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Economics Chapter 1 1 Rene Descartes realized that he could define the location of any point on the ceiling, relative to a corner of the room
Chapter 1 APPENDIX Multiple Choice 1. In the Cartesian coordinate system, the point on a two-dimensional graph were both variables have a value of zero, i.e., (0,0), is called the A) intercept. B) slope. C) origin. D) y-axis. Answer: C […]
Economics Chapter 10 1 When the Federal Reserve loans money to banks, the rate it charges banks with excellent credit is the
Chapter 10 Monetary Policy Multiple Choice 1. The Federal Reserve came into existence in response to A) the inflation of the Civil War. B) the depression of the 1930’s. C) the boom and bust nature of the late 19th and […]
Economics Chapter 11 1 The trends in the share of mandatory and discretionary spending suggest that the percentage attributable to
Chapter 11 Federal Spending Multiple Choice 1. Federal Spending in 2013 was A) $3.8 trillion. B) $3.8 billion. C) $38 trillion. D) $380 trillion. Answer: A 2. Prior to 2009, Federal Spending as a percentage of GDP had peaked in […]
Economics Chapter 12 1 The argument that a Balanced Budget Amendment would be “pro-cyclical” means that it would cause
Chapter 12 Federal Deficits, Surpluses, and the National Debt Multiple Choice 1. The pattern of the 1930’s through the middle 1990’s was A) deficits interspersed with a few years of surplus. B) deficits each and every year. C) surpluses each […]
Economics Chapter 13 1 Among the most important demand side factors explaining homes prices would be the size of the
Chapter 13 The Housing Bubble Multiple Choice 1. In 2006 and 2007, for the first time in decades, in many major urban areas across the U.S., A) property tax rates decreased. B) housing prices began to fall. C) the NASDAQ […]
Economics Chapter 14 1 The elements of the stimulus package adopted in 2009 that allowed states to continue to make their unemployment compensation
Chapter 14 The Recession of 2007-2009: Causes and Policy Responses Multiple Choice 1. One of the most, if not the most severe recession since World War II began in the A) fall of 2005. B) summer of 1964. C) summer […]
Economics Chapter 15 1 Using an aggregate supply-aggregate demand model, the shock associated with the bursting of the stock and real-estate bursting of the stock and real-estate
Chapter 15 Japan’s Lost Decade – Could It Happen in the the United States? Multiple Choice 1. The economy of Japan grew most rapidly during the A) 1940s. B) 1960s through the 1980s. C) 1990s. D) 2000s. Answer: B 2. […]
Economics Chapter 16 1 Which of the following entities is compelled to pay premiums to the Pension Guaranty Trust Corporation
Chapter 16 Is The Fiscal Sky Falling? An Examination of Unfunded Social Security, Medicare, and State and Local pension Liabilities Multiple Choice 1. A defined benefit pension program is one in which A) the plan that defines eligibility for retirement […]
Economics Chapter 17 1 If a country can, with a single unit of labor, produce more of both clothing and computers than another country
Chapter 17 International Trade: Does It Jeopardize American Jobs? Multiple Choice 1. In 2009, trade made up ____ percent of the U.S. economy. A) 1.3 B) 5.0 C) 11.1 D) 22.7 Answer: C 2. In 2009, the U.S. experienced a […]
Economics Chapter 17 2 The country with a comparative advantage in production of a good or service is the country with the
D) both better off. Answer: D 37. If with one unit of labor the U.S. can produce 20 units of computer software and 10 units of computer hardware and China can produce 5 units of software and 5 units of […]
Economics Chapter 18 1 Suppose an event occurs that causes people to lose faith in the ability of Europeans to pay their euro-denominated debt
Chapter 18 International Finance and Exchange Rates Multiple Choice: 1. Since 1970, U.S. investment in other countries has A) increased by more than foreign investment in the U.S. B) increased by less than foreign investment in the U.S. C) necessarily […]
Economics Chapter 2 1 Ebay does not qualify as a market for the good being sold because it is not a specific physical location
Chapter 2 Supply and Demand Multiple Choice 1) The mechanism by which buyers and sellers negotiate an exchange is called a/an A) equilibrium. B) model. C) market. D) meeting. Answer: C 2) The supply and demand model examines the how […]
Economics Chapter 2 2 The notion that when the price of the good you want rises you will buy less of it because you will find another
B) the real-balances effect. C) diminishing marginal utility. Answer: C 61) The notion that the money in your possession will buy less when the price rises is provided as the explanation for A) the substitution effect. B) the real-balances effect. […]
Economics Chapter 2 3 Of the collection of supply and demand diagrams in Figure 2.2 which one shows the result of a decrease in technology in the market for anything
