The lifetime income distribution of income is a ________ accurate indicator of the degree of economic inequality than the distribution of ________.
A) less; of annual income
B) more; of annual income
C) less; of wealth
D) less; annual Lorenz curves
Ques. 2If this pollution occurs, the marginal social cost equals the
A) marginal external cost.
B) private marginal cost.
C) sum of the private marginal cost and the marginal external cost.
D) private marginal cost minus the marginal external cost.
Ques. 3Insurance works because
A) all policyholders pay in according to risks and all then receive a pay out in return.
B) all policyholders pay in according to risks and then receive a pay out only if they incur a loss.
C) all policyholders pay in according to risks and nobody receives any pay out.
D) only high risk policyholders pay in while everyone is entitled to a pay out.
Ques. 4Interlace, Inc produces and a unique soda. The company cannot price discriminate. The figure above shows Interlace's demand curve, marginal revenue curve, and marginal cost curve. Interlace's profit maximizing price is ________ per bottle.
A) 70 cents
B) 50 cents
C) 40 cents
D) 1 dollar
Ques. 5As time passes after a change in the price, the supply of a good or service
A) becomes more elastic.
B) becomes less elastic.
C) initially becomes more elastic and then becomes less elastic.
D) initially becomes less elastic and then becomes more elastic.
Ques. 6If sanctions are imposed on buyers but NOT on sellers of an illegal good, then the equilibrium price ________ and the equilibrium quantity ________.
A) rises; increases
B) rises; decreases
C) falls; increases
D) falls; decreases
Ques. 7The above table gives some cost data for Peter's Pickles. Peter's fixed cost is 20. Average variable cost (AVC) is lowest when output is equal to
A) 1 barrel of pickles.
B) 2 barrels of pickles.
C) 3 barrels of pickles.
D) 4 barrels of pickles.
Ques. 8In the long run, in monopolistic competition
A) a firm's price equals its marginal cost.
B) firms make an economic profit.
C) firms make zero economic profit.
D) Both answers A and C are correct.
Ques. 9The Sherman Act of 1890 was passed to prohibit
A) combinations, trusts, or conspiracies to restrict interstate or international trade.
B) monopolization or attempts to monopolize interstate or international trade.
C) both of the above.
D) neither of the above.
Ques. 10The rate at which a person is willing to give up a gallon of gasoline to get one more pound of coffee and remain on the same indifference curve is called his or her
A) relative cost of coffee in terms of gasoline.
B) indifference cost of coffee.
C) personal price of coffee.
D) marginal rate of substitution.
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