Individuals have a tradeoff between leisure and work. When income from working is taxed, the cost of leisure is reduced in relative terms.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 2Which of the following properties hold true for the equilibrium price-quantity combination?
a. Buyers who are willing to pay higher than the equilibrium price do not find sellers.
b. At the equilibrium price producer surplus equals consumer surplus.
c. The equilibrium output is produced at the lowest avoidable cost.
d. The equilibrium output is produced at the lowest opportunity cost.
QUESTION 3Monopoly is a market structure in which:
a. there are significant barriers to the entry of new firms.
b. the firms face a perfectly elastic demand curve.
c. there are a large number of close substitutes for the good produced.
d. a homogeneous product is sold.
e. the firms are price takers.
QUESTION 4When price exceeds average variable cost for a firm, it is possible that:
a. it is earning an economic profit.
b. it is breaking even.
c. it is suffering an economic loss.
d. any of the above is true.
QUESTION 5When a low-income individual receives a transfer payment, that individual has less of an incentive to forgo leisure time for work time.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 6Starting from a pure exchange equilibrium, an increase in the demand for a commodity will result in:
a. a fall in the market price.
b. a rise in the market price.
c. a rise in the equilibrium output.
d. a fall in the equilibrium output.
Quick Reply
