Economics 5th Edition

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978-0133455441

ISBN 10

0133455440

Authors

Anthony P. O'brien, Glenn P. Hubbard

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971 documents found.

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BUS 104 Deadweight Loss Refers ToA

Deadweight loss refers to A) the opportunity cost to firms from producing the equilibrium quantity in a competitive market. B) the sum of consumer and producer surplus. C) the loss of economic surplus when the marginal benefit equals the marginal cost of the last unit produced. D) the reduction in economic surplus resulting from

Economics 5th Edition

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BUS 110 Midterm 1

A commercial bank like Comerica creates money by A) printing paper money. B) earning profits. C) selling corporate bonds. D) making loans. Answer: D Answer: D Answer: D Assuming the United States is the "domestic" country, if the real exchange rate between the United States and Russia decreases from 28 to 23, A) the prices of U.S. goods and services

Economics 5th Edition

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BUS 110 Quiz 2

Table 2-13 Table 2-13 shows the output per day of two pet groomers, Tammi and Horace. They can either devote their time to grooming dogs or bathing cats. Which of the following statements istrue? A) Horace has an absolute advantage in both tasks. B) Tammi has an absolute advantage in both tasks. C) Horace has an

Economics 5th Edition

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BUS 114 Test 1

Figure 2-2 Figure 2-2 above shows the production possibilities frontier for Vidalia, a nation that produces two goods, roses and orchids. What is the opportunity cost of one dozen orchids? A) 0.4 dozen roses B) 2.5 dozen roses C) 7.25 dozen roses D) 16 dozen roses Answer: B Answer: B Answer: B Which of the following did not

Economics 5th Edition

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BUS 135 Homework

In August 2011, Standard & Poor's (S&P) changed its rating on U.S. Treasury bonds from ________ based on the state of the federal government's budget deficit. A) "A" to "D" B) "A" to "AAA" C) "A+" to "B+" D) "AAA" to "AA+" Answer: D Answer: D Answer: D In recent years, a monetary growth rule has fallen out

Economics 5th Edition

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BUS 135 Test 2

Figure 2-16 One segment of the circular flow diagram in the figure shows the flow of wages and salaries from market K to economic agents M. What is market K and who are economic agents M? A) K = factor markets; M = households B) K = product markets; M = households C)

Economics 5th Edition

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BUS 141

What is the term that explains why voters often lack knowledge of pending legislation, and lack knowledge of the views of candidates for office on a range of issues that affect their own (the voters') welfare? A) the voting paradox B) logrolling C) rational ignorance D) regulatory capture Answer: C Answer: C Answer: C Figure 2-7 Mercedes Benz

Economics 5th Edition

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BUS 144 Quiz

Figure 15-6 Figure 15-6 shows the cost and demand curves for a monopolist. The profit-maximizing output and price for the monopolist are A) output = 62; price = $24. B) output = 62; price = $18. C) output = 83; price = $22. D) output = 104; price = $20.80. Answer: A Answer: A Answer: A Technological advancements have

Economics 5th Edition

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BUS 156 Test 2

A decrease in the wage rate causes A) an increase in the quantity of labor demanded. B) a rightward shift of the firm's labor demand curve. C) a leftward shift of the firm's labor demand curve. D) a decrease in labor's productivity. Answer: A Answer: A Answer: A To maximize their profits and defend those profits from competitors,

Economics 5th Edition

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BUS 162 Quiz 3 Suppose

Suppose thatAmerican firms claim that protectionism in Canada is on the rise as the Canadian government attempts to protect its infant industries. This protectionism will cause the greatest harm to A) Canadian manufacturers. B) the Canadian government. C) manufacturers who export to Canada. D) Canadian consumers. Answer: C Answer: C Answer: C The Bretton Woods system confronted severe

Economics 5th Edition

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BUS 165 Test 1

Nominal GDP measures the value of all final goods and services at base-year prices. Answer: FALSE Answer: FALSE Answer: FALSE The unemployment rate is higher with a minimum wage law than it would be without a minimum wage law. Answer: TRUE Answer: TRUE Answer: TRUE In the circular flow diagram, the value of all the income in the

Economics 5th Edition

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BUS 166 Midterm 1

Which of the following would contribute to a sustained high rate of economic growth in the long run in an economy? A) growth in capital per hour accompanied by technological change B) increases in labor force participation rates as workers who are out of the labor force pursue rising wages C) a shift of

Economics 5th Edition

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BUS 170

Market equilibrium occurs where supply equals demand. Answer: FALSE Answer: FALSE Answer: FALSE Inflation targeting, typically, has been accompanied by lower inflation. Answer: TRUE Answer: TRUE Answer: TRUE In order to maintain an undervalued yuan to encourage a trade surplus, the Chinese government must buy dollars and increase the supply of yuan. Answer: TRUE Answer: TRUE Answer: TRUE A member of a

Economics 5th Edition

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BUS 172 Midterm

If technological change increases the profitability of new investments for firms, then the ________ curve for loanable funds will shift to the ________. A) supply; right B) supply; left C) demand; right D) demand; left Answer: C Answer: C Answer: C Tanesha sells homemade candles over the Internet. Her annual revenue is $64,000 per year, the explicit costs of

Economics 5th Edition

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BUS 178 Midterm 1

Table 9-6 Production and Consumption Production Without Trade With Trade Denmark and Belize can produce both clocks and hats. Table 9-6 shows the production and consumption quantities without trade, and the production numbers with trade. Which country has an absolute advantage in producing clocks? A) Denmark B) Belize C) both countries D) neither country Answer: A Answer: A Answer: A Consider the

Economics 5th Edition

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BUS 179 Quiz 1

In market economies, income distribution is always going to be completely equitable. Answer: FALSE FALSE FALSE The median voter theorem states that the outcome of a majority vote is likely to represent the preferences of the voter who is in the political middle. Answer: TRUE TRUE TRUE If a country is producing efficiently and is on the production possibilities frontier,

Economics 5th Edition

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BUS 181 Test 1

If the substitution effect of a wage increase dominates the income effect, the labor supply curve has a positive slope. Answer: TRUE TRUE TRUE Expansionary monetary policy lowers interest rates and forces a real appreciation of the dollar in international currency markets. Answer: FALSE FALSE FALSE If there is public dissaving, investment spending in the economy will decline, holding everything else

Economics 5th Edition

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BUS 189 Quiz 2

Figure 16-5 Suppose the firm represented in the diagram decides to use a two-part pricing strategy such that it charges a fixed fee and a per-unit price equal to the monopoly price. What is the revenue collected from the fixed fee portion of the price? A) $10,240 B) $7,870 C) $2,560 D) $1,440 Answer: C Answer: C Answer:

Economics 5th Edition

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BUS 189 Quiz 3

A decrease in the demand for soft drinks due to changes in consumer tastes, accompanied by an increase in the supply of soft drinks as a result of reductions in input prices, will result in A) a decrease in the equilibrium quantity of soft drinks and no change in the equilibrium

Economics 5th Edition

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BUS 195 Test

Increases in real GDP would understate the well-being of a country over time if, over that time period, the A) crime rate increased. B) percentage of people addicted to illegal drugs increased. C) amount of pollution decreased. D) average hours worked per week decreased. Answer: C Answer: C Answer: C A decrease in the equilibrium price for a

Economics 5th Edition

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BUS 199

If the Fed lowers the reserve requirement, then this A) increases excess reserves, encourages banks to make more loans, and increases the money supply. B) decreases excess reserves, causes banks to reduce their loans, and decreases the money supply. C) decreases excess reserves, causes banks to reduce their loans, and increases the money

Economics 5th Edition

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BUS 202

Which of the following characteristics iscommon to monopolistic competition and perfect competition? A) Firms produce identical products. B) Entry barriers into the industry are low. C) Each firm faces a downward -sloping demand curve. D) Firms take market prices as given. Answer: B Answer: B Answer: B Table 16-3 Julie plans to start a pet-sitting service. She surveyed her

Economics 5th Edition

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BUS 204 Midterm 1 Figure

Figure 17-4 Which of the following is true at W2? A) The income effect is larger than the substitution effect. B) The substitution effect is larger than the income effect. C) The income effect and the substitution effect are equal. D) The supply curve is positively sloped. Answer: A Answer: A Answer: A Figure 18-2 Figure 18-2 shows

Economics 5th Edition

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BUS 205 Homework

Which of the following describes a difference between allocative efficiency and productive efficiency in a perfectly competitive market? A) Allocative efficiency is achieved only in the long run. Productive efficiency is achieved only in the short run. B) Allocative efficiency is achieved only in the long run. Productive efficiency is achieved in

Economics 5th Edition

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BUS 225 Midterm 2

A successful market economy requires well defined property rights and A) balanced supplies of all factors of production. B) an independent court system to adjudicate disputes based on the law. C) detailed government regulations. D) a safety net to ensure that those who cannot participate in the market economy can earn an income. Answer: B Answer:

Economics 5th Edition

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BUS 238 Quiz 2

Which of the following will result in an increase in labor productivity? A) a decrease in the number of people attending institutions of higher education B) a decline in the amount of human capital per worker C) an increase in technology D) a decline in the capital stock per hour worked Answer: C Answer: C Answer: C An

Economics 5th Edition

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BUS 247 Quiz 1

DeShawn's Detailing is a service that details cars at the customers' homes or places of work. DeShawn's cost for a basic detailing package is $40, and he charges $75 for this service. For a total price of $90, DeShawn will also detail the car's engine, a service that adds an additional

Economics 5th Edition

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BUS 248 Quiz 1

All of the following are ways in which health insurance companies can potentially reduce adverse selection except A) by insuring only large groups of people. B) by lowering the co-payments and deductibles on the policies they issue. C) by refusing to insure some applicants, for example based on prior health conditions. D) by

Economics 5th Edition

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BUS 252 Test 2

Assume that the personal computer industry is perfectly competitive. The fact that the price of personal computers over the last decade has fallen despite increases in demand signifies that the industry is a decreasing-cost industry. Answer: TRUE Answer: TRUE Answer: TRUE Stagflation occurs when aggregate supply and aggregate demand both increase. Answer: FALSE Answer: FALSE Answer: FALSE If

Economics 5th Edition

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BUS 254

Exchange rates under the Bretton Woods system were determined by relative supplies of gold held by countries within the system. Answer: FALSE[/cpmembership] Answer: FALSE[/cpmembership] Answer: FALSE[/cpmembership] Technological change allows the economy to produce more output with the same amount of capital and labor. Answer: TRUE Answer: TRUE Answer: TRUE The main goal of monetary policy for recent Fed

Economics 5th Edition

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BUS 263 A Firm Using A Twopart

A firm using a two-part tariff can produce the economically efficient outcome by A) making the fixed-fee portion of the price as low as possible. B) setting the per-unit portion of the price equal to the marginal cost of production. C) setting the per-unit portion of the price equal to the average cost

Economics 5th Edition

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BUS 270 Test 2

Article Summary. Seeking ways to improve education, Garrett Johnson has organized technology competitions called hackathons where participants such as students, teachers, and engineers build applications designed to improve secondary and higher education systems. These applications can include ways for teachers to improve skills, more productive study habits for students, improving

Economics 5th Edition

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BUS 279

Money market mutual funds sell shares to investors and use the money to buy A) mortgage-backed securities. B) foreign currency. C) short-term securities. D) overseas assets through foreign direct investment. Answer: C Answer: C Answer: C Arnold Harberger was the first economist to estimate the loss of economic efficiency due to market power. Harberger found that A) the loss

Economics 5th Edition

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BUS 282

When firms exit a perfectly competitive industry, the market supply curve shifts to the left. Answer: TRUE TRUE TRUE The total amount of consumer surplus in a market is equal to the area below the demand curve. Answer: FALSE FALSE FALSE When a firm experiences negative technological change it can produce the same output with fewer inputs. Answer: FALSE FALSE FALSE Expanding, contracting, and managing the

Economics 5th Edition

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BUS 282 Final

If consumers believe the price of LCD televisions will decrease in the future, this will cause the demand for LCD televisions to increase now. Answer: FALSE Answer: FALSE Answer: FALSE Members of management serving on the board of directors of a corporation are referred to as outside directors. Answer: FALSE Answer: FALSE Answer: FALSE If a country has

Economics 5th Edition

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BUS 285 Quiz 2

If the demand for a product decreases and the supply of the same product increases, the equilibrium quantity will increase. Answer: FALSE FALSE FALSE Expanding, contracting, and managing the money supply is easier for a central bank under the gold standard. Answer: FALSE FALSE FALSE The absolute value of the price elasticity of demand for telescopes is 1.5. Therefore, telescopes

Economics 5th Edition

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BUS 291 Test 2 Which Of The

Which of the following is one reason why the income of small family farms has decreased over time? A) Technology has increase farm productivity and market supply. B) The demand for farm products is price elastic. C) The demand for farm products is income inelastic. D) The U.S. population has increased greatly since 1950. Answer:

Economics 5th Edition

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BUS 299 Midterm

If inflation is anticipated, some effects of inflation on the redistribution of income can be avoided. Answer: TRUE Answer: TRUE Answer: TRUE If marginal product is equal to average product, then total product is at a maximum. Answer: FALSE Answer: FALSE Answer: FALSE The basis for trade is absolute advantage, not comparative advantage. Answer: FALSE Answer: FALSE Answer: FALSE Perfectly competitive industries

Economics 5th Edition

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BUS 304 Test

Figure 16-3 Chantal owns a hairdressing salon which caters to two main groups of customers: residents of "The Chateau," a retirement community, and other residents in the neighborhood. Figure 16-3 shows the demand curves for the residents of the retirement community, labeled Market A, and other residents in the neighborhood,

Economics 5th Edition

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BUS 306

The ________ model focuses on the relationship between total spending and real GDP in the short run, assuming the price level is constant. A) supply and demand B) national income C) aggregate expenditure D) business cycle Answer: C Answer: C Answer: C If a decrease in income leads to an increase in the demand for sardines, then sardines

Economics 5th Edition

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BUS 307 Midterm 2

Which of the following characterizes the market that Starbucks competes in? A) All coffeehouses face horizontal demand curves. B) Coffeehouses sell identical products. C) Barriers to entry are low. D) There are a small number of firms. Answer: C Answer: C Answer: C The demand curve for canned peas is downward sloping. If the price of canned peas,

Economics 5th Edition

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BUS 314

A sharp increase in the divorce rate increases the number of lawyers hired to determine divorce settlements. This will A) increase GDP and increase well-being in the economy. B) increase GDP and decrease well-being in the economy. C) decrease GDP and increase well-being in the economy. D) decrease GDP and decrease well-being in the

Economics 5th Edition

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BUS 314 Quiz

What is the dominant strategy in the prisoner's dilemma? A) Each prisoner confesses because this is the rational action to pursue. B) Do nothing in the hope that the other prisoner will also do nothing. C) Do not confess because the other prisoner will most likely confess. D) There is no dominant strategy. Answer: A

Economics 5th Edition

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BUS 315 Final

In making decisions about what to consume, a person's goal is to A) allocate her limited income among all the products she wishes to buy so that she receives the highest total utility. B) buy low-priced goods rather than high-priced goods. C) maximize her marginal utility from the goods and services she wishes

Economics 5th Edition

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BUS 315 Quiz 1

If there is currently a shortage of dollars, which of the following would you expect to see in the foreign exchange market? A) The dollar will appreciate. B) The dollar will depreciate. C) There will be an increase in the demand for dollars. D) There will be an increase in the supply of dollars. Answer:

Economics 5th Edition

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BUS 317 Test

The most important barrier to entry is economies of scale. Answer: TRUE Answer: TRUE Answer: TRUE A cash withdrawal reduces deposits, reserves and excess reserves in the banking system. Answer: TRUE Answer: TRUE Answer: TRUE For a perfectly competitive firm, at the profit-maximizing output average revenue equals marginal cost. Answer: TRUE Answer: TRUE Answer: TRUE There is no evidence that odd pricing

Economics 5th Edition

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BUS 329 Final

The demand for labor depends primarily on the additional output produced as a result of hiring an additional worker and A) the additional revenue received from selling the output produced as a result of hiring an additional worker. B) the payment made to the worker for producing the additional output. C) the elasticity of demand

Economics 5th Edition

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BUS 333 Quiz 1

Table 11-3 The table above refers to the relationship between the quantity of workers employed and the number of cardboard boxes produced per day by Manny's House of Boxes. The capital used to produce the boxes is fixed. Diminishing returns to labor are first observed in this example after Manny hires

Economics 5th Edition

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BUS 343 Quiz

Consumption is $5 million, planned investment spending is $8 million, government purchases are $10 million, and net exports are equal to $2 million. If GDP during that same time period is equal to $27 million, what unplanned changes in inventories occurred? A) There was an unplanned increase in inventories equal to

Economics 5th Edition

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BUS 346 Final

Table 7-6 Production and Consumption Production Without Trade With Trade Estonia and Morocco can produce both swords and belts. Table 7-6 shows the production and consumption quantities without trade, and the production numbers with trade. Which country has a comparative advantage in producing belts? A) Estonia B) Morocco C) both countries D) neither country Answer: B Answer: B Answer:

Economics 5th Edition

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BUS 349

Figure 3-1 An increase in the price of the product would be represented by a movement from A) A to B. B) B to A. C) D1 to D2. D) D2 to D1. Answer: B Answer: B Answer: B Households ________ final goods and services in the ________ market. A) purchase; factor B) purchase; product C) sell; factor D) sell; product Answer: B Answer:

Economics 5th Edition

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BUS 349 Test 2

Figure 2-2 Figure 2-2 above shows the production possibilities frontier for Mendonca, an agrarian nation that produces two goods, meat and vegetables. If Mendonca chooses to produce 120 pounds of meat, how much vegetables can it produce to maximize production? A) 0 pounds of vegetables B) 60 pounds of vegetables C) 100 pounds

Economics 5th Edition

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BUS 377 Final

Economists Kenneth Chay and Michael Greenstone find that in the two years following the passage of the Clean Air Act of 1970, the sharp reduction in air pollution also led to a decline in infant deaths. Although this and other studies provide compelling evidence of the link between pollution and

Economics 5th Edition

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BUS 392

A college must decide if it wants to offer more evening and weekend classes. This decision involves answering the economic question of "for whom to produce." Answer: FALSE Answer: FALSE Answer: FALSE According to the benefits-received principle, those who receive the benefits from a government program should pay the taxes that support the program. Answer:

Economics 5th Edition

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BUS 396

Figure 4-5 Figure 4-5 shows the market for apartments in Springfield. Recently, the government imposed a rent ceiling of $1,000 per month. Suppose that instead of a rent ceiling, the government imposed a price floor of $2,000 per month for apartments. What is the value of producer surplus after the imposition of

Economics 5th Edition

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BUS 401 Test

Assume that the four-firm concentration ratio in an industry is 85 percent. Which of the following statements uses one of the five competitive forces to argue that this industry may be more competitive than its concentration ratio suggests? A) The high concentration may be due to patents owned by the largest

Economics 5th Edition

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BUS 404

Figure 6-7 Between points a and on the demand curve, demand is A) perfectly inelastic. B) unit-elastic. C) perfectly elastic. D) elastic. Answer: B Answer: B Answer: B Table 9-6 Production and Consumption Production Without Trade With Trade Denmark and Belize can produce both clocks and hats. Table 9-6 shows the production and consumption quantities without trade, and the production numbers with trade.

Economics 5th Edition

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BUS 419 Midterm

China began pegging its currency, the yuan, to the dollar in 1994. Because the yuan has been ________ at the pegged exchange rate, the Chinese government ________ its reserves of dollars as the government purchased more ________ to maintain the pegged exchange rate. A) undervalued; increased; dollars B) undervalued; decreased; yuan C) overvalued; decreased;

Economics 5th Edition

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BUS 428 Quiz

In which of the following situations might you expect expansionary monetary policy to reduce the unemployment rate? A) if expectations are rational B) if changes in monetary policy are unanticipated C) if actual inflation is higher than expected D) if actual inflation is lower than expected Answer: D Answer: D Answer: D Which of the following would cause

Economics 5th Edition

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BUS 434 Quiz 3

Figure 28-4 Consider the shift in the short-run Phillips curves shown in the above graph. This shift may be explained by A) an increase in the natural rate of unemployment from 5.0 to 6.2 percent. B) an increase in the expected rate of inflation from 4.0 to 5.5 percent. C) either an increase

Economics 5th Edition

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BUS 445 Test 1

Long-run macroeconomic equilibrium occurs when aggregate demand ________ short-run aggregate supply and they ________ the long-run supply curve. A) equals; intersect at a point to the right of B) equals; intersect at a point on C) is greater than; intersect at a point to the left of D) is less than; intersect at a

Economics 5th Edition

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BUS 446 Quiz 3

Which of the following is not an advantage to an insurance company of insuring a large group of people for health insurance? A) The characteristics of a large group are likely to reflect those of the entire population. B) It is easier to accurately predict the number of claims for a group

Economics 5th Edition

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BUS 461 Quiz

Retained earnings are sufficient to finance a firm's rapid expansion in a high-growth economy. Answer: FALSE Answer: FALSE Answer: FALSE A monopolistically competitive industry that earns economic profits in the short run will be able to expand its market share even if the market size remains constant. Answer: FALSE Answer: FALSE Answer: FALSE In the highly competitive fast-food

Economics 5th Edition

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BUS 466 Test 1

One reason why firms would choose a salary system rather than a commission compensation system is that their employees might become less concerned about the quality of their work. Answer: TRUE Answer: TRUE Answer: TRUE If the price of peaches, a substitute for plums, decreases, the demand for plums will increase. Answer: FALSE Answer: FALSE Answer: FALSE The

Economics 5th Edition

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BUS 476

When a firm faces a downward-sloping demand curve, marginal revenue A) must exceed price because the price effect outweighs the output effect. B) is less than price because a firm must lower its price to sell more. C) equals price because the firm sells a standardized product. D) must exceed price because the output

Economics 5th Edition

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BUS 476 Producer Surplus Is The

Producer surplus is the Difference between the highest price someone is willing to pay and the price he actually pays. Answer: FALSE Answer: FALSE Answer: FALSE In the case of an upward-sloping aggregate supply curve, the change in real GDP brought about by a change in government spending will be less than that predicted

Economics 5th Edition

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BUS 478 If The Demand For A Product

If the demand for a product decreases and the supply of the product does not change, equilibrium price and equilibrium quantity will both increase. Answer: FALSE Answer: FALSE Answer: FALSE Assume that price is greater than average variable cost. If a perfectly competitive firm is producing at an output where price is $114 and

Economics 5th Edition

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BUS 481 If A Supply Curve Is A

If a supply curve is a horizontal line, supply is said to be A) perfectly inelastic. B) unit-elastic. C) inelastic. D) perfectly elastic. Answer: D Answer: D Answer: D If, for the last bushel of apples produced and sold by an apple farm marginal revenue exceeds marginal cost, then in producing that bushel the farm A) added more to

Economics 5th Edition

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BUS 484 Because Each Customer Pays

Because each customer pays according to her willingness to pay, a consumer maximizes her consumer surplus under first-degree price discrimination. Answer: FALSE FALSE FALSE The demand for heating oil in the short run is more elastic than the long run demand for heating oil. Answer: FALSE FALSE FALSE Aggregate expenditure includes consumption spending, planned investment spending, government purchases, and net exports. Answer: TRUE TRUE TRUE The formula

Economics 5th Edition

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BUS 487 Test 1

Figure 2-6 If the economy is currently producing at point E, what is the opportunity cost of moving to point B? A) 13 thousand hammers B) 10 thousand hammers C) 30 thousand wrenches D) 0 wrenches Answer: D Answer: D Answer: D Figure 4-15 Figure 4-15 shows the market for beer. The government plans to impose a unit tax

Economics 5th Edition

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BUS 489 Firms In Perfect

Firms in perfect competition are price takers because A) one firm determines the price that all other firms in the industry will charge. B) consumers have enough market power to set prices. C) firms accept the price determined by the government. D) each firm is too small relative to the market to be able

Economics 5th Edition

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BUS 489 Quiz

Figure 9-2 Suppose the U.S. government imposes a $0.40 per pound tariff on rice imports. Figure 9-2 shows the impact of this tariff. Without the tariff in place, the United States consumes A) 9 million pounds of rice. B) 15 million pounds of rice. C) 31 million pounds of rice. D) 42 million pounds

Economics 5th Edition

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BUS 490

The public choice model can be used to examine voting models that contrast the manner in which collective decisions are made by governments (state, local and federal) and the manner in which individual choices are made in markets. Which of the following descriptions is consistent with the difference between collective decision

Economics 5th Edition

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BUS 494

A monopsony is a term used to refer to a firm that is the sole seller of a good or service. Answer: FALSE Answer: FALSE Answer: FALSE The sales revenue a seller receives from the sale of an additional unit of goods is called the marginal cost. Answer: FALSE Answer: FALSE Answer: FALSE It is possible to have

Economics 5th Edition

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BUS 495 Quiz 3

Table 7-6 Production and Consumption Production Without Trade With Trade Estonia and Morocco can produce both swords and belts. Table 7-6 shows the production and consumption quantities without trade, and the production numbers with trade. If the actual terms of trade are 1 belt for 1.5 swords and 70 belts are traded,

Economics 5th Edition

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BUS 506 Quiz 1

The marginal rate of technical substitution is measured by A) the slope of the isoquant. B) the relative input prices. C) the slope of the isocost line. D) the ratio of the product's price to the product's cost of production. Answer: A Answer: A Answer: A Farmers can plant either corn or soybeans in their fields. Which of

Economics 5th Edition

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BUS 507 Test

Thailand's experience with pegging the baht to the dollar failed because the baht was ________ relative to the dollar, and China's experience with pegging the yuan to the dollar has run into difficulties because the yuan has been ________ relative to the dollar. A) overvalued; overvalued B) undervalued; overvalued C) undervalued; undervalued D) overvalued;

Economics 5th Edition

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BUS 511 Quiz 3

Jack was unemployed two weeks ago but just started a new job. As a result of this increase in the number of employed workers, which of the following occurred? A) The labor force participation rate increased. B) The unemployment rate increased. C) The labor force participation rate decreased. D) The unemployment rate decreased. Answer: D Answer:

Economics 5th Edition

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BUS 516 Quiz

Article Summary. Over the past two years, the Indian rupee has fallen 26 percent in value against the U.S. dollar, reaching a record low of 61.80 rupees per dollar in August 2013. The decline reflects increasing capital outflows and pessimism regarding the government's attempts to reverse this trend. The Indian

Economics 5th Edition

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BUS 525 Midterm 2

Goodyear's sales are now greater outside the United States than inside the United States. Answer: TRUE Answer: TRUE Answer: TRUE The value of the price elasticity of supply depends primarily on how quickly firms can acquire inputs to increase quantity supplied when price increases. Answer: TRUE Answer: TRUE Answer: TRUE In face of rational expectations regarding changes in

Economics 5th Edition

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BUS 526 Quiz 1

Assume that a 50 percent gasoline tax led to a large increase in its price and only a small decrease in the quantity of gasoline demanded. Economic analysis would lead one to conclude that A) gasoline should be taxed because the benefits of the tax would exceed the costs. B) gasoline should not

Economics 5th Edition

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BUS 527 Homework

Table 4-1 The table above lists the highest prices three consumers, Curly, Moe, and Larry, are willing to pay for a bottle of champagne. If the price of one of the bottles is $95 dollars, total consumer surplus will be A) $0. B) $35. C) $80. D) $95. Answer: A Answer: A Answer: A In the early 1900s, Henry Ford

Economics 5th Edition

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BUS 527 Quiz

From 1983-2013, net exports for the United States A) grew and then declined. B) were negative. C) were positive. D) increased as exports rose above imports. Answer: B Answer: B Answer: B Table 2-17 Table 2-17 shows the output per week of two people, James and Lucy. They can either devote their time to making wagons or making tricycles. Which

Economics 5th Edition

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BUS 527 Test 2

According to Nobel laureate Douglass North, one reason why the Industrial Revolution occurred in England before many other countries was because the king in England consistently maintained control over the court system and the government. Answer: FALSE Answer: FALSE Answer: FALSE In the market for factors of production, firms earn income by selling factors

Economics 5th Edition

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BUS 535

Figure 29-1 Currency speculators believe that the value of the euro will decrease relative to the dollar. Assuming all else remains constant, how would this be represented? A) Supply would decrease, demand would decrease and the economy moves from B to C to D. B) Supply would increase, demand would decrease

Economics 5th Edition

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BUS 540 Quiz

Holding everything else constant, a decrease in the price of GPS systems will result in A) a decrease in the quantity of GPS systems demanded. B) an increase in the demand for GPS systems. C) a decrease in the supply of GPS systems. D) an increase in the quantity of GPS systems demanded. Answer: D Answer:

Economics 5th Edition

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BUS 549 Quiz 2

Suppose the demand curve for a product is represented by a typical downward-sloping curve. Now suppose the demand for this product decreases. Which of the following statements accurately predicts the resulting decrease in price? A) The more elastic the supply curve, the greater the price increase. B) The more elastic the supply

Economics 5th Edition

Exam Prep

BUS 555 A Change In Quantity

A change in quantity supplied is represented by a movement along the supply curve. Answer: TRUE Answer: TRUE Answer: TRUE A perfectly competitive firm's marginal revenue curve is downward sloping. Answer: FALSE Answer: FALSE Answer: FALSE Market equilibrium occurs where the quantity supplied is equal to the quantity demanded. Answer: TRUE Answer: TRUE Answer: TRUE If the demand for a product is

Economics 5th Edition

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BUS 564 Midterm 2

Figure 9-5 Suppose the U.S. government imposes a $0.75 per pound tariff on coffee imports. Figure 9-5 shows the impact of this tariff. The loss in domestic consumer surplus as a result of the tariff is equal to A) $5 million. B) $19.875 million. C) $24.875 million. D) $31.125 million. Answer: D Answer: D Answer: D In the

Economics 5th Edition

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BUS 573 Midterm

Figure 5-1 Figure 5-1 represents the market for vaccinations. Vaccinations are considered a benefit to society, and the figure shows both the marginal private benefit and the marginal social benefit from vaccinations. At the market equilibrium, A) the marginal cost is equal to the marginal benefit. B) the marginal cost is greater

Economics 5th Edition

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BUS 574 Midterm 2

Society faces a trade-off in all of the following situations except A) when deciding who will receive the goods and services produced. B) when deciding what goods and services will be produced. C) when deciding how goods and services will be produced. D) when some previously unemployed workers find jobs. Answer: D Answer: D Answer: D That

Economics 5th Edition

Exam Prep

BUS 575 Quiz

If the long-run average total cost curve is downward sloping, then the firm is experiencing decreasing returns to scale. Answer: FALSE FALSE FALSE In a decreasing-cost industry, the entry of new firms lowers average cost at each level of output. Answer: TRUE TRUE TRUE The budget deficit increases during wars and recessions. Answer: TRUE TRUE TRUE The payment received by suppliers of entrepreneurial skills is called

Economics 5th Edition

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BUS 579 Midterm 2

If the marginal benefit of reducing emissions of some air pollutant is less than the marginal cost, A) further reductions will make society better off. B) further reduction will make society worse off. C) pollution taxes should be imposed on producers to pay for further reductions. D) economic efficiency will be increased if further

Economics 5th Edition

Exam Prep

BUS 590 Test

It is possible to have a comparative advantage in producing a good or service without having an absolute advantage. Answer: TRUE Answer: TRUE Answer: TRUE Firms are more likely to find themselves in a prisoner's dilemma in sequential games as opposed to simultaneous games. Answer: FALSE Answer: FALSE Answer: FALSE An argument in favor of the Federal Reserve

Economics 5th Edition

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BUS 595 Quiz 3

The demand for all carbonated beverages is likely to be ________ the demand for Dr. Pepper. A) more elastic than B) perfectly elastic compared to C) less elastic than D) perfectly inelastic compared to Answer: C Answer: C Answer: C The phrase "demand has decreased" means that A) a demand curve has shifted to the left. B) there has been

Economics 5th Edition

Exam Prep

BUS 595 Test

When a monopolistically competitive firm breaks even in the long run, this is equivalent to earning a zero accounting profit. Answer: FALSE FALSE FALSE The private cost of a good or service is the cost borne by the producer. Answer: TRUE TRUE TRUE Accounting profit is the Difference between a firm's revenue and its opportunity costs. Answer: FALSE FALSE FALSE The additional cost to a

Economics 5th Edition

Exam Prep

BUS 596 Final

What impact might a decrease in the U.S. federal budget deficit have on interest rates and exchange rates in the market for the U.S. dollar? (Assume the exchange rate is stated in terms of foreign currency per U.S. dollar.) A) Interest rates and exchange rates increase. B) Interest rates increase and exchange

Economics 5th Edition

Exam Prep

BUS 608 Midterm 1

Changes in the health of the average person are relatively unimportant as an indicator of changes in the standard of living. Answer: FALSE Answer: FALSE Answer: FALSE International flows of capital increase both efficiency and growth in countries around the world. Answer: TRUE Answer: TRUE Answer: TRUE Transfer payments are subtracted from national income to get to personal income. Answer:

Economics 5th Edition

Exam Prep

BUS 610 Test 2

Once a country has lost its comparative advantage in producing a good, its income will be ________ and its economy will be ________ if it switches from producing the good to importing it. A) higher; less efficient B) higher; more efficient C) lower; less efficient D) lower; more efficient Answer: B Answer: B Answer: B If a graph

Economics 5th Edition

Exam Prep

BUS 611

The principal-agent problem that exists between shareholders and managers also exists between managers and workers. Answer: TRUE Answer: TRUE Answer: TRUE An decrease in the price level in the United States will shift the aggregate expenditure line downward. Answer: FALSE Answer: FALSE Answer: FALSE If economies of scale are significant, the typical firm will not reach the minimum

Economics 5th Edition

Exam Prep

BUS 614 Quiz 1

Figure 5-5 Figure 5-5 shows a market with an externality. The current market equilibrium output of Q1 is not the economically efficient output. The economically efficient output is Q2. If, because of an externality, the economically efficient output is Q2 and not the current equilibrium output of Q1, what does D2

Economics 5th Edition

Exam Prep

BUS 617

What is the name of the organization that defines business cycle peaks and troughs in the United States? A) the Bureau of Labor Statistics B) the Federal Reserve C) the National Bureau of Economic Research D) the National Peak and Trough Committee Answer: C Answer: C Answer: C Equations for C, I, G, and NX are given below.

Economics 5th Edition

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BUS 621

Figure 24-4 Given the economy is at point A in year 1, what is the inflation rate between year 1 and year 2? A) 0.9% B) 1.8% C) 2.7% D) 3.0% Answer: B Answer: B Answer: B Figure 2-7 Mercedes Benz recently decided to introduce its B-class automobile in the U.S. market, an electric car that is has

Economics 5th Edition

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BUS 625 Midterm

The price elasticity of an upward-sloping supply curve is always A) positive. B) negative. C) greater than one. D) impossible to determine. Answer: A Answer: A Answer: A To affect the market outcome, a price floor A) must be set above the black market price. B) must be set above the legal price. C) must be set above the price ceiling. D)

Economics 5th Edition

Exam Prep

BUS 629 Test 1

In the short run, if price falls below a firm's minimum average total cost, the firm should shut down. Answer: FALSE Answer: FALSE Answer: FALSE Expansionary fiscal policy crowds out both domestic investment and net exports. Answer: TRUE Answer: TRUE Answer: TRUE Monetarists believe that the quantity of money should be increased at an increasing rate. Answer: FALSE Answer: FALSE Answer:

Economics 5th Edition

Exam Prep

BUS 650 Quiz 1

Contractionary monetary policy to prevent real GDP from rising above potential real GDP would cause the inflation rate to be ________ and real GDP to be ________. A) higher; higher B) higher; lower C) lower; higher D) lower; lower Answer: D Answer: D Answer: D Growth in aggregate demand will A) cause deflation. B) increase unemployment. C) move the economy to

Economics 5th Edition

Exam Prep

BUS 651 Test

A monopolistically competitive firm can increase its profits beyond the long-run equilibrium break-even level by deliberately lowering its price to force some of its competitors out of the market. Answer: FALSE Answer: FALSE Answer: FALSE The aggregate demand curve shows the relationship between the price level and the level of planned aggregate expenditure in

Economics 5th Edition

Exam Prep

BUS 669 Homework

Suppose there has been an increase in investment. As a result, real GDP will ________ in the short run, and ________ in the long run. A) increase; increase further B) increase; decrease to its initial value C) decrease; decrease further D) decrease; increase to its initial level Answer: B Answer: B Answer: B The average total cost of

Economics 5th Edition

Exam Prep

BUS 672

If workers and firms ignore inflation or form their inflation expectations adaptively, expansionary monetary policy will lower unemployment permanently. Answer: FALSE Answer: FALSE Answer: FALSE According to Nobel laureate Douglass North, one reason why the Industrial Revolution occurred in England before many other countries was because the king in England consistently maintained control over

Economics 5th Edition

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BUS 680

Economics 5th Edition

Exam Prep

BUS 694 Test

Marginal analysis involves undertaking an activity A) until its marginal costs start declining. B) only when its marginal benefits are positive. C) until its marginal benefits equal marginal costs. D) only if its marginal costs are greater than its marginal benefits. Answer: C Answer: C Answer: C If the price of gasoline was $3.25 a gallon and it

Economics 5th Edition

Exam Prep

BUS 697 Test 2

Table 3-2 The table above shows the demand schedules for cashews of two individuals (Jordy and Amy) and the rest of the market. If the price of cashews falls from $4 to $2, the market quantity demanded would A) decrease by 28 lbs. B) increase by 36 lbs. C) increase by 28 lbs. D) decrease by

Economics 5th Edition

Exam Prep

BUS 698 Test

Those who favor changes in the market for health care that would make it more like the markets for other goods and services are generally in favor of universal health care coverage. Answer: FALSE Answer: FALSE Answer: FALSE A normal good is a good for which the demanded increases as income decreases, holding everything

Economics 5th Edition

Exam Prep

BUS 708 Test 2

Inflation targeting refers to conducting ________ policy so as to commit the central bank to achieving a ________. A) fiscal; publicly announced level of inflation B) fiscal; zero inflation rate C) monetary; publicly announced level of inflation D) monetary; zero inflation rate Answer: C Answer: C Answer: C Which of the following is a positive economic statement? A) The

Economics 5th Edition

Exam Prep

BUS 709

The income effect of a price change refers to the change in the quantity demanded of a good that results from a change in the price of a complementary product. Answer: FALSE Answer: FALSE Answer: FALSE In the short run, if a firm shuts down, its maximum loss equals the amount of its fixed

Economics 5th Edition

Exam Prep

BUS 710

Table 7-6 Production and Consumption Production Without Trade With Trade Estonia and Morocco can produce both swords and belts. Table 7-6 shows the production and consumption quantities without trade, and the production numbers with trade. If the actual terms of trade are 1 belt for 1.5 swords and 70 belts are traded,

Economics 5th Edition

Exam Prep

BUS 716 Quiz

When the economy enters a recessionary phase of the business cycle, unemployment tends to A) decrease. B) increase. C) be unchanged. D) change in the same direction as the rate of inflation. Answer: B Answer: B Answer: B Some economists argue that the federal government should normally run a deficit at potential GDP, with the borrowed funds applied

Economics 5th Edition

Exam Prep

BUS 727 Midterm

Why does the short-run aggregate supply curve shift to the right in the long run, following a decrease in aggregate demand? A) Workers and firms adjust their expectations of wages and prices downward and they accept lower wages and prices. B) Workers and firms adjust their expectations of wages and prices downward

Economics 5th Edition

Exam Prep

BUS 729 Midterm 1

The more excess reserves banks choose to keep, A) the larger the deposit multiplier. B) the smaller the deposit multiplier. C) the higher the required reserve ratio. D) the lower the required reserve ratio. Answer: B Answer: B Answer: B Countries that engage in trade will tend to specialize in the production of goods and services in which

Economics 5th Edition

Exam Prep

BUS 730 Midterm 1

When the demand for a product is less elastic than the supply, A) consumers pay the majority of the tax on the product. B) firms pay the majority of the tax on the product. C) firms pay the entire tax on the product. D) consumers pay the entire tax on the product. Answer: A Answer: A Answer:

Economics 5th Edition

Exam Prep

BUS 736

Jaycee Jeans sold 40 pairs of jeans at a price of $40. When it lowered its price to $20, the quantity sold increased to 60 pairs. Calculate the absolute value of the price elasticity of demand. Use the midpoint formula. A) 1.67 B) 1.0 C) 0.6 D) 0.53 Answer: C Answer: C Answer: C The ________ demonstrates the

Economics 5th Edition

Exam Prep

BUS 737 Final

The National Football League has long-term leases with the stadiums in major cities. Control of these stadiums is an entry barrier to a potential new football league. Answer: TRUE Answer: TRUE Answer: TRUE When a business is set up as partnership, the owner of the business faces unlimited liability. Answer: TRUE Answer: TRUE Answer: TRUE The household survey

Economics 5th Edition

Exam Prep

BUS 740 ________ Consumption Is

________ consumption is consumption that depends upon the level of GDP and ________ consumption is consumption that does not depend upon the level of GDP. A) Autonomous; induced B) Induced; autonomous C) Voluntary; autonomous D) Autonomous; voluntary Answer: B Answer: B Answer: B The popularity of digital cameras has enticed large discount stores like Wal-Mart and Costco to

Economics 5th Edition

Exam Prep

BUS 741 Quiz 3

The price elasticity of an upward-sloping supply curve is always A) positive. B) negative. C) greater than one. D) impossible to determine. Answer: A Answer: A Answer: A Hovnanain Enterprises, a residential home builder based in New Jersey, did well during the mid-2000s but did not do so well in during and immediately after the recession of 2007-2009.

