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72 Miller Economics Today, 16th Edition 43) Which one of the following is an example of a normative statement? A) Public school teachers are not paid enough. B) The average public school teacher earns less than the average truck driver. […]

Chapter 1 The Nature of Economics 41 3) Economics is an empirical science, which means that economists A) must use laboratory experiments to test their theories. B) evaluate a model or theory by whether its assumptions are consistent with the […]

Chapter 1 The Nature of Economics 61 85) The combination of psychology and economics to determine individual decision making is known as A) b ehavioral economics. B) pyschomics. C) the rule of thumb. D) positive analysis. 86) The idea of […]

Chapter 1 The Nature of Economics 1.1 The Power of Economic Analysis 1) The economic way of thinking will help you A) make decisions in financing your home. B) decide whether the U.S. government should encourage or discourage immigration. C) […]

Chapter 1 The Nature of Economics 21 84) An example of a microeconomic decision is a situation in which A) the Federal Reserve considers how much to increase the money supply during the coming month in an effort to constrain […]

304 Miller Economics Today, 16th Edition 81) The aggregate demand curve shows A) a direct relationship between changes in the price level and changes in real GDP. B) real GDP does not change as the price level changes. C) an […]

322 Miller Economics Today, 16th Edition 15) When the price level is below the level at which the aggregate demand curve crosses the long run aggregate supply curve, A) there will be no price level change. B) there will be […]

Chapter 10 Real GDP and the Price Level in the Long Run 10.1 Output Growth and the Long Run Aggregate Supply Curve 1) The aggregate supply curve A) shows what each producer is willing and able to produce at each […]

284 Miller Economics Today, 16th Edition 7) The sum of all planned expenditures for the entire economy at each possible price level is A) aggregate supply. B) effective demand. C) aggregate demand. D) actual expenditures by consumers. 8) The aggregate […]

Chapter 11 Classical and Keynesian Macro Analyses 417 37) If the U.S. government were to relax its restrictions on offshore oil well drilling and open drilling in Alaskan national parks, the result to aggregate supply would be to A) cause […]

Chapter 11 Classical and Keynesian Macro Analyses 399 22) According to the above figure, what will the price level be in the new long run equilibrium? A) 115 B) 110 C) 100 D) Less than 100 23) What is the […]

Chapter 11 Classical and Keynesian Macro Analyses 359 86) Saving is not a problem in the classical model because A) the classical economists assume that saving was beneficial to people for retirement. B) saving would be spent by consumers eventually. […]

Chapter 11 Classical and Keynesian Macro Analyses 379 21) Keynes suggested that the short run aggregate supply (SRAS) curve A) is vertical. B) is horizontal. C) slopes downward. D) is not a relevant concept. 22) Keynesian economics predicts that if […]

Chapter 11 Classical and Keynesian Macro Analyses 11.1 The Classical Model 1) Whom among the following was a classical economist? A) Adam Smith B) A. C. Pigou C) David Ricardo D) all of the above 2) All of the following […]

Chapter 12 Consumption, Real GDP, and the Multiplier 12.1 Some Simplifying Assumptions in a Keynesian Model 1) Which of the following is NOT a simplifying assumption in the simple Keynesian model? A) Net investment and gross investment are equal. B) […]

Chapter 12 Consumption, Real GDP, and the Multiplier 531 13) If the multiplier is 4, the marginal propensity to consume (MPC) must be A) 0.25. B) 0.5. C) 0.75. D) 1. 14) The multiplier effect tends to A) generate instability. […]

Chapter 12 Consumption, Real GDP, and the Multiplier 495 8) In the Keynesian model, planned investment is inversely related to A) the interest rate. B) the level of income. C) the wage rate. D) the tax rate. 9) If business […]

Chapter 12 Consumption, Real GDP, and the Multiplier 455 43) According to the above figure, autonomous consumption equals A) $0. B) $5,000. C) $20,000. D) $5,000. 44) Refer to the above figure. If real disposable income is less than $5,000, […]

