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41 33) A politician says that the government should tax behavior they want less of and subsidize behavior they want more of. This is an example of A) cynical behavior in modern democracies. B) failing to consider the alternatives available […]

61 33) Which of these social sciences deals most with models of behavior rather than with thought processes? A) psychology B) sociology C) political science D) economics Answer: D Diff: 1 Topic: 1.4 Economics as a Science Learning Outcome: Micro-1: […]

©2018 Pearson Education, Inc. for decision making and economic model building. The concept of behavioral economics is introduced. Economics as a science is closely associated with the development of models. To aid understanding, a significant section on the methodology of […]

Lecture Extender Examples Chapter 1 The Nature of Economics The Perceived Value of Gifts At Christmas and birthdays, aunts, uncles, grandparents, and parents give gifts to their college-aged loved ones. Joel Waldfogel, an economist at Yale University, surveyed several thousand […]

Copyright © 2018 Pearson Education, Inc. 2) Normative economics involves A) a statement of fact. B) a statement of “what should be.” C) a statement of “what is.” D) a statement that is purely descriptive. Answer: B Diff: 1 Topic: […]

Copyright © 2018 Pearson Education, Inc. 76) The study of how a particular firm might choose to maximize its profits would fall into what type of analysis? A) macroeconomics B) microeconomics C) political economics D) aggregate economics Answer: B Diff: […]

Copyright © 2018 Pearson Education, Inc. Economics Today, 19e (Miller) Chapter 1 The Nature of Economics 1.1 The Power of Economic Analysis 1) The economic way of thinking will help you A) make decisions in financing your home. B) analyze […]

Copyright © 2018 Pearson Education, Inc. 45) The President’s statement that “to encourage economic growth, taxes should be cut” A) would be an example of a normative statement. B) would be an example of a positive statement. C) would be […]

Copyright © 2018 Pearson Education, Inc. 36) If persistent inflation was due to declines in long-run aggregate supply, what pattern would be observed? A) Increases in the price level would occur simultaneously with decreases in real GDP. B) Increases in […]

Copyright © 2018 Pearson Education, Inc. 75) A long-run aggregate supply curve may graphically be represented as a A) vertical line. B) horizontal line. C) an upward sloping line. D) a downward sloping line. Answer: A Diff: 2 Topic: 10.1 […]

• 10.2 Explain why the aggregate demand curve slopes downward and list key factors that cause this curve to shift • 10.3 Evaluate the meaning of long-run equilibrium for the economy as a whole and explain why economic growth can […]

534 Miller Economics Today, Nineteenth Edition Chapter 10 Real GDP and the Price Level in the Long Run Investment and Long-Run Aggregate Supply in the Great Recession Between the second quarter of 2006 and the second quarter of 2009, real […]

Copyright © 2018 Pearson Education, Inc. 135) In the above figure, a movement from point A to point B could be explained by A) an increase in the price level. B) an increase in the quantity of money in circulation. […]

Copyright © 2018 Pearson Education, Inc. 66) Holding nominal money balances constant, a decrease in the price level A) causes the real value of the money balances to increase, in turn increasing total planned real expenditures. B) causes the real […]

Copyright © 2018 Pearson Education, Inc. Economics Today, 19e (Miller) Chapter 10 Real GDP and the Price Level in the Long Run 10.1 Output Growth and the Long-Run Aggregate Supply Curve 1) The aggregate supply curve A) shows what each […]

Copyright © 2018 Pearson Education, Inc. 79) Which of the following is NOT an assumption of the classical model? A) Buyers and sellers react to changes in relative prices. B) Households want to maximize economic well being. C) No single […]

Copyright © 2018 Pearson Education, Inc. 6) If the economy is near full capacity, the effect of a negative aggregate demand shock is to A) increase the level of aggregate demand. B) cause the price level to fall. C) increase […]

536 Miller Economics Today, Nineteenth Edition Chapter 11 Classical and Keynesian Macro Analyses An Antiterrorism Regulation Creates an Aggregate Supply Shock In August 2002, President George Bush signed the Trade Act, which, among other things, created a new set of […]

©2018 Pearson Education, Inc. understanding of the “Keynesian” macroeconomic model of national income and employment determination. The focus is on the short run using the AS–AD model. In the Keynesian model, the concept of the short-run aggregate supply curve, SRAS, […]

Copyright © 2018 Pearson Education, Inc. 9) Refer to the above figure. Suppose the current aggregate demand is represented by AD2. If aggregate demand falls to line AD3, then A) the new equilibrium will be at j. B) the new […]

