If US workers can produce everything in less time than Mexican workers, it is not possible for the US to gain from trade with Mexico.

If the government imposes a binding price ceiling in a market, then the producer surplus in that market will increase.

With the resources it has, an economy can produce at any point on or outside the production possibilities frontier, but it cannot produce at points inside the frontier.

Six friends decide to meet at a Greek restaurant for dinner. They decide that each person will order an item off the menu, and they will share all dishes. They will split the cost of the final bill evenly among each of the people at the table. A Tragedy of the Commons problem is likely for each of the following reasons except

If a profit-maximizing monopolist faces a downward-sloping market demand curve, its

A benevolent social planner would prefer that the output of good x be increased from its current level if, at the current level of output of good x,

Which of the following is not one of the ways that antitrust laws promote competition?

Horizontal equity refers to a tax system in which individuals with higher incomes pay more in taxes than individuals with lower incomes.

As the number of firms in a cartel increases, the easier it is to enforce the cartel agreement.

Demand is inelastic if the price elasticity of demand is greater than 1.

Historical episodes allow economists to illustrate and evaluate current economic theories.

A price ceiling is a legal minimum on the price at which a good or service can be sold.

Suppose the government imposes a tax of 10 percent on the first $40,000 of income and 20 percent on all income above $40,000. What are the tax liability and the marginal tax rate for a person whose income is $50,000?

When a state levies a sales tax, the tax

Workers at a bicycle assembly plant currently earn the mandatory minimum wage. If the federal government increases the minimum wage by $1.00 per hour, then it is likely that the

Which of the following events would cause the price of oranges to fall?

Scenario 13-1

Korie wants to start her own business making custom furniture. She can purchase a factory that costs $400,000. Korie currently has $500,000 in the bank earning 3 percent interest per year.

Refer to Scenario 13-1. Suppose Korie purchases the factory using $200,000 of her own money and $200,000 borrowed from a bank at an interest rate of 6 percent. What is Korie's annual opportunity cost of purchasing the factory?

The minimum wage was instituted to ensure workers

All goods and services are sold in perfectly competitive markets.

Tax revenue equals the size of the tax multiplied by the quantity sold in the market after the tax is levied.

Sellers respond to a surplus by cutting their prices.

Marginal costs are costs that do not vary with the quantity of output produced.

According to the benefits principle, it is fair for people to pay taxes based on the benefits they receive from the government.

Different values are not a reason for disagreement among economists.

Marginal cost is equal to average total cost when

When buyers in a competitive market take the selling price as given, they are said to be

If a firm experiences constant returns to scale at all output levels, then its long-run average total cost curve would

Which of the following costs of publishing a book is a fixed cost?

The use of theory and observation is more difficult in economics than in sciences such as biology due to the difficulty in

A firm operating in a perfectly competitive market may earn positive, negative, or zero economic profit in the short run.

Necessities tend to have inelastic demands, whereas luxuries tend to have elastic demands.

In the circular-flow diagram, factors of production include land, labor, and capital.

The administrative burden of complying with tax laws is a cost to the government but not to taxpayers.

The best option to control the behavior of a natural monopoly is to use public ownership of the monopoly.

A binding minimum wage may not help all workers, but it does not hurt any workers.

A tax on buyers usually causes buyers to pay more for the good and sellers to receive less for the good than they did before the tax was levied.

If the demand curve is more price elastic than the supply curve, will the buyers or the sellers bear a greater burden of a tax?

Suppose a subsidy is offered to consumers of education as a means of internalizing the externalities associated with education. If the subsidy accurately reflects the external benefits of education, then the new demand curve

for education coincides with which other curve?

For a monopoly, marginal revenue is often greater than the price it charges for its good.

The difference between economic profit and accounting profit is that economic profit is calculated based on both implicit and explicit costs whereas accounting profit is calculated based on explicit costs only.

In a competitive market, firms are unable to differentiate their product from that of other producers.

An individual deciding how to allocate her limited time is dealing with both scarcity and trade-offs.

Inflation and unemployment both increase as the money supply increases.

Oligopolies produce more when they collude then when they do not.

Entry of new firms in monopolistically competitive industries can convey a positive externality on consumers because new products result in more consumer surplus. This externality is called the

What is another word for “marginal”?

When a price ceiling is binding, is the price ceiling set above or below the market equilibrium price?

What are the two types of costs that a well-designed tax policy tries to avoid or minimize?

A competitive market has two basic characteristics. What are those two characteristics?

Does a binding price ceiling result in a shortage or a surplus in the market?

Comparing firms in perfectly competitive markets to monopoly firms, which can earn economic profits in the long run?