Chapter 12 Consumption, Real GDP, and the Multiplier 515 36) Suppose autonomous consumption is $1 trillion, investment spending is $1.5 trillion, and the marginal propensity to consume is 0.75. Show the graph for the C I curve. What is the […]

Chapter 13 Fiscal Policy 603 8) In the United States economy, the progressive income tax and unemployment compensation are both A) destabilizers. B) discretionary presidential effectors. C) automatic stabilizers. D) time lag factors. 9) Refer to the above figure. As […]

586 Miller Economics Today, 16th Edition 69) Supply side economists argue cuts in tax rates A) always reduce tax revenues. B) may increase tax revenues. C) always increase budget deficits. D) have no effect on tax revenues. 70) The notion […]

Chapter 13 Fiscal Policy 13.1 Discretionary Fiscal Policy 1) When the government deliberately alters its level of spending and/or taxes in order to achieve specific national economic goals, it is exercising A) monetary policy. B) discretionary fiscal policy. C) a […]

566 Miller Economics Today, 16th Edition 74) Which of the following statements about fiscal policy is true? A) Real Gross Domestic Product (GDP) can be increased above its long run equilibrium only in the short run. B) Real Gross Domestic […]

Chapter 14 Deficit Spending and the Public Debt 14.1 Public Deficits and Debts: Flows versus Stocks 1) In the current year, a nation s government spending equals $1.5 trillion and its revenues are $1.9 trillion. Which of the following is […]

Chapter 14 Deficit Spending and the Public Debt 637 29) Suppose that initially there is no public debt. Using the above table, what is the public debt as a percentage of GDP in Year 4? A) 5.8 percent B) 7.8 […]

Chapter 15 Money, Banking, and Central Banking 695 42) If the transactions approach to measuring money is used, then the money supply consists of A) currency only. B) transaction deposits only. C) currency and transaction deposits only. D) currency, checkable […]

Chapter 15 Money, Banking, and Central Banking 675 16) Checkable and debitable accounts in commercial banks and other financial institutions are classified as money because A) they are not liabilities of the banks. B) they sometimes earn an interest income […]

Chapter 15 Money, Banking, and Central Banking 753 105) The reserve ratio is 10 percent. Depositors regularly keep 10 percent of their deposits as cash. If the Fed buys $1 million of U.S. government securities, excess reserves A) increase by […]

Chapter 15 Money, Banking, and Central Banking 15.1 The Functions of Money 1) In a barter system, we would expect to see A) many different units of money. B) money and goods exchanged for each other. C) wide spread financial […]

790 Miller Economics Today, 16th Edition 88) Travis always carries $100 in his wallet to pay for groceries. This is an example of the A) precautionary demand for money. B) asset demand for money. C) transactions demand for money. D) […]

810 Miller Economics Today, 16th Edition 23) Refer to the above figure. Suppose point A is the original equilibrium. If there is an increase in the money supply, the new short run equilibrium is given by point A) A. B) […]

848 Miller Economics Today, 16th Edition 43) Suppose there is an increase in the money supply, but that people s demand for money balances increases by a greater amount at the same time. The net effect would be A) a […]

Chapter 16 Domestic and International Dimensions of Monetary Policy 16.1 The Demand for Money 1) What are the two features of money that distinguish it from all other goods in the economy? A) Money is government issued and it is […]

830 Miller Economics Today, 16th Edition 34) According to the quantity theory of money and prices, a 10 percent increase in the money supply ultimately leads to A) a 10 percent increase in real GDP. B) a 10 percent increase […]

942 Miller Economics Today, 16th Edition 19) If the price of bubble gum changed in the market from 1 cent to 1.5 cents and Joe s Market didn t change the price it charges for the bubble gum, this behavior […]

Chapter 17 Stabilization in an Integrated World Economy 17.1 Active versus Passive Policymaking 1) Active policy making refers to A) actions taken by policy makers in response to or in anticipation of some change in the overall economy. B) policy […]

