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Economics Chapter 1 1 According to the classical economists, the amount that businesses plan to invest will always be equal to the amount that households desire to save because
Introduction to Economic Reasoning, 8e (Rohlf) Web Chapter: Keynes and the Classical Economists: The Early Debate on Policy Activism 1) The aggregate supply curve implied by the classical model of the economy is A) upward sloping. B) downward sloping. C) […]
Economics Chapter 1 1 In the Keynesian model, if households and businesses attempt to purchase more output than the economy is capable of producing
Introduction to Economic Reasoning, 8e (Rohlf) Web Chapter: The Keynesian Total Expenditures Model 1) According to the Keynesian model, the primary determinant of the level of equilibrium output is A) the level of total income. B) the level of total […]
Economics Chapter 1 1 Suppose an economy is operating at a point on its production possibilities curve showing clothing and food. If the economy desires to produce additional clothing
Introduction to Economic Reasoning, 8e (Rohlf) Chapter 1: The Study of Economics 1) Economics is the study of how to use A) limited resources to fully satisfy unlimited wants. B) unlimited resources to satisfy unlimited wants as fully as possible. […]
Economics Chapter 1 2 Based on the figure above, if the economy is operating at point B, the opportunity cost of producing another one million bushels of wheat is
11) The production possibilities curve slopes downward because A) some resources are better suited to the production of one product than another. B) economic resources are limited. C) economic wants are unlimited. D) All of the above Answer: B Question […]
Economics Chapter 10 1 Which of the following is least likely to suffer a reduction in real income during a period of unanticipated inflation
Introduction to Economic Reasoning, 8e (Rohlf) Chapter 10: Measuring Aggregate Performance 1) The difference between microeconomics and macroeconomics is that A) microeconomics involves normative issues, while macroeconomics does not. B) microeconomics studies the individual parts of the economy, while macroeconomics […]
Economics Chapter 11 1 Suppose the economy suffers an adverse supply shock. If the Federal Reserve responds by increasing the money supply, the short-run result will be
Introduction to Economic Reasoning, 8e (Rohlf) Chapter 11: Aggregate Demand and Supply: The Model of the Self-Correcting Economy 1) The aggregate demand curve is A) horizontal because when there is substantial unemployment, the price level tends to remain stable. B) […]
Economics Chapter 11 2 Suppose that the value of the average family home increased dramatically. This change would tend to shift the
11) Suppose that the value of the average family home increased dramatically. This change would tend to shift the A) aggregate demand curve to the left, lowering real GDP and the price level. B) aggregate supply curve to the right, […]
Economics Chapter 12 1 According to activists, if the economy were experiencing unemployment, which of the following would be most appropriate
Introduction to Economic Reasoning, 8e (Rohlf) Chapter 12: Fiscal Policy 1) In 2010, the federal government planned to spend approximately A) $170 million. B) $5.6 billion. C) $550 billion. D) $3.6 trillion. E) $22 trillion. Answer: D Question Status: Revised […]
Economics Chapter 12 2 The amount paid out as unemployment compensation automatically increases when the jobless rate begins to rise.
13) A legitimate concern regarding the national debt relates to A) the higher taxes that are necessary to make the interest payments on the debt. B) our inability to pay off such a large sum. C) the fraction of the […]
Economics Chapter 13 1 Money makes it possible to easily compare the prices of different products with one another. In this capacity, money is functioning as a
Introduction to Economic Reasoning, 8e (Rohlf) Chapter 13: Money, Banking, and Monetary Policy 1) Which of the following represents the basic functions of money? A) standard of value, source of status, and medium of exchange B) source of status, unit […]
Economics Chapter 13 2 When the Federal Reserve buys government securities in the open market, the lending ability of banks
requirement is 20 percent, how much additional money can the banking system create? A) $20 million B) $50 million C) $100 million D) $200 million Answer: C Question Status: Previous Edition 10) Which of the following is not a function […]
Economics Chapter 14 1 Supporters to the theory of rational expectations believe that Keynesian monetary and fiscal policies for combating unemployment
Introduction to Economic Reasoning, 8e (Rohlf) Chapter 14: The Activist-Nonactivist Debate 1) All of the following schools of economists would be described as nonactivists EXCEPT A) monetarist economists. B) classical economists. C) rational expectations theorists. D) Keynesian economists. E) new […]
Economics Chapter 15 1 When income tax rates are reduced, households tend to spend part of the additional take-home pay they receive
Introduction to Economic Reasoning, 8e (Rohlf) Chapter 15: Economic Growth: The Importance of the Long Run 1) Economic growth occurs whenever A) nominal GDP increases. B) real GDP increases. C) potential GDP increases. D) per-capita income increases. E) per-capita GDP […]
Economics Chapter 16 1 According to the principle of comparative advantage, a nation should specialize in producing those products
Introduction to Economic Reasoning, 8e (Rohlf) Chapter 16: International Trade 1) In 2008, approximately what percentage of the U.S. GDP was made up of exports of goods and services? A) 50 percent B) 3 percent C) 13 percent D) 30 […]
Economics Chapter 16 2 If the European central bank intervenes in the foreign exchange market by buying dollars for euros, the intervention would tend to
Page 14 9) Dumping occurs whenever a firm A) charges a lower price in foreign markets than it charges in its home market. B) sells a lower-quality product in foreign markets than it sells in its home market. C) earns […]