Economics 5th Edition

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BUS 750 Test 1

For the purchasing power of money to increase, the price level has to fall. Answer: TRUE TRUE TRUE If income is unequally distributed in an economy, increases in GDP may not raise well-being in an economy. Answer: TRUE TRUE TRUE A tariff is a tax imposed by a government on imports. Answer: TRUE TRUE TRUE Fed Chairman Alan Greenspan managed to keep the rate of

Economics 5th Edition

Exam Prep

BUS 750 Test 2

Which of the following is not a consequence of minimum wage laws? A) Low skilled workers are hurt because minimum wage reduces the number of jobs providing low skilled workers with training. B) Employers will be reluctant to offer low-skill workers jobs with training. C) Producers have an incentive to offer workers non-wage

Economics 5th Edition

Exam Prep

BUS 756 Homework

Which of the following is not part of the "taxes" provision of the Patient Protection and Affordable Care Act (ACA)? A) Pharmaceutical firms and health insurance firms will pay new taxes. B) Investors earning more than $200,000 will pay a new tax on their investment income. C) Beginning in 2018, all taxes on

Economics 5th Edition

Exam Prep

BUS 759 Midterm

Figure 7-1 Figure 7-1 shows the U.S. demand and supply for leather footwear. Suppose the government allows imports of leather footwear into the United States. What will be the quantity of imports? A) Q0 B) Q1 C) Q2 D) Q2 - Q0 Answer: D Answer: D Answer: D Between 1981 and 2011, the overall

Economics 5th Edition

Exam Prep

BUS 759 Midterm The FOMC No Longer

The FOMC no longer sets targets for M1 and M2 to meet its goals of price stability and high employment. Answer: TRUE TRUE TRUE Increases in population shift the market supply curve for labor to the right. Answer: TRUE TRUE TRUE A law requiring the government to balance its budget in each year would serve as an automatic destabilizer. Answer: TRUE TRUE TRUE On a

Economics 5th Edition

Exam Prep

BUS 763 Marginal Revenue Product

Marginal revenue product of labor for a competitive seller is A) the change in total product from hiring one more worker. B) equal to the marginal product of labor multiplied by the output price. C) the output price multiplied by the quantity sold. D) the marginal revenue of the product multiplied by the output

Economics 5th Edition

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BUS 764 Final

Michael Spence proposed the signaling hypothesis. According to this hypothesis, A) workers signal their desire to work for a particular firm by the way they answer questions in job interviews. B) employers signal their preferences for the type of employee they wish to hire through job ads and the questions they ask

Economics 5th Edition

Exam Prep

BUS 768

Market power in the United States causes a huge loss of economic efficiency. Answer: FALSE FALSE FALSE Examining the conditions that could lead to inflation in an economy is an example of microeconomics topic. Answer: FALSE FALSE FALSE An increase in the inflation rate increases employment only if the increase in inflation is unexpected. Answer: FALSE FALSE FALSE Net exports equals the balance of trade surplus. Answer: FALSE FALSE FALSE For

Economics 5th Edition

Exam Prep

BUS 769 An Increase In Government

An increase in government spending may expedite recovery from a recession in the short run, but in the long run this policy may A) reduce investment in new capital. B) make domestic businesses less competitive in international markets as the dollar appreciates in value. C) raise interest rates and reduce consumer expenditures on

Economics 5th Edition

Exam Prep

BUS 781 Quiz

If, in response to a decrease in the price of grapes, the quantity of grapes demanded increases, economists would describe this as A) an increase in demand. B) an increase in quantity demanded. C) a change in consumer income. D) an increase in consumers' taste for coffee. Answer: B Answer: B Answer: B If you transfer all of

Economics 5th Edition

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BUS 786 Quiz 2

Figure 12-6 Figure 12-6 shows the demand, marginal cost (MC) and average total cost (ATC) curves for Jason's House of Apples. To maximize his profit, Jason should produce the rate of output indicated by point A) a. B) b. C) e. D) d. Answer: D Answer: D Answer: D Which of the following would

Economics 5th Edition

Exam Prep

BUS 791 Midterm

An argument in favor of the Federal Reserve adopting inflation targeting is that in the long run, the Fed can have an impact on inflation but not on real GDP. Answer: TRUE Answer: TRUE Answer: TRUE In reality, the Fed is unable to use monetary policy to keep real GDP exactly at its potential

Economics 5th Edition

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BUS 792 Midterm 1

For each of the following pairs of products state which are complements, which are substitutes, and which are unrelated. a. Blu-ray discs and video-on-demand b. Fiat 500 and Mini Cooper S c. Toothpaste and toothbrush d. Popcorn and snowboards e. Razors and razor blades Answer:a. Substitutes b. Substitutesc. Complementsd. Unrelatede. Complements Answer:a. Substitutes b. Substitutesc. Complementsd. Unrelatede.

Economics 5th Edition

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BUS 793 Quiz

Figure 19-3 Which of the following is not true? A) U.S imports are cheaper at exchange rates greater than $.03/baht than at the equilibrium exchange rate. B) The baht is overvalued at exchange rates greater than $.03/baht. C) To achieve an exchange rate greater than $.03/baht, the Bank of Thailand must buy surplus

Economics 5th Edition

Exam Prep

BUS 797

Which of the following is not a characteristic of a monopolistically competitive firm in long-run equilibrium? A) Marginal revenue is equal to marginal cost. B) Price is equal to average revenue. C) The firm has excess capacity. D) Price is equal to marginal cost. Answer: D Answer: D Answer: D The economic analysis of minimum wage involves both

Economics 5th Edition

Exam Prep

BUS 809 Test 1

If an 8 percent decrease in the price of lobster leads to a 15 percent decrease in the quantity supplied of lobster, then the supply of lobster is A) unit-elastic. B) unitarily elastic. C) elastic. D) perfectly inelastic. Answer: C Answer: C Answer: C Fiscal policy is determined by A) the Federal Reserve. B) the president and the Federal Reserve. C)

Economics 5th Edition

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BUS 814 Midterm

Which of the following is a factor of production that generally is fixed in the short run? A) raw materials B) labor C) a factory building D) water Answer: C Answer: C Answer: C As a form of business, a partnership A) has limited liability. B) has only one owner. C) cannot issue stock. D) has the most government rules and regulations

Economics 5th Edition

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BUS 826

Which of the following countries had the lowest GDP per capita in 2012? A) France B) Mexico C) Democratic Republic of the Congo D) Argentina Answer: C Answer: C Answer: C Jeremy is thinking of starting up a small business selling NASCAR memorabilia. He is considering setting up his business as a corporation. What is one advantage to

Economics 5th Edition

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BUS 835 Quiz 1

A nonmonetary opportunity cost is called a(n) ________, while a cost that involves spending money is called a(n) ________. A) accounting cost; explicit cost B) implicit cost; explicit cost C) accounting profit; economic profit D) normal rate of return; asset Answer: B Answer: B Answer: B Danielle Ocean pays for monthly pool maintenance for her home swimming pool.

Economics 5th Edition

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BUS 839 Test

Fluctuating exchange rates can alter a multinational firm's profits and losses. The U.S. corporation, Motorola, produces cell phones and sells cell phones in Mexico. If the dollar appreciates against the peso, then Motorola's revenues from these operations should ________ and its costs from these operations should ________. A) rise; fall B) rise;

Economics 5th Edition

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BUS 842 Final

Table 2-10 Table 2-10 shows the output per month of two people, Fred and Barney. They can either devote their time to making pogo sticks or making unicycles. Which of the following statements istrue? A) Fred has a comparative advantage in making both products. B) Barney has a comparative advantage in making both products. C)

Economics 5th Edition

Exam Prep

BUS 847 Midterm 1

Figure 30-6 Which of the following would cause the change depicted in the figure above? A) An increase in investment in infrastructure causes U.S. productivity to rise relative to Mexican productivity. B) A growing preference for Margaritas causes U.S. consumers to increase their preferences for Mexican tequila relative to American-produced alcohol. C) Dumping

Economics 5th Edition

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BUS 856 Midterm 1 Monopolistic

Monopolistic competition differs from oligopoly in that in monopolistic competition firms act independently while in oligopoly firms act interdependently. Answer: TRUE TRUE TRUE A decrease in the price of inputs will cause the supply curve for a product to shift to the right. Answer: TRUE TRUE TRUE The only Giffen goods that have been identified so far in the real

Economics 5th Edition

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BUS 866 Homework Suppose That The

Suppose that the federal budget is balanced when GDP is at potential GDP. If equilibrium GDP falls below potential, A) this will result in a current budget deficit. B) the cyclically adjusted budget will be balanced. C) government transfer payments will be rising and tax receipts will be falling. D) All of the above

Economics 5th Edition

Exam Prep

BUS 867 Quiz 2

In the circular flow model, households supply resources such as labor services in the product market. Answer: FALSE Answer: FALSE Answer: FALSE Some researchers have been unable to find evidence of increasing returns to human capital. Answer: TRUE Answer: TRUE Answer: TRUE If net exports are positive for China, it must be true that China is experiencing net

Economics 5th Edition

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BUS 867 Test 2

The basic activity of a firm is A) to set the prices of its products as high as possible. B) to compete with other firms that produce similar products. C) to provide jobs for its employees. D) to use inputs to produce outputs of goods and services. Answer: D Answer: D Answer: D If the Fed pursues expansionary

Economics 5th Edition

Exam Prep

BUS 874 Test 1

Figure 7-1 Figure 7-1 represents the market for vaccinations. Vaccinations are considered a benefit to society, and the figure shows both the marginal private benefit and the marginal social benefit from vaccinations. Marginal social benefit is represented by which curve? A) D1 B) D2 C) Supply D) All of the above represent marginal social

Economics 5th Edition

Exam Prep

BUS 883

How will an interest rate increase in the United States affect equilibrium in the market for dollars against foreign currencies? (Assume the exchange rate is stated in terms of foreign currency per U.S. dollar.) A) The equilibrium exchange rate will increase, and the equilibrium quantity of dollars traded cannot be determined. B)

Economics 5th Edition

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BUS 884 Test

In a competitive market equilibrium, A) total consumer surplus equals total producer surplus. B) marginal benefit and marginal cost are maximized. C) consumers and producers benefit equally. D) the marginal benefit equals the marginal cost of the last unit sold. Answer: D Answer: D Answer: D Figure 3-7 Assume that the graphs in this figure represent the demand

Economics 5th Edition

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BUS 886

If Tanisha can audit more tax returns in one hour than Libby, then Tanisha has an absolute advantage in auditing tax returns. Answer: TRUE Answer: TRUE Answer: TRUE When products that create positive externalities are produced, at the market equilibrium output, the social benefit generated by consuming the product exceeds the private benefit. Answer: TRUE Answer: TRUE Answer:

Economics 5th Edition

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BUS 887 Test

Why does a prisoner's dilemma lead to a noncooperative equilibrium? A) because each player had agreed before the game started to minimize the harm that he can inflict on the other players B) because each player is uncertain how other players will play the game C) because players must choose from a limited number

Economics 5th Edition

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BUS 897 Quiz 3

An increase in the purchasing power of money need not lead to an increase in the purchasing power of income because the falling price level would likely mean falling wages and salaries. Answer: TRUE Answer: TRUE Answer: TRUE Net foreign investment is a measure of net capital outflows, equal to capital outflows minus capital

Economics 5th Edition

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ECB 101 Quiz 2

In the past two decades the United States lost its comparative advantage in automobiles to Japan. What factor was most responsible for the development of Japan's comparative advantage in automobiles? A) Japanese firms excelled in process technology. B) Japan has abundant supplies of labor. C) Japanese firms benefited from external economies. D) Japan has

Economics 5th Edition

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ECB 102 Test 1

If the Gini coefficient for Cartland is 1, it means that income distribution is perfectly equal in this society. Answer: FALSE Answer: FALSE Answer: FALSE Rent control is an example of a price ceiling. Answer: TRUE Answer: TRUE Answer: TRUE Entrepreneurs who earn arbitrage profit are able to do so by extracting the total consumer surplus from buyers. Answer:

Economics 5th Edition

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ECB 104

In an increasing-cost industry the long-run supply curve is upward sloping. Answer: TRUE Answer: TRUE Answer: TRUE If aggregate expenditure is less than GDP, then inventories rise and GDP falls. Answer: TRUE Answer: TRUE Answer: TRUE A country which incurs a current account deficit will most likely have a financial or capital account surplus. Answer: TRUE Answer: TRUE Answer: TRUE An externality

Economics 5th Edition

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ECB 105 Final

The federal budget deficit acts as an automatic stabilizer because A) government tax revenues decrease during a recession. B) unemployment insurance payments decrease during a recession. C) food stamp payments increase during expansionary periods. D) Medicaid payments increase during expansionary periods. Answer: A Answer: A Answer: A Suppose the price of capital and labor remain constant. As a

Economics 5th Edition

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ECB 126 Midterm

________ means the supply curve has shifted to the right, while ________ refers to a movement along a given supply curve in response to an increase in price. A) An increase in supply; a decrease in supply B) A decrease in supply; an increase in supply C) An increase in supply; an increase

Economics 5th Edition

Exam Prep

ECB 134

What is an inside director? A) a movie director who also appears in the movie B) a member of a corporate board of directors that is also a manager of the business C) the CEO that is selected by the corporation's board of directors D) a board of director chair who has been in

Economics 5th Edition

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ECB 146 Homework

A voluntary export restraint is an agreement negotiated between two countries that places a numerical limit on the quantity of a good that can be imported by one country from the other country. Answer: TRUE Answer: TRUE Answer: TRUE Consider the following T-account for a bank: If the required reserve ratio is 20 percent and

Economics 5th Edition

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ECB 148

The intention of the U.S. tariff on Chinese tries was to A) protect jobs in the U. S. tire industry. B) protect infant industries in tire U.S. tire market. C) insure that Chinese tires meet U.S. quality and safety standards. D) save the government money by restricting the sale of more expensive Chinese-made tires. Answer:

Economics 5th Edition

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ECB 152 Test 2

Table 23-3 Given the consumption schedule in the table above, the marginal propensity to consume is A) 0.1. B) 0.3. C) 0.6. D) 0.9. Answer: D Answer: D Answer: D In economics, choices must be made because we live in a world of A) unemployment. B) scarcity. C) greed. D) unlimited resources. Answer: B Answer: B Answer: B Figure 13-3 The marginal revenue from one additional unit sold is

Economics 5th Edition

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ECB 159

Canada has a single-payer health care system in which the government provides national health insurance to all Canadian residents. Answer: TRUE Answer: TRUE Answer: TRUE If buyers of a monopolistically competitive product feel the products of different sellers have little differences between them, then the demand for each seller's product is relatively elastic. Answer: TRUE Answer: TRUE Answer:

Economics 5th Edition

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ECB 160 Quiz 3

If the nominal exchange rate between the American dollar and the New Zealand dollar is 1.36 New Zealand dollars per American dollar, how many American dollars are required to buy a product that costs 3.50 New Zealand dollars? A) $2.14 B) $2.24 C) $2.57 D) $4.76 Answer: C Answer: C Answer: C Figure 10-6 Which diagram demonstrates a decrease

Economics 5th Edition

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ECB 163 Quiz 1

The study of how people make decisions in situations in which attaining their goals depends on their interactions with others is called A) game theory. B) oligopoly. C) competitive analysis. D) strategic analysis. Answer: A Answer: A Answer: A If firms and workers have rational expectations, including knowledge of the policy being used by the Federal Reserve, the

Economics 5th Edition

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ECB 184 Quiz

If the number of firms producing mouthwash increases and consumer preference for mouthwash increases, the equilibrium price of mouthwash will definitely increase. Answer: FALSE FALSE FALSE When the government imposes a tax equal to the external cost of producing a product that causes pollution, the government is said to externalize the externality. Answer: FALSE FALSE FALSE Small differences in economic

Economics 5th Edition

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ECB 191 Midterm 1

If you exhibit the endowment effect as a decision maker, then you are A) deciding on the basis of sunk costs. B) buying something you can't really afford because you expect to save in the future. C) ignoring non-monetary opportunity costs. D) consuming based on celebrity endorsements. Answer: C Answer: C Answer: C Table 15-3 Assume Table 15-3 gives

Economics 5th Edition

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ECB 202 Test 1

A monopolistically competitive firm should lower its price if its marginal revenue exceeds its marginal cost. Answer: TRUE Answer: TRUE Answer: TRUE If the demand for a product decreases and the supply of the product does not change, equilibrium price and equilibrium quantity will both increase. Answer: FALSE Answer: FALSE Answer: FALSE By 2013, spending on federal health

Economics 5th Edition

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ECB 211 Midterm 2

The GDP deflator is the best measure that reflects the prices of goods and services purchased by the typical household. Answer: FALSE FALSE FALSE The signaling hypothesis of education states that education is a costly activity that enhances a worker's productivity. Answer: FALSE FALSE FALSE The sum of consumer surplus and producer surplus is called economic surplus. Answer: TRUE TRUE TRUE On a diagram of

Economics 5th Edition

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ECB 220 Test

If a decrease in income leads to in a decrease in the demand for mac and cheese, then mac and cheese is A) a normal good. B) a neutral good. C) a complement. D) a necessity. Answer: A Answer: A Answer: A The aggregate demand curve shows the relationship between the ________ and ________. A) inflation rate; quantity of

Economics 5th Edition

Exam Prep

ECB 222 Which Of The Following Is A

Which of the following is a positive economic statement? A) People should not buy imported fruits and vegetables. B) The government should subsidize solar power for homeowners. C) The minimum wage law causes unemployment. D) The number of work visas should not be limited by the government. Answer: C Answer: C Answer: C If planned aggregate expenditure is

Economics 5th Edition

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ECB 224 Quiz 2

Article Summary. For only the second time in the previous 10 quarters, China's GDP grew at a faster rate than from the same period a year earlier. From July through September 2013, China's GDP increased 7.8 percent, but a decline in exports, growing inflation, and slowing growth in factory production

Economics 5th Edition

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ECB 227 Midterm 2

In San Francisco there are many restaurants that specialize in a wide variety of cuisines. Patronage at these restaurants is influenced by factors such as tastes, price and location. This market is A) perfectly competitive. B) monopolistically competitive. C) oligopolistic. D) monopolistic. Answer: B Answer: B Answer: B Figure 21-6 The loanable funds market is given in the figure

Economics 5th Edition

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ECB 227 Test

Suppose that the economy is producing above potential GDP and the Fed implements the correct change in monetary policy, but not until after the economy has passed the peak of the boom. Then A) the Fed's contractionary policy will result in too large of a decrease in GDP. B) the Fed's contractionary

Economics 5th Edition

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ECB 248 Quiz 3

Which of the following best describes how banks create money? A) Banks charge higher interest rates on loans than they pay on deposits. B) Banks charge fees for providing financial advice. C) Banks create checking account deposits when making loans from excess reserves. D) Banks make loans from reserves. Answer: C Answer: C Answer: C Figure 4-1 Figure

Economics 5th Edition

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ECB 250 Quiz 1

Which of the following would increase gross private domestic investment in an economy? A) an increase in the shares of Apple stock households own B) an increase in the number of workers Apple hires C) an increase in the level of Apple's inventory D) an increase in the number of highway construction projects the

Economics 5th Edition

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ECB 251 Quiz 2

Figure 13-2 Ceteris paribus, an increase in the expected price of an important natural resource would be represented by a movement from A) SRAS1 to SRAS2. B) SRAS2 to SRAS1. C) point A to point B. D) point B to point A. Answer: B Answer: B Answer: B How are intermediate goods treated in the calculation of GDP? A)

Economics 5th Edition

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ECB 255

Which of the following is "crowded out" by higher interest rates that can be the result of expansionary fiscal policy? A) consumption B) private investment C) net exports D) All of the above are crowded out by higher interest rates. Answer: D Answer: D Answer: D A(n) ________ is represented by a leftward shift of the demand curve while

Economics 5th Edition

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ECB 257 Midterm 2

In general, the supply curve for a natural resource A) is vertical. B) is horizontal. C) slopes downward to reflect decreasing available quantities over time. D) slopes upward. Answer: D Answer: D Answer: D Table 4-7 Table 4-7 shows the demand and supply schedules for labor market in the city of Pixley. Suppose that the quantity of labor supplied increases

Economics 5th Edition

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ECB 269 Quiz 2

Expansionary monetary policy enacted during a recession will cause the inflation rate to increase. Answer: TRUE TRUE TRUE Early adopters are consumers who will pay a high price to be among the first to own new products. Answer: TRUE TRUE TRUE An increase in the price level shifts the aggregate demand curve to the left. Answer: FALSE FALSE FALSE If the market wage rate increases, a

Economics 5th Edition

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ECB 271 Final

A decrease in the demand for incandescent light bulbs due to changes in consumer tastes, accompanied by a decrease in the supply of incandescent light bulbs as a result of government restrictions, will result in A) a decrease in the equilibrium quantity of incandescent light bulbs and no change in the

Economics 5th Edition

Exam Prep

ECB 285 Quiz

The government proposes a tax on imported champagne. Buyers will bear the entire burden of the tax if the A) supply curve for imported champagne is vertical. B) demand curve for imported champagne is vertical. C) demand curve for imported champagne is horizontal. D) demand curve is downward sloping and the supply curve is

Economics 5th Edition

Exam Prep

ECB 296 Midterm 2

Table 12-1 Table 12-1 shows the short-run cost data of a perfectly competitive firm that produces plastic camera cases. Assume that output can only be increased in batches of 100 units. If the market price of each camera case is $8, what is the profit-maximizing quantity? A) 300 units B) 400 units C) 500

Economics 5th Edition

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ECB 300 Quiz 2

The goals of monetary policy tend to be interrelated. For example, when the Fed pursues the goal of ________, it also can achieve the goal of ________ simultaneously. A) high employment; economic growth B) high employment; lowering government spending C) economic growth; a low current account deficit D) stability of financial markets; a low

Economics 5th Edition

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ECB 306 Figure 241Ceteris Paribus

Figure 24-1 Ceteris paribus, an increase in the growth rate of domestic GDP relative to the growth rate of foreign GDP would be represented by a movement from A) AD1 to AD2. B) AD2 to AD1. C) point A to point B. D) point B to point A. Answer: B Answer: B Answer: B Part of the spending

Economics 5th Edition

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ECB 311 Test 2

Consumers benefit from monopolistic competition by A) being able to choose from products more closely suited to their tastes. B) paying the lowest possible price for the product. C) paying the same price as everyone else. D) being able to purchase high-quality products at low prices. Answer: A Answer: A Answer: A Sarah is a full-time student who

Economics 5th Edition

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ECB 321

When an economy faces diminishing returns, A) the slope of the per-worker production function becomes steeper as capital per hour worked increases. B) the slope of the per-worker production function becomes flatter as capital per hour worked increases. C) the per-worker production function shifts to the left. D) the per-worker production function shifts to

Economics 5th Edition

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ECB 329 Test 2

Figure 27-9 Given that the economy has moved from A to B in the graph above, which of the following would the appropriate fiscal policy to achieve potential GDP? A) increase taxes B) increase government spending C) decrease the money supply D) increase interest rates Answer: A Answer: A Answer: A Figure 9-1 Figure 9-1 shows the U.S.

Economics 5th Edition

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ECB 334 Homework

Table 14-2 Table 14-2 shows the payoff matrix for Wal-Mart and Target from every combination of pricing strategies for the popular PlayStation 3. At the start of the game each firm charges a low price and each earns a profit of $7,000. Is the current strategy in which each firm charges the

Economics 5th Edition

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ECB 340 Final

If a graph has a line that shows the amount of outsourcing in the last ten years, it is known as A) a pie chart. B) a time-series graph. C) a demand curve for outsourcing. D) a supply curve of outsourcing. Answer: B Answer: B Answer: B Soo Jin shares a one-bedroom apartment with her classmate. Her share

Economics 5th Edition

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ECB 346

If marginal benefit is less than marginal cost, output is inefficiently high. Answer: TRUE Answer: TRUE Answer: TRUE A decrease in liabilities will reduce a firm's net worth. Answer: FALSE Answer: FALSE Answer: FALSE Holding all else constant, an economic expansion in Mexico should decrease the demand for U.S. dollars. Answer: FALSE Answer: FALSE Answer: FALSE The developing countries have been catching

Economics 5th Edition

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ECB 367 Test 2

Figure 6-4 Which of the following statements is true about the price elasticity of demand? A) The elasticity coefficient is constant along the demand curve. B) The elastic portion of a straight-line downward sloping demand curve corresponds to the segment above the midpoint. C) The inelastic portion of the demand curve corresponds to the segment

Economics 5th Edition

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ECB 376 Test

Of the following high-income countries, which has the highest mortality ratio for cancer? A) Canada B) Japan C) the United Kingdom D) the United States Answer: B Answer: B Answer: B Consider the following pricing strategies: a. perfect price discrimination b. charging different prices to different groups of customers c. optimal two-part tariff d. single-price monopoly pricing Which of the pricing strategies

Economics 5th Edition

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ECB 378

As a percentage of GDP, imports are greater than exports for which of the following countries? A) Germany B) Japan C) the Netherlands D) the United States Answer: D Answer: D Answer: D If people assume that future rates of inflation will follow the pattern of inflation rates in the past, they are said to have A) rational expectations. B) adaptive

Economics 5th Edition

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ECB 378 Local Or State Offices Of

Local or state offices of the Department of Justice usually set prices for natural monopolies in their jurisdictions. Answer: FALSE Answer: FALSE Answer: FALSE The quantity equation becomes the basis for a theory when we assume that velocity of money is constant. Answer: TRUE Answer: TRUE Answer: TRUE If speculators believe a currency is soon going to be

Economics 5th Edition

Exam Prep

ECB 407

Figure 12-4 Figure 12-4 shows the cost and demand curves for a profit-maximizing firm in a perfectly competitive market. If the market price is $30 and the firm is producing output, what is the amount of the firm's profit or loss? A) loss of $1,080 B) profit of $1,440 C) loss of $2,520 D)

Economics 5th Edition

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ECB 414

Allison's Auto Art is a company that applies pinstripes to vehicles. Allison's cost for a basic 1-color pinstriping job is $35, and she charges $95 for this service. For a total price of $175, Allison will apply a fancier 3-color pinstripe application to an automobile, a service that adds an

Economics 5th Edition

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ECB 417

Table 17-1 Suppose the output price is $3. If the wage rate is $90, what is the profit-maximizing quantity of labor that the firm should hire? A) 7 units B) 5 units C) 4 units D) 3 units Answer: A Answer: A Answer: A If the required reserve ratio is RR, the simple deposit multiplier is defined as A) . B)

Economics 5th Edition

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ECB 419 Test

Net foreign investment is a measure of net capital outflows, equal to capital outflows minus capital inflows in a given period of accounting. Answer: TRUE Answer: TRUE Answer: TRUE If you purchase a share of stock from your friend who initially purchased the stock three years ago, your purchase of the stock represents a

Economics 5th Edition

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ECB 420 Midterm 2

Marginal benefit is the benefit that your activity provides to someone else. Answer: FALSE Answer: FALSE Answer: FALSE The purchase of stocks and bonds issued in another country is known as foreign direct investment. Answer: FALSE Answer: FALSE Answer: FALSE One possible reason as to why consumers respond to sales is that by displaying a "high" regular price and

Economics 5th Edition

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ECB 421

If the nominal exchange rate between the American dollar and the Canadian dollar is 0.89 Canadian dollars per American dollar, how many American dollars are required to buy a product that costs 2.5 Canadian dollars? A) $1.32 B) $2.23 C) $2.75 D) $2.81 Answer: D Answer: D Answer: D In the United States, many beekeepers travel from state

Economics 5th Edition

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ECB 425 Test 2

The discount rate is A) the interest rate banks charge each other for overnight loans. B) the interest rate banks charge their best customers. C) the interest rate the Fed charges to banks for loans from the Fed. D) the interest rate the U.S. Treasury pays on Treasury Bills. Answer: C Answer: C Answer: C Which of the

Economics 5th Edition

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ECB 426 Test 1

By tying the salaries of top corporate managers to the price of the corporation's stock, corporations hope to avoid A) corporate governance. B) conflict between the CFO and the CEO. C) the principal-agent problem. D) paying high salaries to their managers. Answer: C Answer: C Answer: C Table 2-9 Table 2-9 shows the output per week of two jewelers,

Economics 5th Edition

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ECB 434 Quiz

Declines in spending on residential construction are often due to increases in interest rates. The collapse in residential construction prior to and during the recession of 2007-2009 was due more to ________ than to higher interest rates. A) the financial crisis that began in 2007 B) the rapid inflation of the early

Economics 5th Edition

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ECB 434 Quiz 2

Marginal cost is the additional cost to a firm of producing one more unit of a good or service. Answer: TRUE Answer: TRUE Answer: TRUE The dynamic aggregate demand and aggregate supply model assumes that potential GDP increases over time. Answer: TRUE Answer: TRUE Answer: TRUE When net exports equal zero, the economy is in macroeconomic equilibrium. Answer: FALSE Answer:

Economics 5th Edition

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ECB 439 Midterm

If policy makers are concerned that the economy is in danger of rising inflation because aggregate demand is increasing faster than aggregate supply, the appropriate fiscal policy response is to A) increase taxes. B) increase government spending. C) use expansionary fiscal policy. D) increase interest rates. Answer: A [/cpmembership] Answer: A [/cpmembership] Answer: A [/cpmembership] Behavioral economics refers to

Economics 5th Edition

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ECB 451 Quiz 1

In the short run, marginal product of labor increases at first and then falls because A) as more labor is hired, they are not as skilled as the first ones hired. B) there are fewer opportunities for division of labor and specialization when fewer workers are hired. C) managerial inefficiency sets in when

Economics 5th Edition

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ECB 462 Midterm 2

Assume that the demand curve for DVD players shifts to the left and the supply curve for DVD players shifts to the right, but the supply curve shifts more than the demand curve. As a result A) both the equilibrium price and quantity of DVD players will decrease. B) the equilibrium price

Economics 5th Edition

Exam Prep

ECB 462 Quiz 1

The area ________ the market supply curve and ________ the market price is equal to the total amount of producer surplus in a market. A) above; above B) above; below C) below; above D) below; below Answer: B Answer: B Answer: B Health Clubs typically experience an increase in one-year memberships in January, but many new customers cancel

Economics 5th Edition

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ECB 466 Quiz 2

A decrease in supply is caused by a decrease in the price of the product. Answer: FALSE Answer: FALSE Answer: FALSE If in the long run a firm makes zero profit, it should exit the industry. Answer: FALSE Answer: FALSE Answer: FALSE The actual division of a tax between buyers and sellers in a market is the excess

Economics 5th Edition

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ECB 479 Test 2

Marginal utility can be A) negative. B) zero. C) positive. D) positive, negative or zero. Answer: D Answer: D Answer: D Figure 4-5 The figure above represents the market for pecans. Assume that this is a competitive market. If the price of pecans is $9, A) economic surplus is maximized. B) too many consumers want to buy pecans. C) the quantity

Economics 5th Edition

Exam Prep

ECB 484 Midterm 1

In a closed economy, which of the following components of GDP is not included? A) investment B) government spending C) net exports D) consumption Answer: C Answer: C Answer: C Suppose a decrease in the supply of paper results in an increase in revenue. This indicates that A) the demand for paper is inelastic. B) the demand for paper is

Economics 5th Edition

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ECB 484 Quiz 2

What does the PPI measure? A) the average change in the prices paid for all goods produced in the economy over a given year B) the average of the prices received by producers of goods and services at all stages of the production process C) the level of production of goods and services

Economics 5th Edition

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ECB 492

Figure 15-10 The deadweight loss due to a monopoly is represented by the area A) FHE. B) FGE. C) GEH. D) FQ1Q2E. Answer: A Answer: A Answer: A The following equations represent the demand and supply for kumquats. QD = 60 - 3P QS = -20 + 5P What is the equilibrium price (P) and quantity

Economics 5th Edition

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ECB 500 Quiz 1

If the opportunity cost of producing more of one good remains the same as more of that good is produced, then the production method is inefficient. Answer: FALSE Answer: FALSE Answer: FALSE The problem with inflation is that as prices rise, consumers can no longer afford to buy as many goods and services. Answer: FALSE Answer:

Economics 5th Edition

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ECB 519 Midterm The Recession Of

The recession of 2007-2009 made many consumers pessimistic about their future incomes. How does this increased pessimism affect the aggregate demand curve? A) This will move the economy up along a stationary aggregate demand curve. B) This will move the economy down along a stationary aggregate demand curve. C) This will shift the

Economics 5th Edition

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ECB 527

If net exports are positive, A) net foreign investment is also positive. B) capital inflows must be greater than capital outflows. C) net foreign investment is negative. D) Both A and B are correct. Answer: A Answer: A Answer: A A period of expansion in the business cycle ends when A) real GDP is equal to potential GDP. B) the

Economics 5th Edition

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ECB 532 Midterm 2

Cassie's Quilts alters, reconstructs and restores heirloom quilts. Cassie has just spent $800 purchasing, cleaning and reconstructing an antique quilt which she expects to sell for $1,500 once she is finished. After having spent $800, Cassie discovers that she would need some special period fabric that would cost her $200

Economics 5th Edition

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ECB 559 Midterm 1 How Does The

How does the construction of a market demand curve for a private good differ from that for a public good? A) There is no difference; in both cases the demand curve is determined by adding up the price each consumer is willing to pay for each quantity of the good. B) There is

Economics 5th Edition

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ECB 560 Final

The level of real GDP in the long run is A) potential GDP. B) affected by changes in the price level. C) determined solely by aggregate demand. D) the same as the level of nominal GDP in the long run. Answer: A Answer: A Answer: A Figure 11-7 Figure 11-7 shows the cost structure for a firm. If

Economics 5th Edition

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ECB 586 Quiz 2

Table 19-11 Consider the following data for Tyrovia, a country that produces only two products: guns and butter. Real GDP for Tyrovia for 2013 using 2005 as the base year equals A) $1,140. B) $880. C) $690. D) $560. Answer: C Answer: C Answer: C Toot Sweets Bakery sells freshly baked muffins from 6.30 am at $1.20 per muffins. By

Economics 5th Edition

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ECB 591

If the average variable cost curve is above the marginal cost curve, then A) marginal costs must be decreasing. B) average variable costs must be increasing. C) marginal costs must be increasing. D) marginal costs can be either increasing or decreasing. Answer: D Answer: D Answer: D In the mid-1990s, cattle ranchers in the United States kept raising

Economics 5th Edition

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ECB 595 Homework

Which of the following is the best example of a perfectly competitive industry? A) wheat production B) steel production C) electricity production D) airplane production Answer: A Answer: A Answer: A The rules of accounting generally require that ________ costs be used for purposes of keeping a company's financial records and for paying taxes. These costs are sometimes

Economics 5th Edition

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ECB 603 Test 2

If the United States has a net export surplus, which of the following must be true? A) The balance on the financial account must equal the balance on the current account. B) Net foreign investment must be positive as well. C) Domestic private saving must be greater than net foreign investment. D) Domestic public

Economics 5th Edition

Exam Prep

ECB 604

Figure 7-4 Figure 7-4 represents the market for medical services with and without insurance, and the effect of a third-party payer system on the demand for medical services. With insurance and a third-party payer system, what is the amount of the deadweight loss? A) $0 B) $1,500 C) $3,000 D) $9,500 Answer: C Answer: C Answer: C Which of

Economics 5th Edition

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ECB 616 Quiz 3

Figure 5-13 Figure 5-13 illustrates the market for gasoline before and after the government imposes a tax to bring about the efficient level of gasoline production. The market equilibrium quantity of gasoline is ________ million gallons per month. A) 20 B) 32 C) 48 D) 56 Answer: C Answer: C Answer: C Consider a downward-sloping demand curve. When the

Economics 5th Edition

Exam Prep

ECB 624

If it costs Danitra $225 to create 4 necklaces and $275 to create 5 necklaces, then $50 is the marginal cost of producing the 5th necklace. Answer: TRUE Answer: TRUE Answer: TRUE In the short-run, changes in output can only be brought about by a change in the quantity of variable inputs. Answer: TRUE Answer: TRUE Answer: TRUE Inflation

Economics 5th Edition

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ECB 626 Homework

In international exchange markets, a rise in interest rates in the United States will cause the demand for dollars to ________ and the supply of dollars to ________. A) increase; increase B) increase; decrease C) decrease; increase D) decrease; decrease Answer: B Answer: B Answer: B Abercrombie & Fitch wants to raise $8 million to finance the construction

Economics 5th Edition

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ECB 630 Homework

Figure 5-6 Figure 5-6 shows the market for measles vaccinations, a product whose use generates positive externalities.What is the market equilibrium output level? A) Q1 B) Q2 C) Q1 + Q2 D) Q2 - Q1 Answer: A Answer: A Answer: A Let D = demand, S = supply, P = equilibrium price, Q= equilibrium

Economics 5th Edition

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ECB 632 Test

Werner & Sons is a manufacturer of three-ring binders operating in a perfectly competitive industry. Table 12-5 shows the firm's cost schedule. Table 12-5 Use the table to answer the following questions. a. Complete Table 12-5 by filling in the blank cells. b. Werner is selling in a perfectly competitive market at

Economics 5th Edition

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ECB 672

When a celebrity has the desire to have his image protected following his death, this is best described as an example of the protection of A) an invention. B) a patent. C) a trademark. D) intellectual property. Answer: D Answer: D Answer: D One important difference between the political process and the market process is that A) the political

Economics 5th Edition

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ECB 681 Test

Figure 4-3 Figure 4-3 shows Kendra's demand curve for ice-cream cones. What is the total amount that Kendra is willing to pay for 1 ice cream cone? A) $0.50 B) $3.50 C) $9.00 D) $13.50 Answer: B Answer: B Answer: B Figure 19-6 Which of the following would cause the change depicted in the figure above? A) An increase in

Economics 5th Edition

Exam Prep

ECB 683 Quiz

If, in the market for oranges, the supply has increased then A) the supply curve for oranges has shifted to the right. B) the supply curve for oranges has shifted to the left. C) there has been a movement upwards along the supply curve for oranges. D) there has been a movement downwards along

Economics 5th Edition

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ECB 684 Midterm

The branch of economics which studies how households and firms make choices, interact in markets and how government attempts to influence their choices is called A) macroeconomics. B) microeconomics. C) positive economics. D) normative economics. Answer: B Answer: B Answer: B During what period of time did the United States most consistently adhere to the gold standard? A) from

