Microeconomics Chapter Quizzes

A variable cost is one that changes a. as the level of output changes b. year to year c. only in the short run d. month to month e. only in the long run

as the level of output changes

The opportunity cost of moving from point c to point b is point c: 2 units of food, 42 units of education point b: 3 units of food, 20 units of education a. 1 unit of food. b. 62 units of education. c. 12 units of education. d. 3 units of food. e. 22 units of education.

22 units of education

Table 7.2 Labor: Total product (pairs of shoes) 0 0 1 20 2 50 3 75 4 80 5 75 Refer to table 7.2, which shows labor and the quantity of shoes produced by a firm. What is the marginal product of the third unit of labor? a. 15 pairs of shoes b. 45 pairs of shoes c. 50 pairs of shoes d 25 pairs of shoes e. 75 pairs of shoes

25 pairs of shoes

Table 7.2 Labor: Total product (pairs of shoes) 0 0 1 20 2 50 3 75 4 80 5 75 Refer to Table 7.2, which shoes labor and the quantity of shoes produced by a firm. What is the marginal product of the fourth unit of labor. a. 5 pairs of shoes b. 10 pairs of shoes c. 80 pairs of shoes d. 50 pairs of shoes e. 20 pairs of shoes

5 pairs of shoes (how much the total product changed from the 3rd to 4th unit of labor)

DEMAND Price Quantity (cords) 60 5 80 4 100 3 120 2 COST Quantity (cords) Marginal cost 1 50 2 60 3 100 4 140 Refer to table 8.2. The perfectly competitive firewood market is composed of 1,000 identical consumers and 1,000 identical firms. The table shows the cost for one representative firm and the demand schedule for one representative consumer. The equilibrium price in this market is ______. a. $100 b. $60 c. below $60 d. $120 e. $80

$100

Dale is willing to pay $300 for a pair of rollerblades, and he purchases them on sale for $200. His consumer surplus is valued at _____ a. $200 b. $300 c. $0 d. $100 e. $1.50

$100

Figure 9.2 Price ($) Quantity Demanded 50 2 40 3 30 4 20 5 10 6 Refer to Table 9.2. Total revenue from selling 5 units is _____. a. $5 b. $10 c. $140 d. $20 e. $100

$100 Total revenue = price x quantity 20 x 5 =100

Figure 9.2 Price ($) Quantity Demanded 50 2 40 3 30 4 20 5 10 6 Refer to Table 9.2. Marginal revenue from the third unit of output is _______. a. $0 b. $100 c. $40 d. $120 e. $20

$20 (change in total revenue when the quantity demanded increases from 2 units to 3 units)

Table 7.1 Total revenue: $100,000 Assistant's salary: $20,000 Material and equipment: $15,000 Forgone salary: $30,000 Forgone interest: $1,000 Forgone building rental: $10,000 Refer to table 7.1, which shoes revenue and cost information for Sally's small business. Sally owns a small business that she operates in a building she owns. Given the information in the table below, Sally's economic profit is equal to _____ a. $65,000 b. $80,000 c. $50,000 d. $24,000 e. $35,000

$24,000 (total revenue -explicit and implicit costs

A young chef is considering opening his own sushi bar. To do so, he would have to quit his current job, which pays $20,000 a year, and move into a storage building that he owns and currently rents to his brother for $6,000 a year. His estimated expenses at the sushi bar would be $50,000 for food and $2,000 for gas and electricity. The chef's implicit costs are equal to ______. a. $52,000 b. $72,000 c. $66,000 d. $26,000 d. $78,000

$26,000 (the value of what he is giving up)

Table 9.3 Quantity Price ($) 0 7 1 6 2 5 3 4 4 3 5 2 6 1 Refer to table 9.3. The average revenue earned by the firm from four units of output is _______. a. -$4 b. $12 c. $0 d. $3 e. $4

$3 (total revenue divided by quantity is the average revenue per unit of output)

Table 7.1 Total revenue: $100,000 Assistant's salary: $20,000 Material and equipment: $15,000 Forgone salary: $30,000 Forgone interest: $1,000 Forgone building rental: $10,000 Refer to table 7.1, which shoes revenue and cost information for Sally's small business. Sally owns a small business that she operates in a building she owns. Given the information in the table below, Sally's accounting profit is equal to ______. a. $65,000 b. $80,000 c. $50,000 d. $24,000 e. $35,000

