The Economic Way of Thinking 13th Edition

People who disagree vehemently about whether or not it is efficient to clear-cut forests or strip-mine for coal are basically disagreeing about A) the importance of material wealth. B) the importance of the economy. C) the proper relationship of human beings to the natural world. D) who should have which rights. Answer: D Answer: D Answer:

If freezing weather in Florida destroys a large portion of the current orange crop, A) prices of Florida oranges will rise and quantity demanded will fall. B) the supply of and the demand for Florida oranges will both fall. C) the demand for Florida oranges will fall and prices will rise. D) the supply

Let's assume producers in Canada can make 200 units of beef or 50 units of oranges, and U.S. producers can make 50 units of beef or 200 units of oranges per time period. Therefore A) U.S. producers have a comparative advantage in oranges. B) Canadian producers have a comparative advantage in beef. C)

Complete this sentence: in a market system income is generally earned A) independently of acts of exchange and production. B) arbitrarily and randomly. C) unproductively. D) in the process of its creation. Answer: D Answer: D Answer: D If total consumer expenditures (in dollars) for bus transportation were to increase when the price of bus transportation was

Suppose an economist claims there are substitutes for wetlands. The person is saying A) wetlands are of no value. B) wetlands are worth less than their substitutes. C) there is a cost to maintaining a wetland. D) there is a cost to maintaining a wetland, and it is necessarily too high. E) economists don't like

Elected government officials seem biased toward favoring A) the national interest. B) the global interest. C) well organized, special interest groups. D) policies that are in the long-run interest of economists. Answer: C Answer: C Answer: C Suppose a pickpocket steals your $20 bill and spends all of it on pizza and beer. What happens to GDP? A)

For which of the following goods would the price elasticity of demand ordinarily be greatest? A) Gasoline B) Mobil regular gasoline C) Petroleum products D) Transportation services E) Unleaded gasoline Answer: B Answer: B Answer: B Positive externalities and high transaction costs make voluntary social cooperation difficult because they A) are also obstacles to the effective working of democratically

Which of the following most accurately describes what occurs during a time of inflation? A) People must work longer to live as well. B) Prices rise faster than incomes. C) The average standard of living declines. D) The cost of living increases. E) The purchasing power of money falls. Answer: E Answer: E Answer: E Suppose consumers view

Fill in the blank: According to your textbook, "Fiscal policy is simply ________." A) budget policy B) monetary policy under a different name C) price policy D) wage policy E) stupid Answer: A Answer: A Answer: A Which of the following things does not have an objective cost? A) Platinum B) Water C) Ski lift tickets D) Medical equipment E) None of the

Suppose we observe the following sequence of production and exchange: sand is used to make silicon; silicon is used to make silicon chips; silicon chips are used to make computers; computers are sold to retailers; retailers sell those computers to consumers. Which represents the purchase of a final good? A) The

Which of the following clearly restricts the competitive market process? A) Selling below cost B) Selling above cost C) Selling at cost D) Setting a price above marginal cost E) None of the above. Answer: E Answer: E Answer: E The economic way of thinking views government as a social institution A) in which people do not compete. B) in

Marginal revenue is A) revenue earned by increasing the margin between cost and price. B) revenue earned by purchasing stock on credit. C) revenue on which a seller is not dependent for survival. D) the additional monetary receipts that result from a decision. Answer: D Answer: D Answer: D Suppose Ann can produce 8 units of a

A speculator who incorrectly anticipates the future A) cannot inflict a loss on others because one person's loss must be someone else's gain. B) incurs a personal loss but benefits everyone else. C) inflicts a loss on others and incurs a personal loss. D) makes a personal profit but inflicts a loss on

Which of the following is an important difference between government and privately-owned enterprises? A) Government can distribute goods without employing discriminatory rationing criteria. B) Government can more easily use negative incentives to obtain resources. C) Government does not produce exchangeable commodities or services. D) Government provides services at a lower opportunity cost. E) Government tends

If the market clearing price of computer tablets falls from $400 to $300, and the market clearing output increases from 5 million to 7 million units, A) demand decreased and supply remained unchanged. B) supply increased and demand remained unchanged. C) demand increased and supply remained unchanged. D) supply decreased and demand remained unchanged.

