p. 2 v. 06
1. Which of the following is NOT a social cost of
a. the value of stolen bicycles
b. the inconvenience of having to leave bicycles
in a safe place
c. the cost of the thief’s time
d. the cost of bicycle locks
Figure BMC. The marginal costs of lamps for a
factory in a perfectly competitive market.
2. See Figure BMC. If the price of lamps is $2, the
factory will obtain about $_____ of producer surplus.
[Choose the closest value.]
3. See Figure BMC. How many lamps will the factory
produce when the price of lamps is $5?
d. MORE information needed
4. See Figure BMC. The variable cost of producing 5
lamps is about $_____. [Choose the closest value.]
d. more than 50.00
5. Economists use models, because
a. computers are able to process even unimportant
b. every economic situation is essentially the
same, so specific details are unnecessary.
c. exceptions to the model prove that people are
d. the omission of unimportant details makes
6. LeBron James is an extremely talented basketball
player with a salary of almost $23 million per year.
What is true about LeBron?
a. His behavior is a good example of rent seeking.
b. Most of his income can be explained by his
c. Most of his income is an economic rent to his
d. NONE of the above
7. In competitive economies, many workers are often
paid more than would be required to make them
willing to do their jobs, because
a. good workers receive economic rents when
firms compete with each other for labor.
b. firms will not pay economic rents to workers
c. firms cannot receive economic rents under
d. a fair wage maximizes profits.
Table STX. The table below displays the willingness
to pay of each consumer for his first three oranges (no
one wants to eat more than three). Alex, Barb, and
Carlos are the only buyers of oranges.
1st Orange 2nd Orange 3rd Orange
Alex $2.00 $1.50 $0.75
Barb $1.50 $1.00 $0.80
Carlos $0.75 $0.25 $0
8. See Table STX. If the market price of an orange is
$1.20, consumer surplus amounts to
9. See Table STX. The market quantity of oranges
demanded is exactly 5 if the price of an orange P
a. $1.00 < P < $1.50.
b. $0.80 < P < $1.00.
c. $0.75 < P < $0.80.
d. $0.80 < P < $1.50.
10. Which of the following does NOT affect a consumer's
demand curve for cashmere sweaters?
a. current fashion
b. the consumer’s income
c. expectations about future clothing prices
d. manufacturing costs