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One effect of the government-imposed seat belt law in the U.S. has been an increase in the number of accidents

Suppose the cost of operating a 75 room hotel for a night is $6,000 and there are 5 empty rooms for tonight. If the marginal cost of operating one room for one night is $40, the hotel manager should rent one of the empty rooms only if a customer is willing to pay more than $40, as the marginal benefit will exceed the marginal cost.

The decisions of firms and households are guided by prices and self-interest in a market economy

Senator Bright, who understands economic principles, is trying to convince workers in her district that trade with other countries is beneficial. Senator Bright should argue that trade can be beneficial because it allows specialization, which increases total output.

Suppose that the Federal Reserve Bank announces that it will be making a change to a key interest rate to increase the money supply. This is likely because the Federal Reserve Bank is worried about unemployment.

The historical rise in living standards of American workers is primarily a result of the rise in American productivity

Refer to Figure 2-8, Panel (a). The opportunity cost of moving from point M to point L is 2 donuts

A macroeconomist - as opposed to a microeconomist - would study the effects of borrowing by the federal government.

The most common data for testing economic theories come from historical episodes of economic change.

Refer to Figure 2-9, Panel (a). Production is possible at points A, B, C, and D, but efficient only at points A, C, and D.

Which of the following is an example of a normative, as opposed to positive, statement? Income taxes should be reduced.

When two variables have a negative correlation, they tend to move in opposite directions.

00:02 01:36 Nâng câấp để gỡ bỏ quảng cáo Chỉ 2,99 US$ / tháng Table 3-5 Assume that England and Spain can switch between producing cheese and producing bread at a constant rate.

Refer to Table 3-5. We could use the information in the table to draw a production possibilities frontier for England and a second production possibilities frontier for Spain. If we were to do this, measuring bread along the horizontal axis, then the slope of England's production possibilities frontier would be -4 and the slope of Spain's production possibilities frontier would be -2

Table 3-11 Assume that Falda and Varick can switch between producing wheat and producing cloth at a constant rate.

Quantity Produced in 1 Hour Bushels of Wheat Yards of Cloth

Falda 8 12 Varick 6 15 Refer to Table 3-11. Falda's opportunity cost of one bushel of wheat is 3/2 yards of cloth and Varick's opportunity cost of one bushel of wheat is 5/2 yards of cloth.

Figure 3-7 Bintu's Production Possibilities Frontier Juba's Production Possibilities Frontier

Refer to Figure 3-7.

If the production possibilities frontier shown for Juba is for 2 hours of work, then how long does it take Juba to make one bowl? 1/2 hour

Table 3-10Juanita and Shantala run a business that programs and tests cellular phones. Assume that Juanita and Shantala can switch between programming and testing cellular phones at a constant rate. The following table applies.

Refer to Table 3-10. Which of the following points would be on Juanita's production possibilities frontier, based on a 40-hour week? (130 cellular phones programmed, 225 cellular phones tested)

Table 3-17US and French Production Opportunities

Refer to Table 3-17 The US has a comparative advantage in the production of cheese

Figure 3-9 Uzbekistan's Production Possibilities Frontier Azerbaijan's Production Possibilities Frontier

Refer to Figure 3-9. If Uzbekistan and Azerbaijan switch from each country dividing its time equally between the production of bolts and nails to each country spending all of its time producing the good in which it has a comparative advantage, then total production will increase by 5 bolts and 10 nails.

Table 3-1Assume that Andia and Zardia can switch between producing wheat and producing beef at a constant rate.

Refer to Table 3-1. What is Zardia's opportunity cost of producing one pound of beef? 2/3 bushels of wheat

Refer to Figure 3-5. Merve should specialize in the production of wallets

Assume that Maya and Miguel can switch between producing mixers and producing toasters at a constant rate. Opportunity cost for 1 toaster for Maya is 0.625 mixers.