If price changes by one firm induce rival firms selling close substitutes to alter their prices, A) firms will be able to raise their prices without fear of losing sales. B) the demand curve will shift in response to a change in price. C) the original firm faces an elastic demand curve. D) the

Let's assume Ben can produce 3 units of a material good (M) or 3 units of a spiritual good (S) in a day, while Cal can produce 1 M or 2 Ss in a day. Both Ben and Cal can potentially produce a larger combination of M and S A) if

A business can be operated profitably at a loss for an indefinite period of time A) if it is unable to meet all their obligations but able to cover operating costs. B) if we neglect the social costs of discriminatory pricing. C) for firms that enjoy special legal privileges. D) if costs are calculated

Roughly what was the change in Chile's per capita GDP between 1960 and 2011? A) 2.65% B) 26.5% C) 265% D) 2,650% Answer: C Answer: C Answer: C Pick the true statement regarding the notion of competition as a process versus the model of perfect competition. A) The process notion allows for uncertainty and incomplete information; perfect competition

Which supports the economist's claim that buyers don't compete against sellers? A) Diners would rather have more restaurants to choose among. B) Music buyers prefer having access to internet music stores compared to only the local music shop in town. C) Car buyers prefer several dealerships in the region compared to only one. D)

An effective price ceiling tends to A) decrease quantity supplied. B) Increase quantity demanded. C) discoordinate the plans of buyers and sellers. D) do all of the above. Answer: D Answer: D Answer: D The fees physicians charge patients are most closely related to the physicians' cost of A) acquiring a medical degree. B) earning a target income. C) maintaining

According to the authors of your text, the phrase "property rights" can be substituted with the phrase A) "property wrongs." B) "what people think they can get away with." C) "animal rights." D) "rugged individualism." E) "free market capitalism." Answer: B Answer: B Answer: B Specialization and exchange develop under conditions of A) massive ignorance. B) a total conflict of

When a government mandate sets the rental price of an apartment below the market clearing level, which of the following result? A) A shortage B) A surplus C) Scarcity D) The outcome is unknowable. Answer: A Answer: A Answer: A When determining value added, national income accounting systematically ignore A) accounting profits. B) economic profits. C) accounting losses. D) the expected

The deposit expansion multiplier would increase if the Fed were to A) raise the required reserve ratio. B) lower the required reserve ratio. C) raise the discount rate. D) sell bonds. Answer: B Answer: B Answer: B The logical principle for maximization can be stated as follows: A) Do it if it feels good. B) Do it if the

A price support on milk is not in the interest of milk drinkers, so why do elected public officials successfully implement milk price supports? A) Milk price supports are in the public interest. B) A small number of households (dairy farmers) gain a great deal, while the costs of the support program

The owner of a scenic waterfall is trying to decide whether to rent the site to a manufacturing firm as an industrial power source or to rent it to a recreational association, which would turn the site into a park and campground. Which of the following statements is true? A) An

Roughly what was the Democratic Republic of Congo's per capita GDP in 2011? A) $110 B) $1,100 C) $11,000 D) $110,000 Answer: A Answer: A Answer: A Cooperation among different people can occur A) even if most people know nothing about one another. B) only if at least 10% of the people know one another personally. C) only if the

National output and national income are essentially the same because A) every purchase implies a sale. B) every cost implies a benefit. C) every profit implies a loss. D) every gain implies a sacrifice. Answer: A Answer: A Answer: A Suppose a Chinese restaurant provides free tea to its customers. In the economic way of thinking, the restaurant

Let's assume Ben can produce 3 units of a material good (M) or 3 units of a spiritual good (S) in a day, while Cal can produce 1 M or 2 Ss in a day. Which statement below is true? A) It costs Cal 1/2 M to produce 1 S. B) It

When does a price searcher's marginal revenue curve lie below its demand curve? A) At all times, since this is the definition of a price searcher B) When it cannot confine price reductions to the new sales it's trying to attract by lowering its price C) When it is producing more than the

Fill in the blank: ________ leads to speculation. A) Love B) Uncertainty C) Greed D) Money E) Sin Answer: B Answer: B Answer: B At the moment, the Federal Reserve keeps the discount rate above the fed funds rate. In so doing, they are A) discouraging commercial banks from borrowing from the Fed. B) encouraging commercial banks to borrow from

The usefulness of money in commercial societies comes from the fact that A) money is backed by gold. B) most people will change their behavior at least a little in response to money incentives. C) most people will do anything at all for money. D) most people would rather spend money than save it. E)

Rationing when goods have suddenly become more scarce, by asking people to make sacrifices voluntarily for the sake of others, discriminates against people who are A) considerate. B) poor. C) unethical. D) unwilling to sacrifice. E) wealthy. Answer: A Answer: A Answer: A iTunes offers samples of music downloads, and in doing so they A) further inform customers. B) further

