12. Regarding Harry and Darby, for whom have sandwiches a normal good?
(A) only for Harry
(B) only for Darby
(C) for both Harry and Darby
(D) This cannot be determined from the given information

13. Suppose x = 1. Then it must be true that (A) Harry and Jake have the same income, which is lower than Darby's income. (B) if sandwiches and potato chips are complements for Harry, then those two goods are also complements for Jake. (C) Harry's demand curve is identical to Jake's demand curve. (D) All of the above are correct.

14. Suppose x = 1. Then the slope of the inverse market demand curve is (A) -3. (B) -1/3. (C) 1/3. (D) 3.

15. Suppose Harry, Darby, and Jake are the only demanders of sandwiches and that the market demand violates the law of demand.Then, in the table, the value of x must be (A) less than or equal to 5. (B) greater than or equal to 5. (C) greater than or equal to 7. (D) greater than or equal to 10.

16. For a monopolist, marginal revenue is (A) positive when the demand effect is greater than the supply effect. (B) positive when the monopoly effect is greater than the competitive effect. (C) negative when the price effect is greater than the output effect. (D) negative when the output effect is greater than the price effect.

17. Consider the following table for a competitive firm. What is the lowest price at which this firm would operate in the short run? (A) $3. (B) $4. (C) $5. (D) $6.

18. A study sponsored by the Food Consumer Safety Board found that consumption of irradiated tomatoes increased the health of laboratory rats. As a result of national press coverage of the report, the demand for irradiated tomatoes increased dramatically. Organic farmers were able to switch from organic production of tomatoes to irradiated production with no additional cost. Assume that the tomato market satisfies all of the assumptions of perfect competition. As a result of the increase in the demand for tomatoes, we would predict that in the short run that the (A) production of tomatoes would be at efficient scale. (B) price of tomatoes would rise. (C) total cost for existing irradiated tomato producers must rise. (D) number of firms in the market would fall as prices fall and firms exit the market.

19. As in question 18, if the increased production of irradiated tomatoes caused a rise in the marginal transportation costs of moving irradiated tomatoes to market, the (A) short-run market supply curve for irradiated tomatoes would be affected but not the long-run market supply. (B) long-run market supply curve for irradiated tomatoes would be perfectly elastic. (C) long-run market supply of irradiated tomatoes would be downward sloping. (D) long-run market supply of irradiated tomatoes would be upward sloping.

20. Abe owns a dog; the dog's barking annoys Abe's neighbor, Jenny. Suppose that the benefit of owning the dog is worth $200 to Abe and that Jenny bears a cost of $400 from the barking. Assuming Abe has the legal right to keep the dog, a possible private solution to this problem is that (A) Jenny pays Abe $150 to give the dog to his parents who live on an isolated farm. (B) Abe pays Jenny $350 for her inconvenience. (C) Jenny pays Abe $300 to give the dog to his parents who live on an isolated farm. (D) There is no private transaction that would improve this situation.

21. An internet radio broadcast is (A) excludable and rival in consumption. (B) excludable and not rival in consumption. (C) not excludable and rival in consumption. (D) not excludable and not rival in consumption.

22. Contractionary monetary policy (A) leads to disinflation and makes the short-run Phillips curve shift right. (B) leads to disinflation but leave the short-run Phillips curve unchanged. (C) leads to disinflation and makes the short-run Phillips curve shift left. (D) does not lead to disinflation but makes the short-run Phillips curve shift left.

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