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Chapter 1 1 Economics is best defined as the study of
Copyright © 2014 Pearson Education, Inc. Survey of Economics, 6e (O’Sullivan/Sheffrin/Perez) Chapter 1 Introduction: What Is Economics? 1.1 What Is Economics? 1) Economics is best defined as the study of A) financial decision-making. B) how consumers make purchasing decisions. C) […]
Chapter 1 2 One Reason For Studying Microeconomics To better Understand
Copyright © 2014 Pearson Education, Inc. 20) Ceteris paribus is the same as rise / run. Answer: FALSE Diff: 1 Topic: Isolate Variables – Ceteris Paribus Skill: Definition AACSB: Reflective Thinking Learning Outcome: Micro-1 21) A small, one-unit change in […]
Chapter 10 1 A curve that shows the relationship between the wage
Copyright © 2014 Pearson Education, Inc. Survey of Economics, 6e (O’Sullivan/Sheffrin/Perez) Chapter 10 The Labor Market and the Distribution of Income 10.1 The Demand for Labor 1) Labor costs account for approximately ________ of total production costs. A) three-fourths B) […]
Chapter 10 2 For a perfectly competitive firm, the marginal-revenue product
Copyright © 2014 Pearson Education, Inc. 57) In less-developed countries the ________ effect leads to ________. A) input-substitution; labor intensive production B) input-substitution; mechanized production C) output effect; labor intensive production D) input effect; mechanized production Answer: A Diff: 2 […]
Chapter 10 3 Iraq d Only Few People Have Skills Necessary
Copyright © 2014 Pearson Education, Inc. 18) Suppose the wage rate in a certain industry falls, and firms hire more workers. The best explanation of this is that labor A) demand fell. B) demand increased. C) supply fell. D) supply […]
Chapter 10 4 Advances Technology Have Increased The Demand For
Copyright © 2014 Pearson Education, Inc. 71) Which of the following statements about featherbedding is correct? A) It could increase production costs, resulting in higher prices for products. B) The quantity of labor demanded by firms could actually decrease. C) […]
Chapter 11 1 Which of the following is a macroeconomic statement
Copyright © 2014 Pearson Education, Inc. Survey of Economics, 6e (O’Sullivan/Sheffrin/Perez) Chapter 11 Measuring a Nation’s Production and Income 11.1 The “Flip” Sides of Macroeconomic Activity: Production and Income 1) Macroeconomics differs from microeconomics in that A) macroeconomics is the […]
Chapter 11 2 Wages paid to teachers, police personnel, and postal workers
Copyright © 2014 Pearson Education, Inc. 56) Wages paid to teachers, police personnel, and postal workers are not transfer payments because they are payments for services and not simply “transfers” of money. Answer: TRUE Diff: 1 Topic: Government Purchases Skill: […]
Chapter 11 3 When differences between nominal GDP and real GDP result
Copyright © 2014 Pearson Education, Inc. 13) When differences between nominal GDP and real GDP result due to price changes and nothing else is compared, an index is created called the A) inflation index. B) consumer price index. C) GDP […]
Chapter 12 1 Economists define the labor force to include
Copyright © 2014 Pearson Education, Inc. Survey of Economics, 6e (O’Sullivan/Sheffrin/Perez) Chapter 12 Unemployment and Inflation 12.1 Examining Unemployment 1) During periods of poor economic performance, real GDP A) declines and unemployment rises. B) declines and unemployment declines. C) declines […]
Chapter 12 2 In periods when GDP fails to grow at its normal rate
Copyright © 2014 Pearson Education, Inc. 21) In periods when GDP fails to grow at its normal rate, the actual unemployment rate will be ________ than the natural rate of unemployment. A) lower B) higher C) the same D) falling […]
Chapter 12 3 When wages or benefits are automatically increased based
Copyright © 2014 Pearson Education, Inc. 20) When wages or benefits are automatically increased based on the reported inflation rate, it is called the ________ adjustment. A) natural flow of money B) cost-of-living C) change in exports D) change in […]