$65,000 (accounting profit = total revenue-explicit costs)

Refer to Table 5.7, which shows the change in the quantity demanded for Good A and Good B as a result of a change in income. Use the information to calculate the value of the income elasticity of demand for Good B Good B: Q1=200, Q2= 140, P1=$20, P2=$35 a. -0.64 b. 1 c. 3.33 d. 1.89 e. -0.3

-0.64

Use the information to calculate the value of the income elasticity of demand for Good A. Good A: Q1=100, Q2=120, P1=$1,000, P2=$2,000 a. -0.67 b. -0.64 c. -0.5 d. 0.27 e. -1.55

0.27

Refer to Table 6.5, which shows the total utility and marginal utility derived from the consumption of plums. The first column of the table represents the number of plums a consumer consumes in a day, and the second column of the table presents the total utility derived from that consumption. The marginal utility of eating the third plum is _____ Plums Total Utility 0 0 1 10 2 18 3 24 4 28 5 30 a. 8 units. b. 24 units. c. 9 units. d. 6 units. e. 4 units

6 units

If Joe says that nothing comes close to Pepsi, his demand for Pepsi is likely to be _______ a. relatively income elastic b. relatively price inelastic c. relatively price elastic d. unit elastic e. perfectly elastic

relatively price inelastic

Jennifer expects the price of chewing gum to go up by 10 percent next week. Which of the following is the most likely result of such an expectation? a. Jennifer's demand for chewing gum will increase during the following week. b. Jennifer's demand for chewing gum will increase during this week c. Jennifer's demand for chewing gum will decrease during the following week. d. Jennifer's demand for chewing gum will decrease during this week.

Jennifer's demand for chewing gum will increase during this week

Which of the following statements about a demand curve is true? a. If a supply curve shifts, thereby changing price, the demand curve will shift as well. b. If price increases, the demand curve will shift to the right. c. If a demand curve shifts, the supply curve will shift as well, whether or not the price changes. d. The demand curve for a good will not shift when price changes. e. The demand curve for a good will not shift when the money income of consumers increases.

The demand curve for a good will not shift when price changes.

"I do not feel so good, I should not have eaten that last doughnut." Which of the following supports this statement? a. The total utility of eating doughnuts is negative. b. The marginal utility of the last doughnut is still increasing. c. The marginal utility of the last doughnut was positive. d. The marginal utility of the last doughnut was negative e. The marginal utility of the last doughnut was positive.

The marginal utility of the last doughnut was negative

Economists classify all of the following as physical capital, except one. Which one is not capital? a. a $20 bill in a firm's petty cash drawer b. a factory c. the building where an economics class meets d. a plumber's wrench e/ a railroad car

a $20 bill in a firm's petty cash drawer

A production possibilities frontier can shift outward for all of the following reasons except: a.​ a larger capital stock. b. ​a larger work force. c. ​an improvement in technology. d.​ an increase in the skills of the labor force. e.​ a decrease in the size of the labor force.

a decrease in the size of the labor force.

Which of the following could be true of perfect competition but not of monopoly? a. a firm can sell a good in the market only if the government grants a patent to the firm b. a firm can produce a good only if government licenses authorize it to produce the good c. a firm can face competition from new entrants into the market in the long run d. a from can face economic profit in the long run e. a firm can shut down in the short run only if the price charged by it exceeds the average variable cost of production

a firm can face competition from new entrants into the market in the long run (a monopolized market is characterized by barriers to entry, while a perfectly competitive market is not characterized by barriers to entry)

Which of the following describes a monopolized market structure? a. many firms with no control over price producing identical produces with no differentiation b. a few firms with some control over price producing similar products that are close substitutes c. a single firm producing a highly differentiated produce and serving the entire market d. a few firms with no control over price producing highly differentiated products e. a market structure with a single buyer

a single firm producing a highly differentiated produce and serving the entire market (a monopolist os the sole supplier of a product with no close substitutes)

A tariff is: a. a quality restriction on imports. b. a voluntary limit on the quantities of goods that can be imported. c. a legal limit on the quantities of goods that can be imported. d. a tax on imports e. a subsidy for exports

a tax on imports

Marginal utility is _____ a.​ change in satisfaction that results from consuming 1 percent less of a good. b.​ overall satisfaction obtained from consuming a good. c.​ additional cost of purchasing one more unit of a good. d.​ additional satisfaction obtained from consuming one more unit of a good. e. ​average satisfaction obtained from consuming a good.

additional satisfaction obtained from consuming one more unit of a good.