A) Figure 1 B) Figure 2 C) Figure 3 D) Figure 4 Answer: A 162) Of the collection of supply and demand diagrams in Figure 2.2, which one shows the result of a decrease in the taste for a good? […]
Economics Chapter 2 4 If the price is so high that vendors find too many unsold bottles remaining in inventory, they might dispose of their excess inventory by
A) Figure 1 B) Figure 2 C) Figure 3 D) Figure 4 Answer: D 174) Of the collection of supply and demand diagrams in Figure 2.2, which one shows the result of an increase in the price of an input […]
Economics Chapter 20 1 This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution inany manner
Chapter 20 Economic Growth and Development Multiple Choice 1. A country’s real GDP can increase for brief periods of time A) only if its aggregate demand increases. B) only if its aggregate supply increases. C) if either its aggregate demand […]
Economics Chapter 21 1 Which of the following reasons for making drugs sales illegal do economists generally see as potentially legitimate, but beyond their area of expertise
Chapter 21 The Line Between Legal and Illegal Goods Multiple Choice 1. In Figure 21.1, which area represents total value to the drug addict? A) 0ACQ* B) BP*C C) 0BCQ* D) 0P*CQ* Answer: A 2. In Figure 21.1, which area […]
Economics Chapter 22 1 Economists assume that early in the process of cleaning a dirty environment there are relatively
Chapter 22 Natural Resources, the Environment, and Climate Change Multiple Choice 1. The wood in a forest would be considered a A) limited natural resource. B) renewable natural resource. C) sequestered natural resource. D) sustainable natural resource. Answer: B 2. […]
Economics Chapter 23 1 If a health economist is worried that a system of health insurance will break down because those with health insurance will be less likely
Chapter 23 Health Care Multiple Choice 1. The U.S. spends approximately ____ of GDP on health care. A) 1% (1/100th) B) 16% (1/6th) C) 25% (1/4th) D) 33% (1/3rd) Answer: B 2. The government spends ___ of all health care […]
Economics Chapter 24 1 To be eligible for Medicaid, children under nineteen must live in a household with family income under
Chapter 24 Government-Provided Health Insurance: Medicaid, Medicare, and the Child Health Insurance Program Multiple Choice 1. Medicaid is A) a private health insurance program for government employees. B) a private health insurance program for the poor. C) a public health […]
Economics Chapter 25 1 The reason why a cure to a disease such as AIDS would have less elastic demand than a vaccine at every price is that
Chapter 25 The Economics of Prescription Drugs Multiple Choice 1. In 2009 prescription drugs account for approximately ____ of total health care spending A) 2.5% B) 10% C) 25% D) 50% Answer: B 2. A patent is a legal device […]
Economics Chapter 26 1 Written and recorded works, ideas, formulas and other creative intangible property that are owned by an individual that are owned by an individual
Chapter 26 So You Want to Be a Lawyer: Economics and the Law Multiple Choice 1. Land owned by an individual or a group of individuals is an example of the economic concept of A) physical capital. B) human capital. […]
Economics Chapter 27 1 Under the rational criminal model, a decrease in the legal income producing opportunities available to a population will
Chapter 27 The Economics of Crime Multiple Choice 1. Crime victims in the U.S. are disproportionately A) whites. B) minorities. C) Asian-Americans. D) legal immigrants. Answer: B 2. Crime in the U.S. is committed disproportionately by A) legal immigrants. B) […]
Economics Chapter 28 1 Doing something that is not necessarily discriminatory on its face, but impacts some groups more negatively than others is called
Chapter 28 The Economics of Race and Sex Discrimination Multiple Choice 1. The labor force participation rate for women 16 and over has A) increased from 38% in the 1960s to 57% today. B) increased from 8% in the 1960s […]
Economics Chapter 3 1 If the price rises and the total amount consumers spend on the good falls to zero, then demand must be
Chapter 3 The Concept of Elasticity and Consumer and Producer Surplus Multiple Choice 1) In Figure 3.1, if demand is considered perfectly elastic, then the appropriate figure is? A) Figure 1 B) Figure 2 C) Figure 3 D) Figure 4 […]
Economics Chapter 3 2 When looking at the impact of a change in trade policy economists use consumer and producer surplus to look at the winners and losers
A) there are many substitutes for eggs as breakfast food. B) the demand for food is inelastic. C) the supply of eggs is inelastic. D) they are so inexpensive. Answer: D 73) Suppose a new law makes illegal the sale […]
Economics Chapter 30 1 A justification for government price supports on agricultural that economists generally accept as potentially legitimate is
Chapter 30 Farm Policy Multiple Choice 1. Between 1974 and 2006 prices for food commodities A) rose far faster than inflation. B) rose far slower than inflation. C) rose at about the overall rate of inflation. D) Remained largely constant […]
