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CHAPTER 2
Modeling the Market Process: A Review of the Basics
TRUE-FALSE
1. Producers’ decisions are modeled through the demand function, and consumers’ decisions
are captured by the supply function.
Answer: F
Answer: T
Answer: F
4. The demand price represents the consumer’s willingness to pay for the good.
Answer: T
5. Conventionally, the graph of demand uses the inverse form of the demand function, which
is P = f(QD).
Answer: T
6. Market demand for a private good is found by vertically summing individual demands.
Answer: F
7. The supply curve is positively sloped because marginal cost (MC) rises with output (Q).
Answer: T
Answer: F
Answer: T
10. If the price level is such that quantity supplied exceeds quantity demanded, there is excess
demand, or a shortage in the market.
Answer: F
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Answer: F
12. Assume that the marginal revenue associated with the 12th unit of output is $25 and the
marginal cost is $14. As a result, the firm should produce more, because the marginal profit
at that output level is greater than zero.
Answer: T
13. When a profit-maximizing firm increases output to Q = 50, its MR = $100 and MC = $124,
meaning that total profit falls by $24, so the firm should contract production.
Answer: T
Answer: F
15. The demand faced by the perfectly competitive firm is perfectly elastic, meaning that price
and marginal revenue are equal.
Answer: T
16. If a market is perfectly competitive, allocative efficiency is achieved at the point where the
profit-maximizing firm produces.
Answer: T
17. If a firm maximizes output from a stock of available resources, it must be achieving
allocative efficiency.
Answer: F
18. Consumer surplus is the net gain to the firm measured as the excess of price over the
marginal cost of production summed over all units sold.
Answer: F
19. If a consumer is willing to pay more for a good than he/she actually must pay, he/she
enjoys a gain for that unit of output known as consumer surplus.
Answer: T
20. The sum of the change in consumer surplus plus the change in producer surplus is called
deadweight loss to society.
Answer: T
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MULTIPLE CHOICE
Answer: a.
Answer: d.
a. rivalry in consumption
b. benefits of consumption are nonexcludable
c. consumption of the good precludes consumption by another individual
d. the benefits to a consumer of consuming the good are exclusive to that individual
Answer: b.
Answer: e.
Answer: a.
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The Project Gutenberg eBook of Greece and
Babylon
This ebook is for the use of anyone anywhere in the United
States and most other parts of the world at no cost and with
almost no restrictions whatsoever. You may copy it, give it away
or re-use it under the terms of the Project Gutenberg License
included with this ebook or online at www.gutenberg.org. If you
are not located in the United States, you will have to check the
laws of the country where you are located before using this
eBook.
Language: English
BY
LEWIS R. FARNELL, D.Litt., M.A.
FELLOW OF EXETER COLLEGE, OXFORD
AUTHOR OF
“CULTS OF THE GREEK STATES,” “EVOLUTION OF RELIGION,”
“HIGHER ASPECTS OF GREEK RELIGION” (HIBBERT LECTURES)
CHAPTER II.
Statement of the Problem and the Evidence.
CHAPTER III.
Morphology of the Compared Religions.
CHAPTER IV.
Anthropomorphism and Theriomorphism in Anatolia and the
Mediterranean.
CHAPTER V.
Predominance of the Goddess.
CHAPTER VI.
The Deities as Nature-Powers.
CHAPTER VII.
The Deities as Social-Powers.
CHAPTER VIII.
Religion and Morality.
CHAPTER IX.
Purity a Divine Attribute.
CHAPTER X.
Concept of Divine Power and Ancient Cosmogonies.
CHAPTER XI.
The Religious Temperament of the Eastern and Western
Peoples.
The relation of the individual to the deity more intimate in
Mesopotamia than in Greece—The religious temper more
ecstatic, more prone to self-abasement, sentimentality, rapture
—Humility and the fear of God ethical virtues in Babylonia—The
child named after the god in both societies—In some Semitic
communities the deity takes a title from the worshipper—
Fanaticism in Mesopotamian religion, entire absence of it in the
Hellenic
CHAPTER XII.
Eschatologic Ideas of East and West.
CHAPTER XIII.
Comparison of the Ritual.
CHAPTER XIV.
Summary of Results.
INDEX OF NAMES AND SUBJECTS.
ENDNOTES.
GREECE AND BABYLON.
CHAPTER I.
Inaugural Lecture.