Gross domestic product is the market value of: a. all final goods produced during the course of a year. b. all the goods produced during the course of a year over and above what is required to maintain the population and the stock of capital. c. all exchanges made during the course of a year. d. all monetary transactions during the course of a year. e. all intermediate goods sold during the course of a year.

all final goods produced during the course of a year.

A public good is one that is supplied to: a. only people who do not pay for it. b. the government by private firms. c. only people who pay for it. d. all people, regardless of whether they pay for it or not. e. foreign governments by the federal government.

all people, regardless of whether they pay for it or not

Which of the following is likely to shift the demand curve for a normal good to the right? a. a decrease in income if the good is a normal good b. a decrease in the good's price if the good is a normal good c. an expectation of a surplus in the future d. an increase in the price of a complementary good e. an expectation of a shortage in the future

an expectation of a shortage in the future

Which of the following is most likely to shift the supply curve of a good to the right? a. a decrease in the price of an alternative good b. an increase in the price of a resource used in the good's production c. an expectation of a higher price in the near future d. an increase in the price of the good e. an improvement in the technology used in the good's production

an improvement in the technology used in the good's production

Table 7.2 Labor: Total product (pairs of shoes) 0 0 1 20 2 50 3 75 4 80 5 75 Refer to Table 7.2, which shoes labor and the quantity of shoes produced by a firm. At which point fo diminishing marginal returns set in? a. before the first unit of labor b. between the third and fourth units of labor c. between the fourth and fifth unit of labor d. between the second and third units of labor e. between the first and second units of labor

between the second and third units of labor (when marginal product starts to decine)

Which of the following is a durable good? a. food eaten at a restaurant b. binoculars c. motor oil d. food cooled at home e. gasoline

binoculars

A country has an absolute advantage in the production of a good if that country _____ a. has the lowest opportunity cost of producing the good, regardless of whether it is produced using the fewest resources. b. has the lowest opportunity cost of producing the good and can sell it at the highest price. c. has the greatest opportunity cost of producing the good, regardless of whether it is produced using the fewest resources. d. has the greatest opportunity cost of producing the good and can sell it at the highest price. e. can produce the good using fewer resources than another country would require.

can produce the good using fewer resources than another country would require.

A cottage industry is one that: a. produces cottage cheese. b. produces rural housing. c. takes advantage of division of labor. d. uses highly specialized resources in a complex production process. e. carries out production in workers' homes

carries out production in workers' homes

Refer to Exhibit 6.6, which shows the market demand schedule for a good. When the price of the good is P, the shaded area represents _____ a. the marginal valuation of the good. b. shortage. c. the marginal utility of the good. d. price floor. e. consumer surplus.

consumer surplus

Externalities are defined as: a. managers' dealings with stockholders outside a firm. b. any transaction external to a firm. c. policies that firms adopt to sell products outside a country. d. costs or benefits that fall on third parties. e. costs of maintaining plant and equipment to avoid the scrutiny of external auditors

costs or benefits that fall on third parties.

In order to prove that Coca-Cola and 7UP are substitutes, one should test the ________ and get a _________ a. cross-price elasticity of demand; positive number b. income elasticity of demand; positive number c. price elasticity of demand; number greater than -1 d. price elasticity of demand; number less than -1 e. cross-price elasticity of demand; negative number

cross-price elasticity of demand; positive number

Points outside the production possibilities frontier represent _____ a. unemployment of resources. b. combinations that are attainable only if all resources are used fully and efficiently. c. inefficient use of resources. d. currently unattainable combinations of outputs. e. the only currently attainable combinations from which society must choose.

currently unattainable combinations of outputs.

If the price of potato chips increases, other things constant, the demand for potato chip dips will____ a. increase, because the goods are substitutes. b. decrease, because potato chips are an inferior good. c. decrease, because the goods are substitutes. d. increase, because the goods are complements. e. decrease, because the goods are complements.

decrease, because the goods are complements.