Economics Chapter 31 1 The “elasticity” rebuttal to the traditional analysis of the minimum wage, stating that employers’ demand for workers is unresponsive to wage changes
Chapter 31 Minimum Wage Multiple Choice 1. The lowest wage that may be legally paid for an hour’s work is called the A) just wage. B) minimum wage. C) maximum wage. D) living wage. Answer: B 2. A wage sufficient […]
Economics Chapter 32 1 Although it is illegal in some locations to re-sell a $100 ticket to an event for $200, it is seldom illegal
Chapter 32 Ticket Brokers and Ticket Scalping Multiple Choice 1. The substantive economic difference between ticket scalping and ticket brokering is that A) scalping is more efficient. B) brokering is more efficient. C) scalping is immoral and brokering is not. […]
Economics Chapter 33 1 Though there is no tuition to public elementary and secondary schools, economists do not say that it is free because
Chapter 33 The Economics of K-12 Education Multiple Choice 1. The form of capital through which education increases productivity is A) physical capital. B) human capital. C) human principal. D) brain capital. Answer: B 2. In determining whether a further […]
Economics Chapter 34 1 Commercialization of the internet has helped to increase the price of new textbooks by facilitating
Chapter 34 College and University Education: Why Is It So Expensive? Multiple Choice 1. In 2012, more than ________ was spent to educate _________ college students. A) $223 million, 152 million B) $315 billion, 52 million C) $471 billion, 21 […]
Economics Chapter 35 1 The percentage of people in households with income under that which is sufficient to provide a family with a minimally adequate standard of living is the
Chapter 35 Poverty and Welfare Multiple Choice 1. The poverty line is A) that level of income just sufficient to provide a family with a minimally adequate standard of living. B) the percentage of households with income insufficient to provide […]
Economics Chapter 36 1 If you overhear a group of people talking about their plans to save for their retirement and one of them says that it causes them to save less because
Chapter 36 Social Security Multiple Choice 1. Social Security was enacted in the A) 1870’s. B) 1910’s. C) 1930’s. D) 1960’s. Answer: C 2. Social Security was intended to A) cover all of the income necessary for retirement. B) provide […]
Economics Chapter 37 1 Simply indexing the alternative minimum tax for inflation and making no other adjustments would
Chapter 37 Personal Income Taxes Multiple Choice 1. In 2013, personal income taxes made up _____ of federal government revenues. A) much more than a quarter B) much less than a quarter C) just more than half D) just less […]
Economics Chapter 38 1 At the current pace of oil consumption and given what oil is known to exist and what oil is expected to be discovered, oil reserves are likely to
Chapter 38 Energy Prices Multiple Choice 1. Proven oil reserves in the world amount to A) 1470 barrels. B) 1470 million barrels. C) 1470 billion barrels. D) 1470 trillion barrels. Answer: C 2. World oil consumption runs approximately A) 89 […]
Economics Chapter 39 1 The largest metropolitan area in the United States that has no major league baseball, basketball, football, or hockey franchise is
Chapter 39 If We Build It, Will They Come? And Other Sports Questions Multiple Choice 1. Tampa-St. Petersburg built new facilities to attract a sports franchise, but got a team only after waiting A) two years. B) four years. C) […]
Economics Chapter 4 1 When workers subdivide the tasks of a job in such a way so as to become more efficient economists refer to this as
Chapter 4 Firm Production, Cost, and Revenue Multiple Choice 1) A key assumption about the way firms behave is that they A) minimize costs. B) maximize profit. C) maximize market share. D) maximize revenue. Answer: B 2) A graph that […]
Economics Chapter 4 2 If the market price for a good produced by a price taking firm is $5, the firm’s total revenue is
A) $0. B) $110. C) $115. D) $125. Answer: C 73) Refer to Table 4.1, Box H should be filled with A) $0. B) $110. C) $125. D) $150. Answer: C 74) Refer to Table 4.1, Box I should be […]
Economics Chapter 4 3 The loss the firm makes from shutting down (its TFC) is greater than the loss they make as a result of producing
B) parabolic. C) downward sloping. D) an upward sloping line beginning at the origin and having a slope of 6 Answer: D 99) If the market price for a good produced by a price taking firm is $7, the firm’s […]
Economics Chapter 40 1 The stock index that includes the stock prices of a disproportionate number of technology companies
Chapter 40 The Stock Market and Crashes 1. From 1982 until 2000, stock prices rose dramatically. As measured by the Dow Jones Industrial Average, stocks went from under _____ to above _______ during this period. A) 1000, 11000 B) 200, […]
