Reference no: EM1375650

1. At the equilibrium output for a monopolistic competitor:
Price equals marginal cost equals marginal revenue
Price equals average total cos equals marginal revenue
Marginal cost equals marginal revenue equals average total costs
Price equals average total cost and marginal cost equals marginal
revenue

2. For a cartel to be successful in increasing economic profits for its members:
Entry of new firms must be blocked
Price must be set equal to marginal cost
Individual firms must be encouraged to adjust output so as to maximize
their own profits at the cartel price
Price must be set equal to average total cost

3. Once vaccinated a person cannot catch a cold nor give a cold to someone else. As a result the marginal social benefit resulting from consumption of the vaccine:
Exceeds the marginal benefit received by consumers of the vaccine
Equals the marginal social cost of producing the vaccine in a competitive equilibrium.
is less than the marginal benefit received by consumers of the vaccine.

4. A rightward shift of the marginal social benefit curve for pollution control:
Has no effect on the efficient percentage reduction in polluting
abatement.
Makes it efficient to spend more on pollution abatement.
Makes it efficient to spend less on pollution abatement.
Makes pollution abatement cheaper.

5. A 2004 article written immediately after the re-election of George W. Bush referred to his environmental policy system where power plants buy and sell the right to pollute in the form of emission credits. Do economists tend to favor this approach to pollution control:
No; these programs are ineffective because they encourage major polluters to free ride on the efforts of others.
No; it is possible for some firms to do nothing if they simply buy enough credits. 
Yes; they encourage all firms to cut pollution by the same percentage.
Yes; they believe that such a proposal would achieve a level of pollution reduction with the lowest cost to society.

6. If a positive externality is associated with the purchase of smoke detectors:
The marginal social benefit of smoke detectors exceeds their price
The marginal social benefit of smoke detectors is zero
The marginal social benefit of smoke detectors equals their price
More than the efficient quantity of smoke detectors will be sold

7. What do economists mean when they say there is "market failure"?
Business has introduced a product that consumers did not want
Free markets have led to excessive profits
Markets have surpluses or shortages so that government rationing is necessary.
Free markets yield results that economists do not consider socially optimal.

8. A market for information is more likely to develop even in the absence of government regulation of information as long as the marginal:
Cost of information is zero
Benefit of information is zero
Cost of information exceeds the marginal benefit
Benefit of information exceeds the marginal cost

9. A widget has an opportunity cost of 4 wadgets in Saudi Arabia and 2 wadgets in the United States. Given these opportunity costs, you would suggest that:
Saudi Arabia specialize in widgets and the US in wadgets
No trade should take place
Saudi Arabia specialize in wadgets and the US in widgets
Both countries produce an equal amount of each.

10. Some residents of Key West, an island located at the end of the Florida Keys, fly the flag of the Conch Republic to empahasize that they are different from the rest of the U.S. Suppose that Key West separated from the U.S. and that all trade between it and the rest of the U.S. ceased. What would happen? 
The U.S. would be little affected while the effects on the Key West would be large.
Key West would be little affected while the effects on the U.S. would be large
Both the U.S. and Key West would be affected about equally
We cannot know without knowing about their bargaining abilities

11. Isolationism a policy of trying to minimize a nations political and economic interactions with the rest of the world:
Has always been key part of American politics
Was important until the late 19th century and then declined
Rose in America in the late 19th century and was an important
political element until World War II
Rose to importance in the U.S. after World War II

12. All of the following are arguments in support of protectionist legislation except
Supporting infant industries
Preserving domestic employment
Increasing global trade
Promoting National Security

13. In the early 2000s, China taxed its textile exports when the international quota system for textiles expired. Many countries were worried about rapid Chines expansion into textiles, and there was discussion of new tariffs and quotas to slow an anticipated increase in Chinese exports. Is there any advantage to China for imposing export tariffs rather than having importers impose import tariffs?
No; Both result in fewer jobs in China and higher prices in the U.S. 
Yes; With a Chinese export tariff, China would get the revenue,whereas with an American import tariff, the U.S. would get therevenue.
Yes; With the Chinese export tariff, China will lose fewer jobs than it would with an American import tariff
Yes; with the Chinese export tariff, prices will not rise in the U.S. as they would with an American import tariff

14. If the primary purpose of a tariff is to completely eliminate foreign competition, it will be expected to:
Raise either a large or a small amount of revenue depending on the magnitude of the tariff imposed
Raise a relatively large amount of tax revenue
Raise an amount of revenue equal to the amount of the tariff multiplied by the volume of exports
Raise a relatively small amount of tax revenue.