Question

1.A price-taker faces a demand curve that is:

horizontal at the market price.

vertical at the market

price.

downward sloping.

upward sloping.

2.A situation is efficient if it is:

possible to find a transaction that will make at least one person better off, even if others are made worse off.

not possible to find a transaction that will make at least one person better off without harming others.

possible to find a transaction that will make everyone better off.

possible to find a transaction that will make at least one person better off without harming others.

3.Even when a firm produces the level of output at which price equals marginal cost, it should shut down if its total revenue is less than its:

variable cost.

fixed cost.

total cost.

marginal cost.

4.John is trying to decide how to divide his time between his job as a stocker in the local grocery store, which pays $7 per hour for as many hours as he chooses to work, and cleaning windows for the businesses downtown. He makes $2 for every window he cleans. John is indifferent between the two tasks, and the number of windows he can clean depends on how many hours he spends cleaning in a day, as shown in the accompanying table.

Economics