Economics 5th Edition

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ECB 687 Homework

If a country is producing efficiently and is on the production possibilities frontier, the country can produce more of one good without producing less of the other good. Answer: FALSE Answer: FALSE Answer: FALSE A monopolistically competitive firm can increase its profits beyond the long-run equilibrium break-even level by deliberately lowering its price to

Economics 5th Edition

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ECB 693 Final

Figure 12-9 Figure 12-9 shows cost and demand curves facing a profit-maximizing, perfectly competitive firm. At price P2, the firm would produce A) Q2 units. B) Q3 units. C) Q4 units. D) zero units. Answer: A Answer: A Answer: A Which of the following describes a positive externality? A) John Henry paints the outside of his house in order to

Economics 5th Edition

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ECB 701

A general formula for the multiplier is A) . B) . C) . D) . Answer: C Answer: C Answer: C "Because chips and salsa are complements, an increase in the price of chips will cause the demand for salsa to decrease. This initial shift in demand for chips results in a higher price for chips; this higher

Economics 5th Edition

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ECB 716 Midterm 1

The marginal revenue of a monopolistically competitive firm A) cannot be negative because the price the firm charges will always be greater than zero. B) can be negative if the firm charges a high price. C) can be negative if the firm charges a low price. D) will equal average revenue. Answer: C Answer: C Answer: C Which

Economics 5th Edition

Exam Prep

ECB 717 Test 1

A tax is efficient if it imposes a small excess burden relative to the tax revenue it raises. Answer: TRUE TRUE TRUE Merger guidelines developed by the Antitrust Division of the U.S. Department of Justice use four-firm concentration ratios as measures of concentration. Answer: FALSE FALSE FALSE The equilibrium in the prisoner's dilemma is a dominant strategy Nash equilibrium. Answer: TRUE TRUE TRUE An open

Economics 5th Edition

Exam Prep

ECB 730

Prior to the 1930s, the majority of dollars spent by government was spent at the state and local levels. Answer: TRUE Answer: TRUE Answer: TRUE Retained earnings are sufficient to finance a firm's rapid expansion in a high-growth economy. Answer: FALSE Answer: FALSE Answer: FALSE The tax multiplier is calculated as "one minus the government purchases multiplier." Answer: FALSE Answer:

Economics 5th Edition

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ECB 730 Final

Table 9-6 Mateo and Celeste produce custom saddles and spurs. Table 9-6 lists the number of saddles and pairs of spurs Mateo and Celeste can each produce in one month. Select the statement that accurately interprets the data in the table. A) Mateo has a greater opportunity cost than Celeste for making saddles. B)

Economics 5th Edition

Exam Prep

ECB 730 Midterm

If people assume that future rates of inflation will ________, they are said to have adaptive expectations. A) be higher than inflation rates of the past B) follow the pattern of inflation rates in the past C) be lower than inflation rates of the past D) not be related to inflation rates of the

Economics 5th Edition

Exam Prep

ECB 737 According To The

According to the production possibility model, if more resources are allocated to the production of physical and human capital, then which of the following is likely to happen? A) Fewer goods will be produced for consumption today. B) The production possibilities frontier will be shift inward in the future. C) Future economic growth

Economics 5th Edition

Exam Prep

ECB 746 Quiz 1

Consider the following items: a. the album "21" by Adele b. a Dutch horticulturalist's new method for cultivating hybrid tulips c. Rolls Royce's "Spirit of Ecstasy" hood ornament design d. the sale of Tumi luggage at a Macy's department store Which of the items listed is an example of intellectual property? A) a and b

Economics 5th Edition

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ECB 752 Quiz 3

The production function shows A) the total cost of producing a given quantity of output. B) the maximum output that can be produced from each possible quantity of inputs. C) the technology used to produce output. D) the incremental output gained by improving the production process. Answer: B Answer: B Answer: B What is always true at the

Economics 5th Edition

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ECB 764

Table 9-12 Production and Consumption Production Without Trade With Trade Estonia and Morocco can produce both swords and belts. Table 9-12 shows the production and consumption quantities without trade, and the production numbers with trade. If the actual terms of trade are 1 belt for 1.5 swords and 70 belts are traded, how

Economics 5th Edition

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ECB 764 Homework

You explain to your roommate Surya, who makes beaded headbands, about an economic theory which asserts that consumers will purchase more of a product at lower prices than they will at higher prices. She contends that the theory is incorrect because over the past two years she has lowered the price

Economics 5th Edition

Exam Prep

ECB 776 Quiz 1

The production possibilities frontier model assumes all of the following except A) labor, capital, land and natural resources are fixed in quantity. B) the economy produces only two products. C) any level of the two products that the economy produces is currently possible. D) the level of technology is fixed and unchanging. Answer: C Answer:

Economics 5th Edition

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ECB 780 Test 1

Figure 16-1 Suppose the economy is in short-run equilibrium below potential GDP and no fiscal or monetary policy is pursued. Using the static AD-AS model in the figure above, this would be depicted as a movement from A) A to B. B) B to C. C) C to B. D) B to A. E) A

Economics 5th Edition

Exam Prep

ECB 802 Test 1

There is public dissaving if A) G + TR > T. B) G + TR < T. C) TR > G + T. D) TR < G + T. Answer: A Answer: A Answer: A Figure 2-13 Figure 2-13 shows the production possibilities frontiers for Tahiti and Bora Bora. Each country produces two goods, milk and honey. What is

Economics 5th Edition

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ECB 803 Midterm 2

Which of the following must a firm in a market economy do today to succeed? A) Produce the goods and services that consumers want at a lower cost than consumers themselves can produce. B) Organize the factors of production into a functioning, efficient unit. C) Have access to sufficient funds. D) Market firms today

Economics 5th Edition

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ECB 810

The substitution effect of a wage increase is observed when A) the higher wage income causes workers to take more leisure and work less. B) leisure's higher opportunity cost causes workers to take less leisure and work more. C) the higher wage income causes workers to take more leisure and work more. D) leisure's

Economics 5th Edition

Exam Prep

ECB 810 Which Of The Following Has A

Which of the following has a tendency to raise the unemployment rate? A) implementing a minimum wage in an economy B) reducing unemployment insurance in an economy C) offering wages at the market-clearing rate D) reducing labor unions membership in an economy Answer: A Answer: A Answer: A In the United States, barriers to entry in professional team

Economics 5th Edition

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ECB 816 Quiz 3

The perfectly competitive market structure benefits consumers because A) firms do not produce goods at the lowest possible price in the long run. B) firms are forced by competitive pressure to be as efficient as possible. C) firms add a much smaller markup over average cost than firms in any other type of

Economics 5th Edition

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ECB 822 Final

Exempting food purchases from sales tax is consistent with the ability-to-pay principle, although not necessarily consistent with vertical equity. Answer: TRUE TRUE TRUE An increase in expected inflation will shift the short-run Phillips Curve. Answer: TRUE TRUE TRUE An inferior good is a good for which the quantity demanded increases as the price decreases, holding everything else constant. Answer: FALSE FALSE FALSE Optimal decisions are

Economics 5th Edition

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ECB 822 How Does The Owner Of A Sole

How does the owner of a sole proprietorship relate to the business? A) The owner and the business are separate legal entities. B) The owner and the business are not separate legal entities. C) The assets of the owner are considered separate from the asset of the business. D) None of these describe the

Economics 5th Edition

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ECB 823 Test 2

Where do economic agents such as individuals, firms and nations, interact with each other? A) in public locations monitored by the government B) in any arena that brings together buyers and sellers C) in any physical location people where people can physically get together for selling goods, such as shopping malls D) in any

Economics 5th Edition

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ECB 827 Midterm 2

You have a bond that pays $60 per year in coupon payments. Which of the following would result in a decrease in the price of your bond? A) Coupon payments on newly-issued bonds fall to $40 per year. B) The likelihood that the firm issuing your bond will default on debt decreases. C)

Economics 5th Edition

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ECB 828 Quiz 2

The unemployment rate in the United States is typically lower than in Western Europe because the United States has tougher requirements for the unemployed to receive government payments. Answer: TRUE Answer: TRUE Answer: TRUE In economics, the optimal level of pollution is the level for which the net benefit from reducing the pollution is

Economics 5th Edition

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ECB 828 Test 2

A decrease in the unemployment rate may be represented as a movement from a point on the production possibilities frontier to a point outside the frontier. Answer: FALSE Answer: FALSE Answer: FALSE If consumers believe the price of iPads will decrease in the future, this will cause the demand for iPads to decrease now. Answer:

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ECB 833 Quiz 1

Changes in the federal funds rate usually result in A) changes in both short-term and long-term interest rates with more of an effect on short-term interest rates. B) changes in both short-term and long-term interest rates with more of an effect on long-term interest rates. C) changes in both short-term and long-term interest

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ECB 834 Midterm

Economics 5th Edition

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ECB 856 Quiz 3

Suppose a tax equal to the value of the marginal external cost at the optimal output is imposed on a pollution generating good. All of the following will result from the tax except A) an increase in the equilibrium market price. B) a decrease in the equilibrium quantity produced and consumed. C) a

Economics 5th Edition

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ECB 864 Midterm 2

Which of the following is an example of a "how much" decision? A) The Pleasantville movie theatre is open only in the evenings. The theatre's manager is debating whether to add daily matinee shows. B) The Zhous have demolished their old home and are debating whether to build a ranch-style house or

Economics 5th Edition

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ECB 874 Quiz 1

One result of a tax is an increase in economic efficiency. Answer: FALSE Answer: FALSE Answer: FALSE In most circumstances, employees pay taxes on the value of health insurance their employers provide them. Answer: FALSE Answer: FALSE Answer: FALSE In the short run, a firm might choose to produce rather than shut down even if its market price

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ECB 875 Final

Discouraged workers are classified by the BLS as A) part of the labor force. B) out of the labor force. C) unemployed. D) employed. E) part-time employees. Answer: B Answer: B Answer: B The town of Harmonia gives away all 500 tickets to its annual Founder's Day Free Concert-in-the-Park to local residents. Each year, more than 500 people wish

Economics 5th Edition

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ECB 877 Quiz

A final good is one that A) is used in the production of another good. B) is a natural resource used to produce a good. C) is purchased as an input in the production process. D) is purchased by its final user. Answer: D Answer: D Answer: D The ________ effect refers to the change in quantity demanded

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ECB 881

Which of the following would shift the supply curve for smartphones to the right? A) an increase in the price of a substitute in production B) an increase in consumer income (assuming that all smartphones are normal goods) C) a decrease in the number of firms that produce smartphones D) a decrease in the

Economics 5th Edition

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ECB 889 Quiz

Table 9-11 Production and Consumption Production Without Trade With Trade Denmark and Belize can produce both clocks and hats. Table 9-11 shows the production and consumption quantities without trade, and the production numbers with trade. Which country has an absolute advantage in producing hats? A) Denmark B) Belize C) both countries D) neither country Answer: A Answer: A Answer: A Structural unemployment

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ECB 892 Homework

If the long-run aggregate supply curve is vertical, A) the economy stays at the natural rate of inflation in the long run. B) the short-run Phillips curve must be vertical. C) unemployment and inflation are positively related in the long run. D) the trade-off between unemployment and inflation cannot be permanent. Answer: D Answer: D Answer: D Rent

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ECON 106 Midterm

Table 8-17 A very simple economy produces three goods: movies, burgers, and bikes. The quantities produced and their corresponding prices for 2006 and 2013 are shown in the table above. What is nominal GDP in 2013? A) $3,320 B) $3,690 C) $6,360 D) $7,035 Answer: D Answer: D Answer: D A change in consumption spending caused by income changes

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ECON 107 Quiz

The public choice model asserts that the self-interest of policymakers is likely to cause them to take actions that are inconsistent with the preferences of voters, even where those preferences are clear. Answer: TRUE Answer: TRUE Answer: TRUE Your checking account balance is included in your bank's assets. Answer: FALSE Answer: FALSE Answer: FALSE A shortage is defined

Economics 5th Edition

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ECON 112 Homework

The excess burden of a tax is also a deadweight loss. Answer: TRUE Answer: TRUE Answer: TRUE In the United States, corporate profits are taxed at the corporate level and then are taxed again as personal income in the form of dividend payments. Answer: TRUE Answer: TRUE Answer: TRUE A profit-maximizing monopolistically competitive firm produces and sells an allocatively

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ECON 113 Midterm

The Federal Reserve's performance in the mid-to-late 1980s, 1990s, and early 2000s has received high marks from economists, even without inflation targeting. Answer: TRUE Answer: TRUE Answer: TRUE The airline industry routinely engages in price discrimination across time. Answer: FALSE Answer: FALSE Answer: FALSE On a diagram of a production possibility frontier, opportunity cost is represented by the slope

Economics 5th Edition

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ECON 115

The currency adopted by most countries in Western Europe is referred to as the A) euro. B) Eurodollar. C) yen. D) pound. Answer: A Answer: A Answer: A The expenses you encounter when you buy in one market and sell in a distant market are known as A) production costs. B) fixed costs. C) transactions costs. D) sunk costs. Answer: C Answer: C Answer: C Some

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ECON 119 Midterm 2

Table 9-12 Production and Consumption Production Without Trade With Trade Estonia and Morocco can produce both swords and belts. Table 9-12 shows the production and consumption quantities without trade, and the production numbers with trade. Prior to trade, what was the opportunity cost to produce 1 sword in Morocco? A) 1/2 of a belt B)

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ECON 139

The portion of ________ that a bank does not loan out or spend on securities is known as ________. A) loans; reserves B) deposits; reserves C) deposits; securities D) loans; securities Answer: B Answer: B Answer: B A monopoly differs from monopolistic competition in that A) a monopoly has market power while a firm in monopolistic competition does not

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ECON 148 Quiz

If the average productivity of American firms is rising more quickly than the average productivity of Indian firms, which of the following would you expect to see? (India's currency is the rupee.) A) an increase in the value of the rupee relative to the dollar B) a decrease in the prices of

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ECON 152 Homework

When banks gain ________, they can ________ their loans; and the money supply ________. A) reserves; increase; contracts B) withdrawals; increase; expands C) withdrawals; decrease; expands D) reserves; increase; expands Answer: D Answer: D Answer: D The quantity theory of money was derived from the quantity equation by asserting that A) real output was fixed. B) the money supply was

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ECON 163 Quiz

Psychologists Daniel Kahneman and Amos Tversky conducted the following experiments by asking a sample of people the following questions: Scenario A: "Imagine that you have decided to see a play and paid the admission price of $10 per ticket. As you enter the theater you discover that you have lost the

Economics 5th Edition

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ECON 168 Midterm 2

As a firm hires more labor in the short run, the A) level of total product stays constant. B) output per worker rises. C) extra output of another worker may rise at first, but eventually must fall. D) costs of production are increasing at a fixed rate per unit of output. Answer: C Answer: C Answer: C Suppose

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ECON 182 Quiz 3

Which of the following is a positive economic statement? A) U.S. citizens should only buy products which are produced in the United States. B) The government should ban the production and sale of incandescent light bulbs. C) Raising the tax on gasoline raises the selling price of gasoline. D) The government should revamp its

Economics 5th Edition

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ECON 189 Test 1

If a firm expects that the price of its product will be higher in the future than it is today A) the firm will go out of business. B) the firm has an incentive to increase supply now and decrease supply in the future. C) the firm has an incentive to decrease quantity

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ECON 190 Midterm

Long-run equilibrium in a monopolistically competitive market is similar to long-run equilibrium in a perfectly competitive market in that in both markets, firms A) produce at the minimum point of their average total cost curves. B) produce where price equals marginal cost. C) break even. D) produce where price equals marginal revenue. Answer: C Answer: C Answer: C In

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ECON 196 Homework

Figure 6-1 The demand curve on which elasticity changes at every point is given in A) Panel A. B) Panel B. C) Panel C. D) none of the above graphs. Answer: C Answer: C Answer: C A perfectly competitive firm faces a demand curve that is A) horizontal. B) vertical. C) perpendicular to the quantity axis. D) perfectly inelastic. Answer: A Answer: A Answer: A Which of

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ECON 196 Homework All Of The

All of the following cost curves are U-shaped except one. Which curve is not U-shaped? A) the marginal cost curve B) the average fixed cost curve C) the average total cost curve D) the average variable cost curve Answer: B Answer: B Answer: B Article Summary. In what is being called a "bail-in," the finance ministers of the

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ECON 199 If Blake Can Pick More

If Blake can pick more cherries in one hour than Cody, then Blake has a comparative advantage in cherry picking. Answer: FALSE Answer: FALSE Answer: FALSE A decrease in the amount of human capital acquired by workers will lead to decrease in the supply of labor. Answer: FALSE Answer: FALSE Answer: FALSE Average total cost is equal to

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ECON 217

________ is maximized in a competitive market when marginal benefit equals marginal cost. A) Deadweight loss B) Marginal profit C) Economic surplus D) Selling price Answer: C Answer: C Answer: C According to the saving and investment equation, if net foreign investment falls by $35 million, A) national saving in excess of domestic investment will decrease by $35 million. B) national

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ECON 217 Midterm 1

If it costs Sinclair $300 to produce 3 suede jackets and $420 to produce 4 suede jackets, then the difference of $120 is the marginal cost of producing the 4th suede jacket. Answer: TRUE Answer: TRUE Answer: TRUE The multiplier effect following an increase in expenditure is generated by induced increases in consumption expenditure as

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ECON 220 Homework

If the Fed attempts to reach and maintain very low rates of unemployment, we would expect the rate of inflation to rise. Answer: TRUE Answer: TRUE Answer: TRUE A supply shock causes the long-run aggregate supply curve to shift left, decreasing the price level. Answer: FALSE Answer: FALSE Answer: FALSE If the market for a product is narrowly

Economics 5th Edition

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ECON 226 Test 1

An implicit cost is A) a nonmonetary opportunity cost. B) a cost unique to sole proprietorships. C) a cost that involves spending money. D) a cost unique to corporations. Answer: A Answer: A Answer: A ________ increases economic efficiency because it forces firms to produce and sell goods and services as long as the additional benefit to consumers

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ECON 230

Figure 19-6 Which of the following would cause the change depicted in the figure above? A) Lack of investment in infrastructure causes Mexican productivity to fall relative to American productivity. B) A possibility of diseased poultry in Mexico causes U.S. consumers to decrease their preferences for Mexican-raised chickens relative to U.S.-raised chickens. C)

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ECON 235

Joss is a marketing consultant. Iris and Daphne are potential customers interested in commissioning Joss to undertake a market survey and compile the findings in a report. Iris is willing to pay $500 for the service while Daphne is willing to pay $800. Suppose that the opportunity cost of Joss's

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ECON 235 Quiz 2

An increase in population shifts the production possibility frontier inwards over time. Answer: FALSE Answer: FALSE Answer: FALSE Ceteris paribus, an increase in the government budget deficit increases interest rates in the United States and causes a real appreciation of the dollar. Answer: FALSE Answer: FALSE Answer: FALSE If the income effect of a wage increase equals the

Economics 5th Edition

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ECON 237

Figure 9-3 Since 1953 the United States has imposed a quota to limit the imports of peanuts. Figure 9-3 illustrates the impact of the quota. What is the area of domestic producer surplus without a quota? A) C B) C + B C) A + B + C D) A +

Economics 5th Edition

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ECON 241 Quiz

The model of purchasing power parity is the only way to determine whether a country's currency is undervalued or overvalued. Answer: FALSE Answer: FALSE Answer: FALSE If the demand for a product increases and the supply of the same product decreases, the equilibrium price will increase. Answer: TRUE Answer: TRUE Answer: TRUE A positive technological change will cause

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ECON 247

What is Different about buying stocks and buying bonds? A) A stock can possibly pay dividends forever, but bonds have a fixed number of payments. B) Differences of opinion about a stock's future may vary considerably but there is less Difference about a bond's future. C) The future growth of a stock is

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ECON 248 Homework

"The distribution of income should be determined by the government" is an example of a positive economic statement. Answer: FALSE FALSE FALSE In monopolistic competition, if a firm produces a highly desirable product relative to its competitors, the firm will be able to raise its price without losing any customers. Answer: FALSE FALSE FALSE The producer price index tracks the prices

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ECON 250

When a credit card company offers different services with its card, like travel insurance for air travel tickets purchased with the credit card or product insurance for items purchased with the card, the credit card company is trying to A) create a barrier to entry for competing firms. B) create a perfectly

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ECON 252 Midterm 2

Figure 4-8 Figure 4-8 shows the market for taxi rides. The following question(s) are based on this figure. To legally drive a taxicab in New York City, you must have a medallion issued by the city government. Assume that only 13,200 medallions have been issued. Let's also assume this puts an

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ECON 256 Quiz 3

Figure 5-1 Figure 5-1 shows a market with an externality. The current market equilibrium output of Q1 is not the economically efficient output. The economically efficient output is Q2. If, because of an externality, the economically efficient output is Q2 and not the current equilibrium output of Q1, what does S1

Economics 5th Edition

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ECON 257 Test 1

If, for a given percentage increase in price, quantity demanded falls by a proportionately smaller percentage, then demand is A) unit-elastic. B) perfectly elastic. C) relatively inelastic. D) relatively elastic. Answer: C Answer: C Answer: C If a perfectly competitive firm's total revenue is less than its total variable cost, the firm A) should raise its price above its

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ECON 258 Final

All else equal, as the price of a product falls, the quantity supplied increases. Answer: FALSE Answer: FALSE Answer: FALSE As the number of firms in a market increases, the supply curve will shift to the right and the equilibrium quantity will rise. Answer: TRUE Answer: TRUE Answer: TRUE Increasing a fixed exchange rate is called a revaluation. Answer: TRUE Answer:

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ECON 262 Test

What is the poverty rate? A) the rate at which the number of people relative to the size of the population fall below the poverty line B) the percentage of the population earning an annual income below the poverty line, according to the federal government's definition C) the percentage of working adults whose

Economics 5th Edition

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ECON 263

A perfectly competitive firm breaks even at a price equal to its minimum average total cost. Answer: TRUE TRUE TRUE Peanut butter and jelly are complements. If the price of peanut butter increases, the demand for jelly will increase. Answer: FALSE FALSE FALSE Suppose at a price of $50, Yoshi's Jazz Bar sells 20 tickets to its nightly jazz performance

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ECON 267 Midterm 2

Bubba's Hula Shack bar and bistro has begun giving customers who can show proof that they arrived at the establishment by public transportation a 10 percent discount on their total bill. This is an example of A) arbitrage. B) two-part tariff pricing. C) price discrimination. D) odd pricing. Answer: C Answer: C Answer: C Most doctors and hospitals

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ECON 267 Quiz

The long-run supply curve for a perfectly competitive, constant-cost industry A) is upward sloping. B) is horizontal. C) is downward sloping. D) is found by adding up the marginal cost curves for all firms in the industry. Answer: B Answer: B Answer: B The following appeared in a Florida newspaper a week after a hurricane hit the state.

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ECON 271 Quiz

Table 15-1 A monopoly producer of foreign language translation software faces a demand and cost structure as given in Table 15-1. What is the marginal revenue from the sale of the 12th unit? A) $75 B) $50 C) $20 D) -$5 Answer: C Answer: C Answer: C Holding the price of a firm's output constant, if the marginal product of

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ECON 277

Figure 2-1 Point B is A) technically efficient. B) unattainable with current resources. C) inefficient in that not all resources are being used. D) the equilibrium output combination. Answer: A Answer: A Answer: A When firms benefit from the results of research and development they didn't pay for, we say firms A) are litigious. B) free ride. C) invest in knowledge capital. D)

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ECON 281 Final

Consider two single-malt whiskey distillers, Laphroaig and Knockando. If they advertise, they can both sell more whiskey and increase their revenue. However, the cost of advertising more than offsets the increased revenue so that each distiller ends up with a lower profit than if they do not advertise. On the other

Economics 5th Edition

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ECON 290 Homework

Assume that the hourly price for the services of tarot card readers has risen and sales of these services have also risen. One can conclude that A) the law of demand has been violated. B) the number of tarot card readers has increased. C) the demand for tarot card readers has increased. D) tarot

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ECON 300 Test 2

Market power in the United States causes a huge loss of economic efficiency. Answer: FALSE Answer: FALSE Answer: FALSE Expansionary fiscal policy involves increasing government purchases or increasing taxes. Answer: FALSE Answer: FALSE Answer: FALSE If inflationary expectations are increasing, we would expect that the nominal interest rate would also be increasing, holding all else constant. Answer: TRUE Answer: TRUE Answer:

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ECON 303 Midterm 1

Deadweight loss refers to the reduction in economic surplus resulting from a market not being in competitive equilibrium. Answer: TRUE Answer: TRUE Answer: TRUE When net exports equal zero, the economy is in macroeconomic equilibrium. Answer: FALSE Answer: FALSE Answer: FALSE An increase in liabilities will reduce a firm's net worth. Answer: TRUE Answer: TRUE Answer: TRUE A monopolist's demand curve is the

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ECON 305 Quiz 3

A monopolistically competitive firm should lower its price if its marginal revenue exceeds its marginal cost. Answer: TRUE Answer: TRUE Answer: TRUE A rising price level decreases consumption by decreasing the real value of household wealth. Answer: TRUE Answer: TRUE Answer: TRUE The question of whether economic growth is desirable is a positive question, easily settled by economic

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ECON 316 Test 2

Table 10-3 The table above shows Lee's marginal utility per dollar from consuming ice cream cones and cans of Lime Fizz Soda. The price of an ice cream cone is $2 and the price of Lime Fizz Soda is $1. Use this information to select the correct statement. A) We cannot determine how

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ECON 322 Inflation Is MeasuredA

Inflation is measured A) using the level of the consumer price index. B) as the percentage change in the consumer price index. C) using the level of real GDP. D) as the percentage change in real GDP. Answer: B Answer: B Answer: B Figure 5-3 The private profit maximizing output level is A) Qm. B) Q. C) Qo. D) Qo- Qm. Answer: A Answer:

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ECON 323 Test 1

Figure 16-7 The Lizard Lounge is well known for its exotic cocktails. Figure 16-7 shows its estimated demand curve for cocktails. The owners of the Lizard Lounge are considering the following four pricing options: a. A single price scheme where the cocktail price equals the monopoly price. b. A single price scheme

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ECON 326 Homework

Voluntary exchange ________ economic efficiency because neither the buyer nor the seller would agree to a trade unless ________. A) increases; they both benefit B) increases; only one party benefits C) decreases; neither benefit D) decreases; they both benefit Answer: A Answer: A Answer: A Which of the following will not shift the demand for the euro to

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ECON 326 Midterm 1

Table 12-2 Table 12-2 lists the various pounds (lbs.) of apples that Margie Stattler can sell. Assume that Margie operates in a perfectly competitive market. What is Margie's total revenue if she sells 250 pounds of apples? A) $250 B) $500 C) $750 D) There is not enough information in the table to determine Margie's total revenue. Answer:

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ECON 331 Midterm 2

In response to accounting scandals in 2002, the federal government passed legislation requiring that corporate directors have a certain level of expertise with financial information and mandating that chief executive officers personally certify the accuracy of financial statements. What is the name of this legislation? A) the Accountant Reliability Act B) the

Economics 5th Edition

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ECON 335 Test

Figure 11-7 Figure 11-7 shows the cost structure for a firm. When output level is 100, what is the total cost of production? A) $20 B) $1,000 C) $1,200 D) $2,000 Answer: D Answer: D Answer: D The level of real GDP in the long run is called A) potential GDP. B) short-run GDP. C) frictional GDP. D) low-capacity GDP. Answer: A Answer: A Answer: A Figure

Economics 5th Edition

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ECON 340 Quiz 1

Producer surplus is the Difference between the lowest price a firm is willing to accept for a product and the price it actually receives for the product. Answer: TRUE Answer: TRUE Answer: TRUE A depreciation of a country's currency always lowers the domestic firm's profits. Answer: FALSE Answer: FALSE Answer: FALSE "Cost disease" refers to the tendency for

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ECON 351

Expansionary fiscal policy crowds out both domestic investment and net exports. Answer: TRUE Answer: TRUE Answer: TRUE Economists assume people's tastes are identical. Answer: FALSE Answer: FALSE Answer: FALSE An increase in the tax wedge associated with a given economic activity will decrease the level of that activity. Answer: TRUE Answer: TRUE Answer: TRUE The application of economic analysis to human resources

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ECON 351 Test

As output increases A) average variable cost becomes smaller and smaller. B) the difference between average total cost and average variable cost decreases. C) marginal cost increases continuously. D) the difference between average total cost and average variable cost becomes greater and greater. Answer: B Answer: B Answer: B ________ is defined as the value of a household's

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ECON 353 Midterm 2

Disposable personal income is defined as A) personal income less personal taxes plus indirect sales taxes. B) personal income less transfer payments plus personal taxes. C) personal income less personal taxes. D) personal income less depreciation. Answer: C Answer: C Answer: C On a two-dimensional graph, ________ allows for the effects of additional variables. A) moving along a curve B)

Economics 5th Edition

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ECON 362 Test 1

Which of the following would be classified as fiscal policy? A) The federal government passes tax cuts to encourage firms to reduce air pollution. B) The Federal Reserve cuts interest rates to stimulate the economy. C) A state government cuts taxes to help the economy of the state. D) The federal government cuts taxes

Economics 5th Edition

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ECON 372 Midterm 2

Some economists argue that the short-run Phillips curve is not vertical, and that monetary policy can be effective in the short run. Which one of the following is not one of the reasons for this skepticism? A) Empirical evidence shows workers and firms have rational expectations. B) Contracts with workers and suppliers may

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ECON 372 Midterm 2 Sole

Sole proprietorships are ________ type of business. A) the most profitable B) the least common C) the most common D) the least risky Answer: C Answer: C Answer: C Golda Rush quit her job as a manager for Home Depot to start her own hair dressing salon, Goldilocks. She gave up a salary of $40,000 per year, invested

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ECON 380 Quiz 2

What is the United States government's formal definition of the poverty line? A) It is a level of annual income equal to total income in society divided by the population, adjusted for a family of four. B) It is a level of annual income equal to the amount of money necessary to

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ECON 391 Quiz 3

An inward shift of the production possibilities frontier represents A) positive economic growth. B) negative economic growth. C) a rise in the unemployment rate. D) technological improvement. Answer: B Answer: B Answer: B The poverty rate is defined as the percentage of the A) labor force that is poor according to the federal government's definition of poverty. B) population that

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ECON 392 Test

The demand for most farm products is relatively inelastic. All else constant, what is the effect on farm revenues as a result of the introduction of new and better farm equipment which increases in productivity? A) Farm revenues increase. B) Farm revenues decrease. C) Farm revenues remain constant because consumers will not increase their

Economics 5th Edition

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ECON 393 Test 1

If people speculate that a run on one bank will cause a run on all banks in the financial system, and this speculation proves accurate, then the financial system would experience what is known as a A) commodity crisis. B) securitization meltdown. C) bank panic. D) institutional death spiral. Answer: C Answer: C Answer: C If net foreign

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ECON 421 Test 1

One reason why McDonald's charges a single price for its products is that it is difficult and costly for the company to determine each individual consumer's willingness to pay. Answer: TRUE Answer: TRUE Answer: TRUE A real appreciation of the dollar is caused by either a nominal appreciation of the dollar, a rise in the

Economics 5th Edition

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ECON 422 Suppose The Required

Suppose the required reserve ratio is 20 percent. If banks are conservative and choose not to loan all of their excess reserves, the real-world deposit multiplier is A) less than 5. B) equal to 5. C) greater than 5. D) equal to 20. Answer: A Answer: A Answer: A Suppose a firm uses labor and capital to produce

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ECON 431 Quiz 1

On a diagram of a production possibility frontier, economic growth is represented by the slope of the production possibility frontier. Answer: FALSE FALSE FALSE The Coase Theorem asserts that government intervention is a prerequisite for addressing externality problems. Answer: FALSE FALSE FALSE Optimal decisions are made at the point where marginal benefit is maximized. Answer: FALSE FALSE FALSE All renters benefit from rent control and

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ECON 435 Quiz 3

If inventories decline by more than analysts predict they will decline, this implies that A) actual investment spending was greater than planned investment spending. B) actual investment spending was less than planned investment spending. C) actual investment spending was equal to than planned investment spending. D) there is no relationship between actual investment spending

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ECON 436 Final

Economists use game theory to analyze oligopolies because A) real markets are too complicated to analyze without using games. B) it is more enjoyable for economists and students to learn by playing games. C) game theory helps us to understand why interactions among firms are crucial in determining profitable business strategies. D) game theory

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ECON 445

The poverty rate is defined as the percentage of the A) labor force that is poor according to the federal government's definition of poverty. B) population that is exempt from paying federal income taxes. C) population who qualify to receive welfare payments and food stamps. D) population that is poor according to the federal

Economics 5th Edition

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ECON 447 Test 1

A subgame is a simultaneous game embedded in a sequential game. Answer: FALSE Answer: FALSE Answer: FALSE Marketing refers to all the activities necessary for a firm to sell a product to a consumer. Answer: TRUE Answer: TRUE Answer: TRUE If nominal GDP is less than real GDP, then the GDP deflator will be greater than 100. Answer: FALSE Answer:

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ECON 450 Quiz 3

Marla is an architect who is designing a home for Chuck. Chuck is paying Marla $150 per hour to design his new home. When Chuck and Marla get married, Marla continues to work on designing the home, but she no longer charges Chuck for her work. As a result, GDP

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ECON 465 Quiz 3

When unemployment is above its natural rate, the inflation rate will eventually A) increase. B) decrease. C) move to its natural rate. D) become equal to the natural rate of unemployment. Answer: B Answer: B Answer: B The ability of a firm to charge a price greater than marginal cost is called A) monopoly power. B) price-making power. C) cost-plus pricing. D)

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ECON 466 Final

In order to be binding, a price floor A) must lie above the free market equilibrium price. B) must lie below the free market equilibrium price. C) must coincide with the free market equilibrium price. D) must be high enough for firms to earn a profit. Answer: A Answer: A Answer: A Table 9-3 Bryce and Tina are artisans

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ECON 466 Quiz 2

David Card and Alan Kruger conducted a study of fast-food restaurants in New Jersey and Pennsylvania. The study found that A) there was a large reduction in employment of low-skilled workers when the minimum wage was raised in these states. B) the earned income tax credit is more effective in raising the

Economics 5th Edition

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ECON 473 Quiz 3

With an optimal two-part tariff, A) consumer surplus equals producer surplus. B) all consumer surplus is transformed into profit. C) consumers maximize consumer surplus. D) the firm earns zero profit. Answer: B Answer: B Answer: B Economists played a key role in the development of merger guidelines by the Department of Justice and the Federal Trade Commission in

Economics 5th Edition

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ECON 483

In the United States, health care spending as a percentage of GDP has declined since 1965. Answer: FALSE Answer: FALSE Answer: FALSE If planned investment is equal to actual investment, then aggregate expenditure is equal to GDP. Answer: TRUE Answer: TRUE Answer: TRUE By the 2000s, investment banks had become significant participants in the secondary market for mortgages. Answer:

Economics 5th Edition

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ECON 486 Quiz 1 During What

During what period of time did the United States most consistently adhere to the gold standard? A) from the nineteenth century until the 1930s B) from the eighteenth century until the nineteenth century C) from 1914 until 1929 D) from 1944 until 1980 Answer: A Answer: A Answer: A Arthur buys a new cell phone for $150. He

Economics 5th Edition

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ECON 486 Test 2

Which of the following is motivated by an efficiency concern? A) In 2009, the Obama administration increased unemployment benefits. B) As part of an economic stimulus package, each taxpayer received a $3,000 tax rebate check. C) Following a six-month drought, a city banned homeowners from watering their lawns in an effort to conserve water. D)

Economics 5th Edition

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ECON 494 Midterm 2

Crowding out refers to a decline in ________ as a result of an increase in ________. A) tax revenues; unemployment B) government purchases; tax rates C) government purchases; private expenditures D) private expenditures; government purchases Answer: D Answer: D Answer: D You have a bond that pays $60 per year in coupon payments. Which of the following would

Economics 5th Edition

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ECON 495

Beginning in 1965, the head of the Antitrust Division of the U.S. Department of Justice began to change antitrust policy. How did antitrust policy change? A) For the first time horizontal mergers were allowed - with government approval - and vertical mergers were allowed without need for approval from the government. B) For

Economics 5th Edition

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ECON 524 Quiz 2

Figure 5-10 Chicken pox vaccinations for toddlers benefit society by protecting young children and by preventing an epidemic of the disease. Thus, the social benefits of chicken pox vaccinations exceed the private benefit for any quantity of vaccinations as illustrated in Figure 5-10. What is the value of the net gain to

Economics 5th Edition

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ECON 529 Quiz 2

Assume a hypothetical case where an industry begins as perfectly competitive and then becomes a monopoly. Which of the following statements regarding economic surplus in each market structure is true? A) Under perfectly competitive conditions, economic surplus in this industry equals consumer surplus plus producer surplus. Under monopoly conditions, some consumer surplus

Economics 5th Edition

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ECON 531

With the Troubled Asset Relief Program (TARP), the Treasury provided funds to banks in exchange for stock. Answer: TRUE Answer: TRUE Answer: TRUE If the marginal tax rate is greater than the average tax rate, the tax structure is described as regressive. Answer: FALSE[/cpmembership] Answer: FALSE[/cpmembership] Answer: FALSE[/cpmembership] In a Nash equilibrium, all players select non-dominant strategies. Answer: FALSE[/cpmembership] Answer:

Economics 5th Edition

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ECON 531 Currency Traders Expect

Currency traders expect the dollar to depreciate. What impact will this have on equilibrium in the foreign exchange market? A) The dollar will appreciate, and the equilibrium quantity of dollars will decrease. B) The dollar will depreciate, and the equilibrium quantity of dollars exchanged will decrease. C) The dollar will appreciate, and the

Economics 5th Edition

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ECON 550 Midterm

The marginal cost curve is U-shaped because of the law of increasing opportunity costs. Answer: FALSE Answer: FALSE Answer: FALSE The Sarbanes-Oxley Act of 2002 requires that each member of the board of directors personally certify the accuracy of financial reports. Answer: FALSE Answer: FALSE Answer: FALSE If demand is inelastic, the absolute value of the price elasticity

Economics 5th Edition

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ECON 559 Quiz

Figure 12-13 Suppose the prevailing price is P1 and the firm is currently producing its loss-minimizing quantity. If the firm represented in the diagram continues to stay in business, in the long-run equilibrium A) it will reduce its output to Q0 and face a price of P0. B) it will continue to produce

Economics 5th Edition

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ECON 560 Midterm 1

Suppose the price of capital and labor remain constant but that the average educational level of workers has increased and therefore, productivity of labor increases. This would lead a firm A) to adopt a more capital-intensive production technology. B) to adopt a more labor-intensive technology. C) to keep its output and production technology

Economics 5th Edition

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ECON 560 Test 1

Gold is an example of A) commodity money. B) fiat money. C) barter money. D) M1. Answer: A Answer: A Answer: A If a stock's dividend is expected to grow at a constant rate of eight percent in the future and it has just paid a dividend of $1.25 a share, and you have an alternative investment of

Economics 5th Edition

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ECON 563 Midterm

Increases in population shift the market supply curve for labor to the right. Answer: TRUE TRUE TRUE Transfer payments are subtracted from national income to get to personal income. Answer: FALSE FALSE FALSE The GDP deflator is a measure of the price level which is calculated as nominal GDP divided by real GDP and multiplied by 100. Answer: TRUE TRUE TRUE Both first-degree price discrimination

Economics 5th Edition

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ECON 567

Figure 2-2 Figure 2-2 above shows the production possibilities frontier for Vidalia, a nation that produces two goods, roses and orchids. If Vidalia chooses to produce 40 dozen orchids, how many roses can it produce to maximize production? A) 30 dozen roses B) 50 dozen roses C) 100 dozen roses D) 150 dozen roses Answer:

Economics 5th Edition

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ECON 582 Midterm 2

A decrease in quantity supplied is represented by a leftward shift of the supply curve. Answer: FALSE Answer: FALSE Answer: FALSE The dynamic aggregate demand and aggregate supply model accounts for the price level rising every year. Answer: TRUE Answer: TRUE Answer: TRUE A network externality causes firms to sacrifice profits in the short run in order to

