d. (i), (ii) and (iii)
B
The defining characteristic of a natural monopoly is a. constant marginal cost over the relevant range of output. b. economies of scale over the relevant range of output. c. constant returns to scale over the relevant range of output. d. diseconomies of scale over the relevant range of output.
B
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 university research and the socially optimal quantity of university research produced? (a) tax university researchers (b) offer grants to university researchers (c) eliminate subsidized student loans (d) nothing
B
Which of the following conditions is characteristic of a monopolistically competitive firm in long-run equilibrium? a. P > MR and P = MC b. ATC = P and MR = MC c. P < MC and P = ATC d. P > ATC and P > MR
B
Which of the following statements is correct? a. In the long run, both perfectly competitive firms and monopolistically competitive firms operate with excess capacity. b. A firm operates with excess capacity when, in the long run, its level of output is below the output level where average costs are the lowest. c. For any market, the efficient level of output is the quantity at which the average-total-cost curve is tangent to the demand curve. d. All of the above are correct.
B
17. Refer to Figure 3. If the monopoly firm is currently producing Q3 units of output, then a decrease in output will definitely cause profit to (https://imgur.com/a/nbhiMBs) a. remain unchanged. b. decrease. c. increase as long as the new level of output is at least Q2. d. increase as long as the new level of output is at least Q1.
C
20. Refer to Figure 4. Firms will earn losses in the short run but will remain in business if the market price (https://imgur.com/a/jUU5RqC) a. exceeds P3. b. is less than P1. c. is greater than P1 but less than P3. d. exceeds P2.
C
4. At the local park there is a playground for children to use. While anyone is allowed to use the playground, it is often very busy, reducing the enjoyment of many of the children who use it. The playground is a a. private good. b. natural monopoly. c. common resource. d. public good.
C
A decrease in the price of GPS systems will result in A) a decrease in the demand for GPS systems. B) a larger quantity of GPS systems supplied. C) a smaller quantity of GPS systems supplied. D) an increase in the supply of GPS systems.
C
A movement along the demand curve for toothpaste would be caused by A) a change in population. B) a change in the price of toothbrushes. C) a change in the price of toothpaste. D) a change in consumer income.
C
A perfectly competitive market is in long-run equilibrium. If demand decreases, we can be certain that price will a. fall in the short run. All firms will shut down, and some of them will exit the industry. Price will then rise to reach the new long-run equilibrium. b. fall in the short run. No firms will shut down, but some of them will exit the industry. Price will then rise to reach the new long-run equilibrium. c. fall in the short run. All, some, or no firms will shut down, and some of them will exit the industry. Price will then rise to reach the new long-run equilibrium. d. not fall in the short run because firms will exit to maintain the price.
C
An increase in price of inputs would be represented by a movement from (https://imgur.com/a/q61J1f) A) A to B. B) B to A. C) S2 to S1. D) S1 to S2.
C
As firms exit a monopolistically competitive market, profits of remaining firms a. decline, and product diversity in the market decreases. b. decline, and product diversity in the market increases. c. rise, and product diversity in the market decreases. d. rise, and product diversity in the market increases.
C
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 generic products by providing misleading information. d. consumer-advocate groups have found to be inferior.
C
Danielle Ocean pays for monthly pool maintenance for her home swimming pool. Last week the owner of the pool service informed Danielle that he will have to raise his monthly service fee because of increases in the price of pool chemicals. How is the market for pool maintenance services affected by this? A) There is a decrease in the quantity of pool maintenance services supplied. B) There is an increase in the supply of pool maintenance services. C) There is a decrease in the supply of pool maintenance services. D) There is a decrease in the demand for pool maintenance services.
C
Each firm in a monopolistically competitive firm faces a downward-sloping demand curve because a. there are many other sellers in the market. b. there are very few other sellers in the market. c. the firm's product is different from those offered by other firms in the market. d. that firm faces the threat of entry into the market by new firms.
C
For a monopolist, marginal revenue is a. positive when the demand effect is greater than the supply effect. b. positive when the monopoly effect is greater than the competitive effect. c. negative when the price effect is greater than the output effect. d. negative when the output effect is greater than the price effect.