926 Miller Economics Today, 16th Edition 67) Adding the assumption of pure competition and complete flexibility of all prices and wages to the rational expectations hypothesis yields a theory that provides support for A) passive policy making. B) active policy […]

886 Miller Economics Today, 16th Edition 55) We observe the duration of unemployment falling and wage rates rising. It is likely that A) the government has initiated expansionary fiscal policy but the policies haven t taken effect yet. B) summer […]

Chapter 18 Policies and Prospects for Global Economic Growth 18.1 Labor Resources and Economic Growth 1) According to the text, population growth in many poor countries does not generally result in increased labor resources because A) many people do not […]

Chapter 18 Policies and Prospects for Global Economic Growth 993 15) Which of the following is NOT a criticism that has been leveled at the World Bank? A) Too many loans go to nations capable of privately financing their projects. […]

Chapter 18 Policies and Prospects for Global Economic Growth 977 33) Explain the meaning of the term dead capital , and discuss why its existence retards economic growth. 34) Define what dead capital is and why economists are concerned with […]

78 Miller Economics Today, 16th Edition 14) The responsiveness of demand to changes in income holding the good s relative price constant is A) price elasticity of demand. B) income elasticity of demand. C) elasticity of supply. D) cross price […]

Chapter 19 Demand and Supply Elasticity 21 14) If a one percent increase in the price of bananas leads to a one percent decrease in the quantity of bananas demanded, then the demand for bananas is A) elastic. B) inelastic. […]

Chapter 19 Demand and Supply Elasticity 19.1 Price Elasticity 1) The price elasticity of demand is a measure of A) the responsiveness of the quantity demanded of a good to a changes in the price of the good. B) the […]

Chapter 19 Demand and Supply Elasticity 41 29) In the above figure, along the section of the demand curve between point a and point b, demand is A) elastic. B) inelastic. C) unit elastic. D) unit inelastic. 30) In the […]

Chapter 19 Demand and Supply Elasticity 61 45) In which of the following situations is the absolute price elasticity of demand for an item most likely to exceed a value of 1? A) when there are very few close substitutes […]

142 Miller Economics Today, 16th Edition 51) A point inside a production possibilities curve indicates A) resources are not being used efficiently. B) resources are being used very efficiently. C) opportunity costs are constant. D) an output combination that is […]

Chapter 2 Scarcity and the World of Trade Offs 2.1 Scarcity 1) Scarcity arises because A) resources are finite and are inadequate to meet all human wants and needs. B) import taxes depress the rate of growth of goods and […]

102 Miller Economics Today, 16th Edition 92) Briefly explain the factors of production and give an example of each. 93) Explain why even the most affluent people, businesses and counties never solve the problem of scarcity. Answer: Scarcity is a […]

176 Miller Economics Today, 16th Edition 22) Suppose that at a bicycle shop, instead of having each worker assemble an entire bicycle themselves, one person welds the frames, another person works on the braking system, another person works on the […]

122 Miller Economics Today, 16th Edition 23) The curve that represents all possible combinations of goods that can be produced is called A) the production possibilities curve. B) the resource allocation curve. C) the efficiency curve. D) the supply curve. […]

530 Miller Economics Today, 16th Edition 10) A major difference between a monopolist and a perfectly competitive firm is that A) the monopolist is certain to earn economic profits. B) the monopolist s marginal revenue curve lies below its demand […]

162 Miller Economics Today, 16th Edition 7) How is economic growth shown by the production possibilities curve? A) By shifting the curve to the right. B) By moving the curve to the left. C) By moving up the existing curve. […]

Chapter 20 Consumer Choice 115 92) What is utility analysis? What is the goal of this analysis? 93) What do we know about total utility when marginal utility is zero? Answer: Marginal utility is the extra utility from consuming another […]

Chapter 20 Consumer Choice 175 2) According to the substitution effect, if the price of a product goes down A) the consumer will buy more of the good at the lower price than at a higher price, creating a downward […]