Assume that Zimbabwe and Portugal can switch between producing toothbrushes and producing hairbrushes at a constant rate.

Refer to Table 3-3. Assume that Zimbabwe and Portugal each has 60 machine minutes available. Originally, each country divided its time equally between the production of toothbrushes and hairbrushes. Now, each country spends all its time producing the good in which it has a comparative advantage. As a result, the total output increased by 4 toothbrushes and 2 hairbrushes.

If Shawn can produce donuts at a lower opportunity cost than Sue, then Shawn has a comparative advantage in the production of donuts.

Assume that Greece has a comparative advantage in fish and Germany has a comparative advantage in cars. Also assume that Germany has an absolute advantage in both fish and cars. If these two countries specialize and trade so as to maximize the benefits of specialization and trade, then all of the above

Refer to Figure 3-11. If the production possibilities frontier shown is for 240 hours of production, then which of the following combinations of ham and cheese could Bonovia produce in 240 hours? 225 pounds of ham and 140 pounds of cheese

Refer to Figure 3-9. If Uzbekistan and Azerbaijan each divides its time equally between making bolts and making nails, then total production is 25 bolts and 70 nails.

Refer to Figure 3-7. If Bintu and Juba both spend all of their time making bowls, then total production is 6 bowls.

Refer to Figure 3-3. If Arturo and Dina both spend all of their time producing tacos, then total production is NOT NOT NOT 400 tacos and 250 burritos.

Which of the following is an example of a normative - as opposed to a positive - statement? The government should increase the tax on gasoline.

The essence of science is scientific method

The scientific method is applicable to studying

both natural sciences and social sciences

For economists, substitutes for laboratory experiments often come in the form of natural experiments offered by history.

Refer to Table 2-4. What is the opportunity cost to Batterland of increasing the production of pancakes from 150 to 300? 75 waffles

For a very long time Treeland has had an inflation rate of 9%. Suddenly its inflation rate drops to 3%. The drop in the inflation rate could be due to slower money supply growth. We would expect unemployment to be higher.

To raise productivity, policymakers could All of the above are correct

Which of the following is not generally regarded by economists as a legitimate reason for the government to intervene in a market? to protect an industry from foreign competition

The self-interest of the participants in an economy is guided into promoting general economic selfinterest by the invisible hand.

What you give up to obtain an item is called your opportunity cost

As a result of a successful attempt by government to cut the economic pie into more equal slices, the pie gets smaller, and there will be less pie overall.

The supply of a good or service is determined by those who sell the good or service.

The market demand curve is the sum of all individual demand curves

Which of the following changes would not shift the demand curve for a good or service? a change in the price of the good or service

Refer to Table 4-1. If the market consists of Michelle and Hillary only and the price falls by $1, the quantity demanded in the market increases by 3 units

An increase in the price of a good will increase quantity supplied.

Refer to Figure 4-11. If these are the only two sellers in the market, then the market quantity supplied at a price of $6 is 22 units

An increase in which of the following would shift the supply curve for gasoline to the right? number of producers of gasoline

If consumers view cappuccinos and lattés as substitutes, what would happen to the equilibrium price and quantity of lattés if the price of cappuccinos rises? Both the equilibrium price and quantity would increase.

If the supply of a product increases, then we would expect equilibrium price to decrease and equilibrium quantity to increase.

What would happen to the equilibrium price and quantity of lattés if consumers' incomes rise and lattés are a normal good? Both the equilibrium price and quantity would increase.

Refer to Figure 4-21. Which of the following movements would illustrate the effect in the market for Ramen noodles of a decrease in the incomes of young adults, assuming that Ramen noodles are an inferior good? Point A to Point D

Which of the following statements is correct?

The demand for flat-screen computer monitors is more elastic than the demand for monitors in general. The demand for grandfather clocks is more elastic than the demand for clocks in general. The demand for cardboard is more elastic over a long period of time than over a short period of time. Correct! All of the above are correct. all of the above

In which of the following situations will total revenue increase?