An increase in the price of a good normally increase the a. money income of the consumer b. quantity demanded of all goods that are unrelated to the good in question c. supply of complements for the good d. demand for its substitutes e. purchasing power of consumers' dollar incomes

demand for its substitutes

According to the law of _____, the marginal utility received from each additional unit of a good consumed declines, other things constant. a. increasing marginal rate of substitution b. supply c. marginal rate of substitution d. diminishing marginal utility e. increasing marginal returns

diminishing marginal utility

The law of demand is illustrated by a demand curve that is a. vertical b. downward sloping c. horizontal d. constant e. upward sloping

downward sloping

Perfectly competitive firms are price takers because _________ a. firms charge the price that government determines b. firms earn high profits by charging different prices to different groups of consumers c. firms must accept any price that consumers offer them d. each firm is too small compared to the market to be able to affect price e. one firm determines the market price and all other firms accept this price

each firm is too small compared to the market to be able to affect price

If a 5 percent increase in price leads to an 8 percent decrease in quantity demanded, demand is______ a. unit elastic b. elastic c. perfectly inelastic d. perfectly elastic e. inelastic

elastic

The opportunity cost of moving from point b to d is: point b: 250 socks, 0 mufflers point d: 150 socks, 50 mufflers a. equal to 30 mufflers. b. equal to 150 socks. c. equal to 100 socks d. equal to 50 mufflers e. equal to 250 socks

equal to 100 socks

Which of the following is likely to be present in a perfectly competitive market? a. firms producing identical products b. patents c. government licenses d. non-price competition such as advertising e. high capital costs

firms producing identical products

Labor: Total product: Marginal Product: 0 0 - 1 6 6 2 14 8 3 24 10 4 36 12 5 42 6 6 46 4 Refer to Table 7.4, which shows labor, total product, and marginal product for a firm. Marginal returns increase with the hiring of up to _______ workers. a. two b. three c. six d. five e. four

four

Efficiency involves: a.​ producing output using the least amount of labor. b.​ producing only one out of many possible commodities. c.​ producing as far inside the production possibilities frontier as possible. d.​ producing output using the least amount of capital. e.​ getting the maximum possible output from available resources.

getting the maximum possible output from available resources.

In a circular-flow model, households supply all of the following except: a. natural resources b. labor c. capital d. entrepreneurial ability e. goods and services

goods and services

Refer to the circular-flow model to answer this question. Firms supply ______ to households through product markets. a. wages, interest, rent, and profit b. labor, capital, natural resources, and entrepreneurial ability c. products d. goods and services e. none of the answers are correct

goods and services

Refer to the circular-flow model to answer this question. The flow from firms to product markets is_______ a. wages, interest, rent, and profit b. goods and services c. products d. labor, capital, natural resources, and entrepreneurial ability

goods and services

Households act as demanders when they demand: a. payments for the goods and services they sell to firms and governments. b.goods and services from firms and governments. c. that corporate executives and government officials be held accountable for their actions. d. interest and capital gains from the bonds they hold. e. dividends from the stocks they hold.

goods and services from firms and the government

The law of comparative advantage says that a person should produce a good if he or she _____ a. has an absolute advantage in producing the good. b. is equally good at producing this good as someone else is. c. has a comparative advantage in a related activity. d. has the lowest opportunity cost of producing the good. e. has the greatest desire to consume the good

has the lowest opportunity cost of producing the good.

If people have more time to adjust to a price change, the price elasticity of demand for that good is likely to _______. a. be equal to -1 b. remain unchanged c. decrease d. increase e. fall to zero

increase

If people believe that prices are going to be higher in the future than they are today, they will a. decrease their demand now b. save more today so they have the income to buy more in the future c. increase their demand now d. wait until the future to purchase the things they want e. increase their supply now

increase their demand now

If Good A and Good B are complements, then a decrease in the price of Good B _____ a. decreases the quantity demanded of Good A. b. increases the demand for Good B. c. decreases the demand for Good A. d. increases the quantity demanded of Good A. e. increases the demand for Good A.

increases the demand for Good A.