If a legal ceiling price causes the quantity of a good demanded to be greater than the quantity supplied A) competition among both buyers and sellers is prevented. B) competition among buyers is prevented. C) competition among sellers is prevented. D) competition among buyers will raise the nonmonetary costs of obtaining the good. Answer:

Pick the best answer using the economic way of thinking. If information is a scarce good, then ignorance might be A) a sin. B) stupid. C) bliss. D) rational. E) inefficient. Answer: D Answer: D Answer: D According to your textbook, the notion of price "gouging" is problematic because A) the higher prices are normally the result of decreases

In the economic way of thinking, speculation can only occur A) in a capitalist economy. B) in a society where time-travel is possible. C) under uncertainty. D) under perfect information. E) in an underground or illegal market system. Answer: C Answer: C Answer: C Which statement is consistent with the economic way of thinking? A) Individuals in the market

Higher relative wages for labor tends to A) increase the supply of labor. B) decrease the demand for labor. C) encourage firms to find substitutes, such as automation. D) accomplish all of the above. Answer: C Answer: C Answer: C If the price of sandals is fixed by law below the market-clearing price, A) a surplus of sandals

What is the error in the following argument? "An increased sales tax on gasoline won't reduce consumption, because while the higher price will at first reduce demand, the reduced demand will eventually bring the price back down again, and consumption will return to its former level." A) A higher price doesn't reduce

Suppose a university refunds students 75% of their tuition if they drop out before the third week of class, 50% if they drop out between their third and fifth week, 25% if they drop out between their sixth and eighth week, and 0% after the eighth week. Flint paid $1,000 tuition,

An effective price ceiling tends to A) increase quantity supplied. B) decrease quantity demanded. C) leave quantity supplied and demanded unchanged. D) do none of the above. Answer: D Answer: D Answer: D Ann Trepreneur was formerly a landlord, renting her building for $1,200 a month. She now uses her building for her own florist shop. Pick

Typically, in towns and villages across the Midwest, bowling alleys are one-story buildings. In Manhattan, one is more likely to bowl in alleys found in multi-story high rises. Why? A) Because Midwesterners live on flat lands, they think flat and build flat. B) The bowling cultures are different. C) The cost of building

Competition would probably be abolished if society could find a way to abolish A) inequality. B) scarcity. C) money. D) economists. Answer: B Answer: B Answer: B Suppose it costs a farmer $1.00 to produce 1 unit of corn, $2.10 to produce 2 units of corn, and $3.30 to produce 3 units of corn. What's the average

We do not have reliable information on the time lags between expansionary fiscal and monetary policy actions and their effect on production and prices because A) Congress has reduced the funds available to the Bureau of Economic Analysis. B) economists believe any discretionary policy would only make matters worse. C) economists have only

Chapter 15 suggests that the Community Reinvestment Act (CRA) provides an example of A) bad intentions and bad unintended consequences. B) good intentions and bad unintended consequences. C) bad intentions and good unintended consequences. D) good intentions and good unintended consequences. Answer: B Answer: B Answer: B A person who refuses an offer of employment in order to

A fish hatchery raises brook trout and rainbow trout. An increase in the market price of brook trout therefore tends to A) reduce the demand for brook trout. B) increase the hatchery's cost of raising rainbow trout. C) increase the demand for brook trout. D) decrease the hatchery's cost of raising rainbow trout. Answer:

A stable rule of law A) invariably turns losses into profits. B) allows people to cooperate more effectively with one another. C) converts price searchers into price takers. D) renders the law of comparative advantage ineffective. Answer: B Answer: B Answer: B Economist's can justify supporting education through taxation on which of the following grounds? A) Education generates

The Skinned Knee Corporation can produce either 300 skateboards each week or 500 snowboards each week. What is their opportunity cost of producing 300 skateboards each week? A) 300 skateboards B) 200 snowboards C) 500 snowboards D) 800 snowboards Answer: C Answer: C Answer: C If an economist were to consult for a major Fortune 500 company,

If one really believes that price spikes known as "price gouging" are due to a surge in greed among suppliers, then A) they haven't quite mastered the economic way of thinking. B) their comfort in knowing that thousands if not millions of others agree with them is not sufficient economic evidence to

