31) The slope of a country’s production possibility frontier is equal to ________ and the optimal production point is located where the slope is equal to ________. Assume that output of good Y is measured on the vertical axis, output of good X is measured on the horizontal axis, MPL is the marginal product of labor with a subscript indicating which good, P […]

  Table 2-21                   165) Refer to Table 2-21. This table shows the number of labor hours required to produce a digital cameras and a bushel of wheat in China and South Korea. a. Which country has an absolute advantage in the production of digital cameras? b. Which country has an absolute advantage in the production of […]

  151.RefertoFigure8-7.Whichofthefollowingstatementssummarizestheincidenceofthetax? a.Foreachunitofthegoodthatissold,buyersbearone-halfofthetaxburden,andsellersbearone-halfofthetaxburden. b.Foreachunitofthegoodthatissold,buyersbearone-thirdofthetaxburden,andsellersbeartwo-thirdsofthetaxburden. c.Foreachunitofthegoodthatissold,buyersbearone-fourthofthetaxburden,andsellersbearthree-fourthsofthetaxburden. d.Foreachunitofthegoodthatissold,buyersbearthree-fourthsofthetaxburden,andsellersbearone-fourthofthetaxburden. 152.RefertoFigure8-7.Whichofthefollowingstatementsiscorrect? a.Totalsurplusbeforethetaxisimposedis$500. b.Afterthetaxisimposed,consumersurplusis45percentofitspre-taxvalue. c.Afterthetaxisimposed,producersurplusis45percentofitspre-taxvalue. d.Alloftheabovearecorrect. 153.RefertoFigure8-7.Whichofthefollowingstatementsiscorrect? a.Totalsurplusbeforethetaxisimposedis$180. b.Afterthetaxisimposed,consumersurplusis25percentofitspre-taxvalue. c.Afterthetaxisimposed,producersurplusis36percentofitspre-taxvalue. d.Alloftheabovearecorrect. 154.RefertoFigure8-7.Asaresultofthetax, a.consumersurplusdecreasesfrom$200to$80. b.producersurplusdecreasesfrom$200to$145. c.themarketexperiencesadeadweightlossof$80. d.Alloftheabovearecorrect. 155.RefertoFigure8-7.Asaresultofthetax,consumersurplusdecreasesby a.$130,producersurplusdecreasesby$170,taxrevenueis$240,anddeadweightlossis$60. b.$150,producersurplusdecreasesby$150,taxrevenueis$240,anddeadweightlossis$60. c.$160,producersurplusdecreasesby$160,taxrevenueis$240,anddeadweightlossis$80. d.$240,producersurplusdecreasesby$240,taxrevenueis$400,anddeadweightlossis$80. 156.RefertoFigure8-7.Whichofthefollowingstatementsiscorrect? a.Thelossofproducersurplusthatisassociatedwithsomesellersdroppingoutofthemarketasaresultofthetaxis$60. b.Thelossofconsumersurplusforthosebuyersofthegoodwhocontinuetobuyitafterthetaxisimposedis$120. c.Thelossofconsumersurpluscausedbythistaxexceedsthelossofproducersurpluscausedbythistax. d.Thistaxproduces$320intaxrevenueforthegovernment. 157.RefertoFigure8-7.Thedeadweightlossassociatedwiththistaxamountsto a.$80,andthisfigurerepresentstheamountbywhichtaxrevenuetothegovernmentexceedsthecombinedlossofproducerandconsumersurpluses. b.$80,andthisfigurerepresentsthesurplusthatislostbecausethetaxdiscouragesmutuallyadvantageoustradesbetweenbuyersandsellers. c.$60,andthisfigurerepresentstheamountbywhichtaxrevenuetothegovernmentexceedsthecombinedlossofproducerandconsumersurpluses. d.$60,andthisfigurerepresentsthesurplusthatislostbecausethetaxdiscouragesmutuallyadvantageoustradesbetweenbuyersandsellers. Figure8-8 Supposethegovernmentimposesa$10perunittaxonagood.   158.RefertoFigure8-8.Thetaxcausesconsumersurplustodecreasebythearea a.A. b.B+C. c.A+B+C. d.A+B+C+D+F. 159.RefertoFigure8-8.Afterthetaxgoesintoeffect,consumersurplusisthearea a.A. b.B+C. c.A+B+C. d.A+B+D+J+K. 160.RefertoFigure8-8.Thetaxcausesproducersurplustodecreasebythearea a.D+F. b.D+F+G. c.D+F+J. d.D+F+G+H.    

  31) Household production, such as baking bread at home, is not included in GDP because it A) has better quality than the bread in the store. B) has lower quality than the bread in the store. C) does not add anything of value to GDP. D) does not involve a market transaction. E) is not really production. 32) The calculation of GDP excludes the […]

  91) Refer to Figure 10-4. Suppose this monopolist is practicing perfect price discrimination. How does this differ from the situation where this firm is charging a single price for its product? A) The firm is producing the same quantity, has successfully identified different segments of the market, and is able to capture some of the consumer surplus. B) The firm is restricting output to […]

  31) Which of the following is an example of a two-part tariff? A) price discrimination based on the buyers’ willingness to pay B) charging a hookup fee plus a monthly charge equal to marginal cost C) higher sales tax on specific products D) different prices based on the cost of production and quantity bought E) A regulated firm uses marginal cost pricing for some […]

  19.3   Chapter Figures   The figure above shows the demand curve for dollars in the foreign exchange market.   1) If the exchange rate rises as shown by the arrow, the price of American exports to foreigners will be ________, and foreign nations will demand ________ dollars in order to buy ________ American exports. A) cheaper; more; more B) higher; more; more C) cheaper; […]

  41) Assume that households have positive wealth. As the interest rate ________, nonlabor income ________ and current consumption ________. A) decreases; decreases; increases B) decreases; increases; decreases C) increases; increases; decreases D) increases; increases; increases 42) At the beginning of 2013, Albert planned to buy a new home theater system, laptop computer, and hybrid car by borrowing money. Albert already owes $9,000 on other […]

  71) The substitution effect of a price change leads consumers to ________ their demand for goods whose prices have risen. The income effect leads consumers to buy less of all ________ goods whose prices have risen. A) reduce; normal B) increase; inferior C) increase; normal D) reduce; Giffen E) reduce; complement 72) Consumer surplus is A) the sum of the marginal values to the […]

    31) Consumers in Beachland consume only two goods, sodas and DVDs. If they spend $10 on sodas and $90 on DVDs a month, how many sodas and DVDs are in their CPI market basket if the price of a soda is $1 and the price of a DVD is $9? A) 9 sodas and 1 DVD B) 1 soda and 9 DVDs C) […]