____ 2. (2 points) On the production possibilities frontier, if a point is currently not feasible, how can it be achieved?

A. By the curve shifting inward B. By the curve shifting outward

C. By the curve staying the same D. By reducing total outputs

Chapter 3

____ 3. (2 points) "The ability to produce a good using fewer inputs than another producer" is known as which of the following?

A. Comparative advantage B. Opportunity costs

C. Absolute advantage D. Import-Export Balance

Chapter 4

____ 4. (2 points) Which of the following does NOT cause a shift in supply?

A. Price changes of the good B. Technology changes related to input price

C. Change in expectations D. Change in the number of buyers

Chapter 5

____ 5. (2 points) Changes in total revenue depend on the elasticity of the good being sold. If an elastic good experiences an increase in price, all else equal, the total revenue will:

A. Decrease B. Increase

C. Stay the same D. Change in an unknown way

Chapter 6

____ 6. (2 points) Rent-controlled apartments are an example of:

A. a price floor. B. a quota.

C. a tax. D. a price ceiling.

Chapter 7

____ 7. (2 points) When demand increases, which of the following is NOT a reason for the level of producer surplus?

A. Initial Producer Surplus B. Additional Surplus to Existing Producers

C. Potential Producer Surplus D. Producer Surplus to New Producers

Chapter 8

____ 8. (2 points) When a group of buyers and sellers are not able to make a transaction solely because of a tax imposed on their transaction, this is known as what?

A. Consumer Surplus B. Producer Surplus

C. Returns to Scale D. Deadweight Loss

Chapter 9

____ 9. (2 points) If a country opens up to international trade, and the prices for the good are lower in international markets, who is worse off in the short run? (Assume world price stays constant.)

A. Domestic Producers B. Domestic Consumers

C. International Producers D. International Consumers

Chapter 10

____ 10. (2 points) The Coase Theorem predicts that externalities can be overcome by the interested parties:

A. Ignoring the Externality B. Appealing to Courts for a Solution

C. Regulating the Unwanted Behavior D. Bargaining over Property Rights

Chapter 11

____ 11. (2 points) A good that is excludable but not rival in consumption is called what?

A. Club Good B. Public Good

C. Common Resource D. Private Good

Chapter 12

____ 12. (2 points) If the tax code exempts the first $20,000 of income from taxation and then taxes 25 percent of all income above that level, then a person who earns $50,000 has an average tax rate of _______ percent and a marginal tax rate of _________ percent.

A. 25, 30 B. 25, 15

C. 15, 25 D. 30, 25

____ 13. (2 points) Which is an example of vertical equity in tax payments?

A. A Progressive Income Tax B. The Gasoline Tax

C. Car Registration Tax D. Taxes on Groceries

Chapter 13

____ 14. (2 points) Which type of costs does NOT rise with each additional unit produced?

A. Marginal Costs B. Fixed Costs

C. Variable Costs D. Total Costs

____ 15. (2 points) As a factory increases its level of production, the average total costs decrease. This is an example of which concept?

A. Constant Returns to Scale B. Efficient Scale

C. Economies of Scale D. Diseconomies of Scale

Chapter 14

____ 16. (2 points) In the long-run equilibrium, firms in competitive markets operate at which point?

A. MR=MC

C. MR=MC

____ 17. (2 points) In the short-run, firms whose prices are below average variable costs should do what?

A. Exit the Market B. Temporarily Shut Down

C. Increase Production D. Continue at this Equilibrium

Chapter 15

____ 18. (2 points) A firm is a natural monopoly if it exhibits the following as its outputs increases:

A. Decreasing Marginal Revenue B. Increasing Marginal Cost

C. Decreasing Average Total Costs D. Decreasing Average Revenue

____ 19. (2 points) Which is NOT an example of price discrimination?

A. Discount Coupons B. A Scholarship for All Students

C. Lower Matinee Movie Prices D. Increased Airline Ticket on Day of Departure

Chapter 16

____ 20. (2 points) In what ways are monopolistically competitive firms and perfectly competitive firms the same?

A. Both are Price Takers B. Both Maximize Welfare

C. Firms Enter and Exit in the Long-Run D. Markup Prices Over Marginal Cost

____ 21. (2 points) Which is a characteristic of a monopolistically competitive market?

A. One Seller B. Can Earn Economic Profits in the Long-Run

C. Price at Marginal Cost D. Products are Differentiated

Chapter 17

____ 22. (2 points) A strategy that is best for a player in a game regardless of the strategies chosen by the other players is what?

A. Collusion B. An Arms Race

C. Nash Equilibrium D. Dominant Strategy

____ 23. (2 points) Which is an example of an agreement to collude?

A. Predatory Pricing B. Monopoly Pricing

C. OPEC Oil Prices D. Service Bundling

Chapter 18

____ 24. (2 points) Which does NOT cause the labor-supply curve to shift?

A. Changes in Female Work Patterns B. Higher Immigration Levels

C. Technological Advance D. Changes in Alternative Opportunities

____ 25. (2 points) Which is NOT a factor of production?

A. Land B. Contracts

C. Capital D. Labor

Chapter 19

____ 26. (2 points) A worker with 128 hours of college credit and a degree makes more money on average than a worker with 125 hours of college credit and no degree. What is this an example of?

A. Human Capital B. Compensating Differential

C. Discrimination D. Signaling

____ 27. (2 points) An efficiency wage is:

A. The Minimum Wage B. High Wages to Decrease Turnover

C. Higher Wages from Unions D. Higher Wages Due to Chance

Chapter 20

____ 28. (2 points) Which is an example of an in-kind transfer?

A. Earned Income Tax Credit B. Spending Based on Future Income

C. Medicaid for Poor Families D. Cash Handout

____ 29. (2 points) Killing one person to save the lives of ten others is most closely associated with which type of philosophical thinking?

A. Liberalism B. Libertarianism

C. Social-Contract Theory D. Utilitarianism

Chapter 21

____ 30. (2 points) Which is a property of indifference curves?

A. They are Upward Sloping B. Lower Curves are Preferable

C. They are Bowed Inward D. They Cross at One Point

____ 31. (2 points) An optimal choice of a consumer will have how many tangent points with the budget constraint?

A. 0 B. 1

C. 2 D. 3

Chapter 22

____ 32. (2 points) When buying a used car, who is the principal?

A. The Salesperson B. The Buyer

C. The Previous Owner D. The Car Manufacturer

____ 33. (2 points) In a divided congress, which member has the most power for majority rule according to the Median Voter Theorem?

A. The Most Senior Member B. The Most Left-Leaning

C. The Most Right-Leaning D. The Most Centrist