Instructor's Solutions Manual –
Economics Today (21st Edition, Miller) |
Complete, Verified Answers
(Intro Micro + Intro Macro + Basic
Finance + Markets + Policy)
1–50: Microeconomics Basics
1. Scarcity means:
A) Resources are unlimited
B) Wants are limited
C) Resources are limited relative to wants
D) Prices never change
Answer: C
2. Opportunity cost is:
A) The money spent only
B) The next best alternative forgone
C) A sunk cost
D) The result of specialization
Answer: B
3. A market is:
A) Only a physical store
B) A place where buyers and sellers interact
C) Only online platforms
D) Only government exchanges
Answer: B
4. Demand slopes downward because of:
A) Law of diminishing marginal utility
B) Government policy
C) Fixed supply
, D) Rising costs
Answer: A
5. A shift right in demand means:
A) Quantity demanded falls
B) Demand increases
C) Supply increases
D) Price must fall
Answer: B
6. A price ceiling set below equilibrium causes:
A) Surplus
B) Shortage
C) Market clearing
D) No effect
Answer: B
7. A normal good is one where:
A) Income ↑ → Demand ↑
B) Income ↑ → Demand ↓
C) Price ↓ → Demand ↓
D) Quantity supplied ↓
Answer: A
8. A substitute good example:
A) Tea and coffee
B) Shoes and socks
C) Cars and roads
D) Keys and locks
Answer: A
9. Marginal cost is:
A) Cost of all units produced
B) Cost of producing one additional unit
C) Fixed cost divided by output
D) Revenue per unit
Answer: B
10.Perfect competition firms are:
A) Price makers
B) Price takers
C) Monopolies
D) Mergers
, Answer: B
11.A monopoly causes:
A) Lower prices
B) Higher output
C) Reduced consumer surplus
D) Perfect efficiency
Answer: C
12.Elastic demand means:
A) Price ↑ → TR ↑
B) Price ↑ → TR ↓
C) Price changes have no effect
D) Q stays constant
Answer: B
13.Inelastic goods include:
A) Luxury cars
B) Designer clothing
C) Salt
D) Sports tickets
Answer: C
14.Fixed cost example:
A) Electricity
B) Raw materials
C) Rent
D) Packaging
Answer: C
15.Variable cost example:
A) Loan payments
B) Factory lease
C) Flour used in baking
D) Building permit
Answer: C
16.Profit equals:
A) Price − Cost
B) TR − TC
C) Wage − Rent
D) Capital × Interest
Answer: B
, 17.Long run means:
A) No firm exists
B) All costs are variable
C) All costs are fixed
D) Output cannot change
Answer: B
18.Barriers to entry create:
A) Perfect competition
B) Market power
C) Zero profits
D) Elastic supply
Answer: B
19.Oligopoly is characterized by:
A) Many small firms
B) Government ownership
C) Interdependent firms
D) No competition
Answer: C
20.Cartels attempt to:
A) Maximize output
B) Raise market competition
C) Fix prices
D) Increase consumer surplus
Answer: C
21.Price discrimination works when:
A) Markets are identical
B) Consumers are identical
C) Markets can be segmented
D) Costs are zero
Answer: C
22.A public good is:
A) Excludable and rival
B) Non-excludable and non-rival
C) Invisible and costly
D) Always government-produced
Answer: B
23.Externalities occur when:
A) Markets always clear
Economics Today (21st Edition, Miller) |
Complete, Verified Answers
(Intro Micro + Intro Macro + Basic
Finance + Markets + Policy)
1–50: Microeconomics Basics
1. Scarcity means:
A) Resources are unlimited
B) Wants are limited
C) Resources are limited relative to wants
D) Prices never change
Answer: C
2. Opportunity cost is:
A) The money spent only
B) The next best alternative forgone
C) A sunk cost
D) The result of specialization
Answer: B
3. A market is:
A) Only a physical store
B) A place where buyers and sellers interact
C) Only online platforms
D) Only government exchanges
Answer: B
4. Demand slopes downward because of:
A) Law of diminishing marginal utility
B) Government policy
C) Fixed supply
, D) Rising costs
Answer: A
5. A shift right in demand means:
A) Quantity demanded falls
B) Demand increases
C) Supply increases
D) Price must fall
Answer: B
6. A price ceiling set below equilibrium causes:
A) Surplus
B) Shortage
C) Market clearing
D) No effect
Answer: B
7. A normal good is one where:
A) Income ↑ → Demand ↑
B) Income ↑ → Demand ↓
C) Price ↓ → Demand ↓
D) Quantity supplied ↓
Answer: A
8. A substitute good example:
A) Tea and coffee
B) Shoes and socks
C) Cars and roads
D) Keys and locks
Answer: A
9. Marginal cost is:
A) Cost of all units produced
B) Cost of producing one additional unit
C) Fixed cost divided by output
D) Revenue per unit
Answer: B
10.Perfect competition firms are:
A) Price makers
B) Price takers
C) Monopolies
D) Mergers
, Answer: B
11.A monopoly causes:
A) Lower prices
B) Higher output
C) Reduced consumer surplus
D) Perfect efficiency
Answer: C
12.Elastic demand means:
A) Price ↑ → TR ↑
B) Price ↑ → TR ↓
C) Price changes have no effect
D) Q stays constant
Answer: B
13.Inelastic goods include:
A) Luxury cars
B) Designer clothing
C) Salt
D) Sports tickets
Answer: C
14.Fixed cost example:
A) Electricity
B) Raw materials
C) Rent
D) Packaging
Answer: C
15.Variable cost example:
A) Loan payments
B) Factory lease
C) Flour used in baking
D) Building permit
Answer: C
16.Profit equals:
A) Price − Cost
B) TR − TC
C) Wage − Rent
D) Capital × Interest
Answer: B
, 17.Long run means:
A) No firm exists
B) All costs are variable
C) All costs are fixed
D) Output cannot change
Answer: B
18.Barriers to entry create:
A) Perfect competition
B) Market power
C) Zero profits
D) Elastic supply
Answer: B
19.Oligopoly is characterized by:
A) Many small firms
B) Government ownership
C) Interdependent firms
D) No competition
Answer: C
20.Cartels attempt to:
A) Maximize output
B) Raise market competition
C) Fix prices
D) Increase consumer surplus
Answer: C
21.Price discrimination works when:
A) Markets are identical
B) Consumers are identical
C) Markets can be segmented
D) Costs are zero
Answer: C
22.A public good is:
A) Excludable and rival
B) Non-excludable and non-rival
C) Invisible and costly
D) Always government-produced
Answer: B
23.Externalities occur when:
A) Markets always clear
