...
goods produced domestically and sold abroad.
...
Both buyers and seller
...
will have difficulty estimating the value of the highway.
The Federal Reserve
sets the nation's monetary policy.
...
(i) only
Christy and Claudia are aspiring models. Talent scouts consider them to be similarly beautiful. Both enter a talent show. Claudia contracts food poisoning the night before the competition and withdraws. Christy wins the competition and signs a multi-milli
Differences in human capital
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measures the value that a buyer places on a good
...
All of the above are correct.
Neither public goods nor common resources are
excludable, but only public goods are not rival in consumption.
...
perfect competition.
...
comparative advantage.
The tradeoff between inflation and unemployment
...
Inflation is defined as
an increase in the overall level of prices in the economy.
By definition, imports are
goods produced abroad and sold domestically
If the demand for textbooks is inelastic, then an increase in the price of textbooks will
increase total revenue of textbook sellers.
Normative statements are
prescriptive, whereas positive statements are descriptive.
...
increase both competition and specialization.
...
low price elasticities of demand and low income elasticities of demand.
...
if the government requires marginal cost pricing, it will likely have to subsidize the firm.
A market includes
both buyers and sellers
...
represents the sum of the quantities demanded by all the buyers at each price of the good.
Efficiency is attained when
total surplus is maximized
...
a tax on an imported good
Economists speaking like scientists make
claims about how the world is
...
a tax on the wages that firms pay their workers
...
None of the above is correct.
Which of the following is a tax on labor?
All of the above are labor taxes.
...
does not alone provide conclusive evidence of discrimination.
Which of the following is not correct?
A profit-maximizing firm hires workers so long as the wage rate exceeds the value of the marginal product of labor.
Difference in wages can be explained by differences in
...
In Lee Benham's 1972 article examining the impact of advertising on the average price paid for a pair of eyeglasses, Benham found that
the average price paid for eyeglasses was nearly 20% lower in the states that did not restrict advertising.
...
refers to how much a society can produce with its resources. Equality refers to how evenly the benefits from using resources are distributed among members of society.
Which of the following would be an example of an implicit cost?
(i) forgone investment opportunities
...
the corporation is more like a tax collector than a taxpayer.
...
workers' decisions about the labor-leisure tradeoff respond to a change in the wage.
Variable cost divided by quantity produced is
None of the above is correct.
Corporate profits distributed as dividends are
taxed twice
...
More productive people are more inclined to educate themselves.
...
can generate inequities of their own.
...
both existing customers who now get lower prices on the gowns they were already planning to purchase and new customers who enter the market because of the lower prices.
The two words economists use most often are
supply and demand
...
refers to the quantity of goods and services produced from each unit of labor input.
...
raise the price, reduce the quantity, increase total revenues, and increase crime.
...
employment discrimination may persist if consumers discriminate.
If the United States threatens to impose a tariff on Colombian coffee if Colombia does not remove agricultural subsidies, the United States will be
...
The resources that a taxpayer devotes to complying with the tax laws are a type of
Both b and c are correct.
A price floor is
All of the above are correct
If the government levies a $500 tax per car on sellers of cars, then the price received by sellers of cars would
decrease by less than $500.
A positive externality
is a benefit to someone other than the producer and consumer of the good.
Benefits from trade would not include
less competition
When some resources used in production are only available in limited quantities, it is likely that the long-run supply curve in a competitive market is
upward sloping.
...
both the value of a good to society and the cost to society of making the good
Demand is said to be inelastic if
the quantity demanded changes only slightly when the price of the good changes.
...
$2, and the deadweight loss comes only from Hillary because she does not buy a large French fries after the tax.
The difference between slope and elasticity is that slope
is a ratio of two changes, and elasticity is a ratio of two percentage changes.
The "invisible hand" directs economic activity through
prices.
A monopolistically competitive firm
experiences a zero profit in the long run
During the holiday season, high-end retailers frequently place a high price on merchandise on weekends and discount the price during the week. They do this because they believe that two groups of customers exist: shoppers with little free time and bargain
price discrimination
If the demand curve for economics textbooks shifts to the left, then the value of the marginal product of labor for economics textbook authors will
fall
Positive statements are
claims about how the world is
...
magnitude of the response in quantity demanded to a change in price
...
fails to raise the wage of any employed person.
...
private goods and common resources
...
increase in quantity supplied
First grade teachers who work in Lynn, Massachusetts's (a large, low income city north of Boston) public schools earn more than first grade teachers who work in private schools in more affluent communities north of Boston. Lynn teachers belong to a teache
...
Externalities are
side effects passed on to a party other than the buyers and sellers in the market
...
second number of an ordered pair and represents the point's vertical location
...
lower than in monopoly markets and higher than in perfectly competitive markets.
Workers with more human capital on average earn substantially higher pay than workers with less human capital in
the United States and in most other countries.
Predatory pricing occurs when
A monopolist decreases its prices to maintain its monopoly. Economists are skeptical that this practice is profitable.
...
both to raise revenue for public purposes and to influence market outcomes
Economists normally assume that the goal of a firm is to
(iii) only
...
decreases the demand for the other good.
...
changes by the same percent as the price.
...
The quotas are probably the result of lobbying from U.S. producers of sugar. The quotas increase producer surplus for the United States, reduce consumer surplus for the United States, and harm foreign sugar producers.
The circular-flow diagram is a
visual model of the economy
...
households in the form of wages and fringe benefits.
...
decrease in quantity supplied
...
a measure of how much buyers and sellers respond to changes in market conditions.
...
All of the above are correct
Economists regard events from the past as
interesting and valuable, since those events are capable of helping us to understand the past, the present, and the future
...
All of the above are examples of the principle that trade can make everyone better off.
...
domestic producers gain and domestic consumers lose.
...
people must face tradeoffs
If a poor family has three children in public school and a rich family has two children in private school, the ability-to-pay principle would suggest that
the rich family should pay more in taxes to pay for public education than the poor family.
...
16.67 percent and 70.00 percent, respectively
...
was created in 1946 and consists of three members and a staff of several dozen economists.
The business cycle is the
irregular fluctuations in economic activity
...
persistent wage discrimination based on consumer preferences.
...
causes the equilibrium quantity of the good to decrease
...
a common resource is rival in consumption
A normative economic statement such as "The minimum wage should be abolished
would require values and data to be evaluated
...
a minimum wage that firms may pay workers