If marginal utility is positive, then total utility is_______ a. decreasing b. zero c. increasing d. negative e. constant

increasing

Economics is best defined as the study of how: a. ​individuals decide to use scarce resources in an attempt to satisfy their unlimited wants b.​ to run a business. c. ​to eliminate the problem of scarce resources. d.​ individuals can make money. e.​ the government should deal with unemployment and inflation.

individuals decide to use scarce resources in an attempt to satisfy their unlimited wants

If you enjoy playing golf, the opportunity cost of cleaning your room:​ a. ​is the same on sunny days as it is on rainy days. b. ​is smaller on sunny days than it is on rainy days. c. ​is greater on sunny days than it is on rainy days. d.​ does not change with weather conditions. e. is equal to the opportunity cost of any other chore you have to do that day.

is greater on sunny days than it is on rainy days.

A resources is something that: a. is used to produce goods and services. b.​ is provided by nature, not produced by society. c.​ must be produced by a firm. d.​ is always available free of cost. e.​exists in unlimited quantities.

is used to produce goods and services

Which of the following is true of economic profit? a. it equals total revenue minus total cost. b. it is any profit lower than a normal profit c. it is always equal to zero in a perfectly competitive market in the short run d. firms attempt to maximize accounting profit and are not concerned about economic profit e. it excluded implicit cost

it equals total revenue minus total cost

A monopolist is said to have market power because_______. a. it faces a high marginal cost of production b. it charges a fixed price for it's products c. it faces a downward-sloping demand curve d. it always earns positive profit both in the short run and in the long run e. it faces an upward-sloping marginal cost curve

it faces a downward-sloping demand curve (a monopolist has the power to set the price of its output because it can sell more by lowering price)

Which of the following is true of a patent? a. it gives a firm temporary exclusive right to produce a new good b. it guarantees economic profits to a firm in the long run c. it is issued in recognition of new works of art or literature d. it gives a firm a permanent exclusive right to produce a new good e it reduces a firm's incentive to develop new products

it gives a firm temporary exclusive right to produce a new good (In the U.S., a patent awards an inventor the exclusive right to sell a good or service for 20 years from the date the patent is filed with the patent office)

Refer to the circular-flow model to answer this question. Households supply ______ to firms through resource markets. a. wages, interest, rent, and profits b. labor, capital, natural resources, and entrepreneurial ability c. goods and services d. products

labor, capital, natural resources, and entrepreneurial ability

Gilligan runs the only dry-cleaning business on a desert isle. If the cost of cleaning fluid falls, he can increase profit by a. charging a price that is equal to marginal cost b. accepting fewer dry-cleaning orders c. lowering price d. using less cleaning fluid e. charging the highest price he can

lowering price (if the average total cost of production by a monopolist falls, it can reduce its price to attract a larger number of customers)

Goods with an income elasticity of demand greater than 1 are called_______ a. necessities b. luxuries c. substitutes d. complements e. inferior goods

luxuries

The law of diminishing marginal utility states that _____ a. marginal utility increases as total utility falls, other things constant. b. marginal utility falls as less of a good is consumed, other things constant. c. total utility falls as marginal utility falls, other things constant. d. total utility falls as more of a good is consumed, other things constant. e. marginal utility falls as more of a good is consumed, other things constant.

marginal utility falls as more of a good is consumed, other things constant.

If a consumer buys a good, the expected _____ a. marginal value of the good is greater than or equal to its price. b. marginal utility of per dollar spent on the good equals its price. c. total utility derived from the consumption of the good is less than its price. d. marginal utility of the good is zero. e. opportunity cost of buying the good is more than its price.

marginal value of the good is greater than or equal to its price.

The price charged by a perfectly competitive firm is determined by _______ a. the firm's average variable cost b. a group of firms acting together as a cartel c. the firm's total costs d. market demand and market supply e. each individual firm

market demand and market supply

According to Adam Smith, "invisible hand" refers to _____ a. the most capable entrepreneurs in an economy. b. the hidden role of government in setting regulations that govern markets. c. the unseen mechanism of the financial markets that facilitates trade. d. market forces. e. the role of technological change and random events in an economy.

market forces

When a market is in equilibrium, _____ a. industry output is maximized. b. production exhibits diminishing returns to scale. c. market forces exert no pressure for price to change. d. market forces allow producers to charge the maximum price. e. producers earn economic profits.

market forces exert no pressure for price to change.

