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The General Agreement on Tariffs and Trade (GATT) is2. Refer to Figure 17-10. With the tariff, the domestic price and domestic quantity demanded are3.Figure 17-13In Figure 17-13, the world price of a baseball is $3. With free trade, how many baseballs will the United States import?4.A nation can gain from international trade when5.The benefit (or satisfaction) that an individual expects to derive from an activity is called6.When economists say an individual displays economizing behavior, they simply mean that she is7.When economists say an individual has made a rational choice, they mean the individual has8.Which of the following is not scarce?9.Which of the following statements about exchange is false?10.Use the production possibilities data below for Lebos and Slavia to answer the following question(s).Refer to Table 2-1. Which of the following would be a mutually agreeable rate of exchange?11.Which of the following is NOT true of opportunity cost?12.In which statement(s) is “demand” used correctly?(I) “An increase in the price of hot dogs will reduce the demand for hot dogs.”(II) “An increase in the price of hot dogs will reduce the demand for hot dog buns.”13.Assume that black beans and rice are consistently in the diet of one particular family. How could you tell if these goods were complements, substitutes, or unrelated goods?14.Suppose the demand for tacos decreases. What will happen to producer surplus in the market for tacos?15. Refer to Table 3-2. If the price is $775, who would be willing to supply the product?16.If we observe a decrease in the price of a good and an increase in the amount of the good bought and sold, this could be explained by17.Figure 3-2Given the supply and demand conditions illustrated in Figure 3-2, the equilibrium price of steak is18. Refer to Figure 3-19. Sellers whose costs are less than price are represented by which line segment?19.The efficiency of market organization is dependent on which of the following?20.Suppose the equilibrium price of a physical examination (“physical”) by a doctor is $200, and the government imposes a price ceiling of $150 per physical. As a result of the price ceiling,21.About 35,000 general aviation multiengine airplanes are licensed to operate in the United States. If an additional $1,000-per-year tax was levied on each plane to raise general revenue, economic thinking suggests the22.A $25 government subsidy paid directly to buyers of jeans will result in23.When government gives a subsidy to buyers of good X, the benefits of the subsidy flow to24. Refer to Figure 4-18. In this market, which of the following price controls would be binding?25. Refer to Figure 4-21. How much tax revenue does this tax produce for the government?26.If an economic action generates more costs than benefits, the action27.Suppose that an MBA degree creates no externality because the benefits of an MBA are captured by the student in the form of higher wages. If there are no government subsidies for MBAs, then which of the following statements is correct?28.Economic theory indicates that the behavior of29.Producers tend to be better represented in lobbying efforts and other elements of the political process than consumers because30.The marginal value of a commodity to a consumer31.If Mr. Smith thinks the last dollar spent on shirts yields more satisfaction than the last dollar spent on cola, and Smith is a utility-maximizing consumer, he should32.Consider a consumer who purchases two goods, X and Y. If the price of good Y falls, then the substitution effect by itself will33.Muriel’s income elasticity of demand for football tickets is 1.5. All else equal, this means that if her income increases by 20 percent, she will buy34.The price elasticity of supply35.Figure 7-13Refer to Figure 7-13. A decrease in price from $15 to $10 leads to36.Since it is costly for stockholders to monitor corporate managers, managers may be able to achieve personal perks and pursue other policies that conflict with profit maximization. This is an example of37.Use the table below to answer the following question.What is the marginal cost of producing the third unit of output?38.In the short run, which are most important in determining changes in output?39.Use the table below to answer the following question.Average total cost is at a minimum when output is40.Mr. Hudson notes that if he produces 10 pairs of shoes per day, his average fixed cost (AFC) is $14 and his marginal cost $8; if he produces 20 pairs of shoes per day, his MC is $15. What is his AFC when output is 20 pairs of shoes per day?41.When firms in a price-taker market are temporarily able to charge prices that exceed their production costs,42.Scenario 9-1Assume a certain competitive price-taker firm is producing Q = 1,000 units of output. At Q = 1,000, the firm’s marginal cost equals $15 and its average total cost equals $11. The firm sells its output for $12 per unit.Refer to Scenario 9-1. At Q = 1,000, the firm’s profit amounts to43.Use the table of expected cost and revenue data for the Tuckers Tomato Farm below to answer the following question(s). The Tuckers produce tomatoes in a greenhouse and sell them wholesale in a competitive pricetaker market. Table 9-1 Refer to Table 9-1. If the Tuckers are profit maximizers, how many tomatoes should they produce when the market price is $500 per ton?44.A firm is currently operating where the MC of the last unit produced is $84, and the MR of this unit is $70. What would you advise this firm to do?45.In a constant-cost industry, an increase in output that increases the demand for resources used by the industry46.Use the figure to answer the following question(s).Figure 9-3Figure 9-3 depicts the cost curves of a firm in a price-taker industry. At what output would the firm’s per-unit cost be at a minimum?47.Use the figure to answer the following question(s). Figure 9-11 If the current market price for the firm depicted in Figure 9-11 is A, given the firm’s cost conditions, which output should it produce?48.The long-run supply curve is49.If Dell Computer finds that its marginal cost exceeds its marginal revenue on a model of laptop, then to maximize profit, it will50.Many small U.S. cities are served by only one or two airlines. If a price increase in these markets allows other airlines to quickly and easily enter the market and compete, economists would call these markets51.In the real world, business decisions must be made through insight, trial, and error, without perfect knowledge about demand and costs. Will the profit-maximizing prices and levels of output from the simple economic models still be good guides to real outcomes?52.Use the figure to answer the following question(s).Figure 10-2What is the maximum economic profit this firm depicted in Figure 10-2 will be able to earn?53.Which of the following is a true statement about the difference between a price-taker firm and a competitive price-searcher firm in the long run?54.If the firms in an oligopolistic industry can collude effectively (from the firms’ viewpoints), the resulting price and output in the market will be most similar to that of55.The prisoners’ dilemma is used to illustrate the basic idea that56.Assuming that firms maximize profits, how will the price and output policy of an unregulated monopolist compare with ideal market efficiency?57.Figure 11-18 The total revenue for the firm in Figure 11-18, a monopolist that maximizes profit while charging all customers the same price, is58.The profit-maximizing price the monopoly will charge in Figure 11-20 is59.An increase in the price of a resource would cause60.Refer to Table 12-2. This table describes the number of baseballs a manufacturer can produce per day with different quantities of labor. Each baseball sells for $5 in a competitive market. If the firm is maximizing the marginal product of labor, what is the firm’s marginal revenue product?61.Essays (Select and answer three of the following five essay questions)If economics is correct in its assumption that people are rational, why then would anyone choose to smoke cigarettes?  Suppose the United Auto Workers union obtains a substantial wage increase for auto workers. How will this affect the market for automobiles?  If the demand for pizza falls, pizza suppliers will suffer economic losses, and some firms will leave the industry. Why is this considered good? Shouldn’t we feel sorry for these business owners?  Cattle manure is an input often used in making fertilizer. Suppose a technique is discovered that can transform cattle manure into quality gasoline. What would happen in the fertilizer industry?  Ethyl does not like redheads and refuses to hire any at her business. Paul was the perfect job candidate on paper, but the personal interview revealed that he was a redhead. Are there any costs to Ethyl for not hiring Paul?