Economics Chapter 41 1 If there are powerful unions in a labor market, the use of the supply and demand model to analyze labor markets
Chapter 41 Unions Multiple Choice 1. The percentage of workers represented by unions reached its peak in the A) 1940’s. B) 1970’s. C) 1980’s. D) 1990’s. Answer: B 2. The peak of union representation in the workforce was A) 50% […]
Economics Chapter 41 2 A labor system where by a limited number of workers can be certified to work in a particular field but are of higher ability
A) the kinked shape of the new supply curve. B) the shift in old supply curve. C) the slope of the old demand curve. D) the increase in the demand curve. Answer: D 31. A labor system whereby a limited […]
Economics Chapter 42 1 Theoretically, a firm can enter an industry with low prices, drive out their competition and take advantage of their newly achieved
Chapter 42 Walmart: Always Low Prices (and Low Wages) —Always Multiple Choice 1. Walmart accounts for ____ of US GDP. A) less than 1% B) 2% C) 10% D) 15% Answer: B 2. In very small towns where there is […]
Economics Chapter 43 1 Suppose you are debating a proponent of casino gambling and they note that casinos themselves pay significant state and local taxes
Chapter 43 The Economic Impact of Casino Gambling Multiple Choice 1. The perception that casinos have a dramatic impact on a local economy is A) without any foundation whatsoever. B) reasonable, given their size but overstated given the degree of […]
Economics Chapter 5 1 When firms are in perfect competition the result is that firms charge a price that is always equal to its
Chapter 5 Perfect Competition, Monopoly and Economic versus Normal Profit Multiple Choice 1. In Figure 5.1, what output would a perfect competitor produce? A) Q1 B) Q2 C) Q3 D) Q4 Answer: B 2. In Figure 5.1, what profit would […]
Economics Chapter 5 2 In a diagram of perfect competition, the marginal revenue line moves up and down when there is exit and entry, respectively
A) MR1 B) MR2 C) MR3 D) MR4 Answer: D 49. In Figure 5.7, assuming perfect competition and at MR1 there will be Page 15 © 2015 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not […]
Economics Chapter 6 1 How does GDP account for something that was produced for sale in one year and sold in the next year
Chapter 6 Every Macroeconomic Word You Ever Heard: Gross Domestic Product, Inflation, Unemployment, Recession and Depression Multiple Choice 1. The reason that only final sales are counted in GDP is A) to avoid double counting goods that are sold so […]
Economics Chapter 6 2 The reason that the expected inflation rate matters in determining the impact on borrowers or lenders is that
71. A reason given why the CPI overstates the cost of living is it A) only measures the effects of inflation on the poor. B) makes no attempt to ascertain what average people buy. C) makes no attempt to update […]
Economics Chapter 6 3 If the unemployment rate falls because the number of people not working but searching for work falls, economists would attribute this to the
Answer: D 121. The period of growth from a trough that brings Real GDP back to its previous peak is called a A) recession. B) recovery. C) expansion. Answer: B 122. The period of growth from the level of the […]
Economics Chapter 7 1 Suppose there is a decrease in the confidence that workers have in their future employment and income
Chapter 7 Interest Rates and Present Value Multiple Choice 1. The percentage of a balance that a borrower must pay a lender is called the A) inflation rate. B) usury rate. C) interest rate. D) monetary index. Answer: C 2. […]
Economics Chapter 7 2 The reward investors receive for accepting the probability that they will not be fully paid as agreed or as anticipated is called the
A) $5000. B) $5050 to be received two years from now. C) $5075 to be received three years from now. D) $5500 to be received ten years from now. Answer: D 50. The present value of a $1000 payment received […]
Economics Chapter 8 1 The interest rate effect, the real balance effect and the foreign purchases effect suggests that the aggregate demand curve is
Chapter 8 Aggregate Demand and Aggregate Supply Multiple Choice 1. The interest rate effect, the real balance effect and the foreign purchases effect suggests that the aggregate demand curve is A) downward sloping. B) horizontal. C) vertical. D) shaped as […]
Economics Chapter 8 2 Which of the following will increase macroeconomic equilibrium real gross domestic product
B) Box 2 C) Box 3 D) Box 4 Answer: C 58. Referring to the Aggregate Demand – Aggregate Supply diagram in Figure 8.1, which box should be filled with the label AD for the aggregate demand curve? A) Box […]
Economics Chapter 9 1 If you were to use an Aggregate Supply Aggregate Demand diagram to model nondiscretionary and discretionary fiscal
Chapter 9 Fiscal Policy Multiple Choice 1. Fiscal Policy is controlled by A) the Federal Reserve Board. B) Congress and the President. C) the Supreme Court. D) private banks. Answer: B 2. The purpose of fiscal policy is to A) […]