194 Miller Economics Today, 16th Edition 11) Suppose that indifference curve I1lies to the left of indifference curve I2. We can conclude that A) some, but not all, points on indifference curve I1will correspond to higher utility than points along […]

Chapter 20 Consumer Choice 20.1 Utility Theory 1) In economics, another term for satisfaction is A) income elasticity. B) price elasticity. C) utility. D) marginal productivity. 2) The amount of pleasure or satisfaction derived from consumption of a good is […]

Chapter 20 Consumer Choice 135 48) J ill likes lobsters but she does not eat lobsters in every meal. How can utility theory explain this? 20.4 Optimizing Consumption Choices 1) In order to maximize utility, a consumer should allocate money […]

Chapter 21 Rents, Profits, and the Financial Environment of Business 273 194) What is the difference between accounting profits and economic profits? Which of the two concepts is more appropriate for explaining decisions made by entrepreneurs? Explain. 195) Why is […]

Chapter 21 Rents, Profits, and the Financial Environment of Business 21.1 Economic Rent 1) Pure economic rent is A) a payment to a resource owner over and above what is necessary to keep the resource in its current use. B) […]

Chapter 21 Rents, Profits, and the Financial Environment of Business 233 6) Accounting profit can be calculated as A) total revenue explicit costs. B) total revenue implicit costs. C) total revenue explicit costs implicit costs. D) total revenue fixed costs. […]

292 Miller Economics Today, 16th Edition 83) Present value is A) unrelated to the rate of interest. B) lower the longer the time horizon. C) not expressed in today s dollars. D) opposite the time value of money. 84) The […]

Chapter 21 Rents, Profits, and the Financial Environment of Business 253 99) All of the following are characteristics of a proprietorship EXCEPT A) the business is owned by one individual. B) one person is responsible for all the debts of […]

Chapter 22 The Firm: Cost and Output Determination 331 55) As the amount of a variable input increases, while all other inputs are held constant, total product will A) always increase. B) always decrease. C) initially decrease and then increase. […]

386 Miller Economics Today, 16th Edition 6) In the above figure, the long run cost curve between points C and D illustrates A) diseconomies of scale. B) diminishing marginal product. C) constant returns to scale. D) economies of scale. 7) […]

Chapter 22 The Firm: Cost and Output Determination 371 113) In the above table, what is the average total cost to produce 3 units of output? A) $33.33 B) $53.33 C) $55 D) $20 114) Which of the following statements […]

Chapter 22 The Firm: Cost and Output Determination 22.1 Short Run versus Long Run 1) Economists generally define the short run as being A) that period of time in which at least one of the firm s inputs, usually plant […]

Chapter 22 The Firm: Cost and Output Determination 351 Q TFC TVC TC 0 $90 $ 0 $ 90 1 90 25 115 2 90 32 122 3 90 42 132 4 90 64 154 5 90 95 185 19) […]

460 Miller Economics Today, 16th Edition 35) A firm should never produce any output if A) P AVC. B) P ATC. C) AR ATC. D) MR MC. 36) A firm earning economic losses should operate in the short run as […]

420 Miller Economics Today, 16th Edition 12) A firm in a perfectly competitive market maximizes profits when it finds A) the price at which total revenue minus total cost is the greatest. B) the quantity at which total revenue minus […]

Chapter 23 Perfect Competition 495 58) If the costs of production do not increase as output increases in the long run in a perfectly competitive industry, then this is a A) constant return to scale industry. B) constant competitive industry. […]

440 Miller Economics Today, 16th Edition 53) What does a perfectly competitive firm do to maximize profits? 54) Why should a perfect competitor produce at which price equals marginal cost? Answer: For a perfect competitor, its market price equals marginal […]

Chapter 23 Perfect Competition 23.1 Characteristics of a Perfectly Competitive Market Structure 1) Which of the following is NOT a characteristic of a perfectly competitive market? A) The products sold by the firms in the market are homogeneous. B) There […]

480 Miller Economics Today, 16th Edition 9) Using a graph, show a short run equilibrium for the industry and the firm. Explain the graph. 23.9 The Long Run Industry Situation: Exit and Entry 1) Market signals A) are ways of […]