Chapter 14 1 What Likely Happen To prices And Output That
Copyright © 2014 Pearson Education, Inc. Survey of Economics, 6e (O’Sullivan/Sheffrin/Perez) Chapter 14 Aggregate Demand and Aggregate Supply 14.1 Sticky Prices and Their Macroeconomic Consequences 1) Recessions occur because of A) real adverse shocks to the economy. B) shocks to […]
Chapter 14 2 how would an increase in the aggregate demand affect real GDP
Copyright © 2014 Pearson Education, Inc. 31) Assuming the price level has not changed, how would an increase in the aggregate demand affect real GDP? A) It decreases. B) It increases. C) It only changes with changes in imports. D) […]
Chapter 14 3 Two Approaches to Determining the Causes of Recessions
Copyright © 2014 Pearson Education, Inc. 18) Refer to Figure 14.2. A movement from point d to point b could be caused by a(n) A) increase in government spending. B) increase in the price of oil. C) increase in taxes. […]
Chapter 15 1 Unemployment Varies And Cant Tracked c They Not
Copyright © 2014 Pearson Education, Inc. Survey of Economics, 6e (O’Sullivan/Sheffrin/Perez) Chapter 15 Fiscal Policy 15.1 The Role of Fiscal Policy 1) What are the two tools of fiscal policy that governments can use to stabilize an economy? A) government […]
Chapter 15 2 Households Whose Incomes Are Falling Due Recession
Copyright © 2014 Pearson Education, Inc. 30) A federal budget ________ occurs when the federal government spends more than it collects in taxes. A) surplus B) deficit C) equilibrium D) ceiling Answer: B Diff: 1 Topic: The Federal Deficit and […]
Chapter 16 1 The supply of money in the U.S. economy is determined primarily
Copyright © 2014 Pearson Education, Inc. Survey of Economics, 6e (O’Sullivan/Sheffrin/Perez) Chapter 16 Money and the Banking System 16.1 What Is Money? 1) The supply of money in the U.S. economy is determined primarily by A) decisions made by the […]
Chapter 16 2 Which of the following is a bank liability
Copyright © 2014 Pearson Education, Inc. 4) Which of the following is a bank liability? A) reserve deposits held at the Fed B) loans made to customers C) required reserves D) demand deposit balances Answer: D Diff: 1 Topic: A […]
Chapter 16 3 Explain why depositing cash into a checking account
Copyright © 2014 Pearson Education, Inc. 48) If the reserve ratio is 0.9, the money multiplier will be 10. Answer: FALSE Diff: 1 Topic: How the Money Multiplier Works Skill: Analytical AACSB: Analytic Skills Learning Outcome: Macro-10 49) When one […]
Chapter 17 1 Federal Reserve Stimulate Sluggish Economy a Print More
Copyright © 2014 Pearson Education, Inc. Survey of Economics, 6e (O’Sullivan/Sheffrin/Perez) Chapter 17 Monetary Policy and Inflation 17.1 The Money Market 1) In the short run when prices don’t have enough time to change, the Federal Reserve A) can influence […]
Chapter 17 2 Equilibrium in the money market occurs when
Copyright © 2014 Pearson Education, Inc. 3) Equilibrium in the money market occurs when A) the quantity of money demanded equals the quantity of money supplied. B) the quantity of money demanded is less than the quantity of money supplied. […]
Chapter 18 1 Jesse and April, who hand paint kites and snowboards
Copyright © 2014 Pearson Education, Inc. Survey of Economics, 6e (O’Sullivan/Sheffrin/Perez) Chapter 18 International Trade and Finance 18.1 Comparative Advantage and Exchange 1) Markets exist A) so people can buy and sell things. B) because people are self-sufficient. C) because […]
Chapter 18 2 Exporting nations often agree to voluntary export restraints
Copyright © 2014 Pearson Education, Inc. 18.2 Protectionist Policies 1) An import ban results in A) a decrease in the supply of the product. B) an increase in the product’s price. C) a decrease in the quantity of the product […]
Chapter 18 3 The exchange rate between currencies of different countries
