Question

1) Constant marginal utility means that one's first apple in a sitting is ______ one's second apple in the same sitting.

Select one:

a. worse than

b. better than

c. equally good as

d. incomparable with

2)

The market supply of labor is upward sloping because:

Select one:

a. higher wages would attract fewer workers into the industry.

b. an additional worker hired tends to be more productive.

c. an individual might work less when his wage increases.

d. higher wages would attract more workers into the industry.

3)

Markets tend to be inefficient when it comes to public goods because:

Select one:

a. the government tends to overproduce the good.

b. the rival nature of the good makes it hard to collect payment from consumers.

c. free riders lead to an underproduction of the good.

d. consumers tend to value these goods less than private goods.

4)

Assume that the unit price of good A is $4, and the unit price of good B is $5. If an individual has income of $44, which consumption bundles of (good A, good B) is on the edge of the budget constraint?

Select one:

a. (6,5)

b. (5,4)

c. (6,4)

d. (5,5)

5)

If the goal is to reduce cigarette consumption per smoker through taxation, a federal tax is ______ effective than a state tax.

Select one:

a. less

b. more

c. more or less (depending upon the state)

d. equally

6)

Which would NOT happen as the result of a price floor?

Select one:

a. decreases in product quality

b. lost gains from trade

c. a surplus of the good

d. misallocation of resources