550 Miller Economics Today, 16th Edition 11) In the above figure, the total cost of producing the profit maximizing level of output is shown by rectangle A) 0P1AQ1. B) 0P5EQ5. C) 0P4HQ4. D) 0P2BQ1. 12) In the above figure, suppose […]

590 Miller Economics Today, 16th Edition 36) Selling a product at different prices when the price difference is unrelated to costs is a practice known as A) price fixing. B) price monopolization. C) price discrimination. D) price differentiation. 37) Price […]

Chapter 24 Monopoly 24.1 Definition of a Monopolist 1) Monopoly producers face A) many competitors producing the same product. B) only a few competitors producing the same product. C) at least one competitive producer of the same product. D) no […]

Chapter 25 Monopolistic Competition 25.1 Monopolistic Competition 1) Which of the following is NOT a characteristic of monopolistic competition? A) Product differentiation B) Barriers to entry into the market C) Advertising D) A significant number of sellers 2) Which of […]

Chapter 25 Monopolistic Competition 629 14) In the above figure, the monopolistically competitive firm s profit maximizing output is A) 1,000 units. B) 300 units. C) 900 units. D) 700 units. 15) In the above figure, when this monopolistically competitive […]

668 Miller Economics Today, 16th Edition 26) A good that people must actually consume before they can determine qualities is called A) a credence good. B) a search good. C) an experience good. D) a persuasive good. 27) An experience […]

706 Miller Economics Today, 16th Edition 94) The number of firms in an oligopolistic industry A) must be less than 10. B) must be less than 20. C) must be small enough that firms are interdependent. D) must be large […]

Chapter 26 Oligopoly and Strategic Behavior 26.1 Oligopoly 1) Which of the following does NOT help explain why oligopolies exist? A) Economies of scale B) Mergers C) Product homogeneity D) Barriers to entry 2) Which of the following is a […]

Chapter 26 Oligopoly and Strategic Behavior 743 6) A Battle of the Sexes outcome occurs when A) firms earn highest profits by adopting different product formats. B) firms earn highest profits by trying to coordinate but cannot agree on how […]

726 Miller Economics Today, 16th Edition 65) A game in which any gains one player makes are offset by equal losses by another player is known as a A) zero sum game. B) positive sum game. C) negative sum game. […]

780 Miller Economics Today, 16th Edition 39) Refer to the above figure. If the government uses rate of return regulation for the natural monopolist, the firm will charge price A) P5and sell Q1units. B) P2and sell Q1units. C) P3and sell […]

Chapter 27 Regulation and Antitrust Policy in a Globalized Economy 817 19) Which of the following is exempt from antitrust laws? A) Professional football B) Petroleum companies C) Airlines D) Hospitals 20) Which of the following is exempt from antitrust […]

Chapter 27 Regulation and Antitrust Policy in a Globalized Economy 27.1 Forms of Industry Regulation 1) U.S. government regulation of social and economic activity A) only began after World War II. B) costs less now than it did in the […]

800 Miller Economics Today, 16th Edition 9) Which of the following is an example of an agency concerned with social regulation? A) Federal Communications Commission B) Securities and Exchange Commission C) Consumer Product Safety Commission D) Federal Energy Regulatory Commission […]

854 Miller Economics Today, 16th Edition 91) Ajax has just discovered that the marginal revenue product generated by the last worker hired was $125 while the marginal factor cost was $85. What should Ajax do? A) Leave the level of […]

Chapter 28 The Labor Market: Demand, Supply and Outsourcing 28.1 Labor Demand for a Perfectly Competitive Firm 1) For a perfectly competitive firm, the value of the marginal product of labor falls as more workers are hired because of the […]

894 Miller Economics Today, 16th Edition 47) A decrease in the supply of labor could be caused by A) wage rates falling in another industry. B) b etter working conditions. C) more job flexibility. D) increased wage rates in another […]