Economics 5th Edition

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ECON 591 Quiz 2

Suppliers will be willing to supply a product only if A) the price received is less than the additional cost of producing the product. B) the price received is at least equal to the additional cost of producing the product. C) the price is higher than the average cost of producing the product. D)

Economics 5th Edition

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ECON 593 Quiz 3

If prices rise on average in the U.S. economy, the purchasing power of a dollar declines. Answer: TRUE Answer: TRUE Answer: TRUE A decrease in population shifts the production possibility frontier outwards over time. Answer: FALSE Answer: FALSE Answer: FALSE A monopolist's demand curve is the same as the marginal revenue curve for the product. Answer: FALSE Answer: FALSE Answer: FALSE One

Economics 5th Edition

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ECON 613 Quiz

Ceteris paribus, a decrease in the government's budget deficit will increase domestic investment and net foreign investment. Answer: TRUE Answer: TRUE Answer: TRUE As the number of firms in a market decreases, the supply curve will shift to the left and the equilibrium price will rise. Answer: TRUE Answer: TRUE Answer: TRUE When a monopolistically competitive firm breaks

Economics 5th Edition

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ECON 621 Final

The labor supply for an industry would decrease if A) the wage rate falls. B) the percentage of the population from age 16 to 65 decreases. C) the government welcomes foreign workers into the country. D) a greater percentage of women want to work outside the home. Answer: B Answer: B Answer: B Which of the following characteristics

Economics 5th Edition

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ECON 622 Test

Consumption spending is $5 million, planned investment spending is $8 million, unplanned investment spending is $2 million, government purchases are $10 million, and net export spending is $2 million. What is aggregate expenditure? A) $15 million B) $23 million C) $25 million D) $27 million Answer: C Answer: C Answer: C A price maker is A) a person who

Economics 5th Edition

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ECON 625 Test

Which is the least common type of business? A) corporation B) partnership C) sole proprietorship D) impossible to determine without further information Answer: B Answer: B Answer: B Which of the following causes the unemployment rate to understate the true extent of joblessness? A) Many full time workers really want to be part time workers. B) Persons who collect unemployment

Economics 5th Edition

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ECON 627 Test

Monetarists think that the Fed should use ________ as a target when conducting monetary policy. A) the money supply B) the federal funds rate C) the Treasury bill rate D) the inflation rate E) the unemployment rate Answer: A Answer: A Answer: A Table 23-4 Given the consumption schedule in the table above, the marginal propensity to consume is A) 0.5. B) 0.6. C)

Economics 5th Edition

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ECON 629 Test

Figure 4-11 Figure 4-11 shows the demand and supply curves for the coffee market. The government believes that the equilibrium price is too low and tries to help almond growers by setting a price floor at $7.00. What is the value of producer surplus after the imposition of the price

Economics 5th Edition

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ECON 630 Quiz 1

When aggregate expenditure = GDP, A) macroeconomic equilibrium occurs. B) the federal budget is balanced. C) net exports equal zero. D) saving equals zero. Answer: A Answer: A Answer: A Adhira buys chocolates and almonds. She has 3 bars of chocolates and 4 bags of almonds. The marginal utility of the third chocolate bar is 18 units of

Economics 5th Edition

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ECON 638 Final

In September 2012, the average price of gasoline in the United States was $3.91 per gallon, and consumers purchased nearly 5 percent less gasoline than they had during September 2011, when the average price of gasoline was $3.66 per gallon. Based on these figures, from September 2011 to September 2012,

Economics 5th Edition

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ECON 657 Midterm

In ________, health care spending per person based on income per person is significantly higher than the average for most other countries. A) Austria B) Canada C) Norway D) the United States Answer: D Answer: D Answer: D Table 13-4 Table 13-4 lists estimated revenues and costs (per week) for plastic vials (100 vials per box) for the Victoria

Economics 5th Edition

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ECON 677

In evaluating the degree of economic efficiency in a market, we can state that the size of the deadweight loss in a market will be smaller A) the greater the difference between marginal cost and price. B) the smaller the difference between marginal cost and average total cost. C) the smaller the difference

Economics 5th Edition

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ECON 677 Test 1

The change in consumption divided by the change in disposable income is equal to A) the slope of the consumption function. B) aggregate expenditure. C) household saving. D) real GDP. Answer: A Answer: A Answer: A How does the owner of a sole proprietorship relate to the business? A) The owner and the business are separate legal entities. B) The

Economics 5th Edition

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ECON 678 Quiz

When a business is set up as a sole proprietorship, the owner of the business faces limited liability. Answer: FALSE Answer: FALSE Answer: FALSE An inferior good is a good for which the quantity demanded decreases as the price increases, holding everything else constant. Answer: FALSE Answer: FALSE Answer: FALSE Supply is elastic whenever the elasticity value for

Economics 5th Edition

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ECON 680 Test

An increase in liabilities will reduce a firm's net worth. Answer: TRUE Answer: TRUE Answer: TRUE Suppose a monopoly is producing its profit-maximizing output level. Now suppose the government imposes a lump-sum tax on the monopoly, independent of its output. As a result the monopolist will increase the price of its product to cover

Economics 5th Edition

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ECON 684

Which of the following is not a flow in the circular flow model? A) the flow of goods and services and the flow of resources to produce goods and services B) the flow of profit and the flow of revenue C) the flow of income earned by households and the flow of expenditures

Economics 5th Edition

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ECON 685

Protectionism refers to the use of trade barriers to shield domestic firms from foreign competition. Answer: TRUE Answer: TRUE Answer: TRUE In the United States, imports and exports make up more than half of GDP. Answer: FALSE Answer: FALSE Answer: FALSE Price leadership is a form of explicit collusion where one firm in an oligopoly announces a price

Economics 5th Edition

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ECON 689

In order to support an undervalued euro, the European Central Bank must ________ dollars. Over time, this action will cause the rate of inflation in the EU to ________. A) buy; decrease B) buy; increase C) sell; increase D) sell; decrease Answer: B Answer: B Answer: B If the consumption function is defined as C = 7,250 +

Economics 5th Edition

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ECON 701 Midterm 2

Many economists are critical of proposals to pass comparable worth legislation. Which of the following is the best explanation for this criticism? A) Comparable worth legislation will only lead to efficient market outcomes if women in low-paying jobs suffer from cognitive dissonance. B) Proposals for comparable worth legislation assume that wages for

Economics 5th Edition

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ECON 703 Quiz 2

Figure 2-14 Figure 2-14 shows the production possibilities frontiers for Costa Rica and Guatemala. Each country produces two goods, pineapples and coconuts. What is the opportunity cost of producing 1 ton of coconuts in Guatemala? A) 1/2 of a ton of pineapples B) 1 1/3 tons of pineapples C) 2 tons of pineapples D)

Economics 5th Edition

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ECON 705

Growth in potential GDP in the United States is estimated to be about A) 8.25% per year. B) 5.0% per year. C) 3.2% per year. D) 1.5% per year. Answer: C Answer: C Answer: C Figure 7-2 Figure 7-2 represents the market for vaccinations. Vaccinations are considered a benefit to society, and the figure shows both the marginal

Economics 5th Edition

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ECON 705 Homework

Figure 4-1 Figure 4-1 shows Kendra's demand curve for ice-cream cones. If the market price is $2.50, what is the maximum number of ice cream cones that Kendra will buy? A) 1 B) 2 C) 3 D) 4 Answer: C Answer: C Answer: C Scenario 1-2 Suppose a hat manufacturer currently sells 2,000 hats per week and makes a profit

Economics 5th Edition

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ECON 708 Midterm 2

You have just opened a new Italian restaurant in your hometown where there are three other Italian restaurants. Your restaurant is doing a brisk business and you attribute your success to your distinctive northern Italian cuisine using locally grown organic produce. What is likely to happen to your business in the long

Economics 5th Edition

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ECON 710

The ABC Company manufactures routers that are used to provide high-speed Internet service. ABC sells an average of 1,000 routers each month, but to exhaust economies of scale in its industry ABC would have to sell 3,000 routers each month. Therefore, A) ABC is experiencing diseconomies of scale. B) ABC is experiencing diminishing

Economics 5th Edition

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ECON 715 Test 1

The ________ curve is vertical. A) short-run aggregate supply B) short-run aggregate demand C) long-run aggregate supply D) long-run aggregate demand Answer: C Answer: C Answer: C What is the principal-agent problem? A) It is a problem caused by a person (principal) who hires an agent to act on his behalf but is unwilling to delegate authority to the

Economics 5th Edition

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ECON 727

You borrow $10,000 from a bank for one year at a nominal interest rate of 5%. The CPI over that year rises from 180 to 200. What is the real interest rate you are paying? A) 15% B) 5% C) -1.1% D) -6.1% Answer: D Answer: D Answer: D Which of the following statements is true? A) Input prices are

Economics 5th Edition

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ECON 728 Test

When there is a positive externality A) the private benefit received by consumers is greater than the external benefit. B) the social benefit received by consumers is greater than the private benefit. C) the private benefit received by consumers is greater than the private cost. D) the private benefit received by consumers is greater

Economics 5th Edition

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ECON 734 Midterm

Zane's Vanes is a service that restores old weather vanes. Zane has just spent $125 purchasing a 1920s era weather vane which he expects to restore and sell for $500 once the work is completed. After having spent $125, Zane realizes that he will need to spend an additional $200 on

Economics 5th Edition

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ECON 744

Figure 10-7 Manuri has $300 to spend on Pilates classes and Yoga classes. The price of a group Pilates class is $20 and the price of a group Yoga class is $10. Manuri's optimal bundle is given by "A" in Figure 10-7. Suppose the price of Pilates sessions rise to $30

Economics 5th Edition

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ECON 753 Quiz 2

Yield management is the practice of A) determining production functions to minimize production costs. B) forecasting competitors' responses to price changes. C) using buyer data to rapidly adjust prices. D) using information technology to find the best interest rate. Answer: C Answer: C Answer: C Linesha, a college student working part-time, receives a wage increase. An avid movie

Economics 5th Edition

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ECON 761 Final

Figure 7-2 Figure 7-2 represents the market for vaccinations. Vaccinations are considered a benefit to society, and the figure shows both the marginal private benefit and the marginal social benefit from vaccinations. The efficient equilibrium price is A) $60. B) $50. C) $40. D) <$40. Answer: B Answer: B Answer: B Workers and firms both expect that prices will

Economics 5th Edition

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ECON 762 Test

When production reflects consumer preferences, ________ occurs. A) allocative efficiency B) productive efficiency C) equity D) efficient central planning Answer: A Answer: A Answer: A Table 8-14 Consider the following data on nominal GDP and real GDP (values are in billions of dollars): The GDP deflator for 2013 equals A) 92.2. B) 102.6. C) 108.5. D) 109.1. Answer: C Answer: C Answer: C Firms in a small

Economics 5th Edition

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ECON 764 Quiz

Figure 19-5 The Chinese government pegs the yuan to the dollar, at one of the specified exchange rates on the graph, such that it overvalues its currency. Using the figure above, this would generate A) a shortage of yuan equal to 500 million. B) a shortage of yuan equal to 100 million. C)

Economics 5th Edition

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ECON 768 Test 1

Which of the following is a reason why increases in the price level result in a decline in aggregate expenditure? A) Price level increases raise real wealth, which causes consumption spending and aggregate expenditure to decline. B) Price level increases cause firms and consumers to hold more money, which raises the interest

Economics 5th Edition

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ECON 772 Test 1

Scenario 1-1 Suppose a t-shirt manufacturer currently sells 5,000 t-shirts per week and makes a profit of $10,000 per week. A manager at the plant observes, "Although the last 400 t-shirts we produced and sold increased our revenue by $4,000 and our costs by $4,800, we are still making an overall

Economics 5th Edition

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ECON 774 Test 2

The payment received by suppliers of entrepreneurial skills is called profit. Answer: TRUE Answer: TRUE Answer: TRUE If, when price changes by 35 percent, the quantity demanded changes by 7 percent, then the absolute value of the price elasticity of demand is 5. Answer: FALSE Answer: FALSE Answer: FALSE The circular flow of income shows that GDP can be

Economics 5th Edition

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ECON 776 Test

To what do economists attribute the rapid growth of labor productivity in the United States relative to other countries? A) the flexibility of U.S. labor markets and the efficiency of the U.S. financial system B) the strict government rules in the United States that regulate a firm's ability to hire and fire

Economics 5th Edition

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ECON 783 Quiz 3

Figure 4-10 Figure 4-10 shows the market for apartments in Bay City. Recently, the government imposed a rent ceiling at R0. Suppose that instead of a price ceiling, the government imposed a price floor of R1. What is the quantity of apartments demanded at the new price? A) 0 B) Q1 C)

Economics 5th Edition

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ECON 784

Congress has divided the authority to police mergers between the Antitrust Division of the U.S. Department of Justice (AD) and the Federal Trade Commission (FTC). How is this authority divided? A) The AD decides whether proposed horizontal mergers will be challenged; the FTC decides whether proposed vertical mergers will be challenged. B)

Economics 5th Edition

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ECON 785 Final

Unemployment insurance is usually available to workers in ________ for a shorter period of time than it is in ________. A) the United States; Canada B) Canada and some Western European countries; the United States C) Canada; some Western European countries D) some Western European countries; the United States Answer: A Answer: A Answer: A Under current tax

Economics 5th Edition

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ECON 788 Test

The long-run aggregate supply curve is ________, while the long-run Phillips curve is ________. A) positively sloped; negatively sloped B) vertical; negatively sloped C) vertical; also vertical D) positively sloped; positively sloped Answer: C Answer: C Answer: C Figure 12-9 Figure 12-9 shows cost and demand curves facing a profit-maximizing, perfectly competitive firm. At price P4, the firm would

Economics 5th Edition

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ECON 791

Economists have shown that when the ultimatum game experiment is carried out, both allocators and recipients act as if fairness is important. Answer: TRUE Answer: TRUE Answer: TRUE A perfectly competitive firm in long-run equilibrium produces output at the lowest possible average total cost. Answer: TRUE Answer: TRUE Answer: TRUE If the equilibrium exchange rate exceeds the par

Economics 5th Edition

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ECON 791 Test 2

Figure 13-3 The marginal revenue from one additional unit sold is the sum of the gain in revenue from selling the additional unit and the loss in revenue from having to charge a lower price to sell the additional unit. Based on the diagram in the figure, A) X represents the

Economics 5th Edition

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ECON 792 Midterm

If your total satisfaction increases when you consume another unit, your marginal utility must be A) increasing. B) decreasing. C) negative. D) positive. Answer: D Answer: D Answer: D In 1995, the General Agreement on Tariffs and Trade (GATT), which was established in 1948, was replaced by the World Trade Organization (WTO). Why did members of the GATT push for

Economics 5th Edition

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ECON 798 Quiz 1

Economics 5th Edition

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ECON 801 Midterm 2

A monopolist currently sells 18 units of a good. If marginal revenue on the last unit sold is $117, then the price of the good must be less than $117. Answer: FALSE Answer: FALSE Answer: FALSE Economist Robert Higgs showed that World War II brought great increase in the number of consumer goods available to

Economics 5th Edition

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ECON 805

How does the decreasing use of DVD players affect the market for prerecorded DVDs? A) The demand curve for prerecorded DVDs shifts to the right. B) The quantity of prerecorded DVDs demanded decreases. C) The quantity of prerecorded DVDs demanded increases. D) The demand curve for prerecorded DVDs shifts to the left. Answer: D Answer: D Answer:

Economics 5th Edition

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ECON 816 Test

Suppose your grandfather earned a salary of $12,000 in 1964. If the CPI is 31 in 1964 and 219 in 2013, then the value of your grandfather's salary in 2013 dollars is approximately A) $84,775. B) $63,830. C) $37,200. D) $26,280. Answer: A Answer: A Answer: A If foreign holdings of U.S. dollars decrease, holding all else constant, A)

Economics 5th Edition

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ECON 831 Quiz

If the probability of losing your job remains ________, a recession would be a good time to purchase a home because the Fed usually ________ interest rates during this time. A) low; lowers B) low; raises C) high; lowers D) high; raises E) low; does not change Answer: A Answer: A Answer: A Figure 18-6 Figure 18-6 shows the

Economics 5th Edition

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ECON 840

Suppose there is a bank panic. Which of the following would not be a consequence of this bank panic? A) Bank total reserves would decrease. B) Required reserves would increase. C) Bank checking account balances would decrease. D) Individual banks would have to shrink the value of loans they made. E) The economy would likely

Economics 5th Edition

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ECON 842 Quiz 3

Which of the following is not an example of a government-imposed entry barrier? A) patents B) occupational licensing C) barriers to international trade D) antitrust legislation Answer: D Answer: D Answer: D In the long run, if price is less than average cost A) there is an incentive for firms to exit the market. B) there is profit incentive for

Economics 5th Edition

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ECON 844 Quiz 1

The cyclically adjusted budget deficit or surplus measures what the deficit or surplus would be if the economy was A) in a recession. B) in an expansion. C) at potential GDP. D) at potential tax revenue. Answer: C Answer: C Answer: C When you buy at a low price in one market then sell at a higher price

Economics 5th Edition

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ECON 854

During a business cycle expansion, total production ________ and total employment ________. A) increases; increases B) increases; decreases C) decreases; increases D) decreases; decreases Answer: A Answer: A Answer: A The Brooks Appliance Store and the Lefingwell Appliance Store (both are located in the same city) each sell an identical washer-dryer. The owner of each store considered offering the

Economics 5th Edition

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ECON 854 Quiz 1

An implicit cost is A) a nonmonetary opportunity cost. B) a cost unique to sole proprietorships. C) a cost that involves spending money. D) a cost unique to corporations. Answer: A Answer: A Answer: A Economics does not study correct or incorrect behaviors, but rather it assumes that economic agents behave ________, meaning they make the best decisions

Economics 5th Edition

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ECON 860 Homework

One reason purchasing power parity does not exactly hold is that many goods are not traded internationally. Answer: TRUE Answer: TRUE Answer: TRUE In face of rational expectations regarding changes in monetary policy, the short-run Phillips Curve may be vertical. Answer: TRUE Answer: TRUE Answer: TRUE For a person to have a comparative advantage in producing a product,

Economics 5th Edition

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ECON 866 Quiz

Suppose the extra cost for a doctor to keep his office open for one extra hour is $200. Then, the doctor should stay open for the extra hour even if he can generate additional revenue of $200 for that hour. Answer: TRUE Answer: TRUE Answer: TRUE The substitution effect explains why there is a

Economics 5th Edition

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ECON 869 Quiz 2

Money's most narrow definition is based on its function as a A) store of value. B) unit of account. C) standard of deferred payment. D) medium of exchange. E) standard of barter. Answer: D Answer: D Answer: D The real business cycle model focuses on how A) wage and price stickiness explains fluctuations in real GDP. B) the labor theory of

Economics 5th Edition

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ECON 873 Midterm

Which of the following has not contributed to the overall decline in death rates in the United States since 1981? A) a decline in smoking B) the decline in the population C) the availability of new prescription drugs D) new surgical techniques Answer: B Answer: B Answer: B Which of the following statements is true? A) Consumer surplus under

Economics 5th Edition

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ECON 879 Quiz

If the dollar appreciates against the Mexican peso, A) Mexican imports to the U.S. become more expensive. B) U.S. exports to Mexico become less expensive. C) U.S. exports to Mexico become more expensive. D) The value of Mexican imports to the United States does not change. Answer: C Answer: C Answer: C If policy makers implement an expansionary

Economics 5th Edition

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ECON 884 Homework

Figure 13-13 What is the output price? A) P4 B) P3 C) P2 D) P1 Answer: A Answer: A Answer: A If demand is taken into account, firms that use cost-plus pricing can adjust price by A) letting sales fall, but hold the markup constant if demand falls. B) lowering markups on price-elastic goods and raising

Economics 5th Edition

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ECON 886 Figure 31A Decrease In The

Figure 3-1 A decrease in the price of the product would be represented by a movement from A) A to B. B) B to A. C) D1 to D2. D) D2 to D1. Answer: A Answer: A Answer: A U.S. taxpayers spend many hours during the year maintaining records for tax purposes and preparing their income tax returns.

Economics 5th Edition

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ECON 890

If the best lawyer in town is also the best at operating a word processor, then according to economic reasoning, this person should A) split her time evenly between being a lawyer and a word processor. B) specialize in being a lawyer because its opportunity cost is lower. C) pursue the activity she

Economics 5th Edition

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ECON 890 Quiz 2

The government purchases multiplier is defined as A) . B) . C) . D) . Answer: A Answer: A Answer: A If the U.S. government removes tariffs it had placed on imports from countries that have been accused of deliberately undervaluing their currencies, the price of these imports will ________ and the demand for the undervalued currency will

Economics 5th Edition

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ECON 891 Homework

Gross domestic product understates the total production of final goods and services because of the omission of A) exports. B) inflation. C) intermediate goods. D) household production. Answer: D Answer: D Answer: D Figure 17-6 Figure 17-6 shows two different compensation schemes for the Safelite Glass Corporation, an installer of auto glass windshields. Under Scheme I, the firm

Economics 5th Edition

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ECON 899 Quiz 3

Figure 3-2 A decrease in productivity would be represented by a movement from A) A to B. B) B to A. C) S1 to S2. D) S2 to S1. Answer: D Answer: D Answer: D The reason that the coffeehouse market is monopolistically competitive rather than perfectly competitive is because A) barriers to entry are very low. B) there are many

Economics 5th Edition

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ECON A 112 Quiz

Monetary policy is conducted by the U.S. Treasury Department. Answer: FALSE Answer: FALSE Answer: FALSE In the United States in 2011, over 90 percent of people without health insurance were below the age of 34. Answer: FALSE Answer: FALSE Answer: FALSE Positive analysis is concerned with "what ought to be," while normative analysis is concerned with "what is." Answer:

Economics 5th Edition

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ECON A 112 Quiz 2

When an investor buys a corporate bond, A) the investor becomes part owner of the corporation. B) the principal of the bond is a loan to the corporation. C) the interest made on the bond represents the bondholders limited liability in the company. D) the face value of the bond is equal to what

Economics 5th Edition

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ECON A 113 Final

The quantity theory of money implies that the price level will be stable (no inflation or deflation) when the growth rate of the money supply equals A) 0. B) the growth rate of the price level. C) the growth rate of the velocity of money. D) the growth rate of real GDP. Answer: D Answer: D Answer:

Economics 5th Edition

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ECON A 121 Quiz 3

Jonah lives in a small town where there is only one Mexican restaurant. Which of the following is likely to be true about the price elasticity of demand for meals at the Mexican restaurant? A) Demand is likely to be perfectly inelastic. B) Demand is likely to be perfectly elastic. C) Demand is

Economics 5th Edition

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ECON A 127

A reason why there is more competition among restaurants than among large discount department stores is that restaurants A) have to cater to a variety of consumer tastes while department stores do not. B) unlike department stores, have to abide by government sanitation rules. C) unlike department stores, do not have significant economies

Economics 5th Edition

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ECON A 142 Test 2

Figure 13-2 The marginal revenue from selling the additional unit Qinstead of Qa equals A) the area (G + H). B) the area (H - E). C) the area (E + F) - (G + H). D) the area G. Answer: B Answer: B Answer: B Figure 7-2 Figure 7-2 represents the market for vaccinations. Vaccinations are considered a

Economics 5th Edition

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ECON A 163 Test

The success of Walt Disney's animated film The Lion King in 1994, increased production of animated films, increasing the demand for animators much faster than the supply of animators was increasing. As a result, in the market for animators, the equilibrium wage fell and the equilibrium quantity increased. Answer: FALSE[/cpmembership] Answer: FALSE[/cpmembership] Answer: FALSE[/cpmembership] A

Economics 5th Edition

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ECON A 169 Test 1

If the government finances an increase in government purchases with an increase in taxes, which of the following would you expect to see? A) an increase in the exchange rate B) a decrease in the interest rate C) a decrease in aggregate demand D) an increase in net exports Answer: A Answer: A Answer: A Assume the market

Economics 5th Edition

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ECON A 170 Quiz 2

If a country has a comparative advantage in producing a product, it may not have an absolute advantage in producing that product. Answer: TRUE Answer: TRUE Answer: TRUE Economies cannot function without money. Answer: FALSE Answer: FALSE Answer: FALSE The basis for trade is absolute advantage, not comparative advantage. Answer: FALSE Answer: FALSE Answer: FALSE The double taxation problem occurs because households

Economics 5th Edition

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ECON A 173 Homework

Which of the following models advocate that the quantity of money should be increased at a constant rate? A) the monetarist model B) the new classical model C) the real business cycle model D) the new Keynesian model Answer: A Answer: A Answer: A A sequential game can be used to analyze whether a retail firm should build a

Economics 5th Edition

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ECON A 182

Figure 24-1 Ceteris paribus, a decrease in personal income taxes would be represented by a movement from A) AD1 to AD2. B) AD2 to AD1. C) point A to point B. D) point B to point A. Answer: A Answer: A Answer: A A student comments to his roommate that the only way he will be able to

Economics 5th Edition

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ECON A 183 Midterm

If the cross-price elasticity of demand for computers and software is negative, this means the two goods are A) substitutes. B) complements. C) inferior. D) normal. Answer: B Answer: B Answer: B One way investment banks differ from commercial banks is that investment banks A) lend exclusively to households. B) do not take in deposits. C) only buy and sell mortgages. D)

Economics 5th Edition

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ECON A 191 Homework

Private costs A) are borne by producers of a good while social costs are borne by government. B) are borne by consumers of a good while social costs are borne by government. C) are borne by producers of a good while social costs are borne by society at large. D) are borne by producers

Economics 5th Edition

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ECON A 201 Quiz 3

Figure 17-1 Figure 17-1 shows the marginal revenue product for Dale's Hand-Sewn Doilies, a producer of linen doilies. If Dale can sell her doilies at $2 each, what is the marginal product of the 5th worker? A) $28 B) 28 doilies C) 14 doilies D) $56 Answer: C Answer: C Answer: C If, as your taxable income decreases,

Economics 5th Edition

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ECON A 209 Midterm 2

Collusion between two firms occurs when A) the firms independently pursue strategies that could hurt each other. B) firms explicitly or implicitly agree to adopt a uniform business strategy. C) announce that each will match its rival's market price. D) firms act altruistically to bring about the economically efficient outcome. Answer: B Answer: B Answer: B Indicate whether

Economics 5th Edition

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ECON A 209 Quiz 2

Frieda is at her local florist to buy a dozen roses. She is willing to pay $75 for the roses, and buys them for $75. Frieda's consumer surplus from the purchase is A) $150. B) $75. C) $37.50. D) $0. Answer: D Answer: D Answer: D Some corporate governance experts believe that serving on a company's board of directors

Economics 5th Edition

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ECON A 212 Midterm

Horatio can produce either a combination of 15 bird houses and 25 wind chimes or a combination of 30 bird houses and 15 wind chimes. If he now produces 30 bird houses and 15 wind chimes, what is the opportunity cost of producing an additional 10 wind chimes? A) 2 bird

Economics 5th Edition

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ECON A 212 Quiz 3

Figure 16-5 In the dynamic model of AD-AS in the figure above, if the economy is at point A in year 1 and is expected to go to point B in year 2, Congress and the president would most likely A) decrease government spending. B) increase government spending. C) increase oil prices. D) increase taxes. E)

Economics 5th Edition

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ECON A 216 Test 2

Suppose the supply curve for digital cameras shifts to the right. This will cause a relatively large decrease in the price of digital cameras if both demand and supply are inelastic. Answer: TRUE TRUE TRUE The U.S. government would never approve a proposed merger between two firms that could significantly increase the newly merged firm's

Economics 5th Edition

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ECON A 218 Midterm 1

Even if the population declines, scarcity will still exist. Answer: TRUE Answer: TRUE Answer: TRUE The minimum wage is an example of a price ceiling. Answer: FALSE Answer: FALSE Answer: FALSE Ceteris paribus, an increase in the money supply will lower short-term interest rates. Answer: TRUE Answer: TRUE Answer: TRUE The U.S. economy would gain from the elimination of tariffs and

Economics 5th Edition

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ECON A 221 Quiz

Collusion would be common in an oligopoly and a monopolistically competitive industry. Answer: FALSE FALSE FALSE Technological advancements that increase labor's productivity shift the labor supply curve to the right. Answer: FALSE FALSE FALSE The natural rate of unemployment consists of frictional unemployment plus structural unemployment. Answer: TRUE TRUE TRUE If the GDP deflator is equal to 100, then for that year nominal GDP is

Economics 5th Edition

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ECON A 229 Midterm 1

Which of the following is a factor of production? A) a necklace produced by a jewelry manufacturer B) 50 shares of Google stock C) the security guard at the local bank D) $1,000 in casino chips Answer: C Answer: C Answer: C Figure 5-10 Chicken pox vaccinations for toddlers benefit society by protecting young children and by preventing an

Economics 5th Edition

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ECON A 229 Test 2

If a producer is not able to expand its plant capacity immediately, it is A) bankrupt. B) operating in the long run. C) operating in the short run. D) losing money. Answer: C Answer: C Answer: C For a perfectly competitive firm, which of the following is not true at profit maximization? A) Market price is greater than marginal

Economics 5th Edition

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ECON A 233 Midterm 1

At macroeconomic equilibrium, total ________ equals total ________. A) spending; production B) investment; inventories C) consumption; production D) taxes; transfers Answer: A Answer: A Answer: A The law of demand implies, holding everything else constant, that as the price of gelato A) increases, the demand for gelato will increase. B) increases, the quantity of gelato demanded will increase. C) decreases, the

Economics 5th Edition

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ECON A 238 Final

Economics 5th Edition

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ECON A 238 Test 2

To compete in the automobile market, Tesla must make many strategic decisions such as whether to introduce a new car model, how to sell and service its cars, and where to advertise. At Tesla's Fremont, California plant, managers must decide on the monthly production quantities of their S and X

Economics 5th Edition

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ECON A 263

Which of the following information about fiat money is false? Fiat money A) is backed by gold. B) serves as a medium of exchange. C) has little to no value except as money. D) is authorized by a central bank or governmental body. Answer: A Answer: A Answer: A Figure 6-6 As price falls from PA to PB,

Economics 5th Edition

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ECON A 264

Foreign direct investment occurs when a Chinese corporation A) purchases stock issued in China. B) opens a new Chinese factory. C) purchases 1,000 shares of stock issued by an American company. D) opens a new factory in France. Answer: D Answer: D Answer: D If the 15th unit of output has a marginal cost of $29.50 and the

Economics 5th Edition

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ECON A 273

Article Summary. A growing number of U.S. citizens are going to other countries for elective surgery procedures. Improved quality and significant cost savings abroad have attracted an increasing number of what are being referred to as American medical tourists, especially those who either do not have insurance or whose insurance

Economics 5th Edition

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ECON A 284

The General Agreement on Tariffs and Trade (GATT) was formed to replace the World Trade Organization (WTO) because the WTO was empowered only to reduce barriers to trade in goods. The GATT is an agreement to reduce barriers to trade in goods, services and intellectual property. Answer: TRUE Answer: TRUE Answer: TRUE If bankers

Economics 5th Edition

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ECON A 287 Quiz 2

In an open economy, the current account balance equals ________. (Assume that the capital account is zero and net transfers are zero.) A) net foreign investment + domestic investment B) net capital outflows C) the financial account balance + net income on investments D) net foreign investment Answer: D Answer: D Answer: D Table 14-4 Alistair Luggage and

Economics 5th Edition

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ECON A 290 Homework

An increase in a fixed exchange rate from $2.00 per pound to $2.10 per pound is called a(n) ________ of the pound. A) devaluation B) depreciation C) appreciation D) revaluation Answer: D Answer: D Answer: D A quota is A) a limit placed on the quantity of goods that can be imported into a country. B) a

Economics 5th Edition

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ECON A 297 Midterm

The ________ is a measure of the price level and is calculated by dividing ________ by ________ and multiplying by 100. A) CPI; real GDP; nominal GDP B) GDP deflator; real GDP; nominal GDP C) GDP deflator; nominal GDP; real GDP D) PPI; nominal GDP; real GDP E) PPI; real GDP; nominal GDP Answer: C Answer: C Answer: C Which

Economics 5th Edition

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ECON A 301 Midterm

How much is a bond that pays $50 in coupon payments for 3 years and $1,000 at the end of the third year worth if the interest rate is 10%? A) $876 B) $952 C) $1,045 D) $1,150 Answer: A Answer: A Answer: A Which of the following would increase the balance on the current account? A) an increase

Economics 5th Edition

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ECON A 302 Midterm 2

Which of the following describes a situation in which a good or service is produced at the lowest possible cost? A) productive efficiency B) allocative efficiency C) marginal efficiency D) profit maximization Answer: A Answer: A Answer: A Increasing the growth rate of GDP per capita and sustaining this growth rate in an economy can A) increase infant mortality. B)

Economics 5th Edition

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ECON A 310 Test

Under autarky, consumer surplus is represented by the area A) above the supply curve and below the equilibrium price. B) above the supply curve and below the demand curve. C) below the demand curve and above the equilibrium price. D) above the demand curve and below the supply curve. Answer: C Answer: C Answer: C The following equations

Economics 5th Edition

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ECON A 311 Quiz 3

a. Define the term "globalization." b. Describe the benefits of globalization. c. Who is likely to oppose globalization and why? Answer:a. Globalization refers to the process of countries becoming more open to foreign trade and investment.b. The benefits of globalization include: (1) consumers have access to a wider array of goods and services

Economics 5th Edition

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ECON A 322 Quiz 3

If the purchasing power of a dollar is greater than the purchasing power of the yen, purchasing power parity would predict that A) in the short run, exchange rates will move to equalize the purchasing power of the dollar and the yen. B) in the long run, exchange rates will move to

Economics 5th Edition

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ECON A 323 Test 1

An increase in the supply of capital, which is a complement to labor, will lead to A) a decrease in the quantity of labor demanded. B) an increase in the demand for labor. C) a decrease in the demand for labor. D) an increase in the quantity of labor demanded. Answer: B Answer: B Answer: B The law

Economics 5th Edition

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ECON A 338 Midterm 1

Consider the following statements: a. Consumers rent more DVDs from a video store that rents DVDs at a lower price than other rival video stores in the area. b. Department stores take steps to increase security since they believe it is more costly to allow shoplifting than to install expensive security monitoring equipment. c.

