Problem 1. In perfect competition, which is the case?
a. A firm can influence the price of the good
b. there are many sellers
c. there are restrictions to entry
d. all firms sell a slightly different product
Problem 2. A firm should continue to produce as long as its
a. average total revenue exceeds its average total cost
b. average total revenue exceeds its average variable cost
c. marginal cost exceeds marginal revenue
d. marginal revenue exceeds marginal cost
Problem 3. In the dominant firm model of oligopoly, the dominant firm acts as if it was a
a. perfect competitor
b. monopolistic competitor
c. oligopony
d. monopoly
Problem 4. If the marginal tax rate rises with income, the tax is
a. a sales tax
b. an excise tax
c. a regressive tax
d. a progressive tax
Problem 5. The percentage of an additional dollar of income that is taxed is
a. additional tax
b. marginal tax
c. state tax
d. marginal propensity
Problem 6. Two key features of monopoly are
a. no close substitutes and barriers to entry
b. legal protection and no close substitutes
c. electric companies and cable companies
d. control of the resources and barrier creation
Problem 7. Marginal benefit is the cost of producing just one more good. True/false
Problem 8. Assortive mating tends to
a. break down the barriers among socioeconomic groups
b. equalize the wealth distribution
c. increase the inequality of wealth distribution
d. occur when opposites attract
Problem 9. A tax is progressive if the marginal tax rate
a. increases as income increases
b. increases as income decreases
c. is negative
d. is positive
Problem 10. Under a flat rate income tax (also called a proportional income tax), the marginal tax rate
a. is zero
b. is one
c. equals income
d. is constant
Problem 11. When an employee walks away from work with a box of pens that belong to their employer, it is called
a. school supplies
b. the principal agent problem
c. the zerox subsidy
d. the principal employee problem