Chapter 5 Efficiency and Equity
5.1 Resource Allocation Methods
1) When a market price allocates a scarce resource
A) everyone in the economy can use the resource.
B) only those who show interest can use the resource.
C) willingness-to-pay is not an issue
Chapter 10 Organizing Production
10.1 The Firm and Its Economic Problem
1) A firm's goal is to
A) maximize revenue.
B) maximize cost while minimizing revenue.
C) maximize profit.
D) minimize costs.
E) minimize risk.
2) A firm's total opportunity cost of p
Chapter 9 Possibilities, Preferences, and Choices
9.1 Consumption Possibilities
1) Guy has an income (Y) of $50 with which he can purchase DVDs (D) at $10 each and haircuts
(H) at $20 each. Which one of the following represents Guy's budget line?
A) Y = 1
Chapter 2 The Economic Problem
2.1 Production Possibilities and Opportunity Cost
1) The production possibilities frontier
A) is the boundary between attainable and unattainable levels of production.
B) is the boundary between what we want to consume and w
Chapter 4 Elasticity
4.1 Price Elasticity of Demand
1) A price elasticity of demand of 2 means that a 10 percent increase in price will result in a
A) 2 percent decrease in quantity demanded.
B) 20 percent decrease in quantity demanded.
C) 5 percent decre
Chapter 11 Output and Costs
11.1 Decision Time Frames
1) The short run is a time frame in which
A) the firm is not able to hire more workers.
B) the amount of output produced is fixed.
C) there is a shortage of most factors of production.
D) at least one
Chapter 1 What Is Economics?
1.1 Definition of Economics
1) In a world characterized by scarcity
A) all goods are free.
B) opportunity cost is zero.
C) we are not limited by time.
D) individuals need not work to obtain goods.
E) people must make choices a
Chapter 8 Utility and Demand
8.1 Consumption Choices
1) The change in total utility that results from a one-unit increase in the quantity of a good
A) additional utility.
B) marginal utility.
C) average utility.
D) marginal utility per dollar.
Chapter 3 Demand and Supply
3.1 Markets and Prices
1) The relative price of a good is all of the following except
A) the ratio of one price to another.
B) an opportunity cost.
C) the money price of the good divided by a price index.
D) the same as the mon
Chapter 13 Monopoly
13.1 Monopoly and How It Arises
1) An exclusive right granted to a firm to supply a good or service is
A) a licence.
B) a patent.
C) a public franchise.
D) the essential characteristic of natural monopoly.
E) an economy of scale.
Chapter 12 Perfect Competition
12.1 What Is Perfect Competition?
1) Perfect competition occurs in a market where there are many firms, each selling
A) an identical product.
B) a similar product.
C) a unique product.
D) a capital-intensive product.
E) a co