Economics 5th Edition

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ECON A 349 Midterm

The Organization of Petroleum Exporting Countries (OPEC) controls about 75 percent of the world's proven oil reserves. Economists refer to OPEC as a cartel because A) OPEC is a monopoly, but it is located outside of the boundaries of any one country. This is the definition of a cartel. B) this is

Economics 5th Edition

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ECON A 349 Test

Shrimp is an increasingly popular part of the American diet. Louisiana shrimpers, who represent the bulk of the U.S. industry, were almost all put out of business by Hurricane Katrina. How did this affect the equilibrium price and quantity of shrimp? Answer: The supply curve for shrimp shifted to the left resulting

Economics 5th Edition

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ECON A 356 Quiz 3

Goods can be classified on the basis of whether their consumption is A) internal and excludable. B) rival and competitive. C) includable and cooperative. D) rival and excludable. Answer: D Answer: D Answer: D If 11 workers can produce 53 units of output while 12 workers can produce 56 units of output, what is the marginal product of

Economics 5th Edition

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ECON A 372 Midterm

The price elasticity of supply is equal to A) the value of the slope of the supply curve. B) the change in quantity supplied divided by the change in price. C) the percentage change in price divided by the percentage change in quantity supplied. D) the percentage change in quantity supplied divided by the

Economics 5th Edition

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ECON A 372 Test

In perfect competition A) the market demand curve and the individual's demand are identical. B) the market demand curve is perfectly inelastic while demand for an individual seller's product is perfectly elastic. C) the market demand curve is perfectly elastic while demand for an individual seller's product is perfectly inelastic. D) the market demand

Economics 5th Edition

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ECON A 379

The Federal Reserve responded to the 2008 financial crisis in several ways. Which of the following is not one of the ways the Fed responded? A) The Fed made investment banks eligible for discount loans. B) The Fed lent investment banks Treasury securities in exchange for mortgage-backed securities. C) The Fed lowered the

Economics 5th Edition

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ECON A 381

Political stability is not a prerequisite to economic growth. Answer: FALSE FALSE FALSE College education tends to result in a negative externality because the recipient does not receive the full benefit of the education. Answer: FALSE FALSE FALSE If additional units of a good are produced at an increasing opportunity cost, the production possibility frontier would be bowed outward (concave). Answer: TRUE TRUE TRUE Economic profit

Economics 5th Edition

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ECON A 385

Productive efficiency is achieved when firms produce goods and services A) most desired by society. B) at the highest profit margin. C) at the lowest cost. D) of the highest quality. Answer: C Answer: C Answer: C Table 19-17 A very simple economy produces three goods: movies, burgers, and bikes. The quantities produced and their corresponding prices for 2006

Economics 5th Edition

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ECON A 386 Midterm 2

Total utility is constant along a given indifference curve. Answer: TRUE Answer: TRUE Answer: TRUE Purchasing a firm's stock in an IPO can be risky because financial information may not be fully disclosed. Answer: TRUE Answer: TRUE Answer: TRUE An increase in disposable income will shift the aggregate demand curve to the right. Answer: TRUE Answer: TRUE Answer: TRUE If a per-unit

Economics 5th Edition

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ECON A 409 Homework

An increase in the supply of capital, which is a substitute to labor, will lead to a decrease in the demand for labor. Answer: TRUE Answer: TRUE Answer: TRUE The demand for most farm products is relatively inelastic. A drought that reduces the supply of farm products will also cause farm revenues to fall. Answer:

Economics 5th Edition

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ECON A 412 Quiz 3

On an isoquant/isocost graph, the least cost input combination of producing a given output is A) any point on the isoquant curve. B) any point on the isocost curve. C) given by the tangency between the isoquant curve and the isocost line. D) one of the intercept values on the graph. Answer: C Answer: C

Economics 5th Edition

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ECON A 415 Midterm 2

The Fed can directly lower the inflation rate. Answer: FALSE Answer: FALSE Answer: FALSE Those who favor changes in the market for health care that would make it more like the markets for other goods and services are generally in favor of universal health care coverage. Answer: FALSE Answer: FALSE Answer: FALSE Over time, people in the United

Economics 5th Edition

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ECON A 416

According to a recent study, "Stricter college alcohol policies, such as raising the price of alcohol, or banning alcohol on campus, decrease the number of students who use marijuana." On the basis of this information, how would you describe alcohol and marijuana? A) The two goods are substitutes in consumption. B) There

Economics 5th Edition

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ECON A 417

When a tax on output is imposed to internalize the external costs of pollution, the supply curve shifts down by the amount of the tax. Answer: FALSE Answer: FALSE Answer: FALSE In the market for factors of production, firms earn income by selling factors of production to households. Answer: FALSE Answer: FALSE Answer: FALSE Raising taxes on interest

Economics 5th Edition

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ECON A 422

Suppose that in 2014, all prices in the economy double and that all wages and salaries also double. In 2014 you A) are worse off than you were in 2013 as you can no longer afford to buy as many goods and services. B) are better off than you were in 2013

Economics 5th Edition

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ECON A 422 Midterm 1

Accounting costs exclude implicit costs. Answer: TRUE Answer: TRUE Answer: TRUE A university must decide if it should stop offering foreign language classes. This decision involves answering the economic question of "how to produce." Answer: FALSE Answer: FALSE Answer: FALSE The division of the burden of a tax between buyers and sellers in a market is called tax

Economics 5th Edition

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ECON A 424 Test 1

Monetarism is a school of thought put forth by ________, who argued that the economy would most likely be at potential GDP. A) Karl Marx B) Milton Friedman C) Finn Kydland and Edward Prescott D) Robert Lucas and Thomas Sargent Answer: B Answer: B Answer: B Figure 7-5 Figure 7-5 represents the market for medical services with and without

Economics 5th Edition

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ECON A 439 Midterm 1

Recent rapid economic growth in India and China has reduced the amount of "brain drain" in those countries. Answer: TRUE Answer: TRUE Answer: TRUE A monopolist currently sells 18 units of a good. If marginal revenue on the last unit sold is $117, then the price of the good must be less than $117. Answer: FALSE Answer:

Economics 5th Edition

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ECON A 447 Quiz

Which of the following countries does not come close to the free market benchmark? A) the United States B) Japan C) Cuba D) France Answer: C Answer: C Answer: C Consumers usually pay less than the total cost of medical treatment because A) a third party, usually an insurance company, often pays most of the bill. B) the federal government

Economics 5th Edition

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ECON A 457 Test 1

Table 4-4 Table 4-4 shows the demand and supply schedules for the low-skilled labor market in the city of Westover. What is the equilibrium hourly wage (W*) and the equilibrium quantity of labor (Q*)? A) W* = $9.00; Q* = 370,000 B) W* = $8.50; Q* = 380,000 C) W* = $8.50; Q* =

Economics 5th Edition

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ECON A 466 Quiz 3

One of your classmates asserts that advertising, marketing research, and brand management are redundant expenditures because a firm can obtain the same information by simply looking at what customers are already buying. Which of the following is not a response you might offer her? A) Conducting market research is a good

Economics 5th Edition

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ECON A 470 Midterm

Which of the following is a normative economic statement? A) The price of gasoline is too high. B) The current high price of gasoline is the result of strong worldwide demand. C) When the price of gasoline rises, the quantity of gasoline purchased falls. D) When the price of gasoline rises, transportation costs rise. Answer:

Economics 5th Edition

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ECON A 475 Test

Figure 4-6 Figure 4-6 shows the market for granola. The market is initially in equilibrium at a price of P1 and a quantity of Q1. Now suppose producers decide to cut output to Q2 in order to raise the price to P2. What area represents producer surplus at the equilibrium

Economics 5th Edition

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ECON A 478 Quiz 2

When Disneyland opened in 1955, what prices were charged for admission and rides? A) Admission was free; customers paid for rides. B) All customers paid the same price for admission; rides were free. C) Admission prices varied by your age, home address and occupation; rides were free. D) All customers paid the same low

Economics 5th Edition

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ECON A 481 Homework

Table 6-3 Over what range of prices is the demand elastic? A) over the entire range of prices B) between $14 and $16 C) between $8 and $16 D) between $2 and $8 Answer: B Answer: B Answer: B Table 2-11 Table 2-11 shows the number of labor hours required to produce a digital camera and a pound of wheat

Economics 5th Edition

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ECON A 487 Test

Which of the following is an implicit cost of production? A) the loss in the value of capital equipment due to wear and tear B) the salary you pay yourself for running your business C) the utility bill paid to water, electricity, and natural gas companies D) the interest you pay your mother for

Economics 5th Edition

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ECON A 491 Midterm 1

Table 2-15 Table 2-15 shows the output per day of two gardeners, George and Jack. They can either devote their time to mowing lawns or cultivating gardens. What is George's opportunity cost of mowing a lawn? A) half a garden cultivated B) two lawns mowed C) two-thirds of a garden cultivated. D) one and a

Economics 5th Edition

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ECON A 492 Homework

The tax multiplier equals the change in ________ divided by the change in ________. A) taxes; equilibrium real GDP B) equilibrium real GDP; taxes C) taxes; consumption spending D) consumption spending; taxes Answer: B Answer: B Answer: B Figure 2-5 If the economy is currently producing at point Y, what is the opportunity cost of moving to point W? A) 2

Economics 5th Edition

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ECON A 492 Midterm 2

________ tended to increase spending on health care in the United States. A) The aging of the U.S. population, rather than advances in medical technology, has B) Advances in medical technology, rather than the aging of the U.S. population, has C) The aging of the U.S. population, as well as advances in medical

Economics 5th Edition

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ECON A 503 Test 2

Payments by a corporation to its shareholders are known as A) stocks. B) bonds. C) coupons. D) dividends. Answer: D Answer: D Answer: D Some economists and lawmakers believe the Fed lost some of its independence when it A) began printing money at the directive of the White House prior to the 2008 presidential election. B) began working closely with

Economics 5th Edition

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ECON A 505

Economics 5th Edition

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ECON A 510

Figure 16-5 In the dynamic model of AD-AS in the figure above, if the economy is at point A in year 1 and is expected to go to point B in year 2, and no fiscal or monetary policy is pursued, then at point B A) the unemployment rate is very low. B)

Economics 5th Edition

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ECON A 511

Mortgages issued to borrowers whose credit histories include failures to make payments on bills are known as ________ mortgages. A) catastrophic B) variable rate C) subprime D) Alt-A Answer: C Answer: C Answer: C If the price of train tickets decreases, what will be the impact in the market for bus travel ? A) The demand curve for bus travel

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ECON A 519 Quiz

Figure 11-10 Suppose for the past 8 years the firm has been producing Qdunits per period using plant size ATC4. Now, following a permanent change in demand, it plans to cut production to Qc units. What will happen to its average cost of production? A) In the short run, its average

Economics 5th Edition

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ECON A 529

What happens in the primary market? A) primary inputs like electricity are sold B) a corporate financial manager will resell previously issued shares of stock C) newly issued claims are sold by the borrowing firm to the initial buyer D) already issued claims are sold from one investor to another Answer: C Answer: C Answer: C Figure 2-8

Economics 5th Edition

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ECON A 535 Homework

Suppose your marginal utility from consuming the 3rd slice of cake is zero, then your total utility from consuming cake is A) maximized. B) decreasing. C) negative. D) increasing. Answer: A Answer: A Answer: A The profits a corporation keeps to finance future expansion are known as A) retained earnings. B) preferred stock. C) dividends. D) capital gains. Answer: A Answer: A Answer: A Figure 5-6

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ECON A 549 Midterm

Figure 16-6 In the dynamic model of AD-AS in the figure above, if the economy is at point A in year 1 and is expected to go to point B in year 2, Congress and the president would most likely pursue A) expansionary fiscal policy. B) contractionary fiscal policy. C) expansionary monetary policy. D) contractionary monetary

Economics 5th Edition

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ECON A 552

Figure 13-2 The marginal revenue from selling the additional unit Qinstead of Qa equals A) the area (G + H). B) the area (H - E). C) the area (E + F) - (G + H). D) the area G. Answer: B Answer: B Answer: B In England during the Middle Ages each village had an area of

Economics 5th Edition

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ECON A 556 Test 2

If real GDP per capita in Ireland is estimated to be $7,400 in 2014, what will real GDP per capita be in 2019 if real GDP per capita grows at an annual rate of 2.8%? A) $7,607 B) $8,496 C) $9,472 D) $20,720 Answer: B Answer: B Answer: B Long-run equilibrium in a monopolistically competitive market is similar

Economics 5th Edition

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ECON A 566

Tabitha shares a flea market booth with her sister. Her share of the rent is $150 per month. She is considering moving to her own, larger booth which she will not have to share with anyone. The larger booth rents for $450 per month. Recently, you ran into Tabitha in

Economics 5th Edition

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ECON A 568 Midterm 1

One difference between stocks and bonds is that A) stocks are financial securities, while bonds are labor market securities. B) stocks are usually issued in electronic form, while bonds are usually issued in paper form. C) stocks represent ownership in companies, while bonds represent ownership in banks. D) stocks do not involve a promise

Economics 5th Edition

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ECON A 570 Test 2

The supply of loanable funds has a ________ slope because the greater the interest rate, the ________ the reward to saving, and the ________ the quantity of loanable funds supplied. A) positive; lesser; lesser B) positive; greater; lesser C) negative; lesser; greater D) positive; greater; greater Answer: D Answer: D Answer: D Table 5-1 In an effort to maintain privacy

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ECON A 577

Potential GDP in the United States A) does not change over time. B) grows as the economy grows. C) changes over a given business cycle. D) declines over time. Answer: B Answer: B Answer: B Figure 2-4 Figure 2-4 shows various points on three different production possibilities frontiers for a nation. A movement from ________ could occur because of

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ECON A 578 Final

A decrease in aggregate demand causes a decrease in ________ only in the short run, but causes a decrease in ________ in both the short run and the long run. A) the price level; real GDP B) real GDP; real GDP C) the price level; the price level D) real GDP; the price level Answer:

Economics 5th Edition

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ECON A 583 Quiz 3

Vineyards can grow either red wine grapes or white wine grapes on their land. Which of the following would cause the supply of red wine grapes to decrease? A) an increase in the price of white wine grapes B) a decrease in the price of white wine grapes C) an increase in the demand

Economics 5th Edition

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ECON A 585

Figure 10-5 Which of the following statements is true? A) The consumer gets more utility from bundle than from bundle v. B) The consumer gets less utility from bundle w than from bundle v. C) Bundles r, s, t and u all cost the same. D) Bundlesand w are not affordable. Answer: D Answer:

Economics 5th Edition

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ECON A 586 Quiz 1 Which Of The

Which of the following statements is true about profit? A) Profit refers to the revenue received from the sale of a quantity of goods. B) Profit is calculated by multiplying price and quantity sold. C) The terms "accounting profit" and "economic profit" can be used interchangeably. D) Profit is the difference between revenue and

Economics 5th Edition

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ECON A 592 Quiz

An individual's labor supply curve shows A) the maximum wage rates offered to that individual by various potential employers. B) the relationship between wages and the quantity of labor that she is willing to supply. C) the relationship between wages and the quantity of labor that a firm is willing to employ. D) the

Economics 5th Edition

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ECON A 612

Figure 5-1 Figure 5-1 shows a market with an externality. The current market equilibrium output of Q1 is not the economically efficient output. The economically efficient output is Q2. Suppose the current market equilibrium output of Q1 is not the economically efficient output because of an externality. The economically efficient

Economics 5th Edition

Exam Prep

ECON A 633 Quiz 1

Firms disclose financial statements in ________ and in ________. A) periodic filings to the federal government; annual reports to shareholders B) daily filings to the federal government; daily reports to shareholders C) monthly reports to shareholders; 5-year balance statements to the board of directors D) weekly filings with the SEC; monthly reports to the

Economics 5th Edition

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ECON A 660 Final

Under autarky, domestic producer surplus is represented by the area A) above the supply curve and below the equilibrium price. B) above the supply curve and below the demand curve. C) below the demand curve and above the equilibrium price. D) above the demand curve and below the supply curve. Answer: A Answer: A Answer: A An increase

Economics 5th Edition

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ECON A 664

Two storesLazy Guy's and Ralph's Reclinersare located in the same city. Both stores buy recliner chairs from the same manufacturer at the same price and both stores are about the same size, so that the fixed costs of production for both stores are the same. Ralph's Recliners sells more recliners

Economics 5th Edition

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ECON A 667

Consider the market for blackjack dealers in Las Vegas. In each of the following cases, explain what happens to the equilibrium wage rate and the quantity of blackjack dealers hired. a. Three new large resort casinos open in Las Vegas. b. Fewer students are attending classes to learn to become blackjack dealers. c.

Economics 5th Edition

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ECON A 672

The producer price index tracks the prices firms receive for goods and services at all stages of production. Answer: TRUE Answer: TRUE Answer: TRUE If you purchase a share of stock from your friend who initially purchased the stock three years ago, your purchase of the stock represents a transaction in the primary financial

Economics 5th Edition

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ECON A 683 Midterm

Which of the following statements about the economic decisions consumers, firms, and the government have to make is false? A) Governments face the problem of scarcity in making economic decisions. B) Only individuals face scarcity; firms and the government do not. C) Both firms and individuals face scarcity. D) Each faces the problem of

Economics 5th Edition

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ECON A 700 Final

When plasma television sets were first introduced prices were high and few firms were in the market. Later, economic profits attracted new firms and the price of plasma televisions fell. This example illustrates A) a decreasing-cost industry. B) that consumers receive this new technology "free of charge" in the sense that they

Economics 5th Edition

Exam Prep

ECON A 709 Midterm

Employees at the university have negotiated a 5 percent increase in wages for the next year, based on their inflation expectations. If inflation is actually 4 percent over the next year, which of the following will occur? A) Unemployment of university employees will fall. B) Real wages for university employees will rise. C) Inflation

Economics 5th Edition

Exam Prep

ECON A 710

Assume a hypothetical case where an industry begins as perfectly competitive and then becomes a monopoly. Which of the following statements comparing the conditions in the industry under both market structures is true? A) A monopoly will produce more and charge a higher price than would a perfectly competitive industry producing

Economics 5th Edition

Exam Prep

ECON A 721 Quiz 3

Figure 9-5 Suppose the U.S. government imposes a $0.75 per pound tariff on coffee imports. Figure 9-5 shows the impact of this tariff. If the tariff was replaced by a quota which limited coffee imports to 20 million pounds, the amount of revenue received by coffee importers would equal A) $5

Economics 5th Edition

Exam Prep

ECON A 730

As spending on government purchases increases, income rises and money demand falls. Answer: FALSE Answer: FALSE Answer: FALSE An increase in wages raises the opportunity cost of leisure and leads to an increase in the quantity supplied of labor. Answer: TRUE Answer: TRUE Answer: TRUE The income effect of a price change refers to the change in the

Economics 5th Edition

Exam Prep

ECON A 730 In The United States The

In the United States, the typical person who has lost his or her job finds another one in a few months except during severe recessions. Answer: TRUE Answer: TRUE Answer: TRUE A commission system of compensation reduces the risk to workers during seasonal periods when business is sluggish. Answer: FALSE Answer: FALSE Answer: FALSE Money will fail to serve

Economics 5th Edition

Exam Prep

ECON A 735 Homework

Tax cuts on business income increase aggregate demand by increasing A) business investment spending. B) consumption spending. C) government spending. D) wage rates. Answer: A Answer: A Answer: A Table 7-3 Mateo and Celeste produce custom saddles and spurs. Table 7-3 lists the number of saddles and pairs of spurs Mateo and Celeste can each produce in one month.

Economics 5th Edition

Exam Prep

ECON A 740 Midterm 1

Logrolling refers to attempts by individuals to use government action to make themselves better off at the expense of others. Answer: FALSE Answer: FALSE Answer: FALSE The total amount of producer surplus in a market is equal to the area above the market supply curve and below the market price. Answer: TRUE Answer: TRUE Answer: TRUE Government intervention

Economics 5th Edition

Exam Prep

ECON A 748

Foreign direct investment declined worldwide during the recession of 2007-2009. The decline in foreign direct investment in developing countries can make it more difficult for these countries to break out of the vicious cycle of low economic growth and A) overpopulation. B) low saving and investment. C) a low import/export ratio. D) low government

Economics 5th Edition

Exam Prep

ECON A 756 Quiz 3

All else equal, as the price of a product falls, the quantity supplied increases. Answer: FALSE Answer: FALSE Answer: FALSE Market equilibrium occurs where the quantity supplied is equal to the quantity demanded. Answer: TRUE Answer: TRUE Answer: TRUE The additional output a firm produces by hiring one more worker is called the marginal product of labor. Answer: TRUE Answer:

Economics 5th Edition

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ECON A 764 Test

Assume that the hourly price for the services of personal trainers has risen and sales of these services have also risen. One can conclude that A) the law of demand has been violated. B) the number of personal trainers has increased. C) the demand for personal trainers has increased. D) personal trainers are deliberately

Economics 5th Edition

Exam Prep

ECON A 780

The key idea of the aggregate expenditure model is that in any particular year, the level of GDP is determined mainly by A) investment spending. B) export spending. C) government spending. D) the level of aggregate expenditure. Answer: D Answer: D Answer: D A firm's net worth is calculated as A) the difference between a firm's revenues and explicit

Economics 5th Edition

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ECON A 781 Midterm

Imports are goods and services bought domestically but produced in other countries. Answer: TRUE Answer: TRUE Answer: TRUE Policies based on positive economic ideas tend to decrease economic efficiency and reduce equity. Answer: FALSE Answer: FALSE Answer: FALSE The incidence of a tax depends on whether the government collects the tax from buyers or sellers. Answer: FALSE Answer: FALSE Answer: FALSE The

Economics 5th Edition

Exam Prep

ECON A 789 Quiz 2

If the current unemployment rate is 5%, under which of the following circumstances would you expect the Fed to use contractionary monetary policy? A) if the natural rate of unemployment is below 5% B) if the natural rate of unemployment is above 5% C) if the inflation rate is above 5% D) if the

Economics 5th Edition

Exam Prep

ECON A 796 Quiz

The Clayton Act is an antitrust law that was passed to A) outlaw monopolization. B) address loopholes in the Sherman Act. C) prohibit charging buyers different prices if the result would reduce competition. D) toughen restrictions on mergers by prohibiting mergers that reduce competition. Answer: B Answer: B Answer: B Anything owed by a person or a firm

Economics 5th Edition

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ECON A 801 Test 2

In the principal-agent relationship, the agent is A) the owner of a resource that has hired another party to act on his behalf. B) the person who is placed in control over resources that are not his own, with a contractual obligation to use these resources in the interests of some other

Economics 5th Edition

Exam Prep

ECON A 803

Buying a house during a recession may be a good idea if your job seems secure because the Federal Reserve often lowers interest rates during a recession. Answer: TRUE Answer: TRUE Answer: TRUE Consumers in monopolistically competitive markets face a tradeoff between paying prices greater than marginal costs and purchasing products that are more closely

Economics 5th Edition

Exam Prep

ECON A 810

Suppose the U.S. government encouraged new medical school graduates to take over existing practices from doctors wishing to retire by paying both the new and retiring doctors $100,000. These doctors would be exemplifying the economic idea that A) people are rational. B) people respond to economic incentives. C) optimal decisions are made at

Economics 5th Edition

Exam Prep

ECON A 826 Midterm

Assume that the price for swimming pool maintenance services has risen and sales of these services have fallen. One can conclude that A) the law of supply has been violated. B) the demand for swimming pool maintenance services has increased. C) the supply of swimming pool maintenance services has decreased. D) swimming pool maintenance

Economics 5th Edition

Exam Prep

ECON A 829 Homework

Figure 4-4 Figure 4-4 shows the market for tiger shrimp. The market is initially in equilibrium at a price of $15 and a quantity of 80. Now suppose producers decide to cut output to 40in order to raise the price to $18. What is the value of consumer surplus at a

Economics 5th Edition

Exam Prep

ECON A 831 Test 2

For years economists believed that market structure explained the ability of some firms to earn economic profits. For example, firms in industries with little competition and high barriers to entry would earn higher profits than firms in competitive industries with low entry barriers. Which of the following has caused economists to

Economics 5th Edition

Exam Prep

ECON A 837 Test 2

Marginal revenue is A) total revenue divided by the total quantity of output. B) the change in profit divided by the change in the quantity of output. C) the change in total revenue divided by the change in total cost. D) the change in total revenue divided by the change in the quantity of

Economics 5th Edition

Exam Prep

ECON A 843 Quiz

If inflationary expectations on the part of the public increase, the trade-off between inflation and unemployment becomes worse. Answer: TRUE Answer: TRUE Answer: TRUE The purchase of foreign stocks and bonds by a U.S. brokerage firm is an example of capital inflows to the United States. Answer: FALSE Answer: FALSE Answer: FALSE Maximizing average profit is equivalent to

Economics 5th Edition

Exam Prep

ECON A 846 Final

In labor economics, the term "customer discrimination" refers to a situation where customers are charged different prices for services rendered by a firm. Answer: FALSE Answer: FALSE Answer: FALSE If production displays constant returns to scale, then all economies of scale have been exhausted. Answer: TRUE Answer: TRUE Answer: TRUE A two-part tariff refers to a pricing schedule

Economics 5th Edition

Exam Prep

ECON A 847 Test 2

If a firm's fixed cost exceeds its total revenue, the firm should stop production by shutting down temporarily. Answer: FALSE Answer: FALSE Answer: FALSE In March 2008, the Fed announced that primary dealers would be eligible to receive discount loans. Answer: TRUE Answer: TRUE Answer: TRUE In economics, the term "free market" refers to a market where products

Economics 5th Edition

Exam Prep

ECON A 850 Quiz 3

If the government finances an increase in government purchases with an increase in taxes, which of the following would you not expect to see? A) an increase in the exchange rate B) a decrease in the interest rate C) an increase in aggregate demand D) a decrease in net exports Answer: B Answer: B Answer: B Which of

Economics 5th Edition

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ECON A 853

Economics 5th Edition

Exam Prep

ECON A 858

The value of the four-firm concentration ratio that many economists consider indicative of the existence of an oligopoly in a particular industry is A) anything greater than 10 percent. B) anything greater than 20 percent. C) anything greater than 30 percent. D) anything greater than 40 percent. Answer: D Answer: D Answer: D For each bottle of wine

Economics 5th Edition

Exam Prep

ECON A 863 Final Using A Broader

Using a broader measure of the unemployment rate where discouraged workers and part-time workers who wished to work full time were counted as unemployed, the BLS estimates the unemployment rate in September 2011 would have ________ compared to the measured unemployment rate. A) increased by more than 7 percentage points B) more

Economics 5th Edition

Exam Prep

ECON A 872

Table 20-15 Looking at the table above, real average hourly earnings were equal to ________ in 2012. A) $9 B) $9.52 C) $10 D) $12 Answer: B Answer: B Answer: B ) Figure 24-2 Ceteris paribus, a decrease in the capital stock would be represented by a movement from A) SRAS1 to SRAS2. B) SRAS2 to SRAS1. C) point A to point

Economics 5th Edition

Exam Prep

ECON A 873 Quiz 2

An income tax system is ________ if marginal tax rates increase as income increases. A) progressive B) regressive C) efficient D) equitable Answer: A Answer: A Answer: A Which of the following statements is correct? A) Economic profit takes into account all costs involved in producing a product. B) Accounting profit is not relevant in preparing the firm's financial

Economics 5th Edition

Exam Prep

ECON A 879

For a person to have a comparative advantage in producing a product, he must be able to produce that product at a higher opportunity cost than his competitors. Answer: FALSE Answer: FALSE Answer: FALSE One example of physical capital is the amount of savings that you have. Answer: FALSE Answer: FALSE Answer: FALSE Consumers in monopolistically competitive markets

Economics 5th Edition

Exam Prep

ECON A 883 Midterm 1

An increase in government spending lowers interest rates and increases the rate of investment in new capital. Answer: FALSE Answer: FALSE Answer: FALSE By the 2000s, investment banks had become significant participants in the secondary market for mortgages. Answer: TRUE Answer: TRUE Answer: TRUE A decrease in the marginal income tax rate is a fiscal policy which will

Economics 5th Edition

Exam Prep

ECON A 884 Quiz 2

The Clayton Act of 1936 outlawed price discrimination that reduced competition. Answer: FALSE FALSE FALSE The "rational expectations" school of economists, including Robert Lucas and Thomas Sargent, argue that changes in monetary policy cannot affect unemployment rates in the short run or long run. Answer: FALSE FALSE FALSE If nominal GDP is less than real GDP, then the GDP deflator will

Economics 5th Edition

Exam Prep

ECON A 890 Midterm 2

An advantage of Microsoft windows is its compatibility with the widest range of hardware and software. The dominance of Windows is self-reinforcing: hardware and software manufacturers ensure that their products are compatible with Windows in order to have access to the large number of Windows users. Which principle best describes

Economics 5th Edition

Exam Prep

ECON A 893 Midterm

As a percentage of GDP, federal expenditures ________ from 1950 to the early 1990s, ________ from 1992 to 2001, and have ________ since 2001. A) rose; fell; risen B) fell; fell; risen C) rose; rose; fallen D) fell; rose; fallen Answer: A Answer: A Answer: A Figure 15-4 Figure 15-4 shows the demand and cost curves for a

Economics 5th Edition

Exam Prep

ECON E 101 Test 2

The purchase by a household in China of a CD produced in the United States is included in U.S. A) consumption expenditures. B) investment expenditures. C) government purchases. D) net exports. Answer: D Answer: D Answer: D Consumption is $5 million, planned investment spending is $8 million, government purchases are $10 million, and net exports are equal to

Economics 5th Edition

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ECON E 104

Which of the following are positive economic statements and which are normative economic statements? a. An increase in the price of gasoline will decrease the quantity of gasoline purchased. b. The government should eliminate the minimum wage. c. All states should raise the minimum wage to at least $10 per hour. d. The government

Economics 5th Edition

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ECON E 114 Midterm

The law of one price states that identical products should sell for the same price everywhere as long as transactions costs are zero. Answer: TRUE TRUE TRUE The process of countries becoming more open to foreign trade and investment is known as outsourcing. Answer: FALSE FALSE FALSE In 1995, the General Agreement on Tariffs and Trade (GATT) was replaced by the

Economics 5th Edition

Exam Prep

ECON E 119 Midterm 1

Figure 7-1 Figure 7-1 represents the market for vaccinations. Vaccinations are considered a benefit to society, and the figure shows both the marginal private benefit and the marginal social benefit from vaccinations. At the efficient equilibrium A) economic surplus is maximized. B) economic surplus is minimized. C) economic surplus is zero. D) economic surplus is

Economics 5th Edition

Exam Prep

ECON E 120 Quiz 1

If the United States is a "net borrower" from abroad, A) the United States must be exporting more than it is importing. B) net capital flows must be negative. C) domestic saving is less than domestic investment. D) net foreign investment must be positive. Answer: C Answer: C Answer: C The processes a firm uses to turn inputs

Economics 5th Edition

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ECON E 128 Final

An increase in the unemployment rate may be represented as a movement from a point on the production possibilities frontier to a point inside the frontier. Answer: TRUE Answer: TRUE Answer: TRUE Nominal GDP measures the value of all final goods and services at base-year prices. Answer: FALSE Answer: FALSE Answer: FALSE In the highly competitive fast-food restaurant

Economics 5th Edition

Exam Prep

ECON E 132

A persistent shortage or surplus of a currency under the Bretton Woods system was evidence of A) failure to support the existing fixed exchange rate by central banks. B) fundamental disequilibrium in the country's exchange rate. C) speculation against the currency by speculators in world exchange markets. D) all of the above Answer: B Answer: B Answer:

Economics 5th Edition

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ECON E 133

Figure 18-7 Figure 18-7 shows the Lorenz curve for a hypothetical country. The second lowest 20 percent of households A) earn 12 percent of the society's total income. B) earn 16 percent of the society's total income. C) earn 28 percent of the society's total income. D) earn 40 percent of the society's total

Economics 5th Edition

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ECON E 133 Quiz 3

All economic questions arise from the fact that resources are unlimited. Answer: FALSE Answer: FALSE Answer: FALSE If consumption is defined as C = 1,350 + 0.6Y, then the marginal propensity to consume is 0.6. Answer: TRUE Answer: TRUE Answer: TRUE When the majority of voters have preferences very different from those of the median voter, then the median

Economics 5th Edition

Exam Prep

ECON E 135

If purchasing power parity tells us that if the exchange rate is a pound for a dollar, then price of a haircut in London should cost the same as a haircut in New York. Answer: FALSE FALSE FALSE A decrease in disposable income will shift the aggregate demand curve to the left. Answer: TRUE TRUE TRUE Holding all other factors

Economics 5th Edition

Exam Prep

ECON E 144 Midterm 1

Figure 5-3 In the absence of any government intervention, the private market A) underproduces by Qo- Qm units. B) overproduces by Qo- Qm units. C) overproduces by Q- Qm units. D) underproduces by Q- Qm units. Answer: D Answer: D Answer: D If the Federal Reserve targets the money supply, and the money demand curve shifts to the

Economics 5th Edition

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ECON E 147 Test

Figure 26-10 In the figure above, suppose the economy is initially at point A. The movement of the economy to point B as shown in the graph illustrates the effect of which of the following policy actions by the Federal Reserve? A) an increase in income taxes B) a decrease in the

Economics 5th Edition

Exam Prep

ECON E 156 Test 2

Table 9-6 Production and Consumption Production Without Trade With Trade Denmark and Belize can produce both clocks and hats. Table 9-6 shows the production and consumption quantities without trade, and the production numbers with trade. If the actual terms of trade are 1 hat for 1.8 clocks and 150 hats are traded, how many clocks

Economics 5th Edition

Exam Prep

ECON E 169

The Internet has created a new category in the book selling market, namely, the "barely used" book. How does the availability of barely used books affect the market for new books? A) The demand curve for new books shifts to the right. B) The demand curve for new books shifts to the

Economics 5th Edition

Exam Prep

ECON E 171 Midterm 2

One problem with deflation is that it can raise the real value of debt. Answer: TRUE Answer: TRUE Answer: TRUE The GDP deflator is a measure of the price level which is calculated as nominal GDP divided by real GDP and multiplied by 100. Answer: TRUE Answer: TRUE Answer: TRUE An increase in perceived risk of foreign assets

Economics 5th Edition

Exam Prep

ECON E 191 Quiz 1

An increase in the price level causes a movement down the aggregate demand curve. Answer: FALSE Answer: FALSE Answer: FALSE An increase in the price of inputs will cause the supply curve for a product to shift to the right. Answer: FALSE Answer: FALSE Answer: FALSE The supply of money is easier to control with commodity money than

Economics 5th Edition

Exam Prep

ECON E 200

If inflation is higher than expected, this helps borrowers (by reducing the real interest rate they pay) and hurts lenders (by reducing the real interest rate they receive). Answer: TRUE Answer: TRUE Answer: TRUE Stagflation occurs when short-run aggregate supply decreases. Answer: TRUE Answer: TRUE Answer: TRUE A tariff is a numerical limit on the quantity of a

Economics 5th Edition

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ECON E 203 Quiz 2

In the short run, changes in output can only be brought about by a change in the quantity of variable inputs. Answer: TRUE Answer: TRUE Answer: TRUE A prisoner's dilemma leads to a noncooperative equilibrium. Answer: TRUE Answer: TRUE Answer: TRUE Increases in capital per hour worked cannot sustain high rates of economic growth unless accompanied by technological

Economics 5th Edition

Exam Prep

ECON E 204 Quiz 1

Short-run macroeconomic equilibrium occurs when A) aggregate demand and short-run aggregate supply intersect. B) the equilibrium lies on the long-run aggregate supply curve. C) structural and frictional unemployment equal zero. D) A and B Answer: A Answer: A Answer: A Suppose we want to use game theory to analyze how an oligopolist selects its optimal price. The cells

Economics 5th Edition

Exam Prep

ECON E 206

If the price of a product is expected to increase in the future, the supply today will increase. Answer: FALSE Answer: FALSE Answer: FALSE In monopolistic competition, if a firm produces a highly desirable product relative to its competitors, the firm will be able to raise its price without losing any customers. Answer: FALSE Answer: FALSE Answer: FALSE If

Economics 5th Edition

Exam Prep

ECON E 229

Which type of business is the most difficult to set up? A) sole proprietorship B) partnership C) corporation D) There is no difference in the difficulty of establishment. Answer: C Answer: C Answer: C Workers in industries protected by tariffs and quotas are likely to support these trade restrictions because A) they do not want to offend their employers

Economics 5th Edition

Exam Prep

ECON E 241 Final

Figure 2-4 Figure 2-4 shows various points on three Different production possibilities frontiers for a nation. A movement from ________ could occur because of an influx of immigrant labor. A) W to V B) X to W C) W to Z D) Y to W Answer: C Answer: C Answer: C A full-time student who

Economics 5th Edition

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ECON E 254 Quiz 3

One goal a firm tries to achieve when it advertises a product is to A) make the demand curve for the product more elastic. B) shift the demand curve for the product to the left. C) make the demand curve for the product unitary elastic. D) make the demand curve for the product more

Economics 5th Edition

Exam Prep

ECON E 262 Final

The 10-year protection period from generic competition for drug manufacturers is a form of A) copyright. B) trademark. C) hallmark. D) patent. Answer: D Answer: D Answer: D Commodity money A) has value independent of its use as money. B) has little to no value independent of its use as money. C) is backed by a valuable commodity such as gold. D)

Economics 5th Edition

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ECON E 263 Midterm 2

Golda Rush quit her job as a manager for Home Depot to start her own hair dressing salon, Goldilocks. She gave up a salary of $40,000 per year, invested her savings of $30,000 (which was earning 5 percent interest) and borrowed $10,000 from a close friend, agreeing to pay 5

Economics 5th Edition

Exam Prep

ECON E 264 Quiz 2

The machines workers have to work with are considered A) human capital. B) physical capital. C) entrepreneurship. D) financial capital. Answer: B Answer: B Answer: B To evaluate the size of the federal budget deficit or surplus over time, it would be best to look at the A) absolute size of the budget deficit or surplus. B) budget deficit or

Economics 5th Edition

Exam Prep

ECON E 291 Figure 53The Efficient

Figure 5-3 The efficient output level is A) Qm. B) Q. C) Qo. D) Qo- Qm. Answer: B Answer: B Answer: B High-income countries have ________ and ________ as compared to developing countries. A) low rates of savings; high rates of growth B) low rates of savings; low rates of growth C) high rates of savings; high rates of growth D) high

Economics 5th Edition

Exam Prep

ECON E 292 Quiz 3 Consider The

Consider the following actions undertaken by a firm: a. charging the same price for products of different quality b. charging different prices to different consumers for the same product when the variation cannot be explained by cost differences c. charging different prices for products of different qualities d. charging a lower price to match

Economics 5th Edition

Exam Prep

ECON E 295 Test 1

When Toyota introduced its 2010 Prius, it announced that the average retail price of the 2010 model would be lower than the average retail price was for the equivalent 2009 model. Which of the following would explain the price Differential? A) The demand for the Prius had increased, and the supply

Economics 5th Edition

Exam Prep

ECON E 302

Table 4-4 Table 4-4 shows the demand and supply schedules for the low-skilled labor market in the city of Westover. If a minimum wage of $9.50 is mandated there will be a A) shortage of 10,000 units of labor. B) surplus of 10,000 units of labor. C) shortage of 20,000 units of labor. D) surplus of

Economics 5th Edition

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ECON E 310 Test

Perfect competition is characterized by all of the following except A) heavy advertising by individual sellers. B) homogeneous products. C) sellers are price takers. D) a horizontal demand curve for individual sellers. Answer: A Answer: A Answer: A In the United States, health care spending on people ________ is six times greater than on people ________. A) under

Economics 5th Edition

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ECON E 317

The term "trust" in antitrust refers to a board of trustees that has collusive control over different companies. Answer: TRUE Answer: TRUE Answer: TRUE Costs that change as output changes are called incremental costs. Answer: FALSE Answer: FALSE Answer: FALSE The most important factor contributing to wage differences in the labor market is differences in the level of

Economics 5th Edition

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ECON E 323

What happens in the secondary market? A) secondary inputs like electricity are sold B) a corporate financial manager will raise funds for expansion of the firm C) newly issued claims are sold by the borrowing firm to the initial buyer D) already issued claims are sold from one investor to another Answer: D Answer: D Answer: D Jason,

Economics 5th Edition

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ECON E 325 Quiz 2

Dividing the current market price of a stock by the firm's earnings per share gives the firm's A) price-earnings ratio. B) year-to-date percentage change. C) dividend yield. D) stock coupon maturity yield. Answer: A Answer: A Answer: A Table 2-10 Table 2-10 shows the output per day of two pet groomers, Tammi and Horace. They can either devote their time

Economics 5th Edition

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ECON E 332 Quiz 3

Except for recessions, the duration of unemployment for the typical person lasts A) less than six months. B) six to nine months. C) over nine months. D) over one year. E) over five years. Answer: A Answer: A Answer: A Tabitha shares a flea market booth with her sister. Her share of the rent is $150 per month. She

Economics 5th Edition

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ECON E 337 Homework

In a market economy, those who are willing and able to buy what is produced A) receives what the government allows them to receive. B) receive the most of what is produced. C) receive no more than everyone else in the market. D) solely determine what is produced. Answer: B Answer: B Answer: B If production displays economies

Economics 5th Edition

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ECON E 338 Quiz 1

Figure 2-9 Carlos Vanya grows tomatoes and strawberries on his land. His land is equally suited for growing either fruit. Which of the graphs in Figure 2-3 represents his production possibilities frontier? A) Graph A B) Graph B C) Graph C D) either Graph A or Graph B E) either Graph B or Graph C Answer:

Economics 5th Edition

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ECON E 339

Alan Krueger conducted a survey of fans at the 2001 Super Bowl who purchased tickets to the game for $325 or $400. Krueger found that (a) 94 percent of those surveyed would not have paid $3,000 for their tickets, and (b) 92 percent of those surveyed would not have sold their

Economics 5th Edition

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ECON E 365 Quiz 3

Most food products have low income and price elasticities of demand. Answer: TRUE Answer: TRUE Answer: TRUE Monopolistically competitive firms achieve allocative efficiency but not productive efficiency. Answer: FALSE Answer: FALSE Answer: FALSE In face of a negative supply shock, the Fed may avoid a rise in unemployment only if it is willing to increase the rate of

Economics 5th Edition

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ECON E 371 Test 1

Firms in perfect competition produce the productively efficient output level in the short run and in the long run. Answer: FALSE Answer: FALSE Answer: FALSE An increase in the real interest rate will decrease consumption and investment. Answer: TRUE Answer: TRUE Answer: TRUE A two-part tariff refers to a pricing schedule under which a buyer must pay a

Economics 5th Edition

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ECON E 378 Midterm 2

If a firm can produce a product at a lower average cost than its competitors, it stands a better chance of earning economic profit. Answer: TRUE Answer: TRUE Answer: TRUE All else equal, a decrease in the supply of labor will shift the labor supply curve to the left and decrease the equilibrium wage. Answer:

Economics 5th Edition

Exam Prep

ECON E 393 Quiz 1

High-income countries have ________ and ________ as compared to developing countries. A) low rates of savings; high rates of growth B) low rates of savings; low rates of growth C) high rates of savings; high rates of growth D) high rates of savings; low rates of growth Answer: C Answer: C Answer: C Even when the demand for

Economics 5th Edition

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ECON E 417

Policies based on normative economic ideas tend to increase economic efficiency and improve equity. Answer: FALSE Answer: FALSE Answer: FALSE Entrepreneurs bring together the factors of production to produce goods and services. Answer: TRUE Answer: TRUE Answer: TRUE The slope of an isoquant is equal to the ratio of the price of the input on the horizontal axis

Economics 5th Edition

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ECON E 428 Midterm 2

Scenario 1-1 Suppose a cell phone manufacturer currently sells 20,000 cell phones per week and makes a profit of $5,000 per week. A manager at the plant observes, "Although the last 3,000 cell phones we produced and sold increased our revenue by $6,000 and our costs by $6,700, we are

Economics 5th Edition

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ECON E 428 Quiz 1

Suppose the supply curve for digital cameras shifts to the right. This will cause a relatively large decrease in the price of digital cameras if both demand and supply are inelastic. Answer: TRUE Answer: TRUE Answer: TRUE GDP is not a complete measure of well-being. Answer: TRUE Answer: TRUE Answer: TRUE The Fed can use expansionary monetary policy

Economics 5th Edition

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ECON E 437 Test

Which of the following is not an example of an efficiency-equity trade-off faced by economic agents? A) According to an article by in the American Journal of Public Health by Edward Kaplan and Michael Merson of Yale University School of Medicine, the federal government's current method of allocating HIV-prevention resources is

Economics 5th Edition

Exam Prep

ECON E 438 Final

You are given the following market data for Venus automobiles in Saturnia. Demand: P = 200 - 0.25Q Supply: P = 130 + 0.10Q where P = Price and Q = Quantity. a. Calculate the equilibrium price and quantity. b. Calculate the consumer surplus in this market. c. Calculate the producer surplus in

Economics 5th Edition

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ECON E 442 Homework

Figure 16-6 Watanabe Sensei operates the only martial arts school in Hartfield. For simplicity, assume that consumers have identical demand curves and that Sensei knows what this demand curve is. Figure 16-6 shows this demand curve. With this pricing schemea competitive price for the classes and a one-time membership feewhat amount of

Economics 5th Edition

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ECON E 450 Midterm 1

Figure 15-15 Figure 15-15 shows the cost and demand curves for the Erickson Power Company. The profit-maximizing price is A) P1. B) P2. C) P3. D) P4. Answer: C Answer: C Answer: C Table 14-7 The payoff matrix shown above assumes that Perfect Plants and Florabunda Florist must decide whether to offer same-day delivery for their products. The matrix shows

Economics 5th Edition

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ECON E 462

Article Summary. In a September 2013 speech to the Independent Bankers Association of Texas, Federal Reserve Bank of Dallas president Richard Fisher stated that the Fed's credibility was harmed when it announced the previous week that it would continue its large bond purchasing program. In June, Fed Chairman Ben Bernanke

