9. The federal government is concerned about the negative effects of cigarette smoking in the United States. Suppose Congress is considering two plans. One plan would limit the production of cigarettes. The other would require manufacturers to include graphic photos on cigarette packages of people suffering cancer's effects. Which of the following statements is true?
(A) Both programs would increase the price of cigarettes.
(B) Both programs would reduce the quantity of cigarettes sold.
(C) Both programs would decrease revenues for cigarette manufacturers.
(D) All of the above are correct.

10. Assume for the United States that the opportunity cost of each airplane is 50 cars. Which of these pairs of points could be on the United States' production possibilities frontier? (A) (200 airplanes, 5,000 cars) and (150 airplanes, 4,000 cars) (B) (200 airplanes, 12,500 cars) and (150 airplanes, 15,000 cars) (C) (300 airplanes, 15,000 cars) and (200 airplanes, 25,000 cars) (D) (300 airplanes, 25,000 cars) and (200 airplanes, 40,000 cars)

11. Consider Frank's decision to go to college. If he goes to college, he will spend $21,000 on tuition, $11,000 on room and board, and $1,800 on books. If he does not go to college, he will earn $16,000 working in a store and spend $7,200 on room and board. Frank's total cost of going to college is (A) $33,800. (B) $42,600. (C) $49,800. (D) $57,000

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.

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