1.Domestic rice farmers are demanding that the government set an import tariff. From an economic perspective, which of the following statements could explain why?

A.The rice farmers want to reduce demand in the domestic market to ease the burden they experience in production.

B.The rice farmers want to increase demand in the domestic market to increase their revenues.

C.The rice farmers expect that helping generate government revenue will lead to more favorable trade deals in the long run.

D.The rice farmers expect the intervention to reduce foreign rice in the market, which will increase their production, price, and surplus.

E.The rice farmers assume that the intervention will increase the foreign rice brought into the market and reduce both price and consumer surplus.

2.Applying cost-benefit analysis, a business should only purchase a large machine if the business

A. can pass the cost of the machine onto consumers

B.projects sales growth based on the machine's use

C.estimates that the machine's cost is less than the revenue it will generate

D.assigns a high utility to the machine based on consumer perceptions

E.has enough financial capital to replace the machine in five years

3.Country X has a Gini coefficient of 0.45, whereas Country P has a Gini coefficient of 0.40. What must be true about these two countries?

A. Country X has a higher income per capita than Country P.

B. Country P has a higher income per capita than Country X.

C. Country X has a higher standard of living than Country P.

D. Country X has higher economic inequality than Country P.

E. Country P has higher economic inequality than Country X.

4.The students in an economics class calculated cross-price elasticity to be zero. Which of the following could be the two goods considered?

A.The price of cars increases by 5 percent, and the quantity of butter remains constant.

B.The price of bread remains constant, and the quantity of butter decreases by 2 percent.

C.The price of cars increases by 5 percent, and the quantity of bikes increases by 5 percent.

D.The price of cars decreases by 2 percent, and the quantity of petrol increases by 2 percent.

E.The price of butter decreases by 7 percent, and the quantity of margarine decreases by 7 percent.

5.A firm has total explicit costs of $20,000 and implicit costs of $40,000. It currently earns total revenue of $100,000. The firm is earning a

A.positive economic profit of $40,000

B.positive accounting profit of $60,000

C.negative accounting profit of $80,000

D.negative economic profit of $40,000

E.economic and accounting profit of $120,000

6.A firm will continue to hire workers so long as ________ is greater than or equal to ________.

A.total product; total cost

B.marginal product; marginal cost

C.marginal revenue; marginal cost

D.average revenue product; average factor cost

E.marginal revenue product; marginal factor cost

7.Which of the following describes a situation where the social marginal cost is equal to the social marginal benefit at equilibrium?

A.Oligopoly

B.Monopoly

C.Positive externality

D.Allocative efficiency

E.Negative externality

8.The demand for a good for which there is a per-unit tax becomes less elastic, ceteris paribus. What would be the impact of the change in elasticity of demand?

A.The government will decrease the value of the tax.

B.The government will collect less tax revenue.

C.Producers will pay a greater portion of the tax than before.

D.Consumers will pay a greater portion of the tax than before.

E.There will be no change in tax incidence.

9.Which of the following statements about income and wealth distribution is true?

A.Inheritance distributes wealth more equally.

B.Discrimination in labor markets distributes income less equally.

C.Progressive tax makes income distribution less equal.

D.Access to quality education by a few distributes income more equally.

E.Differences in degree of labor specialization distributes income more equally.

10.Which of the following terms describes a market in which the market size for cups of coffee is 20,000 cups per day in a city and the production at minimum efficient scale equals 500 cups per day?

A.Concentrated

B.Fragmented

C.Monopolized

D.Oligopolistic

E.Regulated