Economics 5th Edition

Exam Prep

ECON E 463 Final

In 2013, the dividend yield on Abercrombie & Fitch (ANF) stock rose from a low of 1.33% in May to 2.24% in October. Which of the following would have generated that result? A) The closing price of ANF stock rose. B) ANF announced an increase in the dividend it would pay per

Economics 5th Edition

Exam Prep

ECON E 487 Final

The size of the underground economy as a percent of GDP is larger in the United States as compared to poorer countries such as Zimbabwe. Answer: FALSE FALSE FALSE Results of the ultimatum game indicate that most people value fairness enough that they will refuse to participate in a transaction they consider unfair, even if they

Economics 5th Edition

Exam Prep

ECON E 490 Homework FirmsA Have

Firms A) have no influence on the circular flow in a market economy. B) purchase resources in the product market. C) sell goods in the product market. D) sell resources in the factor market. Answer: C Answer: C Answer: C Personal income is defined as A) national income less retained earnings plus transfer payments and plus interest on government

Economics 5th Edition

Exam Prep

ECON E 494 Quiz 1

Table 9-11 Production and Consumption Production Without Trade With Trade Denmark and Belize can produce both clocks and hats. Table 9-11 shows the production and consumption quantities without trade, and the production numbers with trade. Prior to trade, what was the opportunity cost to produce 1 hat in Denmark? A) 1/6 of a clock B) 2/3

Economics 5th Edition

Exam Prep

ECON E 498 Quiz 2

If the cross-price elasticity of demand for goods A and B is zero, this means the two goods are unrelated. Answer: TRUE Answer: TRUE Answer: TRUE The additional cost to a producer of hiring an additional unit of labor is called the marginal cost. Answer: TRUE Answer: TRUE Answer: TRUE Lowering the individual income tax will increase household

Economics 5th Edition

Exam Prep

ECON E 501 Quiz 2

If the economy is currently in equilibrium at a level of GDP that is below potential GDP, which of the following would move the economy back to potential GDP? A) an increase in wealth B) an increase in interest rates C) a decrease in business confidence D) an increase in the value of the

Economics 5th Edition

Exam Prep

ECON E 508 Quiz 2

In the United States in 2012, the percentage of people without any form of health insurance was about A) 16%. B) 29%. C) 64%. D) 83%. Answer: A Answer: A Answer: A ________ occurs when actions taken by one party to a transaction are Different from what the other party expected at the time of the transaction. A) Adverse

Economics 5th Edition

Exam Prep

ECON E 510 Quiz

Ceteris paribus, a rise in interest rates in the United States will cause the yen price of the dollar in international exchange markets to ________. I.e., the dollar ________ in value against the yen. A) increase; appreciates B) increase; depreciates C) decrease; depreciates D) decrease; appreciates Answer: A Answer: A Answer: A Suppose a drought resulted in a

Economics 5th Edition

Exam Prep

ECON E 520

Which of the following can a firm use to defend a successful product's brand name? A) The firm can obtain a patent on the brand name. B) The firm can apply for a trademark to ban other firm's from using the product's name. C) The firm can increase the amount it spends on

Economics 5th Edition

Exam Prep

ECON E 523 The FOMC No Longer Sets

The FOMC no longer sets targets for M1 and M2 to meet its goals of price stability and high employment. Answer: TRUE Answer: TRUE Answer: TRUE If a country produces only two goods, then it is not possible to have an absolute advantage in the production of both those goods. Answer: FALSE Answer: FALSE Answer: FALSE A snack

Economics 5th Edition

Exam Prep

ECON E 525 Midterm

If income is unequally distributed in an economy, increases in GDP may not raise well-being in an economy. Answer: TRUE Answer: TRUE Answer: TRUE A perfectly competitive firm's marginal revenue curve is downward sloping. Answer: FALSE Answer: FALSE Answer: FALSE If you purchase a share of stock from your friend who initially purchased the stock three years ago,

Economics 5th Edition

Exam Prep

ECON E 531 Test 1

From an initial long-run equilibrium, if aggregate demand grows more slowly than long-run and short-run aggregate supply, then Congress and the president would most likely A) increase the required reserve ratio and decrease government spending. B) decrease government spending. C) decrease oil prices. D) decrease taxes. E) lower interest rates. Answer: D Answer: D Answer: D Which of the

Economics 5th Edition

Exam Prep

ECON E 535 Test 1

Jamal, Lawson and Kyle have been standing in line for almost an hour waiting to be served at Kirala, a popular new Japanese restaurant. It is possible that some of the people in line won't be served at all before the restaurant closes. Which of the following could explain why the

Economics 5th Edition

Exam Prep

ECON E 537 Midterm 2

The labor force participation rates of men have gradually increased since 1948. Answer: FALSE FALSE FALSE The difference between consumer surplus and producer surplus in a market is equal to the deadweight loss. Answer: FALSE FALSE FALSE All consumption bundles along a given indifference curve are equally desirable. Answer: TRUE TRUE TRUE Competitive market equilibrium is a market equilibrium with many buyers and sellers. Answer: TRUE TRUE TRUE In a

Economics 5th Edition

Exam Prep

ECON E 541 Midterm 2

Suppose the extra cost for a plumber to keep her shop open for one extra hour is $145. Then, the plumber should not stay open for the extra hour if she can only generate additional revenue of $145 for that hour. Answer: FALSE[/cpmembership] Answer: FALSE[/cpmembership] Answer: FALSE[/cpmembership] The total value of production from Ford's

Economics 5th Edition

Exam Prep

ECON E 542 Quiz

Baxter International, a manufacturer of hospital supplies, acquired American Hospital Supply, a distributor of hospital supplies. This is an example of A) a conglomerate merger. B) a horizontal merger. C) a vertical merger. D) a two-dimensional merger. Answer: C Answer: C Answer: C Proponents of the ________ model argue that the short-run supply curve is vertical. A) the monetarist

Economics 5th Edition

Exam Prep

ECON E 546 Homework

Figure 15-7 Suppose the Fed lowers its target for the federal funds rate. Using the static AD-AS model in the figure above, this situation would be depicted as a movement from A) A to B. B) B to A. C) C to B. D) E to A. E) C to D. Answer: A Answer: A Answer: A Which of

Economics 5th Edition

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ECON E 552 Quiz

Economics 5th Edition

Exam Prep

ECON E 558 Final

Tax incidence is the actual division of the A) burden of the tax between buyers and sellers in a market. B) tax revenues between government agencies. C) tax revenues between the federal government and state governments. D) population into different tax brackets. Answer: A Answer: A Answer: A Figure 16-5 Suppose the firm represented in the diagram decides

Economics 5th Edition

Exam Prep

ECON E 559 Midterm

How would the elimination of a sales tax affect the market for a product that had been subject to the tax? A) The demand for the product would rise and the equilibrium price would fall by the amount of the tax. B) The equilibrium price for the product would fall by less

Economics 5th Edition

Exam Prep

ECON E 562

An example of a seasonally unemployed worker would be A) a software engineer who is laid off because of declining demand for the software he writes. B) a day care provider who quits his job to go back to school. C) a General Motors employee loses her job because the company is downsizing

Economics 5th Edition

Exam Prep

ECON E 569

Suppliers will be willing to supply a product in all of the following situations except A) the price received is greater than the additional cost of producing the product. B) the price received is at least equal to the additional cost of producing the product. C) the price received is equal to

Economics 5th Edition

Exam Prep

ECON E 569 Midterm 2

The U.S. Bureau of Labor Statistics predicts that 9 of the 20 fastest growing occupations over the next ten years will be in A) the medical field. B) the travel and leisure industry. C) education. D) construction. Answer: A Answer: A Answer: A Why do some firms choose not to file for a patent and instead try to

Economics 5th Edition

Exam Prep

ECON E 569 Quiz 1

Which of the following would cause the dollar to depreciate? A) an increase in the demand for dollars B) a decrease in the demand for dollars C) a decrease in the supply of dollars D) a decrease in the demand for imports from foreign countries Answer: B Answer: B Answer: B Explain whether each of the following is

Economics 5th Edition

Exam Prep

ECON E 583 Test 1

Actions taken by investors who sell a country's currency in anticipation of buying it back later at a lower price is known as A) purchasing power parity. B) currency arbitrage. C) destabilizing speculation. D) exchange rate manipulation. Answer: C Answer: C Answer: C If aggregate expenditure is greater than GDP, how will the economy reach macroeconomic equilibrium? A) Inventories

Economics 5th Edition

Exam Prep

ECON E 584 Midterm 1

The size of a deadweight loss in a market is reduced by A) government legislating a ceiling price. B) government legislating a price floor. C) market price being close to marginal cost. D) creative destruction. Answer: C Answer: C Answer: C Figure 16-5 Suppose the firm represented in the diagram decides to use a two-part pricing strategy such that

Economics 5th Edition

Exam Prep

ECON E 584 Quiz 1

If the price level in the United States is 110, the price level is 135 in Mexico, and the nominal exchange rate is 12.5 pesos per dollar, what is the real exchange rate from the U.S. perspective? A) 8.8 B) 10.2 C) 10.8 D) 11.4 Answer: B Answer: B Answer: B If a corporation goes bankrupt, bondholders have

Economics 5th Edition

Exam Prep

ECON E 585 Homework

A monopolistically competitive market is described as one in which there are A) a few firms producing an identical product. B) a large number of firms selling similar, but not identical, products. C) a few firms producing differentiated products. D) one large firm and many small firms producing identical products. Answer: B Answer: B Answer: B Figure 13-4

Economics 5th Edition

Exam Prep

ECON E 602

Suppose the government wants to finance housing for low-income families by placing a tax on the purchase of luxury homes. Assume the government defines a luxury home as a home that is purchased for at least $1 million. This tax is consistent with the A) benefits-received principle. B) social equity principle. C) ability-to-pay principle. D)

Economics 5th Edition

Exam Prep

ECON E 607 Test

Productive efficiency does not hold for a profit-maximizing, monopolistically competitive firm in the long-run equilibrium because the firm operates along the diseconomies-of-scale region of its average total cost curve. Answer: FALSE FALSE FALSE Increases in capital per hour worked cannot sustain high rates of economic growth unless accompanied by technological change. Answer: TRUE TRUE TRUE Inflation targeting has been adopted

Economics 5th Edition

Exam Prep

ECON E 611 Final

Figure 7-1 Figure 7-1 represents the market for vaccinations. Vaccinations are considered a benefit to society, and the figure shows both the marginal private benefit and the marginal social benefit from vaccinations. The efficient equilibrium price is A) $30. B) $25. C) $20. D) <$20. Answer: B Answer: B Answer: B Figure 16-2 Plato Playhouse, a theatre company in

Economics 5th Edition

Exam Prep

ECON E 611 Midterm 1

In which of the following countries does health insurance not pay for most preventive care procedures? A) Canada B) Japan C) the United Kingdom D) the United States Answer: B Answer: B Answer: B Table 10-2 Using the table above, what is the approximate growth rate of real GDP from 2012 to 2013? A) -2% B) -1% C) 1% D) 2% Answer: B Answer: B Answer:

Economics 5th Edition

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ECON E 618 Midterm 2

Scenario 25-2 Imagine that Kristy deposits $10,000 of currency into her checking account deposit at Bank A and that the required reserve ratio is 20%. As a result of Kristy's deposit, Bank A's reserves immediately increase by A) $2,000. B) $8,000. C) $10,000. D) $50,000. Answer: C Answer: C Answer: C Which of the following is evidence of a

Economics 5th Edition

Exam Prep

ECON E 653

A monopoly is a seller of a product A) with many substitutes. B) without a close substitute. C) with a perfectly inelastic demand. D) without a well-defined demand curve. Answer: B Answer: B Answer: B Consumption spending is $5 million, planned investment spending is $8 million, unplanned investment spending is $2 million, government purchases are $10 million, and

Economics 5th Edition

Exam Prep

ECON E 654

"A decrease in the price of digital cameras will decrease the demand for camera film." This statement is an example of a positive economic statement. Answer: TRUE Answer: TRUE Answer: TRUE Japan has a single-payer health care systemin which the government provides national health insuranceto all Japanese residents. Answer: FALSE Answer: FALSE Answer: FALSE If the market price

Economics 5th Edition

Exam Prep

ECON E 654 In 2013 ________ Of

In 2013, ________ of Goodyear's sales were outside North America. A) only 11 percent B) more than 60 percent C) less than half D) 95 percent Answer: B Answer: B Answer: B Table 2-4 Production Choices for Dina's Diner Assume Dina's Diner only produces sliders and hot wings. A combination of 20 sliders and 60 hot wings would

Economics 5th Edition

Exam Prep

ECON E 655 Test

If interest rates in the United States fall, A) the value of the dollar will fall as foreign investors decrease their holdings of U.S. investments. B) the value of the dollar will rise as foreign investors increase their holdings of U.S. investments. C) the value of the dollar will fall as foreign investors

Economics 5th Edition

Exam Prep

ECON E 679 Figure 54Suppose There

Figure 5-4 Suppose there are several paper mills producing paper for a market. These mills, located upstream from a fishing village, discharge a large amount of wastewater into the river. The waste material affects the number of fish in the river, and the use of the river for recreation and as a

Economics 5th Edition

Exam Prep

ECON E 679 Homework

Which of the following leads to an increase in real GDP? A) a decrease in government spending B) a decrease in the inflation rate in other countries, relative to the inflation in the United States C) a decrease in interest rates D) Households have increasingly pessimistic expectations about future income. Answer: C Answer: C Answer: C Figure 4-6

Economics 5th Edition

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ECON E 683 Test 2

Table 11-1 Table 11-1 shows the technology of production at the Matsuko's Mushroom Farm for the month of May. Diminishing marginal returns sets in when the ________ worker is hired. A) 2nd B) 3rd C) 4th D) None of the above; the production function displays increasing marginal returns. Answer: B Answer: B Answer: B Figure 9-4 Suppose the U.S.

Economics 5th Edition

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ECON E 684 Quiz 3

Economics 5th Edition

Exam Prep

ECON E 685

A Big Mac costs $4.00 in the United States and 9.00 reals in Brazil. If the exchange rate is 2 reals per dollar, purchasing power parity predicts that A) the dollar is undervalued. B) the dollar is overvalued. C) the real is undervalued. D) both B and C are correct. Answer: A Answer: A Answer: A Article Summary. Although

Economics 5th Edition

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ECON E 696 Quiz 1

Suppose a price floor on sparkling wine is proposed by the Health Minister of the country of Vinyardia. What will be the likely effect on the market for sparkling wine in Vinyardia? A) Quantity demanded will decrease, quantity supplied will increase, and a surplus will result. B) Quantity demanded will increase, quantity

Economics 5th Edition

Exam Prep

ECON E 698 Quiz 2

Given the equations for C, I, G, and NX below, what is the marginal propensity to consume? C = 2,000 + 0.9Y I = 2,500 G = 3,000 NX = 400 A) -0.1 B) 0.1 C) 0.9 D) 2000 Answer: C Answer: C Answer: C Which of the following is not an option for a perfectly

Economics 5th Edition

Exam Prep

ECON E 699

Table 4-4 Table 4-4 shows the demand and supply schedules for labor market in the city of Pixley. Suppose that the quantity of labor supplied increases by 40,000 at each wage level. What are the new free market equilibrium hourly wage and the new equilibrium quantity of labor? A) W = $8.50; Q

Economics 5th Edition

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ECON E 708 Test

To offset the effect of households and firms deciding to hold more of their money in checking account deposits and less in currency, the Federal Reserve could A) raise bank taxes. B) sell Treasury securities. C) raise government spending. D) lower the required reserve ratio. Answer: B Answer: B Answer: B According to the saving and investment equation,

Economics 5th Edition

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ECON E 710 Midterm 2

Which of the following is part of an economic model? A) preferences of economic agents B) data C) norms D) opinions Answer: B Answer: B Answer: B Figure 11-11 Figure 11-11 illustrates the long-run average cost curve for a firm that produces picture frames. The graph also includes short-run average cost curves for three firm sizes: ATCa, ATC

Economics 5th Edition

Exam Prep

ECON E 713 Midterm 2

The Difference between the ________ and the ________ from the sale of a product is called producer surplus. A) lowest price a firm would have been willing to accept; price it actually receives B) highest price a firm would have been willing to accept; lowest price it was willing to accept C) cost to

Economics 5th Edition

Exam Prep

ECON E 718

Figure 2-5 If the economy is currently producing at point X, what is the opportunity cost of moving to point Y? A) 5 million tons of steel B) 9 million tons of paper C) 5 million tons of paper D) 14 million tons of steel Answer: A Answer: A Answer: A If the economy experiences a(n) ________, inflation will rise

Economics 5th Edition

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ECON E 724 Test

Figure 26-11 In the dynamic model of AD-AS in the figure above, if the economy is at point A in year 1 and is expected to go to point B in year 2, the Federal Reserve would most likely A) increase interest rates. B) decrease interest rates. C) not change interest rates. D) decrease the

Economics 5th Edition

Exam Prep

ECON E 734 Midterm

Scenario 14-2 Imagine that Kristy deposits $10,000 of currency into her checking account deposit at Bank A and that the required reserve ratio is 20%. As a result of Kristy's deposit, Bank A can make a maximum loan of A) $2,000. B) $8,000. C) $10,000. D) $50,000. Answer: B Answer: B Answer: B Delaware and North Dakota have identical

Economics 5th Edition

Exam Prep

ECON E 735 Test 2

Table 9-1 Linda and Sandy own The Preppy Puppy, a dog grooming business. Table 9-1 lists the number of dogs Linda and Sandy can each bathe and groom in one week. Select the statement that accurately interprets the data in the table. A) Linda has an absolute advantage in dog bathing and

Economics 5th Edition

Exam Prep

ECON E 736

Table 11-7 Table 11-7 shows cost data for Lotus Lanterns, a producer of whimsical night lights. What is the variable cost of production when the firm produces 115 lanterns? A) $1,556 B) $1,157 C) $956 D) $10.05 Answer: B Answer: B Answer: B The current exchange rate system in the United States is best described as a A) silver standard. B) managed

Economics 5th Edition

Exam Prep

ECON E 761 Quiz 1

If the GDP deflator is less than 100, then for that year nominal GDP ________ real GDP. A) equals B) is greater than C) is less than D) may be greater than or less than Answer: C Answer: C Answer: C The process of rapidly adjusting prices based on information gathered on consumers' preferences and their responsiveness to

Economics 5th Edition

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ECON E 773 Homework

You agree to lend $1,000 for one year at a nominal interest rate of 10%. You anticipate that inflation will be 4% over that year. If inflation is instead 3% over that year, which of the following is true? A) The real interest rate you earn on your money is lower

Economics 5th Edition

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ECON E 793 Quiz 2

Which of the following accurately describes the impact of the rule of law on a country's economic growth rate? A) Countries with a strong rule of law have faster economic growth. B) Countries with a weak rule of law have faster economic growth. C) Countries that enforce property rights through lawsuits have slower economic

Economics 5th Edition

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ECON E 795

Bubba's Hula Shack bar and bistro has begun giving customers who can show proof that they arrived at the establishment by public transportation a 10 percent discount on their total bill. All else equal, customers who arrive by public transportation to take advantage of Bubba's Hula Shack discount have a

Economics 5th Edition

Exam Prep

ECON E 821 Test 2

Consider a country that produces only two goods: bird feeders and binoculars. Suppose it is possible for this country to increase its production of bird feeders without producing fewer binoculars. In this case, its current output combination is inefficient. Answer: TRUE Answer: TRUE Answer: TRUE The division of the burden of a tax between

Economics 5th Edition

Exam Prep

ECON E 822 Midterm 2

What characteristic of a competitive market has made the "long run pretty short" in the market for iPhone applications? A) few firms in the market B) identical products C) ease of entry D) blocked entry Answer: C Answer: C Answer: C Figure 28-6 If firms and workers have adaptive expectations, an expansionary monetary policy will cause the short-run

Economics 5th Edition

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ECON E 825 Midterm 2

Figure 3-8 The graph in this figure illustrates an initial competitive equilibrium in the market for sugar at the intersection of D1 and S2 (point B). If there is an decrease in the price of fertilizer used on sugar cane and there is a decrease in tastes for sugar-sweetened soft drinks,

Economics 5th Edition

Exam Prep

ECON E 833 Quiz 1

Assume that a perfectly competitive market is in long-run equilibrium. Suppose as a result of a health hazard associated with the industry's product, demand decreases drastically. What is the immediate result of this event? A) The market price falls and the typical firm suffers an economic loss. B) The market supply increases

Economics 5th Edition

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ECON E 838 Quiz 2

What does the phrase "internalizing an external cost" mean? A) limiting the extent to which domestic firms can outsource production B) prohibiting economic activities that create externalities C) forcing producers to factor into their production costs the cost of the externalities created in the production of their output D) finding a way to address

Economics 5th Edition

Exam Prep

ECON E 840

Which of the following would explain why accounting profit might be greater than economic profit? A) A firm has implicit costs as well as explicit costs. B) A firm has only explicit costs. C) A firm's net income is greater than its accounting profit. D) A firm's net income is less than its accounting

Economics 5th Edition

Exam Prep

ECON E 847 Midterm 1

Suppose the supply of bicycles is price elastic. This means that A) consumers will respond significantly to an increase in the quantity supplied of bicycles. B) suppliers will increase the quantity supplied of bicycles, but not immediately. C) suppliers face many substitutes for bicycles. D) suppliers will respond significantly to changes in the price

Economics 5th Edition

Exam Prep

ECON E 851 Quiz 2

What impact does expansionary monetary policy have on the short-run Phillips curve if consumers and firms expect the expansionary monetary policy to increase inflation? A) The short-run Phillips curve shifts down. B) The short-run Phillips curve shifts up. C) The short-run Phillips curve becomes the long-run Phillips curve. D) The short-run Phillips curve is

Economics 5th Edition

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ECON E 860 Test 2

An industry's long-run supply curve shows A) the relationship in the long run between market price and quantity supplied. B) how the government determines the price of the product. C) how average productivity is changing. D) greater than normal profit. Answer: A Answer: A Answer: A In the United States in 2012, of those companies employing more than

Economics 5th Edition

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ECON E 865 Quiz 3

The Soviet Union consistently increased the amount of capital available to its workers, but found that increases in capital resulted in progressively smaller and smaller increases in GDP per worker. This phenomenon is referred to as A) a rising standard of living. B) diminishing returns to capital. C) new growth theory. D) a shift

Economics 5th Edition

Exam Prep

ECON E 869 Midterm

If the consumption function is defined as C = 7,250 + 0.8Y, what is the value of the multiplier? A) 0.2 B) 0.8 C) 1.25 D) 5 Answer: D Answer: D Answer: D Figure 1-2 Calculate the area of the triangle A. A) $1.3 million B) $2.6 million C) $3.4 million D) $5.2 million Answer: B Answer: B Answer: B An average tax rate is

Economics 5th Edition

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ECON E 869 Quiz

The proposition that the outcome of a majority vote is likely to represent the preferences of the voter who is in the political middle is called A) the mean (or average) voter theorem. B) the voting paradox. C) the Arrow impossibility theorem. D) the median voter theorem. Answer: D Answer: D Answer: D Which of the following tools

Economics 5th Edition

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ECON E 871 Midterm

In 2004, hurricanes destroyed a large portion of Florida's orange and grapefruit crops. In the market for citrus fruit, A) the supply curve shifted to the right resulting in an increase in the equilibrium price. B) the supply curve shifted to the left resulting in an increase in the equilibrium price. C) the

Economics 5th Edition

Exam Prep

ECON E 874 Quiz 1

Table 20-7 Suppose that the data in the table above reflect price levels in the economy. What is the inflation rate between 2012 and 2013? A) 2.9% B) 3.5% C) 4.6% D) 5% E) 7.5% Answer: A Answer: A Answer: A The minimum wage is an example of A) a subsidy for low-skilled workers. B) a price floor. C) a price ceiling. D) a

Economics 5th Edition

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ECON E 879 Homework

The government proposes a tax on halogen light bulbs. Sellers will bear the entire burden of the tax if the A) supply curve of halogen bulbs is horizontal. B) demand curve for halogen bulbs is vertical. C) demand curve for halogen bulbs is horizontal. D) demand curve is downward sloping and the supply curve

Economics 5th Edition

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ECON E 895 Final

Figure 4-3 Figure 4-3 shows Kendra's demand curve for ice-cream cones. If the market price is $3.00, what is Kendra's consumer surplus? A) $6.50 B) $5.50 C) $2.50 D) $0.50 Answer: D Answer: D Answer: D Sefronia and Bella share an apartment and they are deciding whether or not to purchase a weekly housecleaning service. The value of the

Economics 5th Edition

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ECON E 899 Quiz

Which of the following is not a consequence of the Fed changing the reserve requirement? A) Changes in the ratio are easily incorporated into banks' routine management. B) Decreasing the ratio will increase excess reserves. C) Increasing the ratio will decrease the amount of reserves banks have to loan. D) Changes in the ratio

Economics 5th Edition

Exam Prep

Economics 102 Test 2

In March 2008, the Fed announced that primary dealers would be eligible to receive discount loans. Answer: TRUE Answer: TRUE Answer: TRUE In a decreasing-cost industry, the entry of new firms lowers average cost at each level of output. Answer: TRUE Answer: TRUE Answer: TRUE In the long-run equilibrium, a monopolistically competitive firm earning normal profit produces the allocatively

Economics 5th Edition

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Economics 104 Midterm 2

When the price level rises from 110 to 115, the aggregate level of GDP supplied rises from $80 billion to $120 billion. This ________ relationship represents the ________ relationship between the quantity of real GDP firms are willing to supply and the price level. A) negative; short-run B) positive; short-run C) negative; long-run D)

Economics 5th Edition

Exam Prep

Economics 107 Test 2

Deflation occurs when A) there is a sustained increase in the price level. B) there is a one-time increase in the price level. C) there is a decline in the price level. D) there is a decrease in the expected rate of inflation. Answer: C Answer: C Answer: C Economists assume that A) individuals behave in unpredictable ways. B) consumer

Economics 5th Edition

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Economics 110 Midterm

Insurance companies use deductibles and coinsurance to reduce moral hazard. Answer: TRUE Answer: TRUE Answer: TRUE After an increase in demand in a constant-cost industry, firms will find themselves with higher average cost curves. Answer: FALSE Answer: FALSE Answer: FALSE The economic model of consumer behavior explains how consumers' tastes and preferences are formed. Answer: FALSE Answer: FALSE Answer: FALSE If voters

Economics 5th Edition

Exam Prep

Economics 112 Quiz 1

How will the exchange rate (foreign currency per dollar) respond to an increase in preference for imported goods in the United States in the long run? A) Exchange rates will rise. B) Exchange rates will fall. C) Exchange rates will be unaffected by changes in the relative rate of productivity growth in the

Economics 5th Edition

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Economics 113 Final

Which of the following is not a reason why the wages of workers and the prices of inputs rise more slowly than the prices of final goods and services? A) Contracts make prices and wages 'sticky." B) Firms are often slow to adjust wages. C) Menu costs make some prices sticky. D) Unions are

Economics 5th Edition

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Economics 116 Midterm 1

One reason a country does not specialize completely in production is that production of most goods involves increasing opportunity costs. Answer: TRUE TRUE TRUE Empirical evidence shows that the short-run Phillips curve was vertical during the 1950s and 1960s. Answer: FALSE FALSE FALSE Paying efficiency wages are a way for a company to cut costs and become more efficient, and

Economics 5th Edition

Exam Prep

Economics 124 Test

In the United States, partnership profits are taxed at the business level and then are taxed again as personal income in the form of dividend payments. Answer: FALSE Answer: FALSE Answer: FALSE A tax is efficient if it imposes a small excess burden relative to the tax revenue it raises. Answer: TRUE Answer: TRUE Answer: TRUE Seth's grandmother

Economics 5th Edition

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Economics 125 Test 1

Article Summary. In 2012, Colorado and Washington legalized marijuana for recreational use, and one of the major selling points in each state's pro-marijuana campaign was the possibility of generating millions of dollars in tax revenue from sales which could be used for funding general education. The Colorado legislature was weighing

Economics 5th Edition

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Economics 137 Midterm 1

In a fixed exchange rate system, speculation regarding an expected revaluation or devaluation of a currency makes it more difficult to maintain the existing exchange rate. Answer: TRUE TRUE TRUE The CPI in 2010 was 218, while the CPI in 1980 was 82. If you had $5,000 in 1980, its equivalent purchasing power in 2008

Economics 5th Edition

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Economics 141 Final

When a business is set up as a sole proprietorship, the owner of the business faces limited liability. Answer: FALSE Answer: FALSE Answer: FALSE If inflation is higher than expected, this helps borrowers (by reducing the real interest rate they pay) and hurts lenders (by reducing the real interest rate they receive). Answer: TRUE Answer: TRUE Answer:

Economics 5th Edition

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Economics 146 Test 1

Which of the following would shift a nation's production possibilities frontier inward? A) discovering a cheap way to convert sunshine into electricity B) producing more capital equipment C) an increase in the unemployment rate D) a law requiring workers to retire at age 50 Answer: D Answer: D Answer: D What is the difference between

Economics 5th Edition

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Economics 155 Quiz

Which of the following is true of a typical firm in a monopolistically competitive industry? A) Product differentiation allows a successful firm to emerge as a market leader in the industry. B) All firms have identical cost structures. C) The more successful firms have an incentive to merge in order to exert greater

Economics 5th Edition

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Economics 156 Midterm 2

In a closed economy with fixed or autonomous (non-income dependent) taxes, the balanced budget government purchases multiplier is negative. Answer: FALSE FALSE FALSE For a given quantity, the total profit of a perfectly competitive firm is equal to the vertical distance between the firm's total revenue curve and its total cost curve. Answer: TRUE TRUE TRUE "Cost disease" refers to

Economics 5th Edition

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Economics 156 Midterm 2 The

The government of Silverado raises revenue to operate the city's hospital, open to all residents, through a general income tax paid by its residents. This method of raising revenue is consistent with the benefits-received principle. Answer: TRUE TRUE TRUE If a perfectly competitive firm maximizes short-run profits, its marginal revenue will be positive and less than

Economics 5th Edition

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Economics 165 Test 1

A series of bank runs in a country should have no effect on M1 as money simply moves from checking deposits to currency. Answer: FALSE Answer: FALSE Answer: FALSE A price ceiling is a legally determined maximum price that sellers may charge. Answer: TRUE Answer: TRUE Answer: TRUE An increase in the money supply is a discretionary fiscal

Economics 5th Edition

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Economics 173 Quiz 2

In 1995, the General Agreement on Tariffs and Trade (GATT) was replaced by the World Trade Organization (WTO). Answer: TRUE Answer: TRUE Answer: TRUE A downward sloping marginal product of labor curve demonstrates the law of diminishing marginal returns. Answer: TRUE Answer: TRUE Answer: TRUE Competition in the form of advertising, better customer service, or longer warranties can

Economics 5th Edition

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Economics 175 Midterm 2

In the 1960s, many economists and policymakers believed the trade-off between inflation and unemployment was permanent. Answer: TRUE Answer: TRUE Answer: TRUE If banks receive a greater amount of reserves and do not hold all of these reserves as excess reserves, the money supply expands. Answer: TRUE Answer: TRUE Answer: TRUE Marketing refers to all the activities necessary

Economics 5th Edition

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Economics 183 Midterm 1

Suppose that real GDP for 2012 was $10,000 billion and real GDP for 2013 was $11,000 billion. What is the rate of growth of real GDP between 2012 and 2013? A) 1% B) 2% C) 5% D) 10% Answer: D Answer: D Answer: D Consider the following methods of pollution reduction: a. the government sets a target for maximum

Economics 5th Edition

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Economics 188 Midterm 2

Foreign currency prices of the U.S. dollar are currently determined by a managed float exchange rate system. Answer: TRUE Answer: TRUE Answer: TRUE The question of whether economic growth is desirable is a positive question, easily settled by economic analysis. Answer: FALSE Answer: FALSE Answer: FALSE As the number of firms in a market increases, the supply curve

Economics 5th Edition

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Economics 215 Quiz 1

Which aggregate supply curve has a positive slope? A) long-run only B) short-run only C) both long-run and short-run D) neither long-run nor short-run Answer: B Answer: B Answer: B When a negative externality exists, the private market produces A) more than the economically efficient output level. B) less than the economically efficient output level. C) products at a low opportunity

Economics 5th Edition

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Economics 223 Test

The Walt Disney Company uses cost-plus pricing to determine the prices it charges for admission and rides at Disneyland and Walt Disney World. Answer: FALSE FALSE FALSE A successful trademark is one that becomes a generic name for a product, for example, "Kleenex" has become a generic term for tissues. Answer: FALSE FALSE FALSE Optimal decisions are made at the

Economics 5th Edition

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Economics 227 Quiz 2

Of the following high-income countries, which has the highest infant mortality rate? A) Canada B) Japan C) the United Kingdom D) the United States Answer: D Answer: D Answer: D If a firm has an incentive to increase supply now and decrease supply in the future, the firm expects that the A) price of its product will be lower

Economics 5th Edition

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Economics 230 Midterm 1

Gross domestic product is generally ________ national income. A) greater than B) less than C) equal to D) unrelated to Answer: A Answer: A Answer: A The level of long-run aggregate supply is affected by all of the following except A) changes in the price level. B) changes in the technology. C) changes in the capital stock. D) changes in the

Economics 5th Edition

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Economics 239

The long-run adjustment to a negative supply shock results in A) the short-run aggregate supply curve shifting to the right. B) the price level rising. C) unemployment rising. D) workers being willing to accept higher wages. Answer: A Answer: A Answer: A Article Summary. Arguing that a merger would lead to higher prices, reduced service, and significantly less

Economics 5th Edition

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Economics 242 Test

When the government makes a firm the exclusive legal provider of a good or service, it grants the firm A) a copyright. B) a network externality. C) a quota. D) a public franchise. Answer: D Answer: D Answer: D Some firms practice odd pricing because A) they believe that customers will buy a larger quantity with an odd price. B)

Economics 5th Edition

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Economics 248 Quiz 3

Figure 4-1 Figure 4-1 shows Arnold's demand curve for burritos. If the market price is $2.00, what is the consumer surplus on the second burrito? A) $0 B) $1.00 C) $2.00 D) $4.50 Answer: A Answer: A Answer: A Table 2-11 Table 2-11 shows the number of labor hours required to produce a digital camera and a pound of wheat

Economics 5th Edition

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Economics 254

Table 18-2 The table above lists three policy alternatives that the U.S. Senate will vote on, along with the ranking of these alternates. The Senate must decide which of these alternatives should receive an additional $1 billion of funding, and there is enough money in the federal budget for only one

Economics 5th Edition

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Economics 281

Which of the following is not an example of an economic trade-off that a firm has to make? A) whether it is cheaper to produce with more machines or with more workers B) whether it is to outsource the production of a good or service C) whether or not consumers will buy its

Economics 5th Edition

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Economics 285 Midterm

Most economists believe that the biases in the consumer price index cause the CPI to overstate the true inflation rate by about A) one-half to one percentage point. B) one to two percentage points. C) one quarter percentage point. D) one and one-half percentage points. Answer: A Answer: A Answer: A During the Great Depression, cyclical unemployment increased

Economics 5th Edition

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Economics 288 Midterm

If wages and prices adjust rapidly, we would expect expansionary monetary policy to be A) more likely to reduce the natural rate of unemployment. B) more likely to affect the unemployment rate. C) less likely to affect the unemployment rate. D) less likely to result in a vertical short-run Phillips curve. Answer: C Answer: C Answer: C If

Economics 5th Edition

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Economics 299 Quiz 1

If society decides it wants more of one good and all resources are fully utilized, then A) it is unable to do this unless technology advances. B) additional resource supplies will have to be found. C) it has to give up some of another good and incur some opportunity costs. D) more unemployment will

Economics 5th Edition

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Economics 305 Midterm 2

Figure 4-9 Figure 4-9 shows the demand and supply curves for the almond market. The government believes that the equilibrium price is too low and tries to help almond growers by setting a price floor at Pf. What area represents the portion of consumer surplus that has been transferred to

Economics 5th Edition

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Economics 305 Test

In a competitive market equilibrium A) total consumer surplus equals total producer surplus. B) marginal benefit and marginal cost are maximized. C) consumers and producers benefit equally. D) the marginal benefit equals the marginal cost of the last unit sold. Answer: D Answer: D Answer: D If taxes are less than transfers plus government spending, then A) there is

Economics 5th Edition

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Economics 311 Test

From an initial long-run equilibrium, if aggregate demand grows faster than long-run and short-run aggregate supply, then Congress and the president would most likely A) decrease the required reserve ratio. B) decrease government spending. C) decrease oil prices. D) decrease tax rates. Answer: B Answer: B Answer: B The marginal productivity theory of income distribution states that A) as

Economics 5th Edition

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Economics 314 Test

Figure 4-10 Figure 4-10 shows the market for apartments in Bay City. Recently, the government imposed a rent ceiling at R0. What is the area that represents consumer surplus after the imposition of the ceiling? A) A + B+ D B) A + B + C C) A + B +

Economics 5th Edition

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Economics 315 Test 2

Proponents of the ________ model argue that the short-run supply curve is vertical. A) the monetarist model B) the new classical model C) the real business cycle model D) the new Keynesian model Answer: C Answer: C Answer: C All of the following are examples of public goods except A) broadcast television with commercials. B) clean water systems. C) stock

Economics 5th Edition

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Economics 323 Test If The Market

If the market price is $40 in a perfectly competitive market, the marginal revenue from selling the fifth unit is A) $8. B) $20. C) $40. D) $200. Answer: C Answer: C Answer: C Figure 30-4 The equilibrium exchange rate is originally at A, $3/pound. Suppose the British government pegs its currency at $4/pound. Speculators expect that the

Economics 5th Edition

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Economics 327

A corporation is A) the easiest type of business to set up. B) the least expensive type of business to set up. C) the most difficult type of business to set up. D) the least profitable type of business to set up. Answer: C Answer: C Answer: C The interest rate that banks charge other banks for overnight

Economics 5th Edition

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Economics 330

If real GDP increases we know for sure that A) output has risen. B) prices have risen. C) prices have risen but output has remained constant. D) prices have remained constant. Answer: A Answer: A Answer: A The short-term unemployment arising from the process of matching workers with jobs is called A) frictional unemployment. B) structural unemployment. C)

Economics 5th Edition

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Economics 336 Test 1

A decrease in the marginal income tax rate is a fiscal policy which will increase aggregate demand. Answer: TRUE Answer: TRUE Answer: TRUE The Congressional Budget Office estimates that the additional taxes and fees enacted under the ACA will be enough to pay for the plan and reduce the federal government's budget deficit. Answer: TRUE Answer:

Economics 5th Edition

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Economics 345 Quiz 3

If the number of firms producing electric cars increases and consumer preference for electric cars increases, the equilibrium quantity of electric cars will definitely increase. Answer: TRUE Answer: TRUE Answer: TRUE An important reason why diseconomies of scale arise is because firms may have to hire lower skilled workers as firms expand. Answer: FALSE Answer: FALSE Answer:

Economics 5th Edition

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Economics 346 Midterm 1

Figure 5-15 Figure 5-15 shows the market for Atlantic salmon, a common resource. The current market equilibrium output of Q1 is not the economically efficient output. The economically efficient output is Q2. The current market equilibrium output is partly the result of overfishing. In that case, what does S1 represent? A) the

Economics 5th Edition

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Economics 361

Table 3-3 The table above shows the demand schedules for Kona coffee of two individuals (Luke and Ravi) and the rest of the market. At a price of $4, the quantity demanded in the market would be A) 40 lb. B) 70 lb. C) 110 lb. D) 150 lb. Answer: D Answer: D Answer: D Typically, as an economy

Economics 5th Edition

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Economics 362 Test 1

Scenario 1-3 Suppose a t-shirt manufacturer currently sells 5,000 t-shirts per week and makes a profit of $10,000 per week. A manager at the plant observes, "Although the last 400 t-shirts we produced and sold increased our revenue by $4,000 and our costs by $4,800, we are still making an overall

Economics 5th Edition

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Economics 381 Homework

Figure 6-3 Using the midpoint formula, calculate the absolute value of the price elasticity of demand between e and f. A) 0.32 B) 0.4 C) 2.5 D) 3.125 Answer: D Answer: D Answer: D A decrease in ________ can put your job at risk if aggregate expenditures fall. A) consumer confidence B) the natural rate of unemployment C) the inflation rate D) the

Economics 5th Edition

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Economics 386 Midterm

In 1935, the U.S. Patent and Trademark Office issued Parker Brothers a trademark on the use of the name Monopoly for a board game. Hasbro bought Parker Brothers in 1991. Which of the following statements is true regarding the trademark on the name Monopoly for a board game? A) The original trademark

Economics 5th Edition

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Economics 393

Between 1981 and 2011, deaths from cancer have increased in the United States. Answer: FALSE Answer: FALSE Answer: FALSE Selling a product at a price below its cost is known as dumping. Answer: TRUE Answer: TRUE Answer: TRUE Market economies tend to grow more quickly than centrally-planned economies. Answer: TRUE Answer: TRUE Answer: TRUE When a business is set up as partnership,

Economics 5th Edition

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Economics 400 Midterm 2

If the production possibilities frontier is linear, then A) opportunity costs are decreasing as more of one good is produced. B) it is easy to efficiently produce output. C) opportunity costs are increasing as more of one good is produced. D) opportunity costs are constant as more of one good is produced. Answer: D Answer: D Answer:

Economics 5th Edition

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Economics 406

The labor productivity slowdown in the United States in the 1970s was due to declining quality of education in the United States, because no other industrialized country experienced the same labor productivity slowdown at the same time. Answer: FALSE Answer: FALSE Answer: FALSE The idea underlying Adam Smith's "invisible hand" is that people tend to

Economics 5th Edition

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Economics 417 Quiz 2 A Product Is

A product is considered to be nonexcludable if A) you can keep those who did not pay for the item from enjoying its benefits. B) you cannot keep those who did not pay for the item from enjoying its benefits. C) your consumption of the product reduces the quantity available for others to

Economics 5th Edition

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Economics 417 Quiz 3 Table

Table 25-3 Consider the following simplified balance sheet for a bank: If the required reserve ratio is 10 percent, the bank can make a maximum loan of A) $2,000. B) $5,000. C) $6,300. D) $45,000. Answer: A Answer: A Answer: A Suppose when the price of hybrid automobiles rises, consumers buy fewer hybrid automobiles. This implies that A) there is

Economics 5th Edition

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Economics 418 Test

The market for smart phones has grown rapidly over the past few years, due in part to the overwhelming success of the Apple iPhone. Following the successful launch of the iPhone in 2007, companies such as Samsung, HTC, and LG have all introduced products to compete with the iPhone. The

Economics 5th Edition

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Economics 446 Test

A rise in the dollar price of the Chinese yuan signals an appreciation of the yuan and a depreciation of the dollar. Answer: TRUE TRUE TRUE To increase gas mileage, automobile manufacturers make cars small and light. Large cars absorb more of the impact of an accident than small cars but yield lower gas mileage.

