Smokers and loud talkers who ignore the external effects of their actions are being rational in the economic sense.
a. True
b. False
QUESTION 2In regards to monopolistic competition, some economists argue that consumers are willing to pay a higher price in order to enjoy a wider selection of goods and services.
a. True
b. False
QUESTION 3If tuna in the sea are open-access resources, they will be used until the marginal value of additional use equals
a. the marginal product of the resource
b. the marginal revenue of the resource
c. infinity
d. negative infinity
e. zero
QUESTION 4Which of the following is not a threat to bricks-and-mortar video rental stores?
a. on-demand movies delivered by broadband cable
b. rental services that deliver DVDs by mail
c. digital movies and TV shows available on Wal-Mart's Web site
d. None of the answers is a threat.
e. All of the answers are threats.
QUESTION 5Unpriced by-products of production or consumption that impose costs on other consumers or firms are known as
a. negative externalities
b. effluent fees
c. pollution rights
d. positive externalities
e. moral hazards
QUESTION 6The retail market for video rentals is a monopolistically competitive market. A greater supply of video rental outlets along with the increased availability of substitutes like cable channels would likely make rental rates
a. decrease slightly
b. remain unchanged
c. crash
d. fluctuate wildly up and down
e. increase
QUESTION 7Pollution and other negative externalities arise because
a. there are no enforceable property rights to open-access resources
b. legislators cannot agree on what to do about them
c. they are the price consumers are willing to pay for production of goods and services
d. private property rights to pollute are controlled by businesses
e. science cannot decide how to control them
QUESTION 8As a real estate agent, Krista Otavi prides herself on her good training, availability to clients, and hard work to make a sale. Which one of the basic ways of product differentiation does Krista emphasize?
a. services
b. product image
c. location
d. commission rate
e. physical differences
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