The Wii is a wildly popular home video game console released by Nintendo. The Wii system was first available in the U.S. in November, 2006 and has sold more than 30 million units as of August 2010. The Wii retails for 199.
Suppose Ahmed is willing to pay 230, Lana is willing to pay 175, and Bodie is willing to pay 300 for a Wii. What is the value of Lana's consumer surplus? A) No consumer surplus is generated because Lana will not buy the Wii.
B) 249
C) 225
D) 24
Ques. 2The table above shows sales of the firms in the chocolate industry. The four-firm concentration ratio in the industry is
A) 52 percent.
B) 65 percent.
C) 72 percent.
D) 80 percent.
Ques. 3To eliminate the inefficiency resulting from an external cost of production, the government can impose a tax on producers that is equal to the
A) MSB.
B) MC.
C) marginal external cost.
D) MSC.
Ques. 4Which of the following is TRUE regarding the distribution of wealth and the distribution of income?
A) The distribution of wealth is a less accurate measure of inequality because it excludes human capital.
B) The distribution of wealth is a more accurate measure of inequality because it includes houses.
C) The distribution of income is a less accurate measure of inequality because it excludes the value of things you own.
D) The distribution of income is a less accurate measure of inequality because not everyone has a job.
Ques. 5The above figures show the market for oranges. Which figure(s) shows the effect of a new government program that provides each public school child with an orange to start the day?
A) Figure A
B) Figure D
C) Figures A and C
D) Figures A and D
Ques. 6Which of the following leads a good to have a high elasticity of supply? I. The good must be produced using unique resources. II. The good is produced using commonly available resources.
A) I only
B) II only
C) I and II
D) neither I nor II
Ques. 7The relationship in the above figure indicates that
A) a decrease in the interest rate leads to a decrease in household income.
B) a decrease in household consumption leads to a decrease in interest rates.
C) a decrease in household income will lead household consumption to increase.
D) none of the above.
Ques. 8Bobby is offered a job as a salesperson in which there is a 50 percent chance that he will make 2,000 and a 50 percent chance that he will make 10,000. Bobby's utility of wealth curve is shown in the figure above. What is Bobby's cost of risk?
A) 1,000
B) 2,000
C) 3,000
D) 4,000
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