910 Miller Economics Today, 16th Edition 14) A profit maximizing monopolist will hire labor up to the point where A) marginal revenue product equals the price of the product. B) marginal revenue product is greater than the wage rate. C) […]

874 Miller Economics Today, 16th Edition 12) The price elasticity of demand for a variable input will be greater A) the fewer substitutes there are for the final product. B) the easier it is for a particular input to be […]

Chapter 29 Unions and Labor Market Monopoly Power 965 56) In the above figure, which wage rate yields the highest union employment? A) W1B) W2C) W3D) W2W1 57) In the above figure, which wage rate will maximize union members income? […]

Chapter 29 Unions and Labor Market Monopoly Power 983 22) A firm that is a monopolist in the output market and a monopsonist in the input market A) will hire the same amount of labor as if perfect competition prevailed […]

Chapter 29 Unions and Labor Market Monopoly Power 29.1 Industrialization and Labor Unions 1) The earliest unions in the United States were A) industrial unions. B) craft unions. C) public sector unions. D) military unions. 2) Labor unions composed of […]

Chapter 29 Unions and Labor Market Monopoly Power 945 97) A labor union composed of workers in the same industry is called A) a craft union. B) an industrial union. C) a company shop. D) a guild. 98) The Taft […]

Chapter 3 Demand and Supply 229 47) Two goods are substitutes when A) an increase in the price of one reduces the demand for the other. B) an increase in the price of one raises the demand for the other. […]

Chapter 3 Demand and Supply 3.1 Demand 1) The law of demand states that A) consumers have unlimited demands for a good. B) a higher price will lead to increased sales. C) the price can never be too high for […]

Chapter 3 Demand and Supply 209 3) A demand curve A) slopes down because of the inverse relationship between price and quantity demanded. B) slopes up because of the direct relationship between price and quantity demanded. C) can slope up […]

Chapter 3 Demand and Supply 249 131) What is the difference between a normal good and an inferior good? How does this relate to the demand curve? 3.4 The Law of Supply 1) The law of supply implies that the […]

Chapter 3 Demand and Supply 269 39) Which of the following is a non price determinant of supply? A) the price of related goods consumers may buy B) technological advances in production C) consumers incomes D) the number of consumers […]

286 Miller Economics Today, 16th Edition 34) When there is a shortage, I. there is a tendency for price to increase. II. there is an excess quantity demanded. A) I only B) II only C) Both I and II D) […]

Chapter 30 Income, Poverty, and Health Care 1041 23) The idea that the Lorenz curve should be along the 45 degree line is consistent with A) the productivity standard. B) the egalitarian principle. C) the conservative principle. D) none of […]

Chapter 30 Income, Poverty, and Health Care 1021 87) Regarding income distribution and the distribution of wealth, A) wealth is a stock concept and income a flow concept. B) a stock is evaluated at a given moment in time; a […]

Chapter 30 Income, Poverty, and Health Care 30.1 Income 1) The Lorenz curve shows A) the demand for jobs. B) the supply of jobs. C) the elasticity of jobs. D) the distribution of income. 2) The graph which represents the […]

Chapter 30 Income, Poverty, and Health Care 1057 30.5 Health Care 1) Which of the following is considered a third party within the medical services industry? A) The patient B) The private insurance company C) The for profit hospital D) […]

1092 Miller Economics Today, 16th Edition 87) Which of the following is the main reason for externalities? A) The full cost of a transaction is not borne by the buyer/seller of the product. B) Police enforcement of scalping is not […]

1128 Miller Economics Today, 16th Edition 30) Which of the following is a true statement? A) Externalities cannot be solved by market solutions and always require government action. B) Externalities would never be a problem if people were willing to […]

Chapter 31 Environmental Economics 31.1 Private versus Social Costs 1) Which of the following statements best defines private costs? A) They are internal in the sense that the firm or household must explicitly take them into account. B) They are […]