Fill in the blank: According to your text, ________ may be the most powerful force behind economic growth. A) minimum wages B) unionization C) technical innovation D) a well-motivated bureaucracy E) price compression Answer: C Answer: C Answer: C Suppose the price level increases and real GDP remains the same. Then A) nominal GDP must decrease. B) nominal GDP must

Suppose the Utopian economy has the following characteristics: 100,000 people in the noninstitutional population; 80,000 people employed; 20,000 people not in the labor force. What's the unemployment rate? A) -20 percent B) 0 percent C) 25 percent D) 60 percent E) 80 percent Answer: B Answer: B Answer: B Consider the following simplified sequence of exchanges. A logger

Which one of the following twentieth-century nations eliminated the problem of scarcity? A) Socialist Cuba B) Socialist China C) Fascist Italy D) The United States of America E) None of the above. Answer: E Answer: E Answer: E Henry David Thoreau faced a choice: Stay in the village of Concord or move out to Walden Pond. He decided

The number of dollars that the commercial banking system can add to the money supply for each dollar of new reserves created by the Fed A) cannot legally be greater than 8 nor less than 2. B) is governed largely by reserve requirements and the form in which the public chooses to

According to the economic way of thinking, elected government officials tend to favor A) contractionary monetary policies. B) contractionary fiscal policies. C) expansionary monetary and fiscal policies. D) monetary and fiscal policies consistent with the public interest. Answer: C Answer: C Answer: C Why do the sellers of some whiskeys pay for advertisements to tell people their

In 2002 some politicians and many representatives of the steel and iron-ore mining industries in the U.S. complained foreign steel producers were illegally "dumping" steel and contributing to a potential unemployment problem. According to the economic way of thinking, their argument is questionable because A) it is not at all clear what the

Fill in the blank: ________ is another term for a decline in real GDP is A) Deflation. B) Inflation C) Economic growth D) Recession E) Unemployment Answer: D Answer: D Answer: D Let's assume producers in Canada can make 200 units of beef or 50 units of oranges, and U.S. producers can make 50 units of beef or

According to the text, a government policy of promoting competition must A) assure small businesses they won't fail because of below-cost pricing or other predatory practices by larger businesses. B) assure small businesses they won't fail under any circumstances. C) equate profit margins among competing suppliers. D) maintain a process rather than some state

California voters and legislators frequently debate about the true cost of water in the course of trying to establish state policy to govern the use of water. The issue is confusing because A) all water is ultimately a free gift of nature. B) the cost of water is infinite. C) water in itself,

Suppose an economy has the following characteristics: 100 people in the noninstitutional population; 60 people employed; 20 people not in the labor force. How many people are unemployed? A) 20 B) 40 C) 60 D) 80 E) 100 Answer: A Answer: A Answer: A According to opportunity-cost theory, people will find themselves increasingly "short of time" when A) their demand

When the price of a good increases, A) supply increases. B) quantity supplied increases. C) supply decreases. D) quantity supplied decreases. Answer: B Answer: B Answer: B A fully licensed driver, Clarity Dence just drove her car to an "Earth Day" rally. By doing so, she exercises A) her right to drive beyond the speed limit. B) her right

Profits resulting from luck can be distinguished from profits attributable to shrewd predictions by A) calculating the opportunity cost of earning the profits. B) comparing the profits with interest rates. C) finding out whether they lead to reduced revenue or increased costs. D) no known empirical test. E) whether or not they were generally anticipated.

The real rate of interest is A) the rate of inflation minus the nominal rate of interest. B) the nominal rate of interest minus the risk premium. C) the nominal rate of interest minus the rate of inflation. D) the rate of inflation minus the risk premium. Answer: C Answer: C Answer: C Suppose the Utopian economy

1 Answer: A 1 Answer: A 1 Answer: A Copyright 2014 Pearson Education, Inc. Copyright 2014 Pearson Education, Inc. Copyright 2014 Pearson Education, Inc. The Economic Way of Thinking, 13e (Heyne) Chapter 1 The Economic Way of Thinking 1) Fill in the blank: Economics is the study of ________

1 Answer: D 1 Answer: D 1 Answer: D Copyright 2014 Pearson Education, Inc. Copyright 2014 Pearson Education, Inc. Copyright 2014 Pearson Education, Inc. The Economic Way of Thinking, 13e (Heyne) Chapter 10 Externalities and Conflicting Rights 1) Economists use the term externalities to refer to A) consequences

