13. An indifference diagram has movies on the vertical axis and sodas on the horizontal axis. As the consumption of sodas increases, the marginal rate of substitution ________ and the indifference curve becomes ________.
(A) falls; flatter
(B) falls; steeper
(C)rises; flatter
(D) rises; steeper

14. The short-run supply curve for a perfectly competitive firm is its(A) marginal cost curve above the horizontal axis.(B) marginal cost curve above its shutdown point.(C)average cost curve above the horizontal axis.(D) average cost curve above its shutdown point.

15. Which market type has characteristics as follows: large number of firms, differentiatedproduct?(A) perfect competition (B) monopoly(C)oligopoly (D) monopolistic competition

16. The above (incomplete) table provides information about the relationships between labor and various product measures. The amount of labor that maximizes the marginal product of labor is(A) 2 units of labor. (B) 3 units of labor. (C)4 units of labor. (D) 5 units of labor.

17. In perfect competition, at al levels of output the market price is the same as the firms ________.(A) marginal revenue (B) normal profit(C)average variable cost (D) fixed cost

18. Suppose some firms in a perfectly competitive industry are incurring an economic loss. As a result,(A) all the firms will eventually incur an economic loss.(B) some firms will leave the industry and the remaining firms quantity will decrease. (C)some firms will leave the industry and the price of the good will rise.(D) the total industry economic profit must equal $0.

19. Which of the following statements is FALSE?(A) In the short run, a monopolist might operate even though it is incurring an economic loss but in the short run a perfectly competitive firm always shuts down if it is incurring an economic loss.(B) A monopoly can earn an economic profit in the long run but a perfectly competitive firm cannot.(C)A monopoly can set its price while a perfectly competitive firm cannot.(D) A monopoly is protected by barriers to entry while a perfectly competitive firm is not.

20. In the long-run, a single-price monopolist will(A) not be able to continue to earn economic profits and will earn a normal profit.(B) be able to continue to earn economic profits as long as the market remains a monopoly.(C)end up being regulated by the government because it is making short-run economicprofits.

21. Which of the following expenditures associated with the production of a new high-performance SUV will be directly included in GDP?(A) the sale of bonds to finance the construction of the assembly plant(B) the purchase of used welding robots to assemble to vehicles(C)the purchase of new tires to be installed on the new vehicles(D) the purchase of new machine tools to manufacture the engines

22. From the data in the above table, GDP equals(A) $1,120. (B) $1,280.(C)$1,290. (D) $1,360.

23. When an individual is frictionally unemployed, the unemployment arises in part from(A) a short-term elimination of jobs because of a slowdown in business activity.(B) individuals searching for appropriate employment.(C)the permanent elimination of jobs because of a change in the structure of the economy.(D) a reduction in the overall demand for workers' skills.

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