Copyright © 2018 Pearson Education, Inc. 74) The full-employment rate of output can A) be surpassed in the long run only if input prices are flexible. B) not be surpassed in either the short run or the long run. C) […]

Copyright © 2018 Pearson Education, Inc. Economics Today, 19e (Miller) Chapter 11 Classical and Keynesian Macro Analyses 11.1 The Classical Model 1) Whom among the following was a classical economist? A) Adam Smith B) A. C. Pigou C) David Ricardo […]

Copyright © 2018 Pearson Education, Inc. 11.5 Explaining Short-Run Variations in Inflation 1) Inflation that is caused solely by an increase in aggregate demand is called A) demand-push inflation. B) demand-pull inflation. C) cost-push inflation. D) cost-pull inflation. Answer: B […]

Copyright © 2018 Pearson Education, Inc. Economics Today, 19e (Miller) Chapter 12 Consumption, Real GDP, and the Multiplier 12.1 Determinants of Planned Consumption and Planned Saving 1) Which of the following is NOT a simplifying assumption in the simple Keynesian […]

Copyright © 2018 Pearson Education, Inc. 33) A decrease in interest rates will A) shift the investment function relating planned investment to the interest rate to the right. B) shift the investment function relating planned investment to the interest rate […]

Copyright © 2018 Pearson Education, Inc. 14) If the MPC equals 0.75, then A) for every $100 increase in consumption, real Gross Domestic Product (GDP) increases by $75. B) consumption is always more than real Gross Domestic Product (GDP). C) […]

• 12.2 Identify the primary determinants of planned investment • 12.3 Describe how equilibrium real GDP is established in the Keynesian model • 12.4 Evaluate why autonomous changes in total planned expenditures have a multiplier effect on equilibrium real GDP […]

538 Miller Economics Today, Nineteenth Edition Chapter 12 Consumption, Real GDP, and the Multiplier The Financial Crisis of 2008 and the U.S. Saving Function In the fall of 2008, the global financial crisis set off fears of a recession. As […]

Copyright © 2018 Pearson Education, Inc. 77) When a family’s income is low and it is spending more on consumption than it is receiving in income A) the APC must be increasing. B) the APC must be equal to the […]

Copyright © 2018 Pearson Education, Inc. 148) Refer to the above figure. Line ACE is called A) the saving function. B) the savings function. C) the 45-degree line. D) the consumption function. Answer: C Diff: 1 Topic: 12.1 Determinants of […]

Copyright © 2018 Pearson Education, Inc. 25) If the MPS is 1/3, a $200 increase in net exports will A) reduce real Gross Domestic Product (GDP) by $600. B) reduce real Gross Domestic Product (GDP) by $300. C) increase real […]

Copyright © 2018 Pearson Education, Inc. 217) The relationship between planned consumption and real disposable income is referred to as A) the wealth function. B) the saving function. C) the multiplier. D) the consumption function. Answer: D Diff: 2 Topic: […]

Copyright © 2018 Pearson Education, Inc. 34) Deficit financing A) is when the government adjusts taxes to raise money to pay for government projects. B) is the mechanism behind the Laffer curve. C) is how the automatic stabilizers work. D) […]

Copyright © 2018 Pearson Education, Inc. Economics Today, 19e (Miller) Chapter 13 Fiscal Policy 13.1 Discretionary Fiscal Policy 1) When the government deliberately alters its level of spending and/or taxes in order to achieve specific national economic goals, it is […]

©2018 Pearson Education, Inc. This chapter examines the use of fiscal policy during contractionary and expansionary gaps. Offsets to fiscal policy such as the indirect crowding out and direct expenditure offsets, which can reduce its effectiveness, are presented. New classical […]

540 Miller Economics Today, Nineteenth Edition Chapter 13 Fiscal Policy Direct Offset of Government Grants Private companies fund a considerable amount of scientific and engineering research. So does the government. Although some of this research is conducted by people directly […]

Copyright © 2018 Pearson Education, Inc. 50) A government proposal to increase marginal tax rates on the wealthiest 1 percent of U.S. residents is supposed to generate an additional $200 billion in tax revenues. It is likely that A) the […]

Copyright © 2018 Pearson Education, Inc. 21) The action time lag is the time period that elapses A) between when an economic problem manifests itself and it is officially acknowledged. B) between the recognition of an economic problem and implementing […]

Copyright © 2018 Pearson Education, Inc. 70) Refer to the above figure. Suppose the relevant aggregate demand curve is AD2. If the government wants to use fiscal policy to close the existing gap, it should A) increase taxes. B) decrease […]

of GDP. The chapter goes on to provide an historical examination of the rise in the public debt over time, followed by the implications in terms of interest payments and other burdens of the debt. The relationship between the federal […]