Copyright © 2014 Pearson Education, Inc. 13) The exchange rate between currencies of different countries is controlled primarily by ________ in currency markets. A) diplomatic relations B) supply and demand C) tariff rates D) the outsourcing agreements Answer: B Diff: […]
Chapter 18 4 The efforts of nations to influence exchange rates are known as
Copyright © 2014 Pearson Education, Inc. 18.5 Fixed and Flexible Exchange Rates 1) If a country’s currency depreciates, the country will experience a ________ in exports and a ________ in imports. A) rise; rise B) fall; fall C) rise; fall […]
Chapter 2 1 Jacinda quit her job as a blackjack dealer where she made
Copyright © 2014 Pearson Education, Inc. 2.1 The Principle of Opportunity Cost 1) The opportunity cost of something is A) the cost of the labor used to produce it. B) what you sacrifice to get it. C) the price charged […]
Chapter 2 2 Explain How This Relates The Marginal Principle answer
Copyright © 2014 Pearson Education, Inc. 12) Krystal runs a nail salon and needs to decide how many hours to stay open. Table 2.2 illustrates her marginal costs of staying open for each additional hour. Suppose that we observe Krystal […]
Chapter 2 3 Refer to the table above. The farmer began to experience
Copyright © 2014 Pearson Education, Inc. 10) Refer to Table 2.4. Increasing the tanks of fertilizer from 3 to 4 will increase the truckloads of potatoes by A) 152. B) 35. C) 17. D) 11. Answer: C Diff: 1 Topic: […]
Chapter 3 1 If a competitive market operates perfectly
Copyright © 2014 Pearson Education, Inc. Survey of Economics, 6e (O’Sullivan/Sheffrin/Perez) Chapter 3 Demand, Supply, and Market Equilibrium 3.1 The Demand Curve 1) If a competitive market operates perfectly, it relies on A) the number of people buying goods. B) […]
Chapter 3 2 If the quantity of a product demanded is greater than
Copyright © 2014 Pearson Education, Inc. 18) If the quantity of a product demanded is greater than the quantity of a product supplied, there is pressure in the market to push the price downward. Answer: FALSE Diff: 1 Topic: Market […]
Chapter 3 3 The Decline Honeybees Threatens 15 Billion Worth
Copyright © 2014 Pearson Education, Inc. 9) Olives are used to produce olive oil. If the price of olives increases A) the demand for olive oil increases. B) the demand for olive oil decreases. C) the supply of olive oil […]
Chapter 4 1 The price elasticity of demand reflects the responsiveness of
Copyright © 2014 Pearson Education, Inc. Survey of Economics, 6e (O’Sullivan/Sheffrin/Perez) Chapter 4 Elasticity: A Measure of Responsiveness 4.1 The Price Elasticity of Demand 1) The price elasticity of demand reflects the responsiveness of A) firms to changes in demand. […]
Chapter 4 2 Senior Citizens Living Low Income And With
Copyright © 2014 Pearson Education, Inc. 59) Which of the following products has the most elastic demand? A) Ben and Jerry’s Chunky Monkey ice cream in the pint container B) all Ben and Jerry’s ice cream C) all premium ice […]
Chapter 4 3 Why would a bumper crop be bad news for farmers
Copyright © 2014 Pearson Education, Inc. 31) Why would a bumper crop be bad news for farmers? A) Their crop has an inelastic demand and the resulting drop in price reduces their total revenue. B) Their crop has an elastic […]
Chapter 4 4 If an increase in the price of good X results in a
Copyright © 2014 Pearson Education, Inc. 25) If an increase in the price of good X results in a decrease in the quantity of Y demanded, A) good X and good Y are substitutes. B) good X and good Y […]
Chapter 4 5 Suppose that the price elasticity of supply
Copyright © 2014 Pearson Education, Inc. Figure 4.4 31) In Figure 4.4 supply is perfectly inelastic in graph A) A. B) B. C) C. D) D. 75 Answer: A Diff: 2 Topic: Extreme Cases: Perfectly Inelastic Supply and Perfectly Elastic […]
Chapter 5 1 The Short Run The Period Time Over