1112 Miller Economics Today, 16th Edition 21) Refer to the above figure. The marginal benefit of pollution abatement is curve A) (1). B) (2). C) (3). D) (4). 22) Refer to the above figure. If the marginal cost curve for […]

Chapter 32 Comparative Advantage and the Open Economy 609 10) Since the 1930s, overall tariff rates in the United States have A) increased. B) decreased. C) remained unchanged. D) b ecome very unstable, changing week to week. 11) A tariff […]

Chapter 32 Comparative Advantage and the Open Economy 32.1 The Worldwide Importance of International Trade 1) Since World War II, world trade has A) decreased in importance as nations turn inward due to security concerns. B) increased, but not as […]

Chapter 32 Comparative Advantage and the Open Economy 569 Maximum Feasible Hourly Production Rates of Either Computers or Bicycles Using All Available Resources Product United States Mexico Computers 8 10 Bicycles 4 2 64) Refer to the above table. Assuming […]

Chapter 32 Comparative Advantage and the Open Economy 589 4) Which of the following is consistent with international trade theory? A) The United States needs trade restrictions to stay competitive. B) The United States has been falling behind Europe and […]

Chapter 33 Exchange Rates and the Balance of Payments 649 International Transactions 1. U.S. resident buys a German camera $300 2. U.S. resident buys stock in a German company 20,000 3. U.S. resident purchases insurance from a German company 1,500 […]

Chapter 33 Exchange Rates and the Balance of Payments 669 33) Which of the following will lead to a depreciation of the U.S. dollar against the British pound? A) An increase in British demand for U.S. imports B) An increase […]

Chapter 33 Exchange Rates and the Balance of Payments 33.1 The Balance of Payments and International Capital Movements 1) The balance of payments is A) the value of goods and services bought and sold in the world market. B) a […]

686 Miller Economics Today, 16th Edition 102) Use the above figure. At equilibrium, the exchange rate is A) 1 euro $1.25. B) $0.80 1.25 euro. C) $1 1.25 euro. D) $1 8 euros. 103) Use the above figure. A rightward […]

322 Miller Economics Today, 16th Edition 41) An increase in the equilibrium quantity of good X can be caused by A) an increase the price of inputs utilized in producing good X. B) an increase in the price of good […]

Chapter 4 Extensions of Demand and Supply Analysis 4.1 The Price System and Markets 1) An economic system in which relative prices change to reflect changes in supply and demand for different commodities is known as a A) socialist system. […]

382 Miller Economics Today, 16th Edition 21) The adverse effects of rent controls include A) keeping rental rates too high in a normal market. B) excessive construction of new rental housing. C) reduced incentive to construct new rental housing. D) […]

Chapter 4 Extensions of Demand and Supply Analysis 395 9) The effect of legislation establishing a minimum wage above the market clearing wage is A) unemployment. B) a shortage of labor. C) higher wages for all workers. D) a shift […]

362 Miller Economics Today, 16th Edition 32) Price ceilings often generate A) market clearing prices. B) rapid increases in supply to meet the excess demand. C) equilibriums that utilize rationing by price. D) b lack markets. 33) An example of […]

342 Miller Economics Today, 16th Edition 115) When supply increases and at the same time demand decreases, we A) can predict that both equilibrium price and quantity will increase. B) can predict that both equilibrium price and quantity will decrease. […]

Chapter 5 Public Spending and Public Choice 427 61) An effluent fee is a A) subsidy given to the producer of a positive externality. B) charge to a polluter that gives the right to discharge pollution into the air. C) […]

Chapter 5 Public Spending and Public Choice 5.1 What a Price System Can and Cannot Do 1) Which of the following terms describes the situation in which too few or too many resources go to a specific economic activity because […]

Chapter 5 Public Spending and Public Choice 483 24) In the above figure, if a Medicare subsidy that had previously been paid by the government has now been eliminated, the result will be A) an increase in the price received […]

Chapter 5 Public Spending and Public Choice 447 9) The legal system in the United States tends A) to support monopolies. B) to actively discourage unionization. C) to discourage the entry of new firms into industries. D) to promote competition. […]