Lecture Extender Examples 543 Chapter 14 Deficit Spending and the Public Debt Republicans and Democrats and the Deficit The Bush administration began with a $300 billion budget surplus in 2001. The deficit declined to $318 billion in 2005. Then fiscal […]

Copyright © 2018 Pearson Education, Inc. Economics Today, 19e (Miller) Chapter 14 Deficit Spending and the Public Debt 14.1 Public Deficits and Debts 1) In the current year, a nation’s government spending equals $100 trillion and its revenues are $130 […]

Copyright © 2018 Pearson Education, Inc. 27) Media reports often suggest that the increasing public debt is a burden on future generations. What they mean is that A) it reduces the current level of investment. B) it makes predicting future […]

Copyright © 2018 Pearson Education, Inc. 15) Why is it unlikely that tax increases will be the way to eliminate current U.S. federal budget deficits? A) Increasing every worker’s taxes by the same amount could eliminate the deficit, but it […]

Copyright © 2018 Pearson Education, Inc. 112) If the reserve ratio is raised, the money multiplier A) is lowered. B) is increased. C) stays the same. D) is doubled. Answer: A Diff: 2 Topic: 15.4 Fractional Reserve Banking, the Federal […]

Copyright © 2018 Pearson Education, Inc. 126) Which of the following is the most liquid? A) real estate B) currency C) government bonds D) shares of stock Answer: B Diff: 1 Topic: 15.1 Functions and Measures of Money Learning Outcome: […]

Copyright © 2018 Pearson Education, Inc. 53) The reserve ratio is 20 percent and all loan proceeds are deposited in transactions accounts. A bond dealer has $100 million in deposits, $8 million in vault cash, and $7 million in deposits […]

Copyright © 2018 Pearson Education, Inc. 56) All of the following are functions of the Federal Reserve System (the Fed) EXCEPT A) supplying currency. B) check clearing. C) regulation of the money supply. D) lender of last resort for consumers. […]

Lecture Extender Examples 545 Chapter 15 Money, Banking, and Central Banking Check Out Check 21 for Twenty-First Century Check Clearing During the 1990s, the Federal Reserve decided to transfer most of its check-clearing operations to the from cities of -sorting […]

current U.S. banking structure and the process of financial intermediation is introduced, followed by an analysis of the organizational structure and functions of the Federal Reserve System. Finally, federal deposit insurance is examined in terms of the reasons for its […]

Copyright © 2018 Pearson Education, Inc. 2) The FDIC was created because A) banks failed to create money the way the Fed wanted them to. B) people worried about bank failures after World War I, even though very few banks […]

Copyright © 2018 Pearson Education, Inc. 63) If Maria buys a latte at Starbucks, her money serves as a A) unit of accounting. B) standard of deferred payment. C) store of value. D) medium of exchange. Answer: D Diff: 2 […]

Copyright © 2018 Pearson Education, Inc. 30) Which of the following is a financial intermediary? A) the U.S. Department of the Treasury B) the Internal Revenue Service C) a share of corporate stock D) an insurance company Answer: D Diff: […]

Copyright © 2018 Pearson Education, Inc. 191) Which of the following is a time deposit with a fixed maturity date offered by banks and other financial institutions? A) savings deposit B) money market deposit account C) time deposit D) small-denomination […]

Copyright © 2018 Pearson Education, Inc. Economics Today, 19e (Miller) Chapter 15 Money, Banking, and Central Banking 15.1 Functions and Measures of Money 1) In a barter system, there are A) many different units of money. B) money and goods […]

Copyright © 2018 Pearson Education, Inc. 35) According to the quantity theory of money and prices, a 2 percent increase in the money supply ultimately leads to A) a 2 percent increase in real GDP. B) a 2 percent increase […]

Copyright © 2018 Pearson Education, Inc. 39) The tools of monetary policy are A) open market operations, differential between the discount rate and the federal funds rate, and tax rates. B) open market operations, government spending, and the required reserve […]

Copyright © 2018 Pearson Education, Inc. Economics Today, 19e (Miller) Chapter 16 Domestic and International Dimensions of Monetary Policy 16.1 The Demand for Money 1) What are the two features of money that distinguish it from all other assets in […]

policy requires a discussion of the direct effect of monetary policy on net exports and the indirect effects on interest rates and aggregate demand. The implications of the globalization of international money markets are presented next. The quantity theory of […]