Copyright © 2014 Pearson Education, Inc. Survey of Economics, 6e (O’Sullivan/Sheffrin/Perez) Chapter 5 Production Technology and Cost 5.1 Economic Cost and Economic Profit 1) In the short run, ________ factors of production are fixed, while in the long run, ________ […]
Chapter 5 2 which shows a family of average cost curves
Copyright © 2014 Pearson Education, Inc. Figure 5.1 28) Refer to Figure 5.1, which shows a family of average cost curves. The average total cost curve is represented by A) Curve 1. B) Curve 2. C) Curve 3. D) the […]
Chapter 5 3 It implies That Output Will Increase Decreasing Rate
Copyright © 2014 Pearson Education, Inc. 80) Suppose you know that at the current level of production average total cost equals marginal cost, then you know that it is also true that A) fixed costs are zero. B) average fixed […]
Chapter 5 4 Suppose that Gigantic Company is increasing in size
Copyright © 2014 Pearson Education, Inc. 20) Suppose that Gigantic Company is increasing in size. As Gigantic Company grows, they are able to buy inputs in bulk, resulting in lower input prices. It is likely that continued growth will result […]
Chapter 6 1 What is the characteristic of a perfectly competitive firm
Copyright © 2014 Pearson Education, Inc. Survey of Economics, 6e (O’Sullivan/Sheffrin/Perez) Chapter 6 Perfect Competition 6.1 Preview of the Four Market Structures 1) What is the characteristic of a perfectly competitive firm that causes it to be a price taker? […]
Chapter 6 2 Variable Cost And The Shutdown Decision Graphing skill
Copyright © 2014 Pearson Education, Inc. 28) If the firm is incurring losses in the short run, then which of the following is true? A) P < ATC B) P > ATC C) P > MC D) MC > ATC […]
Chapter 6 3 The summation of all individual firm marginal cost curves
Copyright © 2014 Pearson Education, Inc. Figure 6.4 38) Figure 6.4 represents a perfectly competitive firm’s costs. Illustrate the firm’s shut-down price on the graph. Explain. 41 Answer: The firm’s shut-down price is defined as the price at which the […]
Chapter 6 4 You notice that the price of butter falls and then rises
Copyright © 2014 Pearson Education, Inc. 12) You notice that the price of butter falls and then rises. The best explanation for this is that A) demand for butter increased causing price to fall, which attracted other firms to enter […]
Chapter 7 1 Which of the following is NOT a characteristic of a monopoly
Copyright © 2014 Pearson Education, Inc. Survey of Economics, 6e (O’Sullivan/Sheffrin/Perez) Chapter 7 Monopoly and Price Discrimination 7.1 The Monopolist’s Output Decision 1) A market served by only one firm is called a(n) A) perfectly competitive market. B) monopoly. C) […]
Chapter 7 2 Which of the following is true in the long run
Copyright © 2014 Pearson Education, Inc. 3) Which of the following is true in the long run for both monopoly and perfectly competitive industries? A) There are low barriers to entry. B) Firms can earn positive economic profits in the […]
Chapter 7 3 What Its Total Profit Under The Student
Copyright © 2014 Pearson Education, Inc. 10) Price discrimination always benefits A) the firm and may benefit or harm the consumer. B) the consumer and may benefit or harm the firm. C) consumers and firms. D) consumers only. Answer: A […]
Chapter 8 1 Firms Have Some Control Over Priced There
Copyright © 2014 Pearson Education, Inc. Survey of Economics, 6e (O’Sullivan/Sheffrin/Perez) Chapter 8 Market Entry, Monopolistic Competition, and Oligopoly 8.1 Effects of Market Entry 1) When a second firm enters a monopolist’s market A) market price will drop. B) sales […]
Chapter 8 2 Under the conditions of monopolistic competition
Copyright © 2014 Pearson Education, Inc. 32) Under the conditions of monopolistic competition A) firm profits are higher in the long run than in the short run. B) average costs of production are the same in the short run as […]
Chapter 8 3 monopolistically competitive firms earn zero economic profits