C
Holding everything else constant, an increase in the price of MP3 players will result in A) an increase in the supply of MP3 players. B) a decrease in the demand for MP3 players. C) a decrease in the quantity of MP3 players demanded. D) a decrease in the quantity of MP3 players supplied.
C
In a perfectly competitive market, there are ________ buyers and ________ sellers. A) many; few B) few; few C) many; many D) few; many
C
In studying oligopolistic markets, economists assume that a. there is no conflict or tension between cooperation and self-interest. b. it is easy for a group of firms to cooperate and thereby establish and maintain a monopoly outcome. c. each oligopolist cares only about its own profit. d. strategic decisions do not play a role in such markets.
C
In the short run, a firm operating in a monopolistically competitive market a. produces an output level where marginal revenue equals average total cost. b. maximizes revenues as well as profits. c. can earn zero economic profits. d. sets price equal to marginal cost.
C
Refer to Figure 1. From the figure it is apparent that (https://imgur.com/a/gkWDeC2) a. New Zealand will experience a shortage of wool if trade is not allowed. b. New Zealand will experience a surplus of wool if trade is not allowed. c. New Zealand has a comparative advantage in producing wool, relative to the rest of the world. d. foreign countries have a comparative advantage in producing wool, relative to New Zealand.
C
Refer to Figure 3-2. An increase in the number of firms in the market would be represented by a movement from (https://imgur.com/a/q61J1f) A) S2 to S1. B) B to A. C) S1 to S2. D) A to B.
C
Refer to Figure 5. Assume that the market starts in equilibrium at point A in panel (b) and that panel (a) illustrates the cost curves facing individual firms. Suppose that demand increases from D0 to D1. Which of the following statements is not correct? (https://imgur.com/a/BV4jZAy) a. Point A is a long-run equilibrium point. b. Points A, B, and C are short-run equilibria points. c. Point B is a long-run equilibrium point. d. Point C is a long-run equilibrium point.
C
Refer to Figure 5. Assume that the market starts in equilibrium at point A in panel (b). An increase in demand from D0 to D1 will result in (https://imgur.com/a/BV4jZAy) a. a new market equilibrium at point D. b. an eventual increase in the number of firms in the market and a new long-run equilibrium at point C. c. rising prices and falling profits for existing firms in the market. d. falling prices and falling profits for existing firms in the market.
C
Refer to Figure 5. If China were to abandon a no-trade policy in favor of a free-trade policy, (https://imgur.com/a/QK4OFsS) (a) Chinese producers of pencil sharpeners would become worse off. (b) Chinese consumers of pencil sharpeners would become better off. (c) total surplus in the Chinese economy would increase. (d) All of the above are correct.
C
Refer to Figure 6. If the market price is P4, in the short run, the perfectly competitive firm will earn (https://imgur.com/a/p9AD2RY) a. positive economic profits. b. negative economic profits but will try to remain open. c. negative economic profits and will shut down. d. zero economic profits.
C
Refer to Figure 6. The imposition of a tariff on carnations (https://imgur.com/a/hh8H6Vq) (a) increases the number of carnations imported by 100. (b) increases the number of carnations imported by 200. (c) decreases the number of carnations imported by 200. (d) decreases the number of carnations imported by 400.
C
Refer to Figure 9. Which of the graphs depicts a short-run equilibrium that will encourage the entry of other firms into a monopolistically competitive industry? (https://imgur.com/a/PC0Dl24) a. panel a b. panel b c. panel c d. panel d
C
Refer to Table 17-9. If both firms follow a dominant strategy, Firm A's profits (losses) will be (https://imgur.com/a/VgH8c8c) a. $-50 b. $-20 c. $-10 d. $-5
C
Refer to Table 17-9. If both firms follow a dominant strategy, Firm B's profits (losses) will be (https://imgur.com/a/VgH8c8c) a. $-50 b. $-15 c. $-10 d. $-5
C
Refer to the figure above. When trade in wool is allowed, consumer surplus in New Zealand (https://imgur.com/a/gkWDeC2) a. increases by the area B + D. b. increases by the area C + F. c. decreases by the area B + D. d. decreases by the area D + G.