12 Answer: D 12 Answer: D 12 Answer: D Copyright 2014 Pearson Education, Inc. Copyright 2014 Pearson Education, Inc. Copyright 2014 Pearson Education, Inc. 60) If the local airport decides to pay monetary compensation to the people on whom the airport's operation has imposed costs, it should compensate the

1 Answer: D 1 Answer: D 1 Answer: D Copyright 2014 Pearson Education, Inc. Copyright 2014 Pearson Education, Inc. Copyright 2014 Pearson Education, Inc. The Economic Way of Thinking, 13e (Heyne) Chapter 11 Markets and Government 1) Which of the following is a clear difference between the market

1 Answer: B 1 Answer: B 1 Answer: B Copyright 2014 Pearson Education, Inc. Copyright 2014 Pearson Education, Inc. Copyright 2014 Pearson Education, Inc. The Economic Way of Thinking, 13e (Heyne) Chapter 12 The Distribution of Income 1) Your textbook argues that the phrase "the distribution of income"

1 Answer: C 1 Answer: C 1 Answer: C Copyright 2014 Pearson Education, Inc. Copyright 2014 Pearson Education, Inc. Copyright 2014 Pearson Education, Inc. The Economic Way of Thinking, 13e (Heyne) Chapter 13 Measuring the Overall Performance of Economic Systems 1) Gross domestic product is the market value

18 Answer: A 18 Answer: A 18 Answer: A Copyright 2014 Pearson Education, Inc. Copyright 2014 Pearson Education, Inc. Copyright 2014 Pearson Education, Inc. 89) For deflation to occur, A) national income must decrease. B) real GDP must decrease. C) the price level must decrease. D) nominal GDP must decrease.

1 Answer: D 1 Answer: D 1 Answer: D Copyright 2014 Pearson Education, Inc. Copyright 2014 Pearson Education, Inc. Copyright 2014 Pearson Education, Inc. The Economic Way of Thinking, 13e (Heyne) Chapter 14 Money 1) The most important function of money is to A) allow for positive interest rates.

13 Answer: B 13 Answer: B 13 Answer: B Copyright 2014 Pearson Education, Inc. Copyright 2014 Pearson Education, Inc. Copyright 2014 Pearson Education, Inc. 66) Roughly what is the required reserve ratio within the U.S. banking system? A) Less than 10 percent. B) 15% C) 25% D) 50% E)

1 Answer: B 1 Answer: B 1 Answer: B Copyright 2014 Pearson Education, Inc. Copyright 2014 Pearson Education, Inc. Copyright 2014 Pearson Education, Inc. The Economic Way of Thinking, 13e (Heyne) Chapter 15 Economic Performance and Real-World Politics 1) Recall from Chapter 5: Other things constant, when households

1 Answer: A 1 Answer: A 1 Answer: A Copyright 2014 Pearson Education, Inc. Copyright 2014 Pearson Education, Inc. Copyright 2014 Pearson Education, Inc. The Economic Way of Thinking, 13e (Heyne) Chapter 16 The Wealth of Nations: Globalization and Economic Growth 1) Fill in the blank: By 2011,

1 Answer: C 1 Answer: C 1 Answer: C Copyright 2014 Pearson Education, Inc. Copyright 2014 Pearson Education, Inc. Copyright 2014 Pearson Education, Inc. The Economic Way of Thinking, 13e (Heyne) Chapter 2 Efficiency, Exchange, and Comparative Advantage 1) In the economic way of thinking, the identification of

20 Answer: A 20 Answer: A 20 Answer: A Copyright 2014 Pearson Education, Inc. Copyright 2014 Pearson Education, Inc. Copyright 2014 Pearson Education, Inc. 103) When countries specialize in what they do efficiently and trade, the material wealth of nations A) expands. B) contracts C) remains the same. D)

1 Answer: C 1 Answer: C 1 Answer: C Copyright 2014 Pearson Education, Inc. Copyright 2014 Pearson Education, Inc. Copyright 2014 Pearson Education, Inc. The Economic Way of Thinking, 13e (Heyne) Chapter 3 Substitutes Everywhere: The Concept of Demand 1) The textbook cautions against speaking of "the people"

20 Answer: B 20 Answer: B 20 Answer: B Copyright 2014 Pearson Education, Inc. Copyright 2014 Pearson Education, Inc. Copyright 2014 Pearson Education, Inc. 99) Could an increase in urban bus fares eventually lead to an increase in the demand for bus service? A) It could not do so,