Economics 5th Edition

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Economics 455 Midterm 2

A perfectly competitive apple farm produces 1,000 bushels of apples at a total cost of $36,000. The price of each bushel is $50. Calculate the firm's short-run profit or loss. A) loss of $14,000 B) profit of $14,000 C) profit of $50,000 D) There is insufficient information to answer the question. Answer: B Answer: B Answer: B The

Economics 5th Edition

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Economics 457 Quiz

Rent-seeking behavior, unlike profit-maximizing behavior in competitive markets, wastes society's scarce resources. Answer: TRUE Answer: TRUE Answer: TRUE The marginal propensity to consume measures the average amount of wealth that a consumer spends in a given period of time. Answer: FALSE Answer: FALSE Answer: FALSE With the Troubled Asset Relief Program (TARP), the Treasury provided funds to banks

Economics 5th Edition

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Economics 458

What is the present value of $888 in a one year if the current rate of interest is five percent? A) $4,440 B) $845.71 C) $177.60 D) none of these Answer: B Answer: B Answer: B Macroeconomics, as opposed to microeconomics, includes the study of what determines the level of A) employment in a specific industry. B) employment in the

Economics 5th Edition

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Economics 459 Quiz

Some individuals seek to use government action to make themselves better off at the expense of others. The actions of these individuals A) are examples of fraud; but these individuals usually avoid prosecution because of logrolling and rational ignorance. B) are examples of rent seeking. C) offer proof that Adam Smith's "invisible hand"

Economics 5th Edition

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Economics 486 Quiz 2

The CPI in 2010 was 218, while the CPI in 1980 was 82. If you had $5,000 in 1980, its equivalent purchasing power in 2008 would be $10,850. Answer: FALSE Answer: FALSE Answer: FALSE Holding all else constant, an economic expansion in Mexico should decrease the demand for U.S. dollars. Answer: FALSE Answer:

Economics 5th Edition

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Economics 487 Midterm 2

Economics 5th Edition

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Economics 493 Quiz 2

Economics 5th Edition

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Economics 496 Homework The Term

The term "trust" in antitrust refers to a board of trustees that has collusive control over different companies. Answer: TRUE Answer: TRUE Answer: TRUE Economists believe that cost-plus pricing may be the best way for a firm to determine its optimal product price when the firm's marginal cost and average cost are about the

Economics 5th Edition

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Economics 503

Suppose that in a market for used cars, there are good used cars and bad used cars (lemons). Consumers are willing to pay as much as $6,000 for a good used car but only $1,000 for a lemon. Sellers of good used cars value their cars at $5,000 each and

Economics 5th Edition

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Economics 511 Quiz 1

In the short run, if price falls below a firm's minimum average total cost, the firm should shut down. Answer: FALSE FALSE FALSE Members of management serving on the board of directors of a corporation are referred to as outside directors. Answer: FALSE FALSE FALSE Natural resource cartels such as OPEC are inherently unstable because their members operate with excess

Economics 5th Edition

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Economics 521 Midterm

Tax cuts on business income ________ aggregate demand. A) would decrease B) would increase C) would not change D) may increase or decrease Answer: B Answer: B Answer: B Suppose the demand curve for a product is represented by a typical downward-sloping curve. Now suppose the demand for this product decreases. Which of the following statements accurately predicts the

Economics 5th Edition

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Economics 524 Quiz 2

For a given quantity, the total profit of a perfectly competitive firm is equal to the vertical distance between the firm's total revenue curve and its total cost curve. Answer: TRUE Answer: TRUE Answer: TRUE A real appreciation of the dollar is caused by either a nominal appreciation of the dollar, a rise in the

Economics 5th Edition

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Economics 534 Homework

Mortgages issued to borrowers who fail to document that their incomes are high enough to afford their mortgage payments are known as ________ mortgages. A) subprime B) Alt-A C) gray market D) reciprocal Answer: B Answer: B Answer: B Table 9-8 Suppose that the data in the table above reflect the price levels in the economy. What is the inflation

Economics 5th Edition

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Economics 551

Figure 13-17 What is the productively efficient output for the firm represented in the diagram? A) Qf units B) Qg units C) Qh units D) Qj units Answer: D Answer: D Answer: D Table 9-19 Looking at the table above, what is the rate of growth of the average price level from 2012 to 2013? A) 1% B) 2% C) 3.5% D) 4.76% E) 5.25% Answer:

Economics 5th Edition

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Economics 551 Midterm

If the long-run average total cost curve is downward-sloping, then the firm is experiencing decreasing returns to scale. Answer: FALSE FALSE FALSE If consumers paid the full price of medical services instead of using health insurance and third-party payers to cover part of the cost, the quantity of medical services provided would increase. Answer: FALSE FALSE FALSE If inflation falls

Economics 5th Edition

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Economics 555 Quiz

In the alcohol industry, both wine and spirits are considered to be substitutes for beer. Answer: FALSE Answer: FALSE Answer: FALSE A decrease in the number of firms in a market will cause supply to increase. Answer: TRUE Answer: TRUE Answer: TRUE Assume that price is greater than average variable cost. If a perfectly competitive firm is producing

Economics 5th Edition

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Economics 556 Quiz

Linesha, a college student working part-time receives a wage increase. An avid movie buff, she increased her purchases of Blu-ray discs and reduced her purchases of DVDs. Based on this information A) DVDs and Blu-ray discs are substitutes. B) Blu-ray discs are normal goods and DVDs are inferior goods. C) DVDs and Blu-ray

Economics 5th Edition

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Economics 559 Quiz 1

In the long run the relevant cost is total cost. Answer: TRUE Answer: TRUE Answer: TRUE If it costs Vijay $150 to design 5 websites and $175 to design 6 websites, then $175 is the marginal cost of producing the 6th website. Answer: FALSE Answer: FALSE Answer: FALSE Marginal benefit is the total benefit to a consumer from

Economics 5th Edition

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Economics 572 Test 2

An entry barrier exists when firms in an industry charge the lowest price possible for their products. Answer: FALSE Answer: FALSE Answer: FALSE An economic model is a complex version of reality used to analyze real-world economic situations. Answer: FALSE Answer: FALSE Answer: FALSE The productivity slowdown experience in the United States from the mid-1970s to the mid-1990s

Economics 5th Edition

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Economics 577

A successful trademark is one that becomes a generic name for a product, for example, "Kleenex" has become a generic term for tissues. Answer: FALSE Answer: FALSE Answer: FALSE If inflation is unanticipated, no redistribution of income can occur. Answer: FALSE Answer: FALSE Answer: FALSE An increase in government spending will force an appreciation of the dollar, which

Economics 5th Edition

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Economics 581 Quiz 2

An entry barrier exists when firms in an industry charge the lowest price possible for their products. Answer: FALSE Answer: FALSE Answer: FALSE If Gladys sells her 1998 Jeep Cherokee for $3,500 in 2013, the sale of her car contributes $3,500 to 2013 GDP. Answer: FALSE Answer: FALSE Answer: FALSE In the market for gasoline, an increase in

Economics 5th Edition

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Economics 590 Quiz 1

Which of the following is an example of a way in which a firm in oligopoly can escape the prisoner's dilemma? A) producing more of its product B) advertising that it will match its rival's price C) reneging on a previous tacit agreement with rival firms to charge identical high prices D) ignoring the

Economics 5th Edition

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Economics 592 Test

The ________ shows the relationship between the price level and quantity of real GDP demanded. A) consumer price index B) aggregate expenditure line C) 45-degree line D) aggregate demand curve Answer: D Answer: D Answer: D Suppose the demand for milk is relatively inelastic. What happens to sales revenue if the government imposes a price floor above the

Economics 5th Edition

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Economics 601 Quiz 2

During a business cycle expansion, total production ________ and total employment ________. A) increases; increases B) increases; decreases C) decreases; increases D) decreases; decreases Answer: A Answer: A Answer: A Classifying a good as excludable means A) that someone can be barred from consuming the good based on race, creed or some other irrelevant characteristic. B) that anyone who does

Economics 5th Edition

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Economics 608 Midterm 2

The interest payment on a bond is called A) the coupon payment. B) principal. C) the interest rate. D) the face value. Answer: A Answer: A Answer: A Because of the slope(s) of the ________, we can say that a decrease in the price level leads to a higher level of real GDP demanded. A) aggregate demand curve B) short-run

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Economics 618 Homework

Figure 18-2 Figure 18-2 shows a demand curve and two sets of supply curves, one set more elastic than the other. If the government imposes an excise tax of $1.00 on every unit sold, the consumer's burden of the tax A) is Pa- Pcunder either supply curve. B) is P- Pcunder either supply

Economics 5th Edition

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Economics 618 Midterm

Which of the following explains why two firms, Apex and Bongo, would engage in implicit collusion, rather than explicit collusion? A) Implicit collusion allows Apex to increase its profits at the expense of Bongo without Bongo knowing that collusion has occurred; if Apex engages in explicit collusion, Bongo will realize collusion

Economics 5th Edition

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Economics 619 Quiz 3

The aggregate demand curve will shift to the right ________ the initial increase in government purchases. A) by less than B) by more than C) by the same amount as D) sometimes by more than and other times by less than Answer: B Answer: B Answer: B Table 4-4 Table 4-4 shows the demand and supply schedules for the

Economics 5th Edition

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Economics 619 Test 2

In explaining consumer behavior economists explain how consumer tastes and preferences are formed. Answer: FALSE Answer: FALSE Answer: FALSE The Federal Reserve's performance in the mid-to-late 1980s, 1990s, and early 2000s has received high marks from economists, even without inflation targeting. Answer: TRUE Answer: TRUE Answer: TRUE Even if expectations of inflation are rational, sluggish adjustment of wages and

Economics 5th Edition

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Economics 620 Test

If a firm has excess capacity, it means A) that the firm expends too much of its resources on advertising its product without seeing an appreciable increase in sales. B) that the firm is not producing its minimum efficient scale of output. C) that the firm's long-run average cost of producing a given

Economics 5th Edition

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Economics 623

Net foreign investment is equal to A) capital inflows minus capital outflows. B) foreign direct investment. C) the balance of trade. D) net foreign portfolio investment plus net foreign direct investment. Answer: D Answer: D Answer: D Table 2-1 Production choices for Tomaso's Trattoria Assume Tomaso's Trattoria only produces pizzas and calzones. A combination of 36 pizzas and

Economics 5th Edition

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Economics 624

Tesla Motors manufacturers its cars at a plant in Fremont, California. At this plant, Tesla is able to take advantage of the high level of technical training possessed by its American workers, but it also sacrifices the ability to pay lower wages had it chosen to open its plant in

Economics 5th Edition

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Economics 624 Midterm

Most employees ________ pay taxes on the value of health insurance provided by employers, and most people ________ get a tax break when buying individual health insurance policies. A) do; do B) do; do not C) do not; do D) do not; do not Answer: D Answer: D Answer: D Figure 4-1 Figure 4-1 shows Arnold's demand curve

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Economics 625 Final

In reference to the federal income tax system, a tax bracket is A) the estimated amount of federal income tax firms withhold from their employees' paychecks. B) the formula the federal government uses to determine the dollar amount of the personal exemption and the amounts taxpayers are allowed for deductions from their

Economics 5th Edition

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Economics 631

Marginal revenue product for a perfectly competitive seller is equal to A) the output price multiplied by the total product of labor. B) the output price multiplied by the number workers hired. C) the change in total revenue that results from hiring another worker. D) the marginal cost of production. Answer: C Answer: C Answer: C Table 17-4 Table

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Economics 634 Homework

Table 4-1 The table above lists the highest prices three consumers, Tom, Dick and Harriet, are willing to pay for a short-sleeved polo shirt. If the price of one of the shirts is $28 dollars A) Tom will buy two shirts, Dick will buy one shirt and Harriet will buy no shirts. B)

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Economics 639 Midterm 2

Which of the following is not an example of inflation causing a redistribution of income because the inflation was unanticipated? A) A firm signs a 3-year contract with a union based on a 2 percent anticipated rate of inflation per year, and the actual rate of inflation ends up being 7 percent

Economics 5th Edition

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Economics 654 Test

Foreign investment can give a low-income country A) access to funds for investment and access to technology. B) the means to slow down growth. C) a path to dependency and low growth. D) no hope to break the vicious cycle of poverty. Answer: A Answer: A Answer: A Efficiency wages cause unemployment because A) firms pay wages that are

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Economics 662

You own a business that answers telephone calls for physicians after their offices close. You have an incentive to substitute capital for labor if the A) price of capital increases. B) price of labor decreases. C) price of labor increases. D) marginal product of labor increases. Answer: C Answer: C Answer: C Table 2-17 Table 2-17 shows the output

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Economics 663 Homework

Differentiating products to suit customers' tastes is a form of price discrimination. Answer: FALSE FALSE FALSE Producer surplus is the difference between the highest price someone is willing to pay and the price he actually pays. Answer: FALSE FALSE FALSE A monopolistically competitive industry that earns economic profits in the short run will face a more elastic demand curve in

Economics 5th Edition

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Economics 689 Test

Automatic stabilizers refer to A) the money supply and interest rates that automatically increase or decrease along with the business cycle. B) government spending and taxes that automatically increase or decrease along with the business cycle. C) changes in the money supply and interest rates that are intended to achieve macroeconomic policy objectives. D)

Economics 5th Edition

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Economics 704 Quiz 3

Bank reserves include A) vault cash and deposits with the Federal Reserve. B) loans to bank customers and deposits with the Federal Reserve. C) vault cash and loans to bank customers. D) customer checking accounts and vault cash. E) deposits with the Federal Reserve and holdings of securities. Answer: A Answer: A Answer: A Consider the following economic agents: a.

Economics 5th Edition

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Economics 710

Figure 11-3 Fancy Footwear manufactures shoes. Figure 11-3 shows Fancy Footwear's marginal product of labor and average product of labor curves in the short run. For what quantity of labor does production display diminishing returns? A) for more than 1 units of labor B) for more than 4 unit of labor C) for more than

Economics 5th Edition

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Economics 711 Final

Table 1-1 Eva runs a small bakery in the village of Roggerli. She is debating whether she should extend her hours of operation. Eva figures that her sales revenue will depend on the number of hours the bakery is open as shown in the table above. She would have to hire a

Economics 5th Edition

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Economics 713 Quiz 2

Macroeconomics is the study of A) how households make choices. B) how firms make choices. C) how households and firms make choices. D) the economy as a whole. Answer: D Answer: D Answer: D Classifying a good as rival means A) that the good is produced in a competitive market. B) that there is a shortage of the good. C) that

Economics 5th Edition

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Economics 714

Health insurance plans which typically reimburse doctors and hospitals with payment for each service they provide are known as A) fee-for-service plans. B) preferred provider organizations. C) single-health-payer systems. D) health maintenance organizations. Answer: A Answer: A Answer: A When demand is unit-elastic, a change in price causes total revenue to stay the same because A) the percentage change

Economics 5th Edition

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Economics 719 Homework

A period of economic expansion ends with a business cycle trough. Answer: FALSE Answer: FALSE Answer: FALSE If inflation is anticipated, some effects of inflation on the redistribution of income can be avoided. Answer: TRUE Answer: TRUE Answer: TRUE Government spending on transfer payments is included in government purchases when calculating GDP because it results in the production

Economics 5th Edition

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Economics 725 Quiz 1

Foreign portfolio investment in the United States has continually declined since 1995. Answer: FALSE FALSE FALSE Expansionary monetary policy enacted during a recession will cause the inflation rate to increase. Answer: TRUE TRUE TRUE If the rate of growth in real GDP exceeds the rate of growth in the money supply, the quantity theory of money predicts a price deflation. Answer: TRUE TRUE TRUE For a

Economics 5th Edition

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Economics 726 Midterm 2

Economics 5th Edition

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Economics 735

Economics 5th Edition

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Economics 748 Test

Active changes in tax and spending by government intended to smooth out the business cycle are called ________, and changes in taxes and spending that occur passively over the business cycle are called ________. A) automatic stabilizers; discretionary fiscal policy B) discretionary fiscal policy; automatic stabilizers C) automatic stabilizers; monetary policy D) discretionary fiscal

Economics 5th Edition

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Economics 754 Midterm 2

If real GDP grows by 3% in 2011, 3.2% in 2012, and 2.5% in 2013, what is the average annual growth rate of real GDP? A) 2.6% B) 2.9% C) 3.1% D) 4.2% Answer: B Answer: B Answer: B Table 9-5 Consider the following values of the consumer price index for 2012 and 2013. The inflation rate for 2013

Economics 5th Edition

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Economics 759 Midterm 1

A demand curve that is horizontal indicates that the commodity A) has few substitutes. B) must be very cheap. C) is a necessity. D) has a large number of substitutes. Answer: D Answer: D Answer: D Figure 12-7 Figure 12-7 illustrates the cost curves of a perfectly competitive firm. If the market price is P2,the firm A) will break even

Economics 5th Edition

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Economics 759 Quiz

What is "brain drain"? A) the tendency for highly educated workers in high-income countries to move to low-income countries to volunteer their services B) increased recruiting efforts that attempt to raise the average level of education in developed nations C) foreign direct investment that flows from a developed country to a developing country D)

Economics 5th Edition

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Economics 768 Midterm 1

Figure 3-3 The figure above shows the supply and demand curves for two markets: the market for original Michelangelo sculptures and the market for Ray Ban sunglasses. Which graph most likely represents which market? A) Graph B represents the market for original Michelangelo sculptures and Graph A represents the market for

Economics 5th Edition

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Economics 770 Midterm

Prisoner's dilemma games imply that cooperative behavior between two people or two firms always breaks down. But reality teaches us that people and firms often cooperate successfully to achieve their goals. Why do the results from prisoner's dilemma games fail to predict real world results? A) Prisoner's dilemma games do not

Economics 5th Edition

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Economics 778 Homework

The study of economics arises due to A) money. B) scarcity. C) greed. D) resources. Answer: B Answer: B Answer: B Which of the following is a characteristic shared by a perfectly competitive firm and a monopoly? A) Each must lower its price to sell more output. B) Each sets a price for its product that will maximize its revenue. C)

Economics 5th Edition

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Economics 781 Quiz

If consumption is defined as C = 1,350 + 0.6Y, then the marginal propensity to consume is 0.6. Answer: TRUE TRUE TRUE Unlike a perfectly competitive firm, a monopolistic competitor does not have a short-run shut-down point. Answer: FALSE FALSE FALSE If a monopolist engages in first-degree price discrimination, it will produce the same output level as a perfectly competitive industry. Answer: TRUE TRUE TRUE A

Economics 5th Edition

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Economics 782 Midterm

Economics 5th Edition

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Economics 786 Homework

When Sophie, a French citizen, purchases a Dell computer in Paris that was produced in Texas, the purchase is A) both a U.S. and an French import. B) a U.S. import and an French export. C) a U.S. export and an French import. D) neither an export nor an import for either country. Answer: C Answer: C Answer:

Economics 5th Edition

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Economics 794 All Centrally

All centrally planned economies A) have been political dictatorships. B) started out as market economies. C) began as mixed economies. D) have become mixed economies. Answer: A Answer: A Answer: A The Pre-Existing Condition Insurance Plan is a federally administered part of the Affordable Care Act, and is designed for people with pre-existing medical conditions to obtain insurance.By

Economics 5th Edition

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Economics 811 Quiz 3

Which of the following statements is false? A) When marginal cost equals average total cost, average total cost is at its highest value. B) The marginal cost curve intersects the average variable cost curve and the average total cost curve at their minimum points. C) The difference between average total cost and average

Economics 5th Edition

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Economics 814 Quiz 2

An increase in individual income taxes ________ disposable income, which ________ consumption spending. A) increases; increases B) increases; decreases C) decreases; increases D) decreases; decreases Answer: D Answer: D Answer: D Figure 5-5 Figure 5-5 shows a market with an externality. The current market equilibrium output of Q1 is not the economically efficient output. The economically efficient output is Q2.

Economics 5th Edition

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Economics 819

All of the following questions or statements regarding medical school are positive except: A) How do changes in expected future incomes affect the decisions of medical students about which specialty to choose? B) Medical students who enter specialized fields make a larger contribution to society than do student who enter primary care. C)

Economics 5th Edition

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Economics 820

Firms do not have market power in which of the following market structures? A) perfect competition only B) perfect competition and monopolistic competition C) oligopoly D) monopoly Answer: A Answer: A Answer: A If a firm produces 20 units of output and incurs a total cost of $1,000 and a variable cost is $700, calculate the firm's average fixed

Economics 5th Edition

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Economics 824 Midterm 2 There Is

There is a federal budget deficit when A) the government spends less that it collects in taxes. B) the government spends more that it collects in taxes. C) the government spends the same amount it collects in taxes. D) taxes are too high. Answer: B Answer: B Answer: B The Clayton Act prohibited A) all vertical mergers. B) all horizontal

Economics 5th Edition

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Economics 826 Homework

Economic costs of production differ from accounting costs in that A) economic costs include expenditures for hired resources while accounting costs do not. B) economic costs add the opportunity costs of a firm using its own resources while accounting costs do not. C) accounting costs include expenditures for hired resources while economic costs

Economics 5th Edition

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Economics 827 Midterm

If the demand for iPods is price elastic, then A) the percentage change in quantity demanded is greater than the percentage change in price (in absolute value). B) the percentage change in quantity demanded is less than the percentage change in price (in absolute value). C) the percentage change in quantity demanded is equal

Economics 5th Edition

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Economics 830 Quiz 2

Baxter International, a manufacturer of hospital supplies, acquired American Hospital Supply, a distributor of hospital supplies. This is an example of A) a conglomerate merger. B) a horizontal merger. C) a vertical merger. D) a two-dimensional merger. Answer: C Answer: C Answer: C Table 2-11 Table 2-11 shows the number of labor hours required to produce a digital camera

Economics 5th Edition

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Economics 839 Midterm 1

What do economists call the situation where a hired manager does not have the same interests as the owners of the business? A) conquest and control B) a financial problem C) a principal-agent problem D) a financial intermediary problem Answer: C Answer: C Answer: C The payroll tax is a tax imposed on ________ that is used to

Economics 5th Edition

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Economics 855 Midterm 2

An average tax rate is calculated as A) total taxable income taxes paid. B) total taxable income taxes paid. C) taxes paid total taxable income. D) (total taxable income - taxes paid) taxable income. Answer: C Answer: C Answer: C Dr. Goldfinger decides to invest in companies which he believes can "improve the productivity and efficiency" of health

Economics 5th Edition

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Economics 856 Test 1

Suppose a developing country experiences a reduction in machinery and capital equipment as foreign entrepreneurs decrease the amount of investment in the economy. As a result, A) the long-run aggregate supply curve will shift to the right. B) the long-run aggregate supply curve will shift to the left. C) the economy will move

Economics 5th Edition

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Economics 864 Quiz 1

If a country has a comparative advantage in producing a product, it may not have an absolute advantage in producing that product. Answer: TRUE Answer: TRUE Answer: TRUE The U.S. economy would gain from the elimination of tariffs and quotas even if other countries do not reduce their tariffs and quotas. Answer: TRUE Answer: TRUE Answer: TRUE In

Economics 5th Edition

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Economics 871

Economics 5th Edition

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Economics 877 Test 2

In most circumstances, employees do not pay taxes on the value of health insurance their employers provide them. Answer: TRUE Answer: TRUE Answer: TRUE One of the main sources of comparative advantage is natural resources. Answer: TRUE Answer: TRUE Answer: TRUE Firms are more likely to find themselves in a prisoner's dilemma in sequential games as opposed to

Economics 5th Edition

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Economics 884 Midterm 2

An increase in a perfectly competitive firm's demand for labor could be caused by A) a decrease in the market wage rate. B) an increase in the amount of human capital among the labor force. C) an increase in the supply of labor. D) a decrease in the market price of the product the

Economics 5th Edition

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Economics 887 Quiz 1

By drawing a demand curve with price on the vertical axis and quantity on the horizontal axis, economists assume that the most important determinant of the demand for a good is A) consumer income. B) consumer tastes and preferences. C) the price of the good. D) the quality of the good. Answer: C Answer: C Answer: C Table

Economics 5th Edition

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MicroEconomic 101 Final

Which of the following describes how output changes in the short run? Because of specialization and the division of labor, as more workers are hired A) output will first increase at an increasing rate, then output will increase at a decreasing rate. B) output will first decrease at an increasing rate, then

Economics 5th Edition

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MicroEconomic 107 Midterm 1

The basic cause of deadweight losses from the existence of common resources and externalities is A) a lack of clearly defined and enforceable property rights. B) the self-interested rationality of human beings. C) the use of a market system to deal with scarcity. D) the absence of government intervention. Answer: A Answer: A Answer: A Figure 5-5 Figure

Economics 5th Edition

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MicroEconomic 118 Test

The price elasticity of supply is calculated as the change in supply divided by the change in price. Answer: FALSE Answer: FALSE Answer: FALSE The GDP deflator is the best measure that reflects the prices of goods and services purchased by the typical household. Answer: FALSE Answer: FALSE Answer: FALSE The income effect of a price change refers

Economics 5th Edition

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MicroEconomic 119 Midterm

Suppose your expenses for this term are as follows: tuition: $28,000, room and board: $9,000, books and other educational supplies: $2,500. Further, during the term, you can only work part-time and earn $16,000 instead of your full-time salary of $42,000. What is the opportunity cost of going to college this

Economics 5th Edition

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MicroEconomic 122 Quiz 2

What is the Congressional act, enacted in 1933 and repealed in 1999, which prevented financial firms from being both commercial banks and investment banks? A) the Sarbanes-Oxley Act B) the Glass-Steagall Act C) the Taft-Hartley Act D) the Cellar-Kefauver Act Answer: B Answer: B Answer: B In 2004, hurricanes damaged a large portion of Florida's orange crop. As

Economics 5th Edition

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MicroEconomic 133 Homework

In response to a shortage the market price of a good will rise; as the price rises, the demand will decrease and supply will increase until equilibrium is reached. Answer: FALSE FALSE FALSE A surplus is defined as the situation that exists when the quantity of a good supplied is greater than the quantity demanded. Answer: TRUE TRUE TRUE An

Economics 5th Edition

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MicroEconomic 134

All of the following would be considered explicit costs of operating a business except A) rent paid to a landlord. B) bonuses paid to employees. C) a normal rate of return for investors. D) corporate income taxes. Answer: C Answer: C Answer: C Workers laid off as a result of a recession suffer A) frictional unemployment. B) structural unemployment. C)

Economics 5th Edition

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MicroEconomic 137

The typical shape of an isoquant is A) convex towards the origin. B) concave towards the origin. C) linear and downward sloping. D) linear and upward sloping. Answer: A Answer: A Answer: A Table 2-11 Table 2-11 shows the number of labor hours required to produce a digital camera and a pound of wheat in China and South Korea. China

Economics 5th Edition

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MicroEconomic 140 Test 1

The relationship between sales and revenue is A) an inverse relationship. B) a direct relationship. C) a negative relationship. D) independent. Answer: B Answer: B Answer: B We should never assume that an inelastic demand curve is a perfectly inelastic demand curve because A) there has never been evidence of a perfectly inelastic demand curve. B) an inelastic demand curve

Economics 5th Edition

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MicroEconomic 140 Test 1 Table

Table 9-10 Table 9-10 shows the output per week for pens and pencils by Tran and Farah. a. Which person has an absolute advantage in the production of pens? pencils? b. Which person has a comparative advantage in the production of pens? c. Which person has a comparative advantage in the production of pencils? Answer:a.

Economics 5th Edition

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MicroEconomic 156 Homework

The United Kingdom has a health care system under which the government owns most of the hospitals and employs most of the doctors. Answer: TRUE Answer: TRUE Answer: TRUE The slope of an isoquant is equal to the ratio of the price of the input on the horizontal axis divided by the price of

Economics 5th Edition

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MicroEconomic 158

Table 2-9 Table 2-9 shows the number of labor hours required to produce a wristwatch and a pound of rice in Japan and Thailand. What is Japan's opportunity cost of producing one pound of rice? A) 0.04 units of a wristwatch B) 4 wristwatches C) 25 wristwatches D) 40 wristwatches Answer: A Answer: A Answer: A If the probability

Economics 5th Edition

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MicroEconomic 158 Midterm

The natural rate of unemployment consists of frictional unemployment plus cyclical unemployment. Answer: FALSE FALSE FALSE All economic questions arise from the fact that resources are unlimited. Answer: FALSE FALSE FALSE A subgame-perfect equilibrium is a Nash equilibrium in which no player can make himself better off by changing his decision at any decision node. Answer: TRUE TRUE TRUE Horizontal equity means that two people

Economics 5th Edition

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MicroEconomic 165 Test 2

Suppose you have just opened a store to sell espresso machines. Both you and a competing store buy this machine from a manufacturer for $130 each. Your competitor who has a store of the same size as yours is currently selling about 10 machines a month at a price of

Economics 5th Edition

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MicroEconomic 166

Table 14-3 Suppose OPEC has only two producers, Saudi Arabia and Nigeria. Saudi Arabia has far more oil reserves and is the lower cost producer compared to Nigeria. The payoff matrix in Table 14-3 shows the profits earned per day by each country. "Low output" corresponds to producing the OPEC assigned

Economics 5th Edition

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MicroEconomic 166 Midterm 1

In recent years, the prices of new domestically produced cars have been falling. Suppose consumers respond by reducing their demand for used cars and mass transport services such as bus travel. This information suggests that the cross-price elasticity between new cars and used cars, and the cross-price elasticity between new

Economics 5th Edition

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MicroEconomic 169

India's rapid growth can be explained by A) reduced regulations and market-based reforms. B) investment in human capital from 1947 through 2013. C) the movement of workers from the agricultural sector to the manufacturing sector. D) an increase in labor force participation. Answer: A Answer: A Answer: A Assume that the price for swimming pool maintenance services has

Economics 5th Edition

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MicroEconomic 174 Which Of The

Which of the following would you expect to increase the equilibrium interest rate? A) an increase in the percentage of income after net taxes that households save B) an increase in the budget deficit C) a decrease in the profitability of investment projects firms are considering D) a change from an income tax to

Economics 5th Edition

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MicroEconomic 178 Quiz 3

Managed float exchange systems were abandoned with the implementation of the gold standard. Answer: FALSE Answer: FALSE Answer: FALSE The marginal product of labor curve is the demand curve for labor. Answer: FALSE Answer: FALSE Answer: FALSE If Tanisha can audit more tax returns in one hour than Libby, then Tanisha has an absolute advantage in auditing tax

Economics 5th Edition

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MicroEconomic 181 Quiz 2

Consider a used car market in which half the cars are good and half are bad (lemons). A rational buyer in this market should A) offer to pay a price equal to the most she would pay for a good car. B) offer to pay a price equal to the most she

Economics 5th Edition

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MicroEconomic 186

GDP in a country grew from $10 billion to $14 billion over the span of 5 years. The average annual growth rate of GDP was A) 4%. B) 7%. C) 10%. D) 40%. Answer: B Answer: B Answer: B If an economy experiences deflation, the real interest rate A) will be less than the nominal interest rate. B) will be

Economics 5th Edition

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MicroEconomic 189 Final

If planned aggregate expenditure is less than real GDP, some firms will experience unplanned increases in inventories. Answer: TRUE Answer: TRUE Answer: TRUE Expansionary fiscal policy is used to increase aggregate demand in an attempt to fight rising inflation. Answer: FALSE Answer: FALSE Answer: FALSE The values of real GDP and real GNP are almost the same in

Economics 5th Edition

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MicroEconomic 197 One Reason

One reason Zimbabwe suffered from hyperinflation is that the government had decided to pay for all of its expenses by A) selling Treasury bonds to foreign governments. B) selling its government-run oil company to a private company, which then defaulted on its payment. C) raising interest rates to attract foreign direct investment, then

Economics 5th Edition

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MicroEconomic 204 Quiz 3

On a diagram of a production possibility frontier, economic growth is represented by the slope of the production possibility frontier. Answer: FALSE Answer: FALSE Answer: FALSE The slope of an isocost line determines the marginal rate of substitution. Answer: FALSE Answer: FALSE Answer: FALSE An increase in income results in an outward shift of an indifference curve. Answer: FALSE Answer:

Economics 5th Edition

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MicroEconomic 205

In recent decades the United States has incurred overall balance of payments deficits. Answer: FALSE Answer: FALSE Answer: FALSE Corporate managers and shareholders always have the same goals. Answer: FALSE Answer: FALSE Answer: FALSE The amount of national income in an economy equals the money supply in an economy. Answer: FALSE Answer: FALSE Answer: FALSE Consumers and make all economic decisions in

Economics 5th Edition

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MicroEconomic 205 Test

With the increased usage of cell phone services, what has happened to the price elasticity of demand for land-line telephone services? A) It has become more price inelastic. B) It has become more price elastic. C) It has become more income elastic. D) The absolute value of the price elasticity coefficient has probably gone

Economics 5th Edition

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MicroEconomic 215

Currency traders expect the value of the dollar to rise. What effect will this have on the demand for dollars and the supply of dollars in the foreign exchange market? A) Demand for dollars will increase, and supply of dollars will decrease. B) Demand for dollars will increase, and supply of dollars

Economics 5th Edition

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MicroEconomic 222 Quiz 2

Table 19-18 A very simple economy produces three goods: cameras, legal services, and books. The quantities produced and their corresponding prices for 2008 and 2013 are shown in the table above. What is the GDP deflator in 2013 if 2013 is the base year? A) 120 B) 118 C) 100 D) 87 Answer: C Answer: C Answer: C A

Economics 5th Edition

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MicroEconomic 240

The endowment effect is the tendency of people to be unwilling to sell a good they already own even if they are offered a price greater than they would be willing to pay to buy the good if they did not already own it. Answer: TRUE Answer: TRUE Answer: TRUE When a monopolistically competitive firm

Economics 5th Edition

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MicroEconomic 241

Consider a downward-sloping demand curve. When the price of a normal good decreases, the income and substitution effects A) work in the same direction to increase quantity demanded. B) work in the same direction to decrease quantity demanded. C) work in opposite directions and quantity demanded increases. D) work in opposite directions and quantity

Economics 5th Edition

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MicroEconomic 244 Homework

A partnership is ________ type of business. A) the most common. B) the least common C) the least risky D) the most profitable Answer: B Answer: B Answer: B Figure 7-3 Since 1953 the United States has imposed a quota to limit the imports of peanuts. Figure 7-3 illustrates the impact of the quota. What is the value

Economics 5th Edition

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MicroEconomic 254 Final

The CPI in 1990 was 131, and the CPI in 2010 was 218. If you earned a salary of $40,000 in 1990, what would be a salary with equivalent purchasing power in 2010? A) $45,977 B) $66,565 C) $87,200 D) $143,486 Answer: B Answer: B Answer: B Digital video recorders (DVRs) were introduced to the market in 1999,

Economics 5th Edition

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MicroEconomic 256 Test 1

Table 2-6 Table 2-6 shows the output per week of two jewelers, Serena and Haley. They can either devote their time to making bracelets or making necklaces. What is Serena's opportunity cost of making a bracelet? A) 2 necklaces B) 1/2 of a bracelet C) 1/2 of a necklace D) 3/4 of a bracelet Answer: A Answer: A Answer: A All

Economics 5th Edition

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MicroEconomic 265

If you put $100 into a bank account that earns five percent interest per year, what is the formula you should use to determine the account's future value in one year? A) Future value equals the present value divided by the rate of interest. B) Future value equals the present value multiplied

Economics 5th Edition

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MicroEconomic 269

The Japanese system of universal health insurance requires no co-payments from residents for health services. Answer: FALSE Answer: FALSE Answer: FALSE The principal-agent problem that exists between shareholders and managers also exists between managers and workers. Answer: TRUE Answer: TRUE Answer: TRUE High-income countries such as the United States spend a greater amount on services as compared to

Economics 5th Edition

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MicroEconomic 277 Test 2

Who receives the goods and services produced in the United States depends largely on A) how income is distributed. B) how the goods and services are produced. C) what goods and services are produced. D) government redistribution. Answer: A Answer: A Answer: A If the U.S. government implements a tariff on Chinese tire imports all of the following

Economics 5th Edition

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MicroEconomic 278 Quiz 3

Which of the following is a reason why it is difficult to estimate the extent of economic discrimination in the labor market? A) Employers who discriminate are likely to do so in overt ways such as awarding some workers with benefits-in-kind. B) Ultimately, employers who discriminate cannot remain profitable. C) Employers who discriminate

Economics 5th Edition

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MicroEconomic 282 Test 2

Table 4-7 Table 4-7 shows the demand and supply schedules for labor market in the city of Pixley. Suppose that the quantity of labor demanded decreases by 80,000 at each wage level. What are the new free market equilibrium hourly wage and the new equilibrium quantity of labor? A) W = $8.50; Q

Economics 5th Edition

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MicroEconomic 283 Midterm 2

According to economists Robert Lucas and Thomas Sargent, the apparent short-run trade-off between unemployment and inflation in the 1950s and 1960s was the result of A) unexpected changes in monetary policy. B) expected changes in monetary policy. C) unexpected changes in fiscal policy. D) expected changes in fiscal policy. Answer: A Answer: A Answer: A Cost-plus pricing is

