The ceteris paribus assumption means
A) favors are returned in kind.
B) this is the proof of the matter.
C) from many, one.
D) other things are equal.
Ques. 2After the price of milk increases, David buys more eggs and less cereal. For David
A) milk, eggs, and cereal are all complements.
B) milk and eggs are complements, and milk and cereal are substitutes.
C) milk and eggs are substitutes, and milk and cereal are complements.
D) milk, eggs, and cereal are all substitutes.
Ques. 3Ad valorem taxation means
A) that only the value added by a service provider is taxed.
B) that the tax rate is a percentage of the price paid for a product.
C) a negative income tax.
D) a progressive property tax imposed in some states.
Ques. 4Given the production possibilities schedule in the above table, a combination of 75 televisions and 60 personal computers
A) is attainable but involves the unemployment of some of society's resources.
B) clearly illustrates the trade-off between televisions and computers.
C) cannot be produced by society, given its current level of resources and production technology.
D) can be produced only if society is willing to have some of its resources used inefficiently.
Ques. 5Morgan graduates from college and gets a job paying 50,000 a year. While in school, she consumed 4 pounds of chicken and 1 pound of shrimp a month. After she starts work, she consumes 2 pounds of chicken and 3 pounds of shrimp a month.
If everything else is held constant, we know that A) chicken and shrimp are normal goods for Morgan.
B) chicken is an inferior good and shrimp is a normal good for Morgan.
C) chicken is an inferior good for Morgan.
D) shrimp is a normal good for Morgan.
Ques. 6What is the consequence of a positive externality in a market? What is the consequence of a negative externality? Why those consequences occur?
What will be an ideal response?
Ques. 7Ceteris paribus means
A) all variables are independent.
B) other things being equal.
C) some assumptions must be accepted without proof.
D) some theories are not rational.
Ques. 8Which of the following is most likely to be sold in an oligopoly market?
A) pizza
B) cell phone service
C) electricity
D) cotton
Ques. 9According to the text, the 17 countries with high degrees of economic freedom
A) account for 81 percent of total world output.
B) account for less than 25 percent of total world output.
C) have the weakest economies.
D) have low productivity.
Quick Reply