1 Answer: C 1 Answer: C 1 Answer: C Copyright 2014 Pearson Education, Inc. Copyright 2014 Pearson Education, Inc. Copyright 2014 Pearson Education, Inc. The Economic Way of Thinking, 13e (Heyne) Chapter 4 Cost and Choice: The Concept of Supply 1) The economizing process (choosing from among alternatives

17 Answer: D 17 Answer: D 17 Answer: D Copyright 2014 Pearson Education, Inc. Copyright 2014 Pearson Education, Inc. Copyright 2014 Pearson Education, Inc. 83) If you pay $35 for a sticker that entitles you to park on campus for 35 weeks of the academic year, the marginal dollar

1 Answer: A 1 Answer: A 1 Answer: A Copyright 2014 Pearson Education, Inc. Copyright 2014 Pearson Education, Inc. Copyright 2014 Pearson Education, Inc. The Economic Way of Thinking, 13e (Heyne) Chapter 5 Supply and Demand: A Process of Coordination 1) According to your text, the central economic

18 Answer: C 18 Answer: C 18 Answer: C Copyright 2014 Pearson Education, Inc. Copyright 2014 Pearson Education, Inc. Copyright 2014 Pearson Education, Inc. 95) What will be the principal and most immediate effect on the supply or demand for raw cotton grown in the United States if an

1 Answer: C 1 Answer: C 1 Answer: C Copyright 2014 Pearson Education, Inc. Copyright 2014 Pearson Education, Inc. Copyright 2014 Pearson Education, Inc. The Economic Way of Thinking, 13e (Heyne) Chapter 6 Unintended Consequences: More Applications of Supply and Demand 1) According to your textbook, the notion

15 Answer: B 15 Answer: B 15 Answer: B Copyright 2014 Pearson Education, Inc. Copyright 2014 Pearson Education, Inc. Copyright 2014 Pearson Education, Inc. 75) Suppose the market-clearing price of wheat is $2.50 per bushel. What would happen if wheat farmers persuaded the government to set a legally-mandated price

1 Answer: C 1 Answer: C 1 Answer: C Copyright 2014 Pearson Education, Inc. Copyright 2014 Pearson Education, Inc. Copyright 2014 Pearson Education, Inc. The Economic Way of Thinking, 13e (Heyne) Chapter 7 Profit and Loss 1) "Total revenue minus total cost" is A) an incorrect definition of

12 Answer: A 12 Answer: A 12 Answer: A Copyright 2014 Pearson Education, Inc. Copyright 2014 Pearson Education, Inc. Copyright 2014 Pearson Education, Inc. 61) From the perspective of economic theory, property rights are A) human rights. B) just as important as human rights. C) less important than human

1 Answer: D 1 Answer: D 1 Answer: D Copyright 2014 Pearson Education, Inc. Copyright 2014 Pearson Education, Inc. Copyright 2014 Pearson Education, Inc. The Economic Way of Thinking, 13e (Heyne) Chapter 8 Price Searching 1) The cost-plus-markup theory of price setting A) explains why firms can't raise their

1 Answer: C 1 Answer: C 1 Answer: C Copyright 2014 Pearson Education, Inc. Copyright 2014 Pearson Education, Inc. Copyright 2014 Pearson Education, Inc. The Economic Way of Thinking, 13e (Heyne) Chapter 9 Competition and Government Policy 1) Which conditions must be present for "perfect competition" to occur?

14 Answer: E 14 Answer: E 14 Answer: E Copyright 2014 Pearson Education, Inc. Copyright 2014 Pearson Education, Inc. Copyright 2014 Pearson Education, Inc. 70) Predatory pricing, as defined in the text, is A) common and profitable but illegal. B) common, profitable, and legal. C) common but both unprofitable

Suppose the United Automobile Workers union agrees to accept lower wages for members if the automobile manufacturers lower their prices to buyers. Will the UAW's measures usually result in a larger number of cars being sold and hence more jobs for UAW members? A) No, because people only buy new cars

Speculators who believe the world-wide demand for cocoa products is going to increase enormously next year will cause A) less cocoa to be consumed next year. B) less cocoa to be consumed this year. C) less cocoa to be produced next year. D) less cocoa to be produced this year. E) none of the above since

Suppose the market-clearing price of wheat is $2.50 per bushel. What would happen if wheat farmers persuaded the government to set a legally-mandated price support of $3.75 per bushel? A) The quantity demanded of wheat would fall. B) The quantity supplied of wheat would rise. C) A surplus of wheat would occur. D) All