Price elasticity of demand is 1.2, and the price of the good decreases. You Answered Price elasticity of demand is 0.5, and the price of the good increases. Price elasticity of demand is 3.0, and the price of the good decreases. Correct Answer All of the above are correct. all of the above

If the demand for textbooks is inelastic, then a decrease in the price of textbooks will decrease total revenue of textbook sellers.

If the price elasticity of demand for a good is 4, then a 12 percent decrease in price results in a 48 percent increase in the quantity demanded

Refer to Table 5-6. Using the midpoint method, what is the income elasticity of demand for good X? 3.5

If the quantity supplied is the same regardless of price, then supply is perfectly inelastic

Refer to Figure 5-13. Over which range is the supply curve in this figure the least elastic? $220 to $430

Farm programs that pay farmers not to plant crops on all their land help farmers by increasing total revenue in the market but hurt consumers by raising food prices.

In the early 1970s, OPEC's goal was to increase the world-wide price of oil by reducing the quantity of oil supplied.

To fully understand how taxes affect economic well-being, we must compare the reduced welfare of buyers and sellers to the amount of revenue the government raises.

Refer to Figure 8-8. The tax causes producer surplus to decrease by the area D+F.

Refer to Figure 8-7. The deadweight loss associated with this tax amounts to $40, and this figure represents the surplus that is lost because the tax discourages mutually advantageous trades between buyers and sellers.

Refer to Figure 8-2. The loss of consumer surplus as a result of the tax is 4.50

The benefit that government receives from a tax is measured by tax revenue

Refer to Figure 8-6. When the tax is placed on this good, the quantity sold is 300, and buyers effectively pay $16.

Refer to Figure 8-16. Suppose the government imposes a $1 tax in each of the four markets represented by supply curves S1, S2, S3, and S4. The deadweight will be the largest in the market represented by S4

As more people become self-employed, which allows them to determine how many hours they work per week, we would expect the deadweight loss from the Social Security tax to increase, and the revenue generated from the tax to decrease.

In which of the following cases is it most likely that an increase in the size of a tax will decrease tax revenue? The price elasticity of demand and the price elasticity of supply are both large.

Refer to Figure 8-20. Suppose the figure pertains to the labor tax, and suppose also that point B represents the position on the curve of the typical European country. Then, according to a recent research paper published by the European Central Bank, the position on the curve of the U.S. would most likely be point A

Under which of the following scenarios would a park be considered a common resource? Visitors can enter the park free of charge, but frequently all of the picnic tables are in use.

When a good is excludable, people can be prevented from using the good.

Which of the following is an approach used by economists to calculate the value of a human life?

comparing the wages of more risky occupations to less risky occupations

Which of the following is an example of the free-rider problem? Bruce owns Buster, a large dog who barks whenever anyone walks near his house. Betty lives next to Bruce, and Buster's barking can be heard whenever anyone walks near her house, too. Thus, Betty receives free protection from burglars because of Buster's barking.

Which of the following is a disadvantage of government provision of a public good? The government lacks information about what people are willing to pay for the good.

Consider the town of Anywhere with only three residents, Mary, Bill, and Tricia. The three residents are trying to determine how large, in acres, they should build the public park. The table below shows each resident's willingness to pay for each acre of the

Table 11-1. Suppose the cost to build the park is $16 per acre. How large should the park be to maximize total surplus from the park in Anywhere? 2 acres 5 acres

One way to eliminate the Tragedy of the Commons is to limit access to the commons.

Refer to Figure 11-1. Cable TV is an example of the type of good represented by Box B

If the use of a common resource is not regulated, it will be overused.

In which of the following examples are property rights not well established? Groups of students play loud music in the open area between the dorms.

Refer to Figure 8-3. The per-unit burden of the tax on sellers is P3 - P2.

Suppose that the government imposes a tax of P3 - P1.

