Microeconomics 7th Edition By R. Glenn Hubbard – Test Bank

Microeconomics 7th Edition By R. Glenn Hubbard – Test Bank

Contents
Chapter 1 Preliminaries …………………………………………………………………………………………………………1
Chapter 2 The Basics of Supply and Demand……………………………………………………………………….16
Chapter 3 Consumer Behavior……………………………………………………………………………………………..55
Chapter 4 Individual and Market Demand………………………………………………………………………..125
Chapter 5 Uncertainty and Consumer Behavior …………………………………………………………………179
Chapter 6 Production …………………………………………………………………………………………………………236
Chapter 7 The Cost of Production ………………………………………………………………………………………273
Chapter 8 Profit Maximization and Competitive Supply ……………………………………………………327
Chapter 9 The Analysis of Competitive Markets ………………………………………………………………..375
Chapter 10 Market Power: Monopoly and Monopsony………………………………………………………..438
Chapter 11 Pricing with Market Power ………………………………………………………………………………..480
Chapter 12 Monopolistic Competition and Oligopoly ………………………………………………………….528
Chapter 13 Game Theory and Competitive Strategy…………………………………………………………….565
Chapter 14 Markets For Factor Inputs ………………………………………………………………………………….614
Chapter 15 Investment, Time and Capital Markets ………………………………………………………………656
Chapter 16 General Equilibrium and Economic Efficiency …………………………………………………..698
Chapter 17 Markets with Asymmetric Information………………………………………………………………743
Chapter 18 Externalities and Public Goods…………………………………………………………………………..787
Chapter 1 Preliminaries
1) Microeconomics is the branch of economics that deals with which of the following topics?
A) The behavior of individual consumers
B) Unemployment and interest rates
C) The behavior of individual firms and investors
D) B and C
E) A and C
Answer: E
Diff: 1
Section: 1.1
2) A Rolling Stones song goes: ʺYou canʹt always get what you want.ʺ This echoes an important
theme from microeconomics. Which of the following statements is the best example of this
theme?
A) Consumers must make the best purchasing decisions they can, given their limited
incomes.
B) Workers do not have as much leisure as they would like, given their wages and working
conditions.
C) Workers in planned economies, such as North Korea, do not have much choice over jobs.
D) Firms in market economies have limited financial resources.
Answer: A
Diff: 1
Section: 1.1
3) Economics is about the allocation of scarce resources. Which of the following is NOT an
example of economic scarcity?
A) If Steve goes to see the movie Master and Commander on Saturday, he will not be able to
afford buying ice cream.
B) If Jenny studies for her economics quiz this evening, she will not have time to walk her
dog.
C) If General Motors increases its production of SUVs this year, it will have to spend more
on advertising.
D) If Borders Books increases the number of titles it carries, it will have to reallocate shelf
space to accommodate the new titles.
Answer: C
Diff: 2
Section: 1.1
4) A valid and useful theory of gold prices:
A) helps to predict the movements of gold prices over time.
B) may be founded on simplifying assumptions.
C) need not exactly predict every change in gold prices.
D) all of the above
E) none of the above
Answer: D
Diff: 1
Section: 1.1
1
5) Use the following two statements to answer this question:
I. Economic theories are developed to explain observed phenomena by deducing from a set
of basic rules and assumptions.
II. Economic theories use value judgments to determine which people ought to pay more
taxes.
A) Both I and II are true. B) I is true, and II is false.
C) I is false, and II is true. D) Both I and II are false.
Answer: B
Diff: 1
Section: 1.1
6) Which of the following is a positive statement?
A) The President of the United States ought to be elected by a direct vote of the American
people rather than the Electoral College.
B) A fundamental assumption of the economic theory of consumer behavior is that
consumers always prefer having more of any good to having less of it.
C) Because many adults cannot afford to go to college, tax credits for tuition should be
introduced.
D) all of the above
E) none of the above
Answer: B
Diff: 1
Section: 1.1
7) Which of the following is a normative statement?
A) The taxes paid by the poor should be reduced in order to improve the income
distribution in the U.S.
B) State governments should not subsidize corporations by training welfare recipients.
C) Presidential candidates should not be given funds from the federal government to run
campaigns.
D) The sea otter should not be allowed to spread into Southern California coastal waters,
because it will reduce the value of fisheries.
E) all of the above
Answer: E
Diff: 1
Section: 1