Economics 5th Edition

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MicroEconomic 285 Quiz

How is a stock's price-earnings ratio found? A) by dividing the dividend by the closing price of the stock B) by dividing the dividend by the firm's earnings per share C) by dividing current market price of the stock by the firm's earnings per share D) by subtracting the firm's earnings per share from

Economics 5th Edition

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MicroEconomic 290

Figure 13-18 The diagram demonstrates that A) in the short run, the monopolistic competitor produces an output Q but in the long run after it adjusts its capacity, it will produce the allocatively efficient output, Qa. B) it is not possible for a monopolistic competitor to produce the productively efficient output level, Qa,

Economics 5th Edition

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MicroEconomic 294 Test 2

Who operates and controls a corporation in its day-to-day activities? A) the board of directors B) stockholders C) employees D) management Answer: D Answer: D Answer: D Economist Jerry Hausman estimated the price elasticity of demand for "Post Raisin Bran" and "All types of breakfast cereals." He found that the price elasticity of demand for Post Raisin Bran

Economics 5th Edition

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MicroEconomic 295 Final

In the short-run, even if a monopoly's total revenue does not cover its variable costs, it should continue to produce because ultimately in the long run, the monopoly will start earning profits. Answer: FALSE Answer: FALSE Answer: FALSE Today, the United States charges an average tariff rate of less than 1.5 percent. Answer: TRUE Answer: TRUE Answer:

Economics 5th Edition

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MicroEconomic 299 Midterm

A reduction in the rate of inflation is referred to as A) unemployment. B) recession. C) disinflation. D) deflation. Answer: C Answer: C Answer: C A standard which came to the market first, such as the QWERTY letter layout in typewriters, can become entrenched (this layout is still used in computer keyboards today). What is this phenomenon called? A)

Economics 5th Edition

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MicroEconomic 303

In a perfectly competitive market the term "price taker" applies to A) sellers and buyers. B) firms but not buyers. C) buyers but not sellers. D) only the smallest sellers and buyers. Answer: A Answer: A Answer: A A firm's net worth is calculated as A) the difference between a firm's revenues and explicit costs. B) the difference between a

Economics 5th Edition

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MicroEconomic 305 Midterm 1

The tax multiplier is smaller in absolute value than the government purchases multiplier because some portion of the A) decrease in taxes will be saved by households and not spent, and some portion will be spent on imported goods. B) decrease in taxes will be saved by households and not spent, and some

Economics 5th Edition

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MicroEconomic 307

What are the three main kinds of unemployment? A) frictional, seasonal, and cyclical B) temporary, permanent, and volunteer C) cyclical, structural, and temporary D) structural, frictional, and cyclical Answer: D Answer: D Answer: D Brand management refers to A) picking a brand name for a new product that will attract attention. B) the efforts to maintain the differentiation of a

Economics 5th Edition

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MicroEconomic 323 Quiz 2

A marginal tax rate is A) the fraction of income that must be paid in taxes. B) the fraction of each additional dollar of income that must be paid in taxes. C) the incremental income one must earn to offset each additional dollar of tax. D) the ratio of a change in income to

Economics 5th Edition

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MicroEconomic 326 Quiz 3

Table 11-1 Table 11-1 shows the technology of production at the Matsuko's Mushroom Farm for the month of May. What is the marginal product of the 4th worker? A) 137 pounds B) 50 pounds C) 12.5 pounds D) 5 pounds Answer: D Answer: D Answer: D If, at the firm's projected sales level, the marginal cost is $40, the

Economics 5th Edition

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MicroEconomic 339 Test 2

A tax is efficient if A) individuals with the lowest incomes pay proportionately lower taxes than individuals with the highest incomes. B) it is based on profits earned and not on wages. C) it encourages saving and investment. D) it imposes a small excess burden relative to the revenue it raises. Answer: D Answer: D Answer: D Figure 4-3

Economics 5th Edition

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MicroEconomic 346 Quiz 3

The ratio of the increase in equilibrium real GDP to the increase in autonomous expenditure is called the A) MPC. B) multiplier. C) MPS. D) consumption function. Answer: B Answer: B Answer: B For a monopolistically competitive firm, marginal revenue A) equals the price. B) is greater than the price. C) is less than the price. D) and price are unrelated. Answer: C Answer:

Economics 5th Edition

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MicroEconomic 347 Midterm

The marginal product of labor is calculated using the formula A) L/Q. B) L/Q. C) Q/L. D) Q/L. Answer: C Answer: C Answer: C Figure 12-2 If the U.S. economy is currently at point K, which of the following could cause it to move to point N? A) The price level in the United States rises

Economics 5th Edition

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MicroEconomic 351 Quiz 3

An increase in the price of off-road vehicles will result in A) a smaller quantity of off-road vehicles supplied. B) a larger quantity of off-road vehicles supplied. C) an increase in the demand for off-road vehicles. D) a decrease in the supply of off-road vehicles. Answer: B Answer: B Answer: B Specializing in the production of a good

Economics 5th Edition

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MicroEconomic 355 Quiz 3

Consumers have to make tradeoffs in deciding what to consume because A) not all goods give them the same amount of satisfaction. B) the prices of goods vary. C) they are limited by a budget constraint. D) there are not enough of all goods produced. Answer: C Answer: C Answer: C Table 14-8 Two rival oligopolists in the

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MicroEconomic 356 Quiz 2

Ariel is a Canadian citizen who works in Montreal, Canada and owns a winter home in Palm Beach, Florida. When Ariel spends the winters in Palm Beach, an increase in the value of the Canadian dollar relative to the U.S. dollar should A) help Ariel as each Canadian dollar of her

Economics 5th Edition

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MicroEconomic 356 Test 2

Table 8-11 Consider the following data for Tyrovia, a country that produces only two products: guns and butter. Real GDP for Tyrovia for 2013 using 2005 as the base year equals A) $1,140. B) $880. C) $690. D) $560. Answer: C Answer: C Answer: C In analyzing the decision to shut down in the short run we assume that the

Economics 5th Edition

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MicroEconomic 361

Ceteris paribus, an increase in the government budget deficit increases interest rates in the United States and causes a real appreciation of the dollar. Answer: FALSE Answer: FALSE Answer: FALSE To successfully price discriminate, a firm must ensure that there are no opportunities for arbitrage. Answer: TRUE Answer: TRUE Answer: TRUE The public choice model asserts that the self-interest

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MicroEconomic 371

One reason why firms would choose a salary system rather than a commission compensation system is that their employees might become less concerned about the quality of their work. Answer: TRUE Answer: TRUE Answer: TRUE Joe Santos owns the only pizza parlor in a small town that is also home to a McDonald's, a

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MicroEconomic 371 An Example Of A

An example of a transfer payment is A) a teacher's paycheck. B) a paycheck for a member of the National Guard. C) a welfare payment. D) a purchase of a new bridge in Alaska. Answer: C Answer: C Answer: C Suppose electronic cigarette manufacturer NJOY is successful in establishing a profitable market for e-cigarettes in what is a

Economics 5th Edition

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MicroEconomic 372 Midterm 2

All else being equal, if the rate of growth in productivity in Spain is greater than the rate of growth in productivity in the United States, the euro A) will decrease in value relative the U.S. dollar. B) will increase in value relative to the U.S. dollar. C) will nominally appreciate against the

Economics 5th Edition

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MicroEconomic 374 Midterm 2

An isocost line shows A) all the possible combinations of two inputs that a firm can use to produce its output. B) all the possible combinations of two inputs a firm can use that have the same total cost. C) all the possible combinations of two inputs a firm can use that have

Economics 5th Edition

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MicroEconomic 378 Test 1

How does contractionary monetary policy affect net exports in the short run? A) Contractionary monetary policy increases exports and reduces imports. B) Contractionary monetary policy reduces exports and increases imports. C) Contractionary monetary policy increases exports and increases imports. D) Contractionary monetary policy reduces exports and reduces imports. Answer: B Answer: B Answer: B Which of the following

Economics 5th Edition

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MicroEconomic 381

The unemployment rate is A) the percentage of the labor force that is employed. B) the percentage of the number employed that is unemployed. C) the percentage of the working-age population that is unemployed. D) the percentage of the labor force that is unemployed. E) the percentage of the working-age population that is employed. Answer: D Answer:

Economics 5th Edition

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MicroEconomic 385

Figure 6-1 A perfectly inelastic demand curve is shown in A) Panel A. B) Panel B. C) Panel C. D) Panel D. Answer: A Answer: A Answer: A If, for the last unit of a good produced by a perfectly competitive firm, MR > MC, then in producing it, the firm A) added more to total costs than it added

Economics 5th Edition

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MicroEconomic 386 Test 2

Of the following high-income countries, which has the lowest number of MRI units per 1 million population? A) Canada B) Japan C) the United Kingdom D) the United States Answer: C Answer: C Answer: C Figure 3-6 The figure above represents the market for coffee grinders. Assume that the price of coffee grinders is $50. At this price, A)

Economics 5th Edition

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MicroEconomic 392

Goodwill is listed as an asset on a firm's balance sheet. Answer: TRUE TRUE TRUE Consider the following T-account for a bank: If the required reserve ratio is 20 percent and the bank is holding no excess reserves, the bank at this point can make no more loans. Answer: TRUE TRUE TRUE In a perfectly competitive market, in the long run, arbitrage

Economics 5th Edition

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MicroEconomic 403

Economists believe the most persuasive argument for protectionism is to A) save jobs. B) protect high wages. C) protect national security. D) protect infant industries. Answer: D Answer: D Answer: D Which of the following willshift the demand curve for a good? A) a change in the technology used to produce the good B) an increase in the price of

Economics 5th Edition

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MicroEconomic 403 Homework

________ involves undertaking an activity until its marginal benefits equal marginal costs. A) Scarcity reduction B) Central planning C) Marginal analysis D) Market intervention Answer: C Answer: C Answer: C Scarcity A) stems from the incompatibility between limited resources and unlimited wants. B) can be overcome by discovering new resources. C) can be eliminated by rationing products. D) is a bigger problem

Economics 5th Edition

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MicroEconomic 418 Test

In 2012, GDP per capita was ________ in the United States than in China, and since 1980, the growth rate of real GDP per capita has been ________ in the United States than in China. A) higher; higher B) higher; lower C) lower; higher D) lower; lower Answer: B Answer: B Answer: B Figure 30-7 Which of the

Economics 5th Edition

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MicroEconomic 423

If the U.S. government places tariffs on imports from countries that have been accused of deliberately undervaluing their currencies, the price of these imports will ________ and the demand for the undervalued currency will ________. A) rise; rise B) rise; fall C) fall; rise D) fall; fall Answer: B Answer: B Answer: B If a brewery wants to

Economics 5th Edition

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MicroEconomic 426 Quiz 3

The justification for occupational licensing laws is that they protect the public from incompetent practitioners (for example, lawyers and medical doctors), but the laws also result in A) higher prices and restrictions on the number of people who can enter the professions affected by the laws. B) economies of scale. C) ownership of

Economics 5th Edition

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MicroEconomic 433 Midterm

A perfectly competitive firm's horizontal demand curve implies that the firm does not have to lower its price to sell more output. Answer: TRUE Answer: TRUE Answer: TRUE Corporations are legally owned by their shareholders. Answer: TRUE Answer: TRUE Answer: TRUE A normal good is a good for which the demand decreases as income decreases, holding everything else

Economics 5th Edition

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MicroEconomic 441 Homework

Of the following countries, which had the highest level of GDP per capita in 2012? A) Japan B) France C) Italy D) the United States Answer: D Answer: D Answer: D According to the short-run Phillips curve, which of the following would result in high rates of unemployment? A) strong increases in aggregate supply B) a lower inflation rate C) strong

Economics 5th Edition

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MicroEconomic 443

Suppose you lend $1,000 at an interest rate of 10 percent over the next year. If the expected real interest rate at the beginning of the loan contract is 4 percent, then what rate of inflation over the upcoming year would be most beneficial to you as the lender? An

Economics 5th Edition

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MicroEconomic 450 Quiz

As a result of the tariff on Chinese tires, U.S. consumers are estimated to have spent ________ on imported tires and ________ on U.S.-produced tires. A) more; more B) more; less C) less; more D) less; less Answer: A Answer: A Answer: A When Mr. Peabody decides on the companies to which he will donate his time and

Economics 5th Edition

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MicroEconomic 451 Midterm 1

Figure 16-1 What is the economically efficient output level? A) Q1 units B) Q2 units C) Q3 units D) Q4 units Answer: C Answer: C Answer: C When net capital flows are positive, A) capital inflows are greater than capital outflows. B) net foreign investment is negative. C) capital outflows are greater than capital inflows. D) A and B are

Economics 5th Edition

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MicroEconomic 457 A Supply CurveA

A supply curve A) is a table that shows the relationship between the price of a product and the quantity of the product supplied. B) is a curve that shows the relationship between the price of a product and the quantity of the product supplied. C) is the relationship between the supply of a

Economics 5th Edition

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MicroEconomic 459 Homework

If the government implements a price ceiling on insulin, this will have all of the following effects on the market for insulin except A) an increase in consumer surplus. B) an increase in producer surplus. C) an increase in deadweight loss. D) a more efficient equilibrium. Answer: D Answer: D Answer: D Figure 4-5 Figure 4-5 shows

Economics 5th Edition

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MicroEconomic 461 Quiz

If aggregate expenditure is less than GDP, how will the economy reach macroeconomic equilibrium? A) Inventories will decline, and GDP and employment will decline. B) Inventories will rise, and GDP and employment will decline. C) Inventories will decline, and GDP and employment will rise. D) Inventories will rise, and GDP and employment will rise. Answer:

Economics 5th Edition

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MicroEconomic 464 Quiz 1

Hewlett-Packard will not raise the prices of its personal computers without first considering how Dell might respond. This is evidence of A) interdependence. B) collusion. C) cutthroat competition. D) price fixing. Answer: A Answer: A Answer: A Figure 2-15 Figure 2-15 shows the production possibilities frontiers for Greenland and Iceland. Each country produces two goods, snow cones and

Economics 5th Edition

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MicroEconomic 480 Midterm

Using the quantity equation, if the velocity of money grows at 5 percent, the money supply grows at 10 percent, and real GDP grows at 4 percent, then the inflation rate will be A) 19 percent. B) 15 percent. C) 11 percent. D) 6 percent. Answer: C Answer: C Answer: C What effect does a depreciation of the dollar

Economics 5th Edition

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MicroEconomic 482

Free trade refers to trade between countries without government restrictions. Answer: TRUE Answer: TRUE Answer: TRUE If prices rise on average in the U.S. economy, the purchasing power of a dollar declines. Answer: TRUE Answer: TRUE Answer: TRUE The saving and investment equation holds only when the federal budget is balanced. Answer: FALSE Answer: FALSE Answer: FALSE A college must decide if

Economics 5th Edition

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MicroEconomic 492 Quiz 2

Figure 15-4 Figure 15-4 shows the demand and cost curves for a monopolist. What is the amount of the monopoly's total revenue? A) $21,600 B) $20,400 C) $19,740 D) $7,800 Answer: B Answer: B Answer: B Suppose Dublin Electronics charges regular customers $90 for a Blu-ray player but allows senior citizens to purchase the same item for $75.

Economics 5th Edition

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MicroEconomic 498 Quiz 1

Examining the conditions that could lead to economic growth is an example of macroeconomic topic. Answer: TRUE Answer: TRUE Answer: TRUE A characteristic of the long run that is not available in the short run is that a firm is free to vary its output. Answer: FALSE Answer: FALSE Answer: FALSE In a two-good, two country world, if

Economics 5th Edition

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MicroEconomic 500 Quiz

Economists have not found a way to predict when recessions will begin and end. Answer: TRUE Answer: TRUE Answer: TRUE An increase in net foreign investment is possible through a decrease in national saving or a decrease in domestic investment. Answer: FALSE Answer: FALSE Answer: FALSE When a firm experiences negative technological change it can produce the same

Economics 5th Edition

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MicroEconomic 503 Final

An increase in the demand for green tea raises the price of apples from $16 a pound to $20 a pound. As a result, quantity supplied increases by 30 percent. Using the midpoint formula, calculate the value of the price elasticity of supply? A) 1.35 B) 1.875 C) 2.22 D) 7.5 Answer: A Answer: A Answer: A Which

Economics 5th Edition

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MicroEconomic 507 Midterm 2

If a firm in Thailand borrows dollars from a U.S. bank, its interest payments on the loan in bahts will decrease if the baht appreciates against the dollar. Answer: TRUE TRUE TRUE If the demand for a product increases and the supply of the same product decreases, the equilibrium price will increase. Answer: TRUE TRUE TRUE An increase in the unemployment

Economics 5th Edition

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MicroEconomic 509 Midterm

Figure 4-9 Figure 4-9 shows the market for cigarettes. The government plans to impose a unit tax in this market. The price buyers pay after the tax is A) $12. B) $8. C) $5. D) $3. Answer: B Answer: B Answer: B A curve that shows combinations of consumption bundles that give a consumer the same utility is called A)

Economics 5th Edition

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MicroEconomic 523 Quiz 3

Investment spending ________ during a recession, and ________ during an expansion. A) declines; increases B) increases; declines C) increases; increases D) declines; declines Answer: A Answer: A Answer: A If Molly Bee increases her work hours when her wage increases, then A) the income effect of the wage increase outweighs the substitution effect. B) the substitution effect of the wage

Economics 5th Edition

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MicroEconomic 530 Quiz 2

Assume that production from an electric utility caused acid rain. If the government imposed a tax on the utility equal to the cost of the acid rain, the government's action would A) externalize the externality. B) result in a marginal social benefit greater than the marginal cost of the electricity. C) be an

Economics 5th Edition

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MicroEconomic 531 Test 2

The economic model of consumer behavior predicts that A) consumers will try to earn as much income as they can over their lifetimes. B) consumers will choose to buy the combination of goods and services that make them as well off as possible from those combinations that their budgets allow them to buy. C)

Economics 5th Edition

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MicroEconomic 532 Midterm 1

When a firm has been granted a trademark, which grants legal protection against other firms using the name of the product that has been granted the trademark, the firm A) still faces the possibility that the name will become widely used and no longer associated with a specific company. B) does not

Economics 5th Edition

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MicroEconomic 533

When President Obama took office in January 2009, he pledged to pursue an expansionary fiscal policy to try to pull the economy out of the recession. The next month, Congress passed the American Recovery and Reinvestment Act of 2009, an $840 billion package of spending increases and tax cuts that

Economics 5th Edition

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MicroEconomic 534 Test 2

If transactions costs are low, private bargaining will always result in an efficient solution to the problem of externalities. Answer: FALSE[/cpmembership] Answer: FALSE[/cpmembership] Answer: FALSE[/cpmembership] "The distribution of income should be left to the market" is an example of a positive economic statement. Answer: FALSE[/cpmembership] Answer: FALSE[/cpmembership] Answer: FALSE[/cpmembership] A consumer's indifference curves can never cross. Answer: TRUE Answer: TRUE Answer:

Economics 5th Edition

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MicroEconomic 539 Quiz

If a country produces only two goods, then it is not possible to have a comparative advantage in the production of both those goods. Answer: TRUE Answer: TRUE Answer: TRUE The United States has a closed economy. Answer: FALSE Answer: FALSE Answer: FALSE Contractionary fiscal policy involves decreasing government purchases or increasing taxes. Answer: TRUE Answer: TRUE Answer: TRUE A firm might

Economics 5th Edition

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MicroEconomic 539 The Athenian

The Athenian Theatre sells play tickets for the same play at different prices: a lower price to those who opt for the seats at the back of the theatre and a higher price for those who purchase seats in the front, around the stage. Which of the following statements is true? A)

Economics 5th Edition

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MicroEconomic 541 Test 2

How does the increasing use of MP3 players affect the market for compact discs? A) The demand curve for compact discs shifts to the right. B) The supply curve for compact discs shifts to the left. C) The supply curve for compact discs shifts to the right. D) The demand curve for compact discs

Economics 5th Edition

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MicroEconomic 549

If nominal GDP rises we can say that A) production has risen and prices remain constant. B) prices have risen and production remains constant. C) production has risen or prices have risen or both have risen. D) production has fallen and prices have risen. Answer: C Answer: C Answer: C The public choice model raises questions about the

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MicroEconomic 554 Homework

Economics 5th Edition

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MicroEconomic 566 Test 2 Which

Which of the following is a positive economic statement? A) The standard of living in the United States should be higher. B) If the price of iPhones falls, a larger quantity of iPhones will be purchased. C) The government should revamp the health care system. D) The U.S. government should not have bailed out

Economics 5th Edition

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MicroEconomic 583 Homework

Technological advancements that increase labor's productivity shift the labor supply curve to the right. Answer: FALSE Answer: FALSE Answer: FALSE Contractionary fiscal policy is used to decrease aggregate demand in an attempt to fight rising inflation. Answer: TRUE Answer: TRUE Answer: TRUE When colleges use yield management techniques, they increase financial aid offers to students likely to be more

Economics 5th Edition

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MicroEconomic 585 Final

A relationship that depends on the basic behavior of consumers and firms and remains unchanged over long periods is called a ________ relationship. A) frictional B) structural C) cyclical D) dynamic Answer: B Answer: B Answer: B When a firm produces more output using the same inputs or the same output using fewer inputs we say that the

Economics 5th Edition

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MicroEconomic 607 Quiz 1

Figure 5-2 Figure 5-2 shows a market with a negative externality. The marginal benefit of the last unit produced is represented by the price A) Pa. B) P. C) Pc. D) Pf. Answer: B Answer: B Answer: B If an airport decides to expand by building an additional passenger terminal, and in doing so it

Economics 5th Edition

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MicroEconomic 609 Midterm 1

Figure 13-11 The firm represented in the diagram A) makes zero economic profit. B) makes zero accounting profit. C) should exit the industry. D) should expand its output to take advantage of economies of scale. Answer: A Answer: A Answer: A The decision to make the U.S. income tax system progressive was A) a progressive decision. B) a positive decision. C)

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MicroEconomic 617 Quiz 2

Table 7-1 Rob Crusoe and Bill Friday spent their week-long vacation on a desert island where they had to find and make their own food. Rob and Bill spent one day each fishing and picking berries. The table lists the pounds of output Rob and Bill produced. Use the table above

Economics 5th Edition

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MicroEconomic 625

If it costs Danitra $225 to create 4 necklaces and $275 to create 5 necklaces, then $50 is the marginal cost of producing the 5th necklace. Answer: TRUE Answer: TRUE Answer: TRUE The basis for trade is comparative advantage, not absolute advantage. Answer: TRUE Answer: TRUE Answer: TRUE Consider a country that produces only two goods: kayaks and coconuts.

Economics 5th Edition

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MicroEconomic 634 Final

Figure 3-2 A decrease in the number of firms in the market would be represented by a movement from A) A to B. B) B to A. C) S1 to S2. D) S2 to S1. Answer: D Answer: D Answer: D ________ involves undertaking an activity until its marginal benefits equal marginal costs. A) Scarcity reduction B) Central planning C) Marginal

Economics 5th Edition

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MicroEconomic 635

Deadweight loss refers to the reduction in economic surplus resulting from a market not being in competitive equilibrium. Answer: TRUE TRUE TRUE A decrease in disposable income will shift the aggregate demand curve to the left. Answer: TRUE TRUE TRUE If the multiplier is 10, the marginal propensity to consume must be 0.1. Answer: FALSE FALSE FALSE Network externalities refer to the situation where the usefulness

Economics 5th Edition

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MicroEconomic 637

If wages and prices adjust slowly, we would expect expansionary monetary policy to be A) less likely to reduce the natural unemployment rate. B) more likely to reduce inflation. C) more likely to affect the unemployment rate. D) more likely to result in a vertical short-run Phillips curve. Answer: C Answer: C Answer: C On a balance sheet,

Economics 5th Edition

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MicroEconomic 656 Midterm 2

Figure 3-8 The graph in this figure illustrates an initial competitive equilibrium in the market for motorcycles at the intersection of D1 and S2 (point B). If there is an increase in number of companies producing motorcycles and a decrease in income (assume motorcycles are a normal good), the equilibrium could

Economics 5th Edition

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MicroEconomic 656 Quiz 1

Table 2-8 Table 2-8 shows the number of labor hours required to produce a digital camera and a pound of wheat in China and South Korea. What is China's opportunity cost of producing one digital camera? A) 0.04 pounds of wheat B) 4 pounds of wheat C) 25 pounds of wheat D) 40 pounds of

Economics 5th Edition

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MicroEconomic 671 Test

Suppose your expenses for this term are as follows: tuition: $9,000, room and board: $1,500, books and other educational supplies: $1,000. Further, during the term, you can only work part-time and earn $3,000 instead of your full-time salary of $8,000. What is the opportunity cost of going to college this

Economics 5th Edition

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MicroEconomic 677 Final

Sparkle, one of many firms in the market for toothpaste, is in long-run equilibrium. Sparkle has a small market share and has been in business for a long time. a. Identify the market structure in which Sparkle operates. Explain your answer. b. What is Sparkle's profit or loss? Explain your answer.

Economics 5th Edition

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MicroEconomic 677 Midterm

The cyclically adjusted budget deficit calculates the budget surplus or deficit at A) real GDP. B) potential GDP. C) nominal GDP. D) average GDP. Answer: B Answer: B Answer: B In September 2012, the average price of gasoline in the United States was $3.91 per gallon and consumers bought 5 percent less gasoline than they had during September

Economics 5th Edition

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MicroEconomic 683

If you purchase a share of stock from your friend who initially purchased the stock three years ago, your purchase of the stock represents a transaction in the secondary financial market. Answer: TRUE Answer: TRUE Answer: TRUE An increase in disposable income will shift the aggregate demand curve to the right. Answer: TRUE Answer: TRUE Answer: TRUE Suppose

Economics 5th Edition

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MicroEconomic 691

Normative analysis is concerned with "what ought to be," while positive analysis is concerned with "what is." Answer: TRUE TRUE TRUE One desirable outcome of a market economy is that it leads to a more equitable distribution of income. Answer: FALSE FALSE FALSE Each year, the U.S. exports about 50 percent of its wheat crop. Answer: TRUE TRUE TRUE The term "market" refers to trading

Economics 5th Edition

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MicroEconomic 702 Quiz 2

You're traveling in Japan and are thinking about buying a new kimono. You've decided you'd be willing to pay $175 for a new kimono, but kimonos in Japan are all priced in yen. If the kimono you're looking at costs 14,000 yen, under which of the following exchange rates would

Economics 5th Edition

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MicroEconomic 704 Quiz

The horizontal-equity principle of taxation is not easy to use in practice because A) some people engage in rent seeking to reduce their taxes below the level other people pay. B) people can use tax loopholes to reduce their incomes below the incomes of other taxpayers. C) different people receive different levels of

Economics 5th Edition

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MicroEconomic 717

Figure 4-1 Figure 4-1 shows Arnold's demand curve for burritos. If the market price is $2.00, what is the consumer surplus on the second burrito? A) $0 B) $1.00 C) $2.00 D) $4.50 Answer: A Answer: A Answer: A Indicate whether each of the following situations would shift the supply curve to the left, to the right, or not

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MicroEconomic 725 Quiz 2

Table 4-13 The equations above describe the demand and supply for Aunt Maud's Premium Hand Lotion. What are the equilibrium price and quantity (in thousands) for Aunt Maud's Lotion? A) $20 and 30 thousand B) $30 and 20 thousand C) $60 and 30 thousand D) $20 and 60 thousand Answer: A Answer: A Answer: A The intention of the

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MicroEconomic 734 Test 1

If the exchange rate changes from $2.00 = 1 euro to $1.98 = 1 euro then A) the dollar has depreciated. B) the dollar has appreciated. C) the euro has appreciated. D) the euro has stayed constant in value. Answer: B Answer: B Answer: B Which of the following is a factor of production? A) a sofa produced by

Economics 5th Edition

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MicroEconomic 737

When voluntary exchange takes place, neither party usually gains from the exchange. Answer: FALSE Answer: FALSE Answer: FALSE If the price elasticity of demand is unit-elastic, a 10 percent increase in price will result in a 10 percent increase in revenue. Answer: FALSE Answer: FALSE Answer: FALSE Any output combination along a production possibility frontier is associated with

Economics 5th Edition

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MicroEconomic 741 Midterm 2

Which of the following statements is consistent with the views of Joseph Schumpeter? A) Research and development by competitive firms is responsible for most technological changes. B) An economy benefits from firms having market power because these firms are more likely to be able to commit funds for research and development. C) Enforcement

Economics 5th Edition

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MicroEconomic 743

Figure 12-15 Assume that the medical screening industry is perfectly competitive and that some firms are making short-run losses. Suppose the medical screening industry runs an effective advertising campaign which convinces a large number of people that yearly CT scans are critical for good health. Which of the diagrams in the

Economics 5th Edition

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MicroEconomic 748

Identify each of the following as (i) part of an expansionary fiscal policy, (ii) part of a contractionary fiscal policy, or (iii) not part of fiscal policy. a. The personal income tax rate is lowered. b. Congress cuts spending on defense. c. College students are allowed to deduct tuition costs from their

Economics 5th Edition

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MicroEconomic 748 Test 1

The present value of $300 received 5 years in the future would be calculated as which of the following when the interest rate is 5%? A) 300/(1.5)5 B) 300/(1.05)5 C) 300 1.5 5 D) 5.05/300 Answer: B Answer: B Answer: B If the consumption function is defined as C = 5,500 + 0.9Y, what is the

Economics 5th Edition

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MicroEconomic 751

Both monopolistically competitive firms and perfectly competitive firms maximize profits A) by producing where price equals average total cost. B) by producing where marginal revenue equals average revenue. C) by producing where marginal revenue is equal to marginal cost. D) by producing where price equals average variable cost. Answer: C Answer: C Answer: C Pegging a country's exchange

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MicroEconomic 752 Quiz

Table 7-2 Madison and Austin own Cafe Ole'. Table 7-2 lists the number of empanadas and tacos Madison and Austin can each make in one hour. Select the statement that accurately interprets the data in the table. A) Madison has an absolute advantage in making tacos and Austin has an absolute advantage

Economics 5th Edition

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MicroEconomic 755

Which of the following correctly describes what the Fed used as monetary targets in the past? A) The Fed used M1 and M2 as targets after 1993. B) The Fed focused on M1 as a target after deregulation of the financial markets. C) The Fed increased its reliance on interest rate targets since the

Economics 5th Edition

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MicroEconomic 756 Midterm 2

Which of the following is an example of human capital? A) a computer B) a factory building C) a college education D) a software program Answer: C Answer: C Answer: C Figure 6-12 Suppose the diagram shows the supply curves for a product in the short run and in the long run. Which supply curve represents supply in the

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MicroEconomic 770 Midterm 2

Which of the following is an advantage of starting a new business as a proprietorship? A) The owner has limited personal liability. B) A proprietorship has few government rules and regulations to comply with. C) Business profits are not taxed. D) A proprietorship can easily attain additional funding. Answer: B Answer: B Answer: B Figure 12-17 The graphs in

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MicroEconomic 774

What is human capital? A) a slang term for the underground labor market B) manufactured goods that are used to produce other goods C) accumulated knowledge and skills acquired by a worker D) the manager or owner of a business Answer: C Answer: C Answer: C The most important of the factors that make a firm successful and

Economics 5th Edition

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MicroEconomic 774 Midterm 1

Mrs. Lovejoy decides to invest in companies which she believes can produce its goods at the lowest possible cost. Mrs. Lovejoy is investing in companies that are A) productively efficient. B) allocatively efficient. C) both productively and allocatively efficient. D) always going to be profitable. Answer: A Answer: A Answer: A Figure 2-8 Figure 2-8 above shows the

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MicroEconomic 775 Quiz 1

The existence of the principal-agent problem A) increases the risk of buying stock in a corporation. B) increases the risk of becoming the sole proprietor of a business. C) implies that managers that have the same incentives as the board of directors. D) does all of the above. Answer: A Answer: A Answer: A An increase in the

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MicroEconomic 777 Quiz 2

The proponents of ________ and ________ think that the Federal Reserve should adopt a constant monetary growth rule. A) new Keynesianism; the new classical model B) the real business cycle model; Marxism C) rational expectations; monetarism D) the monetarist model; the Keynesian model Answer: C Answer: C Answer: C All of the following have enhanced the Fed's credibility in

Economics 5th Edition

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MicroEconomic 781 Final

Arnold Kim began blogging about Apple products during his fourth year of medical school. Kim's Website, MacRumors.com, became so successful that he decided to give up his medical career and work full time on his Website, despite the nearly $200,000 he had invested in his education. In making his decision,

Economics 5th Edition

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MicroEconomic 787

The total amount of producer surplus in a market is equal to the area below the supply curve. Answer: FALSE Answer: FALSE Answer: FALSE If the number of firms producing mouthwash increases and consumer preference for mouthwash increases, the equilibrium price of mouthwash will definitely increase. Answer: FALSE Answer: FALSE Answer: FALSE All of the following are critical

Economics 5th Edition

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MicroEconomic 790 Quiz

Table 14-4 Alistair Luggage and Baine Baggage are the only firms selling luggage in the upscale town of Montecito. Each firm must decide on whether to increase its advertising spending to compete for customers. If one firm increases its advertising budget but the other does not, then the firm with the

Economics 5th Edition

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MicroEconomic 795 Midterm 2

Suppose that when the price of strawberries decreases, Simone increases her purchase of whipped cream. To Simone A) strawberries and whipped cream are complements. B) strawberries and whipped cream and substitutes. C) strawberries and whipped cream are normal goods. D) strawberries are a normal good and whipped cream is an inferior good. Answer: A Answer: A Answer:

Economics 5th Edition

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MicroEconomic 801 Test 1

If a country has a fixed exchange rate, A) the equilibrium exchange rate in that market does not respond to changes in supply and demand for currency. B) central banks have more control over real GDP in the economy. C) central banks must buy and sell their holdings of currencies to maintain a

Economics 5th Edition

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MicroEconomic 809 Quiz 2

Table 9-6 Mateo and Celeste produce custom saddles and spurs. Table 9-6 lists the number of saddles and pairs of spurs Mateo and Celeste can each produce in one month. Select the statement that accurately interprets the data in the table. A) Celeste has a comparative advantage in making spurs. B) Mateo has a

Economics 5th Edition

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MicroEconomic 816

Prices of commercial airline tickets (assume that this is a normal good) have fallen in recent months. Over this same period, the price of jet fuel has risen and consumer incomes have fallen. Which of the following best explains the falling prices of airline tickets? A) The supply curve for airline

Economics 5th Edition

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MicroEconomic 820

Figure 6-10 A unit-elastic supply curve is shown in A) Panel A. B) Panel B. C) Panel C. D) Panel D. Answer: C Answer: C Answer: C Figure 1-1 Using the information in the figure above, calculate the percentage change in sales of alcoholic beverages between 2008 and 2011. A) 23.1% B) 23.8% C) 30% D) 42.9% Answer: D Answer: D Answer: D If Congress wanted to

Economics 5th Edition

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MicroEconomic 828 Midterm

A perfectly competitive wheat farmer in a constant-cost industry produces 1,000 bushels of wheat at a total cost of $50,000. The prevailing market price is $48. What will happen to the market price of wheat in the long run? A) The price remains constant at $48. B) The price falls below $48. C)

Economics 5th Edition

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MicroEconomic 828 Quiz

Which of the following goods would have the most inelastic demand? A) ski vacations B) bread C) luxury cars D) big screen TVs Answer: B Answer: B Answer: B Suppose a chain of convenience stores reorganized its system of supplying its stores with food. This led to a sharp reduction in the number of trucks that the company

Economics 5th Edition

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MicroEconomic 830

The substitution effect explains why there is an inverse relationship between the price of a product and the quantity of the product demanded. Answer: TRUE Answer: TRUE Answer: TRUE For a perfectly competitive firm, at the profit-maximizing output average revenue equals marginal cost. Answer: TRUE Answer: TRUE Answer: TRUE Horizontal equity is achieved when taxes are collected from

Economics 5th Edition

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MicroEconomic 830 Test

Why are laws aimed at regulating monopolies called "antitrust" laws? A) The rise of large firms (e.g., Standard Oil) in the late 1800s in the United States caused consumers to lose trust in private business. B) "Trust" was a word in Old English that meant monopoly in the Middle Ages. Therefore, "antitrust"

Economics 5th Edition

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MicroEconomic 838 Quiz 2

A monopsony restricts the quantity of a factor demanded to force down the price of the factor and increase profits. Answer: TRUE TRUE TRUE The natural rate of unemployment consists of frictional unemployment plus cyclical unemployment. Answer: FALSE FALSE FALSE The rising cost of malpractice insurance is one of the leading causes of the increase in health care spending as

Economics 5th Edition

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MicroEconomic 849

The supply curve of a uniquely talented actor or superstar athlete will be perfectly inelastic. Answer: TRUE Answer: TRUE Answer: TRUE The only type of business that faces unlimited liability is a sole proprietorship. Answer: FALSE Answer: FALSE Answer: FALSE An equilibrium in which each player chooses its best strategy given the strategies chosen by the other players

Economics 5th Edition

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MicroEconomic 851 Midterm 2

Table 17-7 Dante owns a pencil factory and faces the situation shown in the table and the cost of renting a machine is $240 per week. a. Fill in the blanks in the table and determine the profit-maximizing number of machines for Dante to rent. Explain why renting this number of machines

Economics 5th Edition

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MicroEconomic 866 Quiz 2

The Sarbanes-Oxley Act of 2002 requires that each member of the board of directors personally certify the accuracy of financial reports. Answer: FALSE Answer: FALSE Answer: FALSE Assume that price exceeds average variable cost over the relevant range of demand. If a monopolistically competitive firm is producing at an output where marginal revenue is $111.11

Economics 5th Edition

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MicroEconomic 867

Figure 5-9 Companies producing toilet paper bleach the paper to make it white. The bleach is discharged into rivers and lakes and causes substantial environmental damage. Figure 5-9 illustrates the situation in the toilet paper market. The efficient output is A) Q1. B) Q2. C) Q3. D) Q4. Answer: B Answer: B Answer: B Table 2-18 Table 2-18 shows the output

Economics 5th Edition

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MicroEconomic 882 Test 1

Which of the following is a disadvantage of trademarking a firm's product? A) A trademark differentiates a firm's product. B) A trademark conveys information about the product to the public. C) A trademark may become so widely used to denote a particular type of product that the trademark may no longer be a

Economics 5th Edition

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MicroEconomic 883 Quiz 2

According to Porter's Five Competitive Forces Model, similar products produced by different firms within the industry affects a firm's ability to raise prices far more than substitutable products produced outside the industry. Answer: FALSE Answer: FALSE Answer: FALSE Increasing a fixed exchange rate is called a revaluation. Answer: TRUE Answer: TRUE Answer: TRUE Economists believe that consumers would

Economics 5th Edition

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MicroEconomic 892 Midterm 2

Eliminating frictional unemployment would be good for the economy. Answer: FALSE[/cpmembership] Answer: FALSE[/cpmembership] Answer: FALSE[/cpmembership] The demand for gasoline is perfectly inelastic because most people need gasoline to drive their cars. Answer: FALSE[/cpmembership] Answer: FALSE[/cpmembership] Answer: FALSE[/cpmembership] An increase in the purchasing power of money need not lead to an increase in the purchasing power of income because

Economics 5th Edition

Exam Prep

MicroEconomic 899

If people assume that future rates of inflation will follow the pattern of inflation rates in the past, they are said to have A) rational expectations. B) adaptive expectations. C) unstable expectations. D) accommodative expectations. Answer: B Answer: B Answer: B In the long run, A) GDP > potential GDP. B) unemployment is at its natural rate. C) LRAS and SRAS lie

Economics 5th Edition

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Which Of The Following Activities Create A Negative Externality?

Which of the following activities create a negative externality? A) cleaning up the sidewalk on your block B) graduating from college C) repainting the house you live in to improve its appearance D) keeping a junked car parked on your front lawn Answer: D Answer: D Answer: D Table 15-3 Assume Table 15-3 gives the monthly demand and costs

Economics 5th Edition

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Anna

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