Refer to Figure 8-5. Consumer surplus before the tax was levied is represented by area A+B+C. A+B+C.

When the government places a tax on a product, the cost of the tax to buyers and sellers exceeds the revenue raised from the tax by the government.

Refer to Figure 8-1. Suppose the government imposes a tax of P' - P'''. The consumer surplus before the tax is measured by the area J+K+I.

Figure 8-4The vertical distance between points A and B represents a tax in the market.

Refer to Figure 8-4. The per-unit burden of the tax on buyers is $4

Which of the following statements is correct regarding the imposition of a tax on gasoline? The incidence of the tax depends upon the price elasticities of demand and supply.

The amount of deadweight loss from a tax depends upon the

price elasticity of demand. price elasticity of supply. amount of the tax per unit.

Correct! All of the above are correct. all of the above

Which of the following events is consistent with an increase in the deadweight loss of the gasoline tax from $30 million to $120 million? The tax on gasoline increases from $0.30 per gallon to $0.60 per gallon.

According to Arthur Laffer, the graph that represents the amount of tax revenue (measured on the vertical axis) as a function of the size of the tax (measured on the horizontal axis) looks like an upside-down U.

Under which of the following scenarios would a park be considered a public good? Visitors can enter the park free of charge and there are always plenty of empty picnic tables.

A cable television broadcast of a movie is excludable and not rival in consumption.

A free-rider problem exists for any good that is not excludable

Table 11-1Consider the town of Anywhere with only three residents, Mary, Bill, and Tricia. The three residents are trying to determine how large, in acres, they should build the public park. The table below shows each resident's willingness to pay for each acre of the park.

Refer to Table 11-1. Suppose the cost to build the park is $16 per acre. How large should the park be to maximize total surplus from the park in Anywhere? 5 acres

Which of the following is a disadvantage of government provision of a public good?

The government lacks information about what people are willing to pay for the good.

A lighthouse might be considered a private good if the owner of the lighthouse is able to exclude beneficiaries from receiving the benefits of the lighthouse.

Which of the following is an example of the Tragedy of the Commons? The number of satellites increases to the point where they begin running into each other.

The Tragedy of the Commons can be corrected by assigning property rights to individuals.

Refer to Figure 11-1. For which two boxes is it the case that externalities arise because something of value has no price attached to it? Box C and Box D

A common theme among examples of market failure is some item of value does not have an owner with the legal authority to control it.

In 1776, the American Revolution was sparked by anger over British taxes imposed on the American colonies.

Figure 8-6 The vertical distance between points A and B represents a tax in the market.Refer to

Figure 8-6. The tax results in a deadweight loss that amounts to $1,500.

Relative to a situation in which gasoline is not taxed, the imposition of a tax on gasoline causes the quantity of gasoline demanded to decrease and the quantity of gasoline supplied to decrease.

Figure 8-6 The vertical distance between points A and B represents a tax in the market.

Refer to Figure 8-6. Without a tax, producer surplus in this market is $2,400.

For a good that is taxed, the area on the relevant supply-and-demand graph that represents government's tax revenue is smaller than the area that represents the loss of consumer surplus and producer surplus caused by the tax.

The benefit that government receives from a tax is measured by tax revenue

When a tax is imposed on a good for which the supply is relatively elastic and the demand is relatively inelastic, buyers of the good will bear most of the burden of the tax.

Assume the price of gasoline is $2.40 per gallon, and the equilibrium quantity of gasoline is 12 million gallons per day with no tax on gasoline. Starting from this initial situation, which of the following scenarios would result in the largest deadweight loss? There is insufficient information to make this determination.

If the tax on a good is tripled, the deadweight loss of the tax increases by a factor of 9.

Which of the following events always would increase the size of the deadweight loss that arises from the tax on gasoline? The amount of the tax per gallon of gasoline increases.

The idea that "externalities arise because something of ...