Chapter 10 Externalities
MULTIPLE CHOICE Which of the following is the best statement about markets? a. Markets are usually a good way to organize economic activity. b. Markets are generally inferior to central planning as a way to organize economic activ
Chapter 8 Applications: The Costs of Taxation
MULTIPLE CHOICE 1. In 1776, the American Revolution was sparked by anger over a. the extravagant lifestyle of British royalty. b. the crimes of British soldiers stationed in the American Colonies. c. British t
Chapter 7 Consumers, Producers, and the Efficiency of Markets
MULTIPLE CHOICE 1. Welfare economics is the study of a. the wellbeing of less fortunate people. b. welfare programs in the United States. c. the effect of income redistribution on work effort.
Chapter 6 Supply, Demand, and Government Policies
MULTIPLE CHOICE 1. Price controls are a. used to make markets more efficient. b. usually enacted when policymakers believe that the market price of a good or service is unfair to buyers or sellers. c. near
Ten Principles of Economics
Firms in Competitive Markets
For a firm operating in a perfectly competitive industry, total revenue, marginal revenue, and average revenue
are all equal.
LOC: Perfect competition
Application: the Costs of Taxation
Total surplus is always equal to the sum of consumer surplus and producer surplus.
LOC: Supply and demand
TOP: Total surplus
Earnings and Discrimination
A compensating differential refers to a difference in wages that arises from nonmonetary characteristics.
LOC: Labor markets
TOP: Compensating differentials
The essence of an oligopolistic market is that there are only a few sellers.
Game theory is just as necessary for understanding com
The Costs of Production
The economic field of industrial organization examines how firms decisions about prices and quantities
depend on the market conditions they face.
LOC: Costs of producti
The Short-Run Trade-Off Between Inflation and Unemployment
In the long run, the natural rate of unemployment depends primarily on the growth rate of the money supply.
LOC: Unemployment and inf
Frontiers of Microeconomics
The science of economics is a finished jewel, perfect and unchanging.
LOC: The Study of economics, and definitions in economics
The Markets For the Factors of Production
If the marginal productivity of the sixth worker hired is less than the marginal productivity of the fifth worker
hired, then the addition of the sixth worker causes total output to declin
Interdependence and the Gains from Trade
In most countries today, many goods and services consumed are imported from abroad, and many goods and
services produced are exported to foreign customers.
Income Inequality and Poverty
The poverty line is set by the government so that 10 percent of all families fall below that line and are thereby
classified as poor.
LOC: The study of economics,
The "competition" in monopolistically competitive markets is most likely a result of having many sellers in the
LOC: Monopolistic competition