Lumber prices hover below record in wild trading as demand roars. Potanina said she received around $40 million following Russian divorce proceedings. A publisher faces the following demand schedule for the next novel from one of its popular authors: Price Quantity Demanded $100 0 $90 100,000 $80 200,000 $70 300,000 $60 400,000 $50 500,000 $40 600,000 $30 700,000 $20 800,000 $10 900,000 $0 1,000,000 1.

A Publisher Faces The Following Demand Schedule For The Next Novel
A Publisher Faces The Following Demand Schedule For The Next Novel
A Publisher Faces The Following Demand Schedule
A Publisher Faces The Following Demand Schedule Slader

1. The adage, 'There is no such thing as a free lunch,' means

a.	even people on welfare have to pay for food.
b.	the cost of living is always increasing.
c.	people face tradeoffs.
d.	all costs are included in the price of a product.

2. The adage, 'There is no such thing as a free lunch,' is used to illustrate the principle that

a.	goods are scarce.
b.	people face tradeoffs.
c.	income must be earned.
d.	households face many decisions.

3.Which of the following statements best represents the principle represented by the adage, 'There is no such thing as a free lunch'?

a.	Melissa can attend the concert only if she takes her sister with her.
b.	Greg is hungry and homeless.
c.	Brian must repair the tire on his bike before he can ride it to class.
d.	Kendra must decide between going to Colorado or Cancun for spring break.

4. The principle that 'people face tradeoffs' applies to

a.	individuals.
b.	families.
c.	societies.
d.	All of the above are correct.

5. Sophia is planning her activities for a hot summer day. She would like to go to the local swimming pool and see the latest blockbuster movie, but because she can only get tickets to the movie for the same time that the pool is open she can only choose one activity. This illustrates the basic principle that

a.	people respond to incentives.
b.	rational people think at the margin.
c.	people face tradeoffs.
d.	improvements in efficiency sometimes come at the expense of equality.

6. A tradeoff exists between a clean environment and a higher level of income in that

a.	studies show that individuals with higher levels of income pollute less than low-income individuals.
b.	efforts to reduce pollution typically are not completely successful.
c.	laws that reduce pollution raise costs of production and reduce incomes.
d.	employing individuals to clean up pollution causes increases in employment and income.

7. Economists use the word equality to describe a situation in which

a.	each member of society has the same income.
b.	each member of society has access to abundant quantities of goods and services, regardless of his or her income.
c.	society is getting the maximum benefits from its scarce resources.
d.	society's resources are used efficiently.

8. Efficiency means that

a.	society is conserving resources in order to save them for the future.
b.	society's goods and services are distributed equally among society's members.
c.	society's goods and services are distributed fairly, though not necessarily equally, among society's members.
d.	society is getting the maximum benefits from its scarce resources.

9. Market failure can be caused by

a.	low consumer demand.
b.	equilibrium prices.
c.	externalities and market power.
d.	high prices and foreign competition.

10. The term 'market failure'

a.	means the same thing as 'market power.'
b.	refers to the dissolution of a market when firms decide to quit producing a certain product.
c.	refers to the failure of a market to produce an efficient allocation of resources.
d.	refers to government's failure to enforce the property rights of households or firms that participate in a certain market.

11. Production is efficient if the economy is producing at a point

a.	on the production possibilities frontier.
b.	outside the production possibilities frontier.
c.	on or inside the production possibilities frontier.
d.	inside the production possibilities frontier.

12. Unemployment would cause an economy to

a.	produce inside its production possibilities frontier.
b.	produce on its production possibilities frontier.
c.	produce outside its production possibilities frontier.
d.	experience an inward shift of its production possibilities frontier.

13. The production possibilities frontier provides an illustration of the principle that

a.	trade can make everyone better off.
b.	governments can sometimes improve market outcomes.
c.	people face trade-offs.
d.	people respond to incentives.

14. Which of the following concepts cannot be illustrated by the production possibilities frontier?

a.	efficiency
b.	opportunity cost
c.	equality
d.	trade-offs

15. When a production possibilities frontier is bowed outward, the opportunity cost of producing an additional unit of a good

a.	increases as more of the good is produced.
b.	decreases as more of the good is produced.
c.	does not change as more of the good is produced.
d.	may increase, decrease, or not change as more of the good is produced.

16. Refer to Table 2-2. What is the opportunity cost to Batterland of increasing the production of pancakes from 150 to 300?

a.	75 waffles
b.	150 waffles
c.	250 waffles
d.	325 waffles

Figure 2-3

17. Refer to Figure 2-3. At which point is this economy producing its maximum possible quantity of tubas?

a.	J
b.	L
c.	M
d.	N

18. Refer to Figure 2-3. This economy has the ability to produce at which point(s)?

a.	J, K, M, N
b.	K, M, N
c.	K, N
d.	M

19. Refer to Figure 2-3. This economy cannot produce at which point(s)?

a.	J
b.	J, L
c.	J, L, M
d.	L

20. Refer to Figure 2-3<

A Publisher Faces The Following Demand Schedule