Which of the following is the best example of a pair of complements? a. hiking boots and athletic shoes b. milk and coffee c. paperback books and hardcover books d. CDs and DVDs e. coffee and tea

milk and coffee

The difference between a fiscal policy and monetary policy is that: a. monetary policy is a macroeconomic policy, but fiscal policy is a microeconomic policy. b. fiscal policy involves regulation of natural monopolies, but monetary policy involves the provision of public goods. c. monetary policy involves regulation of the money supply, but fiscal policy involves government spending and taxing. d. fiscal policy is a macroeconomic policy, but monetary policy is a microeconomic policy. e. fiscal policy involves the promotion of competition, but monetary policy involves collecting money to pay for taxes.

monetary policy involves regulation of the money supply, but fiscal policy involves government spending and taxing

The law of demand states that _____ a. other things constant, the demand curve shifts whenever the price of a good changes. b. other things constant, quantity demanded varies inversely with price. c. price is the only factor that influences the quantity that people are willing and able to buy. d. other things constant, price and quantity demanded are positively related. e. by producing a product, firms create a demand for it.

other things constant, quantity demanded varies inversely with price.

Perfectly competitive firms respond to changing market conditions by varying ________ a. output b. advertising campaigns c. cost structures d. price e. market share

output

Households: ​a. supply goods and services. b.​ are the largest purchasers of resources. c.​ play a very minor role in the economy. d.​ own and sell resources

own and sell resources

Refer to Exhibit 5.8, which shows a horizontal line. The curve could represent a _________ a. perfectly inelastic supply curve or a perfectly elastic demand curve b. perfectly elastic supply curve or a perfectly inelastic demand curve c. perfectly inelastic supply curve or a unit-elastic demand curve d. perfectly inelastic supply or demand curve e. perfectly elastic demand or supply curve

perfectly elastic demand or supply curve

Refer to exhibit 5.6, which shows a vertical demand curve. The demand is ________ a. relatively elastic b. relatively inelastic c. unit elastic d. perfectly elastic e. perfectly inelastic

perfectly inelastic

Resources are efficiently allocated when production occurs at the point at which ______ a. price is equal to marginal cost b. price is equal to average revenue c. the marginal revenue curve intersects the average variable cost curve d. price is equal to average variable cost e. the marginal cost curve intersects the average variable cost curve

price is equal to marginal cost

Opportunity costs exist because_______ a. efficiency is measured by the monetary cost of an activity b. resources are scarce but wants are unlimited c. of comparative advantage. d. technology is fixed. e. the value of lost opportunities varies

resources are scarce but wants are unlimited

Households act as suppliers when they provide: a. money to firms in exchange for goods and services b. tax payments to governments. c. resources to firms and governments d. goods and services to firms and governments. e. demand for goods and services produced by firms.

resources to firms and governments

The term "utility" refers to: a. a low-valued good b. satisfaction c. productivity d. efficiency e. adaptability

satisfaction

Increases in resources or improvements in technology will cause the PPF (production possibilities frontier) curve to: a. become vertical b. shift outward c. become horizontal d. shift inward e. become a straight line

shift outward

If butter and margarine are substitute goods, an increase in the price of butter is most likely to _____ a. increase the quantity of margarine demanded. b. decrease the price of margarine. c. decrease the quantity of margarine demanded. d. shift the demand curve for margarine rightward. e. shift the demand curve for margarine leftward.

shift the demand curve for margarine rightward.

The table shows the quantity supplied and the quantity demanded of a good at different prices. If the price of the good is $1.40, there is a _____. At $1.40, QD is 80, QS is 50 a. surplus of 30 units b. surplus of 10 units c. surplus of 20 units d. shortage of 30 units e. shortage of 20 units

shortage of 30 units

Total utility is the _____ a. sum of all marginal utilities. b. difference between the marginal utilities of the first and the second unit of a good consumed. c. total expenditure on all units of a good a consumer buys. d. price paid for one unit of a good. e. product of all marginal utilities.

