Exam G - Introduction to Microeconomics Exam No. 2 Multiple...

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Introduction to Microeconomics Exam No. 2 Multiple Choice Identify the choice that best completes the statement or answers the question. ____ 1. ____ 2. ____ 3. ____ 4. Marginal cost is equal to average total cost when a. b. c. d. average variable cost is falling. average total cost is at its minimum. average fixed cost is rising. marginal cost is at its minimum. Which of the following is not a necessary condition for the Coase theorem? a. b. c. d. Property rights are clearly defined. The government intervenes to internalize the externality. There are no bargaining costs. There are only a few parties involved. Table 12-8 Refer to Table 12-8 . If the government imposes a $3,000 lump-sum tax, the marginal tax rate for Charles would be T axpayer Income Marcia $40,000 Charles $30,000 a. b. c. d. 10 percent. 5 percent. 0 percent. 6.7 percent. Figure 7-5 Price 250 225 200 175 150 125 100 75 50 25 Demand 25 50 75 100 125 150 Quantity Refer to Figure 7-5. What happens to the consumer surplus if the price rises from $100 to $150? a. The new consumer surplus is triple the original consumer surplus. b. The new consumer surplus is 25 percent of the original consumer surplus. ____ 5. ____ 6. ____ 7. ____ 8. c. The new consumer surplus is double the original consumer surplus. d. The new consumer surplus is half of the original consumer surplus. When the government places a tax on a product, the cost of the tax to buyers and sellers a. exceeds the revenue raised from the tax by the government. b. is less than the revenue raised from the tax by the government. c. is equal to the revenue raised from the tax by the government. d. Without additional information, such as the elasticity of demand for this product, it is impossible to compare the cost of a tax to buyers and sellers with tax revenue. Figure 13-2 100 90 80 70 60 50 40 30 20 10 Output 1 2 3 4 5 6 7 8 Workers Refer to Figure 13-2 . With regard to cookie production, the figure implies a. b. c. d.
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decreasing cost of cookie production. increasing marginal product of workers. diminishing marginal cost of cookie production. diminishing marginal product of workers. Which of the following statements is correct? a. b. c. d. Economists consider opportunity costs to be included in a firm’s costs of production. Opportunity costs equal explicit minus implicit costs. Economists consider opportunity costs to be included in a firm’s total revenues. All of the above are correct. The privately-owned school system in Smalltown has a virtually unlimited capacity. It accepts all applicants and operates on both tuition and private donations. Although every resident places value on having an educated community, the school's revenues have suffered lately due to a large decline in private donations from the elderly population. Since the benefit that each citizen receives from having an educated community is a public good, which of the following would not be correct? a. b. c.
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Exam G - Introduction to Microeconomics Exam No. 2 Multiple...

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