1. If you can purchase 1slice of pizza for $3.00,2slices of pizza for $5.00,and 3 slices for $6.00; what is the marginal cost of the third slice of pizza.

$3.00

$1.00

$ 2.00

$2.50

Question 2

In order to demand a product, from an economic standpoint, a consumer must:

Have the product in their possession

Be both willing and able to purchase the product

Only be able to purchase the product

Only be willing to purchase the product.

3. External costs are equal to the difference between:

Marginal social benefits and marginal social costs

Average benefits and average costs

Marginal benefits and marginal costs

Social costs and private costs

4.

Economics is the study of how to allocate scarce resources among competing uses.

1. True
2. False

5. Which of the following is not a factor of production?

The CEO of a large corporation

A wrecking ball used to tear down old buildings

The money hidden in an old basement

A toll-bridge across a lake

6. In economics, capital refers to:

The value of a corporation's assets

Goods that can be used to produce other goods

Savings put aside for future investment

Money

7.

Price ceilings are below the equilibrium price and cause surpluses.

1. True
2. False

Ceteris paribus, according to the law of supply, if the price of lawn mowing decreases from $50 per lawn to $45 per lawn, then the:

Quantity supplied of lawn mowing will decrease

Supply curve for lawn mowing will shift to the right

Quantity supplied of lawn mowing will increase

Quantity supplied of lawn mowing will stay the same

Market power is a form of market failure because:

Administrative costs of compliance are high

Monopolies produce more output than is optimal

It involves externalities

Competition is restricted, output is reduced and the price is higher

Which of the following is not considered to be a source of market power for a firm?

Antitrust laws

Efficiencies of large-scale production

Control of resources

A copyright

11.

Which of the following will not shift the demand curve for natural gas?

A change in consumer income

A change in consumer expectations

A change in the weather and heating requirements

A change in the technology used to produce natural gas

12. Ceteris paribus, which of the following will cause the supply of paper to decrease?

The technology used to produce paper improves

People rely more on electronic books and less on printed materials

The federal government decides to subsidize the production of paper

The price of lumber, an ingredient in paper production, increases

1. Question 132 Points

The market tends to overproduce public goods and underproduce private goods.

1. True
2. False

Which of the following is a basic economic question?

Is the society democratic or not?

How is output distributed across society?

Who has social status?

Who holds the political power?

The quantity of a good that suppliers are willing and able to supply at a given price in a given time period depends on:

Income

Consumers' expectation of future prices and costs

The costs of producing the good

The consumer demand for the good

The government uses _____ to alter the distribution of income.

Taxes and transfers

Private and social costs

Emission charges

Antitrust laws

Which of the following is most likely to have social demand greater than market demand?

Health services

Cars

Housing

Cigarettes

The essential signal of the market mechanism is:

Income

Price

Property

Government directive

If supply is unchanged, a decrease in the demand for soft drinks will cause equilibrium price to:

Rise and equilibrium quantity to rise

Fall and equilibrium quantity to rise

Fall and equilibrium quantity to fall

Rise and equilibrium quantity to fall

According to the law of demand, an increase in price leads to a decrease in quantity demanded.

1. True
2. False

Which of the following is associated with microeconomics?

An increase in sales for a chain of pet supply stores

A decrease in the unemployment rate for the nation

An increase in the inflation rate for the entire economy

A decrease in the level of economic growth for the country

Goods produced by the federal, state and local governments are known as public goods.

1. True
2. False

The demand curve shows the quantities of a good buyers are willing and able to purchase at alternative prices.

1. True
2. False

The opportunity cost of walking your dog is:

The fee that you would have to pay to hire someone to do it for you

Negative, since it would cost you more time and trouble if you didn't do so

Zero, since you enjoy the walk also

The next-best alternative activity that is given up in order to do so

Which of the following is most likely a private good?

Bridges

Food

Military protection

Flood control

Ceteris paribus, according to the law of demand, if the price of a computer game increases from $25 to $30, the:

Quantity demanded of computer games will decrease

Quantity demanded of computer games will increase

Demand curve for computer games will shift to the left

Quantity demanded will not be affected

Economic growth always results in:

An expansion of production possibilities

A change in how goods are distributed

A movement along the production possibilities curve

Higher prices

If the economy relies entirely on markets to answer the WHAT question, it tends to _____ goods with external benefits and _____ goods with external costs.

Overproduce; overproduce

Overproduce; underproduce

Underproduce; overproduce

Underproduce; underproduce

Which of the following is not an example of market failure?

Flu shot

Internet

Light house

Smoking

When producing efficiently on the production possibilities curve,increasing the production of one good requires giving up some production of the other good.

1. True
2. False