C
When a country allows trade and becomes an importer of a good, (a) both domestic producers and domestic consumers become better off. (b) domestic producers become better off, and domestic consumers become worse off. (c) domestic producers become worse off, and domestic consumers become better off. (d) both domestic producers and domestic consumers become worse off.
C
When an oligopoly market reaches a Nash equilibrium, a. the market price will be different for each firm. b. the firms will not have behaved as profit maximizers. c. a firm will have chosen its best strategy, given the strategies chosen by other firms in the market. d. a firm will not take into account the strategies of competing firms.
C
Which of the following statements about a well-maintained yard best conveys the general nature of the externality? (a) A well-maintained yard conveys a positive externality because it increases the home's market value. (b) A well-maintained yard conveys a negative externality because it increases the property tax liability of the owner. (c) A well-maintained yard conveys a positive externality because it increases the value of adjacent properties in the neighborhood. (d) A well-maintained yard cannot provide any type of externality.
C
24. If all existing firms and all potential firms have the same cost curves, there are no inputs in limited quantities, and the market is characterized by free entry and exit, then the long-run market supply curve a. is horizontal and equal to the minimum of long-run marginal cost for each firm. b. must slope downward. c. must slope upward. d. is horizontal and equal to the minimum of long-run average cost total for each firm.
D
A dominant strategy is one that a. makes every player better off. b. makes at least one player better off without hurting the competitiveness of any other player. c. increases the total payoff for the player. d. is best for the player, regardless of what strategies other players follow.
D
A perfectly competitive firm in long-run equilibrium has been selling its output for $20 per unit and has been maximizing its profit. Then, the price rises to $25, and the firm makes whatever adjustments are necessary to maximize its profit at the now-higher price. Once the firm has adjusted, which of the following statements is correct? a. The firm's quantity of output is higher than it was previously. b. The firm's average total cost is higher than it was previously. c. The firm's marginal revenue is higher than it was previously. d. All of the above are correct.
D
An example of a common resource would be (a) cable TV service. (b) a tornado siren. (c) clothing. (d) the environment.
D
Consider monopoly, monopolistic competition, and perfect competition. In which of these three market structures must a profit-maximizing firm experience zero economic profit? a. perfect competition only b. perfect competition and monopolistic competition only c. perfect competition, monopolistic competition, and monopoly d. The answer cannot be determined without knowing whether the market is in the long run or short run.
D
In 2004, hurricanes damaged a large portion of Floridaʹs orange crop. As a result of this, many orange growers were not able to supply fruit to the market. At the pre-hurricane equilibrium price (i.e., at the initial equilibrium price), we would expect to see [meaning, IF the price did not change AFTER the hurricane] A) an increase in the demand for oranges. B) a surplus of oranges. C) the quantity demanded equal to the quantity supplied. D) a shortage of oranges.
D
In the prisoners' dilemma game, self-interest leads a. each prisoner to confess. b. to a breakdown of any agreement that the prisoners might have made before being questioned. c. to an outcome that is not particularly good for either prisoner. d. All of the above are correct
D
Let D= demand, S = supply, P = equilibrium price, Q= equilibrium quantity. What happens in the market for tropical hardwood trees if the governments restrict the amount of forest lands that can be logged? A) D decreases, S no change, P and Q decrease B) D no change, S decreases, P increases, Q increases C) D and S decrease, P and Q increase D) S decreases, D no change, P increases, Q decreases
D
Olive oil producers want to sell more olive oil at a higher price. Which of the following events would have this effect? A) a decrease in the cost of transporting olive oil to markets B) an increase in the price of olive oil presses C) an increase in the price of land used to plant olives D) research finds that consumption of olive oil reduces the risk of heart disease
D
Price elasticity of supply is used to gauge A) how responsive sales are to a change in input prices B) how responsive suppliers are to changes in future prices. C) how responsive suppliers are to a change in demand. D) how responsive suppliers are to price changes.