Copyright © 2014 Pearson Education, Inc. 91) In the long run, monopolistically competitive firms earn zero economic profits. Answer: TRUE Diff: 1 Topic: When Entry Stops: Long-Run Equilibrium Skill: Conceptual AACSB: Reflective Thinking Learning Outcome: Micro-15 92) Some monopolistically competitive […]
Chapter 8 4 Becky But Not For David c Dominant Strategy
Copyright © 2014 Pearson Education, Inc. 15) Which one of the following is the best example of an oligopolistic industry? A) long-distance telephone service B) wheat growers C) apple growers D) public utilities Answer: A Diff: 1 Topic: Oligopoly and […]
Chapter 8 5 What Are The Key Characteristics Oligopoly answer
Copyright © 2014 Pearson Education, Inc. 78) What are the key characteristics of an oligopoly? Answer: An oligopoly is an industry in which there are only a few firms. They can sell differentiated products or identical products. Entry is usually […]
Chapter 8 6 If Barney got to move first instead of Fred
Copyright © 2014 Pearson Education, Inc. Figure 8.11 11) The path of the game in Figure 8.11 will be A) Fred chooses a large quantity and Barney stays out. B) Fred chooses a large quantity and Barney enters. C) Fred […]
Chapter 8 7 Suppose a monopolist has costs such that when
Copyright © 2014 Pearson Education, Inc. 38) Suppose a monopolist has costs such that when output is 500 units per hour, average costs are $3. If the monopolist is regulated by a policy of average-cost pricing, the monopolist will charge […]
Chapter 8 8 Two government organizations that are responsible for initiating
Copyright © 2014 Pearson Education, Inc. 28) Two government organizations that are responsible for initiating actions against possible antitrust cases are A) the Department of Justice and the Department of Commerce. B) the Department of Commerce and the Federal Reserve. […]
Chapter 9 1 There exists asymmetric information in a market
Copyright © 2014 Pearson Education, Inc. Survey of Economics, 6e (O’Sullivan/Sheffrin/Perez) Chapter 9 Market Failure: Imperfect Information, External Benefits, and External Costs 9.1 Adverse Selection for Buyers: The Lemons Problem 1) There exists asymmetric information in a market A) if […]
Chapter 9 2 how many fewer cars are sold in equilibrium
Copyright © 2014 Pearson Education, Inc. 55) Figure 9.5 represents the market for used cars. Suppose buyers are willing to pay $5,000 for a plum (high-quality) used car and $3,000 for a lemon (low-quality) used car. If buyers believe that […]
Chapter 9 3 CARFAX is a company that compiles and sells histories
Copyright © 2014 Pearson Education, Inc. 4) CARFAX is a company that compiles and sells histories of used cars. Used car dealers offer to give their customers a copy of the CARFAX history of the cars in their inventory to […]
Chapter 9 4 If you watch a football game on a cable TV
Copyright © 2014 Pearson Education, Inc. 14) If you watch a football game on a cable TV, the cable TV is A) a private good but nonrival in consumption. B) a private good and rival in consumption. C) a public […]
Chapter 9 5 Rubber Factory b Each Price Larger Quantity Rubber
Copyright © 2014 Pearson Education, Inc. 12) Under a Coase bargaining solution, deal making between the two parties continues until the marginal ________ to the harmed party equals the marginal ________ to the other party. A) benefit; benefit B) benefit; […]
Chapter 9 6 A carbon tax will raise the price of an energy
Copyright © 2014 Pearson Education, Inc. 50) A carbon tax will raise the price of an energy-intensive good such as steel. Answer: TRUE Diff: 1 Topic: Example: A Carbon Tax Skill: Conceptual AACSB: Reflective Thinking Learning Outcome: Micro-22 51) A […]
Chapter 9 7 Smith Trades The Right Increase Pollution 500
Copyright © 2014 Pearson Education, Inc. Table 9.6 16) Given the data in Table 9.6, if Firm A were to reduce pollution from 100 gallons of wastewater per day to 0 gallons per day, production costs A) would increase by […]