Economics Chapter 2 1 Which of the following is not an accurate description of the information flows in the command pyramid
Introduction to Economic Reasoning, 8e (Rohlf) Chapter 2: Economic Systems 1) Pure capitalism is characterized by A) public ownership of the means of production. B) centralized decision-making. C) pure competition. D) economic planning. E) equal incomes. Answer: C Question Status: […]
Economics Chapter 2 2 According to the Keynesian model, if the economy were experiencing unemployment, which of the following would be most appropriate
10) If the economy produces a level of output that is too small for equilibrium, A) there will be an unintended, or unplanned, increase in inventories. B) businesses will not be able to sell everything that they’ve produced. C) there […]
Economics Chapter 3 1 One reason that consumers choose to buy more of a product at a lower price than at a higher price is because the product becomes
Introduction to Economic Reasoning, 8e (Rohlf) Chapter 3: Demand and Supply: Price Determination in Competitive Markets 1) According to the law of demand, a reduction in the price of a product will A) increase the demand for the product. B) […]
Economics Chapter 3 2 Consider the market for mobile homes. If personal incomes in the United States rise, we would expect to see
Page 13 11) Consider the market for mobile homes. If personal incomes in the United States rise, we would expect to see A) a decline in mobile home prices if mobile homes are a normal good. B) an increase in […]
Economics Chapter 4 1 If the U.S. government were to artificially maintain the selling price of beef above the equilibrium level, then
Page 1 Introduction to Economic Reasoning, 8e (Rohlf) Chapter 4: Applications Using Demand and Supply 1) If the U.S. government were to artificially maintain the selling price of beef above the equilibrium level, then A) there would be a shortage. […]
Economics Chapter 4 2 The company’s chief executive officer believes that the answer to the company’s problems is to reduce airfares
2) A subsidy paid to sugar producers would tend to A) reduce the demand for sugar. B) increase the market price of sugar. C) increase the supply of sugar. D) produce a surplus of sugar. Answer: C Question Status: Previous […]
Economics Chapter 5 1 Frequent unannounced quizzes tend to improve class attendance. Which of the following might explain such behavior
Introduction to Economic Reasoning, 8e (Rohlf) Chapter 5: Costs and Decision Making 1) Which of the following is not consistent with economists’ assumptions regarding human behavior? A) Individuals are concerned primarily with what is in their best interest. B) Individuals […]
Economics Chapter 5 2 Your neighbor volunteers to help you paint your house. Which of the following explanations is most consistent with the economists’ model
Use the following information in answering the following question(s). Data for Apex Golf Cart Company 17) Based on the table above, the Apex Golf Cart Company faces fixed costs A) of $200 per day. B) of $300 per day. C) […]
Economics Chapter 6 1 In the short run, a purely competitive firm can maximize its profit or minimize its loss by producing at the level of output where
Introduction to Economic Reasoning, 8e (Rohlf) Chapter 6: Price Taking: The Purely Competitive Firm 1) Which of the following is not characteristic of a purely competitive industry? A) a large number of sellers B) relatively small firms C) ease of […]
Economics Chapter 6 2 Suppose the firms in a purely competitive industry are in a long-run equilibrium when the industry experiences a reduction in demand
Use the following diagram in answering the following question(s). 12) Based on the figure above, at the prevailing market price of $15, this firm would A) earn an economic profit. B) earn a normal profit. C) incur a loss but […]
Economics Chapter 7 1 By looking at the above diagram, what can be concluded about the profits or losses of this price searcher
Introduction to Economic Reasoning, 8e (Rohlf) Chapter 7: Price Searching: The Firm with Market Power 1) Which of the following is not an example of a price searcher? A) the neighborhood bakery B) the local phone company C) the corner […]
Economics Chapter 7 2 Based on the figure above, how many units of output will this firm produce to maximize its profit or minimize its loss
Page 14 B) advertising C) unique product features D) low entry barriers 3) Price searchers face downward sloping demand curves because A) they must reduce price to sell more. B) they have unlimited pricing discretion. C) they have the ability […]
Economics Chapter 8 1 The market structure which is characterized by a large number of firms selling slightly differentiated products is known as
Introduction to Economic Reasoning, 8e (Rohlf) Chapter 8: Industry Structure and Public Policy 1) Which of the following is not an element of industry structure? A) the number of sellers in the industry B) the extent of barriers to entry […]
Economics Chapter 8 2 An industry made up of a large number of relatively small firms selling differentiated products would be described as
14) Which of the following is a true statement about industry regulation in the United States? A) It is intended to create more competition in the regulated industry. B) It has been applied only to natural monopolies. C) It has […]
Economics Chapter 9 1 When firms are required to pay the private costs of producing their product, rather than the social costs
Introduction to Economic Reasoning, 8e (Rohlf) Chapter 9: Market Failure 1) Which of the following best defines “market failure”? A) the inability to make the most efficient use of society’s limited resources B) the failure to consider internal benefits in […]
Economics Chapter 9 2 Suppose that coal mining creates external costs. Then, in the absence of government intervention, it is likely that
Page 12 Use the diagram below in answering the following question(s). . 15) Based on the figure above, suppose that production of product X creates external costs. In the absence of government intervention, this industry would tend to produce A) […]