D
Refer to Figure 3-7. Assume that the graphs in this figure represent the demand and supply curves for bicycle (https://imgur.com/a/s8S2XbB) helmets. Which panel best describes what happens in this market if there is a substantial increase in the price of bicycles? A) Panel (a) B) Panel (b) C) Panel (c) D) Panel (d)
D
Refer to Figure 3-7. Assume that the graphs in this figure represent the demand and supply curves for rice. (https://imgur.com/a/s8S2XbB) What happens in this market if buyers expect the price of rice to fall? A) Panel (a) B) Panel (b) C) Panel (c) D) Panel (d)
D
Refer to Figure 7. Suppose that average total cost is $18 when Q=12. What is the profit-maximizing price and resulting profit? (https://imgur.com/a/GdlbI8m) a. P=$12, profit=$0 b. P=$18, profit=$72 c. P=$18, profit=$24 d. P=$18, profit=$0
D
Refer to Table 17-9. Pursuing its own best interests, Firm A will concede that cigarette smoke causes lung cancer (https://imgur.com/a/VgH8c8c) a. only if Firm B concedes that cigarette smoke causes lung cancer. b. only if Firm B does not concede that cigarette smoke causes lung cancer. c. regardless of whether Firm B concedes that cigarette smoke causes lung cancer. d. None of the above. In pursuing its own best interests, Firm A will in no case concede that cigarette smoke causes lung cancer.
D
Refer to Table 17-9. Pursuing its own best interests, Firm B will concede that cigarette smoke causes lung cancer (https://imgur.com/a/VgH8c8c) a. only if Firm A concedes that cigarette smoke causes lung cancer. b. only if Firm A does not concede that cigarette smoke causes lung cancer. c. regardless of whether Firm A concedes that cigarette smoke causes lung cancer. d. None of the above; in pursuing its own best interests, Firm B will in no case concede that cigarette smoke causes lung cancer
D
Refer to Table 3-1. The table above shows the demand schedules for loose-leaf tea of two individuals (Sunil and Mia) and the rest of the market. If the price of loose-leaf tea rises from $3 to $4, the market quantity demanded would (https://imgur.com/a/M1z5cqW) A) decrease by 64 lbs. B) increase by 64 lbs. C) increase by 32 lbs. D) decrease by 32 lbs.
D
Suppose the equilibrium price of a physical examination by a doctor is $200, and the government imposes a price floor of $150 per physical. As a result of the price floor, A) the quantity demanded of physicals increases and the quantity supplied of physicals decreases. B) the supply of physicals decreases C) the demand of physicals increases. D) the number of physicals performed stays the same.
D
The Tragedy of the Commons for sheep grazing on common land can be eliminated by the government doing each of the following except (a) assigning land property rights. (b) auctioning off sheep-grazing permits. (c) taxing sheep flocks. (d) subsidizing sheep flocks.
D
The world price of a pound of T-bone steak is $9.00. Before Guatemala allowed trade in beef, the price of a pound of T-bone steak there was $12.00. Once Guatemala began allowing trade in beef with other countries, Guatemala began (a) exporting T-bone steak and the price per pound in Guatemala remained at $12.00. (b) exporting T-bone steak and the price per pound in Guatemala decreased to $9.00. (c) importing T-bone steak and the price per pound in Guatemala remained at $12.00. (d) importing T-bone steak and the price per pound in Guatemala decreased to $9.00.
D
To achieve the optimal provision of public goods, the (a) market should be allowed to arrive at an equilibrium without government intervention. (b) government must limit the provision of the goods. (c) government must tax producers of the goods. (d) government must either provide the goods or subsidize their production.
D
Which of the following conditions is characteristic of a monopolistically competitive firm in short-run equilibrium? a. P > ATC b. P = ATC c. P < ATC d. Any of the above could be correct.
D
Which of the following products comes closest to having a perfectly inelastic demand? A) iPhones B) gasoline C) bus rides D) cholesterol medication in general
D
Who among the following is a free rider? (a) Barry steals candy from the store where he works. (b) Betty rides to work with Sally, but she pays Sally for gasoline and other travel-related expenses. (c) Joe drives 20,000 miles a year on public streets, but he pays no more in property taxes than Sam, who only drives 1,000 miles. (d) Fred watches many public television programs, but he has never sent in a contribution to the station.
D
