If McDonald's, Wendy's, and Burger King agree with each other not to sell hamburgers for less than 3.95 apiece, all three could be found guilty of
A) an interlocking directorship under the Clayton Act.
B) price fixing under the Sherman Act.
C) a deceptive business practice under the Clayton Act.
D) None of the above answers is correct.
Ques. 2During the twentieth century, the market structure of the U.S. economy has
A) become less competitive.
B) remained about the same.
C) become more competitive.
D) become mostly monopolies.
Ques. 3In the above figure, to achieve efficiency the government could offer a subsidy to producers of ________ per vaccination so that consumers would pay ________ per vaccination.
A) 20; 20
B) 30; 10
C) 20; 10
D) 30; 40
Ques. 4The biggest single factor affecting family income distribution is the
A) householder's age.
B) householder's marital status.
C) household size.
D) householder's education.
Ques. 5The marginal rate of substitution is ________, the ________ is the ________.
A) greater; flatter; indifference curve
B) greater; steeper; budget line
C) smaller; steeper; indifference curve
D) smaller; flatter; indifference curve
Ques. 6Lucy buys only magazines and CDs. Both are normal goods. Lucy's income decreases, but the prices of magazines and CDs do not change. Marginal utility theory predicts that Lucy will ________.
A) buy fewer magazines and fewer CDs
B) substitute magazines for CDs
C) increase her marginal utility from both magazines and CDs by buying more magazines and CDs
D) buy more magazines and more CDs
Ques. 7The short-run market supply curve is
A) the sum of the quantities supplied by all the firms.
B) undefined because the number of firms is constant in the short run.
C) vertical at the total level of output being produced by all firms.
D) horizontal at the current market price.
Ques. 8The federal minimum wage in 2010 was 7.25. If this wage rate was less than the equilibrium wage, what is the effect?
A) The minimum wage does not create unemployment.
B) The number of people who want to work at the minimum wage is the same as the number of available jobs.
C) The number of people who want to work at the minimum wage is greater than the number of available jobs.
D) Deadweight loss exists.
Ques. 9In the long-run, a firm in monopolistic competition has
A) a price that exceeds its average total cost.
B) a price that exceeds its marginal cost.
C) an average total cost that exceeds its price.
D) a marginal cost that exceeds its price.
Ques. 10For the monopoly shown in the figure above, the profit maximizing output is
A) 4 units per day.
B) 5 units per day.
C) 6 units per day.
D) 10 units per day.
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