1.) when moving along a production possibilities curve, the opportunity cost of society of getting more of one good
A.) Is constant
B.) Is measured in dollar terms
C.) Is measured by the amount of the other good that must be given up
D.) Usually decreases
2.) which of the following is true if there is a decrease in the demand of ice cream
A.)There is an increase in producer surplus
B.) There is a decrease in producer surplus
C.) There is no change to producer surplus
D.) It's impossible to tell what will happen to producer surplus
When economic profits in an industry are zero
A.) Firms are really doing badly
B.) It means that firms are doing as well as they could do in other markets
C.) firms should exit, so they can make an economic profit in some other market
D.) the industry is not in long-run equilibrium
In monoploy
A.) Because P>MC, a basic condition for efficiency is violated
B.) Consumers are confronted with a price that is lower than marginal cost
C.) consumers will consume more of the good than is economically efficient
D.) All of the above are true
a tax system __ when it minimizes the direct and indirect costs to the economy of tax collection
A.) is efficient
B.) Is equitable
C.) Has no deadweight loss
D.) is both A and B
The burden of a tax that is imposed on a good is said to fall completely on the consumers if the ___
A.) Price paid by consumers for the food declines by the amount of the tax
B.) price paid by consumers for the food increases by the amount of tax
C.) Price paid by consumers does not change
D.) Wages received by workers who produce the good increases by the amount of the tax
Firms in the model of perfect competition will
A.) Maximize total revenue by using the marginal decision rile
B.) Increase output up to the point that the marginal benefit of output is greater than the marginal cost
C.) Increase output up to the point that the marginal benefit of an additional unit of output is equal to the marginal cost
D.) always attempt to minimize average variable cost
If the price is greater than average total cost at the profit-maximizing quantity of output in the short run, a perfectly competitive firm will
A.) Produce at a loss
B.) Produce at a profit
C.)shut down production
D.) Produce more than the profit-maximizing quantity
A perfectly competitive firm will incure an economic loss but will continue producing the profit maaximizing quantity of output in the short run if price is
A.) less than marginal cost
B.) less then average variable cost
C.) Greater than average total cost
D.) Greater than average variable cost and less than average total cost
economists identify the satisfaction a person derives from the consumption of goods and services as
A.) Happiness
B.) Usefulness
C.) Utility
D.) Pleasure
The principle of diminishing marginal utility
A.) Refers to tendency of total utility to increase until an individual's budget is no longer constrained
B.) Refers to the tendency of marginal utility to decline beyond some level of consumption during a period
C.) Indicates that, if a good is inferior, less of it will be purchased when income falls during a period
D.) assumes all goods are normal
whatever the time period involved, a consumers spending will be __ By his or her ___
A.) Unlimited, marginal utility
B.) Limited, marginal utility
C.) Limited, budget
D.) Unlimited, budget
A.) Is constant
B.) Is measured in dollar terms
C.) Is measured by the amount of the other good that must be given up
D.) Usually decreases
2.) which of the following is true if there is a decrease in the demand of ice cream
A.)There is an increase in producer surplus
B.) There is a decrease in producer surplus
C.) There is no change to producer surplus
D.) It's impossible to tell what will happen to producer surplus
When economic profits in an industry are zero
A.) Firms are really doing badly
B.) It means that firms are doing as well as they could do in other markets
C.) firms should exit, so they can make an economic profit in some other market
D.) the industry is not in long-run equilibrium
In monoploy
A.) Because P>MC, a basic condition for efficiency is violated
B.) Consumers are confronted with a price that is lower than marginal cost
C.) consumers will consume more of the good than is economically efficient
D.) All of the above are true
a tax system __ when it minimizes the direct and indirect costs to the economy of tax collection
A.) is efficient
B.) Is equitable
C.) Has no deadweight loss
D.) is both A and B
The burden of a tax that is imposed on a good is said to fall completely on the consumers if the ___
A.) Price paid by consumers for the food declines by the amount of the tax
B.) price paid by consumers for the food increases by the amount of tax
C.) Price paid by consumers does not change
D.) Wages received by workers who produce the good increases by the amount of the tax
Firms in the model of perfect competition will
A.) Maximize total revenue by using the marginal decision rile
B.) Increase output up to the point that the marginal benefit of output is greater than the marginal cost
C.) Increase output up to the point that the marginal benefit of an additional unit of output is equal to the marginal cost
D.) always attempt to minimize average variable cost
If the price is greater than average total cost at the profit-maximizing quantity of output in the short run, a perfectly competitive firm will
A.) Produce at a loss
B.) Produce at a profit
C.)shut down production
D.) Produce more than the profit-maximizing quantity
A perfectly competitive firm will incure an economic loss but will continue producing the profit maaximizing quantity of output in the short run if price is
A.) less than marginal cost
B.) less then average variable cost
C.) Greater than average total cost
D.) Greater than average variable cost and less than average total cost
economists identify the satisfaction a person derives from the consumption of goods and services as
A.) Happiness
B.) Usefulness
C.) Utility
D.) Pleasure
The principle of diminishing marginal utility
A.) Refers to tendency of total utility to increase until an individual's budget is no longer constrained
B.) Refers to the tendency of marginal utility to decline beyond some level of consumption during a period
C.) Indicates that, if a good is inferior, less of it will be purchased when income falls during a period
D.) assumes all goods are normal
whatever the time period involved, a consumers spending will be __ By his or her ___
A.) Unlimited, marginal utility
B.) Limited, marginal utility
C.) Limited, budget
D.) Unlimited, budget