Chapter 5 Public Spending and Public Choice 467 94) Explain why ensuring economic stability is an economics function of government? 95) Suppose a valley periodically floods. A dam can be built in the river that would prevent the flooding. Explain […]

534 Miller Economics Today, 16th Edition 37) Dynamic tax analysis assumes A) all of the present tax rates will be in place for a minimum of twenty years. B) changes in the tax rates have no effect on the tax […]

518 Miller Economics Today, 16th Edition 19) Eight years ago you purchased an asset for $100,000 that has yielded a nominal capital gain of $30,000. If you sold the asset today, your inflation adjusted capital gains would be zero due […]

Chapter 6 Funding the Public Sector 6.1 Paying for the Public Sector 1) The fact that every dollar that the government spends or transfers must ultimately be provided by the taxes and user charges it collects plus government borrowing is […]

Chapter 7 The Macroeconomy: Unemployment, Inflation, and Deflation 41 36) Which of the following statements is true about the seasonally adjusted unemployment rate? A) The seasonally adjusted unemployment rate is the sum of the frictional unemployment rate, structural unemployment rate, […]

Chapter 7 The Macroeconomy: Unemployment, Inflation, and Deflation 61 2005 Market Basket 2005 2010 Commodity Quantity Price Price A 50 3 4 B 75 2 3 50) Refer to the above table. You are given information on Jane s consumption […]

Chapter 7 The Macroeconomy: Unemployment, Inflation, and Deflation 21 87) A discouraged worker is someone who A) has been fired. B) is unemployed. C) is not in the labor force. D) is employed. 88) One criticism of the unemployment rate […]

Chapter 7 The Macroeconomy: Unemployment, Inflation, and Deflation 7.1 Unemployment 1) Which of the following is true of unemployment? A) It is defined as the number of people actively looking for work who do not have jobs. B) The result […]

Chapter 7 The Macroeconomy: Unemployment, Inflation, and Deflation 79 26) The nominal rate of interest is A) the interest rate observed in today s market. B) the interest rate observed in the market minus the inflation premium. C) not influenced […]

Chapter 8 Measuring the Economy s Performance 157 85) Net investment refers to A) the change in the capital stock after subtracting out depreciation. B) the change in inventories over a 1 year period. C) the change in investment spending […]

176 Miller Economics Today, 16th Edition 51) Disposable personal income is A) the total of factor payments to owners of resources. B) the dollar value of all final goods and services produced in a country in a year. C) the […]

Chapter 8 Measuring the Economy s Performance 137 107) Define and explain gross domestic product. 108) Why aren t financial transactions, sales of secondhand goods, and household production included in measuring GDP? Answer: Financial transactions do not involve the production […]

Chapter 8 Measuring the Economy s Performance 8.1 The Simple Circular Flow 1) The simple circular flow of income shows that the total income in an economy equals A) total profits earned by firms. B) all taxes paid by households. […]

Chapter 8 Measuring the Economy s Performance 117 25) Why might a homemaker be upset with the way Gross Domestic Product (GDP) is calculated? A) Because the government always underestimates the dollar value of the household services produced at home […]

Chapter 9 Global Economic Growth and Development 9.1 How Do We Define Economic Growth? 1) An increase in growth rates will cause the production possibilities curve to A) shift inward. B) b ecome steeper. C) b ecome flatter. D) shift […]

250 Miller Economics Today, 16th Edition 4) A system of private property rights A) enhances economic growth by creating incentives to the Fed to maintain stable prices. B) enhances economic growth by increasing the probability that a person can gain […]

Chapter 9 Global Economic Growth and Development 235 18) According to economist Paul Romer, economies that wish to experience growth must A) invest most of their savings in national defense. B) invest in knowledge. C) drastically lower their standards of […]

Chapter 9 Global Economic Growth and Development 215 80) What is the real GDP after four years if Country X s average annual growth rate is 8.6 percent and the initial real GDP was $2,756.0 million? A) $2,993.0 million B) […]