Question

1. True or false? Actions that allow oligopoly firms to coordinate their pricing behavior are called facilitating practices.

 

2. In the long run, if a perfectly competitive firm is incurring an economic loss, the firm

 

A. Will leave the industry

B. Is earning greater than normal profit but not an economic profit

C. Will minimize opportunity costs by staying in business

D. Will produce as long as total revenue exceeds the total fixed cost

E. Will have some long-run fixed costs

 

3. Which of the following is NOT one of the problems associated with common ownership of resources and a job that needed to be done?

 

A. Zimbody paid big body to do the antibody's job

B. Anybody could have done it, but nobody did it

C. Everybody was sure somebody would do it

D. Everybody blamed somebody

E. Nobody realized that everybody wouldn't do it

 

4. A negative externality related to a product

 

A. Results in an overallocation of resources to that product

B. Can be corrected by government subsidies

C. Is an example of government failure

D. Results in under allocation of resources to that product

E. Can be corrected by lowering the cost of production

 

5. A primary cause of inefficiency in government is that

 

A. Antitrust is applied to government policies as well as market situations

B. Government employees tend to be lazier than private-sector employees

C. The gains from government projects are often concentrated, while the costs are dispersed among all taxpayers

D. Markets interfere with governments

E. All of these are true

 

6. According to the survey reported in the text, most people believe that health-related goods and services should be allocated by the ___ allocation mechanism.

 

A. First come, first served

B. Random

C. Government

D. Price

E. Private

 

7. It is ___ that transfer(s) consumer surplus to producers and creates (s) deadweight losses.

 

A. The commodity market

B. Restrictions to entry

C. The allocation mechanism

D. Government

E. Perfect competition

 

8. The practice of legislators supporting one another's projects in order to ensure support for their own is called

 

A. Social regulation

B. Partisanship

C. Democracy

D. Logrolling

E. Wasteful

 

9. When shopping in some countries, bargaining is standard. The sellers ask for a high price to start and then decrease the price until the sale is made. This is due to

 

A. Producers trying to gain as much consumer surplus as they can

B. Prices changing so quickly that it doesn't make sense to make price tags

C. No government control

D. The market unable to reach equilibrium

E. Consumers trying to gain as much consumer surplus as they can

 

10. All of the following are examples of a first-come, first-served system of allocation EXCEPT

 

A. Classes at school

B. Tickets to concerts

C. Medical care

D. Access to highways

E. All of these are examples allocated by a first-come, first-served system