sum of all marginal utilities

The table shows the quantity supplied and the quantity demanded of a good at different prices. If the price of the good is $1.60, then there is a __________ At $1.60, QD is 60, QS is 90 a. shortage of 20 units b. surplus of 10 units c. shortage of30 units d. surplus of 30 units e. surplus of 20 units

surplus of 30 units

The division of labor increases productivity because: a.​ managers can force workers to produce goods that are valued higher than the costs of producing them. b.​ each worker must learn each of the numerous tasks in the total production process. c.​ workers who repeatedly perform the same tasks become bored. d.​ the specialization of labor allows for the introduction of cheaper, less sophisticated production techniques. e.​ tasks can be assigned according to individual abilities

tasks can be assigned according to individual abilities

Which of the following best defined supply? a. the amount of a good that is produced at the least possible cost, other things constant b. the amount of a good that consumers want to buy at different income levels c. the amount of a good that producers want to sell at a fixed price d. the amount of a good that consumers are willing and able to buy at each possible price, other things constant e. the amount of a good that producers are willing and able to sell at each possible price, other things constant

the amount of a good that producers are willing and able to sell at each possible price, other things constant

Macroeconomics is the study of: a. the economic behavior of individual decision makers b. the behavior of the economy as a whole c.​ the government's role as a stabilizing influence on the economy. d.​ the behavior of large firms in the marketplace. e.​ how to use the fewest natural resources to produce goods and services.

the behavior of the economy as a whole

Microeconomics is the study of: a. the economic behavior of individual decision makers b.​ marginal or inferior products. c. ​the government's role as a producer in the economy. d.​ how to use the fewest natural resources to produce goods and services. e.​ the behavior of the economy as a whole.

the economic behavior of individual decision makers

A constant-cost industry is one ______ a. whose average costs are constant in the short run b. that experiences a stable demand in the long run c. that experiences economies of scale throughout its scale of operation d. whose cost curves do not change as new firms enter the market e. that faces increasing resource prices as new firms enter the market

whose cost curves do not change as new firms enter the market

If the cross price elasticity of demand is -3, then______ a. the goods are unrelated b. one of the two goods is an inferior good c. the goods are substitutes d. one of the two goods is a luxury e. the goods are complements

the goods are complements

A movement along the demand curve for a good can be attributed to a change in _____ a. the quantity demanded of the good b. the substitution effect of consuming the good. c. the demand for the good. d. the income and preference of a consumer. e. the opportunity cost of producing the good.

the quantity demanded of the good

Suppose a consumer can choose to consume either apples or oranges. Which of the following is likely to occur if the price of each fruit increases by 15 percent? a. The consumer will substitute apples for oranges. b. The income effect of the price change will be positive. c. The consumer will substitute oranges for apples. d. The substitution effect of the price change will be zero. e. the consumer will demand more of both of the goods

the substitution effect of the price change will be zero

Which of the following is not an explicit cost? a. sales taxes b. the value of a firm owner's time c. insurance premiums d. salaries e. the cost of utilities, such as gas and electricity

the value of a firm owner's time

DEMAND Price Quantity (cords) 60 5 80 4 100 3 120 2 COST Quantity (cords) Marginal cost 1 50 2 60 3 100 4 140 Refer to table 8.2. The perfectly competitive firewood market is composed of 1,000 identical consumers and 1,000 identical firms. The table shows the cost for one representative firm and the demand schedule for one representative consumer. The profit-maximizing quantity for each firm in this market is_____. a. four cords of wood b. three cords of wood c. two cords of wood d. zero cords of wood e. one cord of wood

three cords of wood (profit maximizing quantity is the amount supplies at the equilibrium market price.. 3 cords are sold for $100, and it takes $100 to make 3 cords of wood)

Which of the following fundamental resources is the basis of labor? a. profit b. capital c. entrepreneurial ability d. time e. natural resources

time

Which of the following is the fundamental resource that is the basis of labor? a. money b. natural resources c. time d. capital e. entrepreneurial ability

time

Average revenue is _____ a. total revenue minus total cost b. total revenue divided by the quantity of the variable input c. the change in total revenue divided by the change in quantity of an input used d. total revenue divided by the quantity of output e. the change in total revenue divided by the change in output

total revenue divided by the quantity of output

Economic profit is defined as_____ a. total revenue minus implicit costs b. total revenue minus implicit and explicit costs c. wages plus interest minus rent d. total revenue plus explicit costs e. total revenue minus implicit costs

total revenue minus implicit and explicit costs