Lecture Extender Examples 551 Chapter 16 Domestic and International Dimensions of Monetary Policy The Bank of Japan Forgets the Quantity Theory of Money From 1999 through 2004, nominal interest rates in Japan were very close to zero. During the same […]

Copyright © 2018 Pearson Education, Inc. 26) Which of the following is a TRUE statement about the relationship between the price of bonds and the interest rate? A) The prices of bonds are directly related to the interest rate. B) […]

Copyright © 2018 Pearson Education, Inc. 43) An indirect effect of monetary policy is that as the money supply A) increases, interest rates fall, and borrowing and spending increase. B) increases, interest rates rise, and borrowing and spending decrease. C) […]

Copyright © 2018 Pearson Education, Inc. 63) Suppose a family is holding $1000 in its checking account for normal transactions, $500 in cash for emergencies, and $1500 as a store of value when the interest rate is 4 percent. If […]

Copyright © 2018 Pearson Education, Inc. 42) According to New Keynesians, an increase in which of the following will tend to cause the inflation rate to increase? A) an anticipation of higher future inflation B) an expected increase in aggregate […]

Copyright © 2018 Pearson Education, Inc. 65) During a recession, the A) natural rate of unemployment has fallen. B) cyclical rate of unemployment is positive. C) cyclical rate of unemployment is zero. D) cyclical rate of unemployment is negative. Answer: […]

is explored, taking note of the effect of expectations and unanticipated change. Next, the rational expectations theory and its implications are discussed. Economic participants’ information is analyzed in relation to the rational expectations theory. The Federal Reserve’s (Fed’s) inability to […]

554 Miller Economics Today, Nineteenth Edition Chapter 17 Stabilization in an Integrated World Economy The Effect of Higher Inflation on Inflation Expectations Three economists at the Federal Reserve Bank of St. Louis Andrew Levin, Fabio Nattaluci, and Jeremy Piger have […]

Copyright © 2018 Pearson Education, Inc. Economics Today, 19e (Miller) Chapter 17 Stabilization in an Integrated World Economy 17.1 Active versus Passive Policymaking and the Natural Rate of Unemployment 1) Active policymaking refers to A) actions taken by policy makers […]

Copyright © 2018 Pearson Education, Inc. 97) In the above figure, starting at E3, if there is an increase in technology that causes a permanent increase in production capabilities A) aggregate supply would shift to SRAS0 and LRAS1 would shift […]

41 28) An unexpected increase in aggregate demand A) causes the price level to fall. B) both the unemployment rate and the price level to rise. C) the unemployment rate to rise. D) causes the price level to rise. Answer: […]

Copyright © 2018 Pearson Education, Inc. 41) Refer to the above figure. Suppose the economy is in equilibrium at point A. If the Fed tries to stimulate the economy by undertaking an expansionary monetary policy action and this is NOT […]

Copyright © 2018 Pearson Education, Inc. 22) Extensive government restrictions on the use of capital are likely to A) create dead capital. B) enhance economic growth. C) enhance economic freedom. D) result in capital resources being devoted to their most […]

Lecture Extender Examples 557 Chapter 18 Policies and Prospects for Global Economic Growth The average resident of Africa earns about 5 percent of the per capita real GDP of a U.S. resident. Furthermore, his or her situation has not been […]

• 18.3 Describe the recent shift in global growth prospects away from the world’s advanced nations in favor of developing and emerging countries • 18.4 Discuss the sources of international investment funds for developing nations and identify obstacles to international […]

Copyright © 2018 Pearson Education, Inc. 43) If there is a major problem in a country that leads to the rapid withdrawal of foreign investment, this is known as A) moral hazard. B) adverse selection crisis. C) an international leakage. […]

Copyright © 2018 Pearson Education, Inc. Economics Today, 19e (Miller) Chapter 18 Policies and Prospects for Global Economic Growth 18.1 Labor Resources and Economic Growth 1) According to the text, population growth in many poor countries does NOT generally result […]

Copyright © 2018 Pearson Education, Inc. 35) All the following would be a possible loan that the International Monetary Fund might make EXCEPT A) a loan to a private firm. B) long-term loans to a nation’s government which support growth […]

560 Miller Economics Today, Nineteenth Edition Chapter 19 Demand and Supply Elasticity Higher Gasoline Prices and Hybrid Car Demand In the summer of 2008, the price of gasoline increased to a little more than $4.00 per gallon. Americans did not […]

©2018 Pearson Education, Inc. • 19.2 Explain its relationship with total revenues • 19.3 Describe the factors that determine the price elasticity of demand • 19.4 Explain the cross price elasticity of demand and the income elasticity of demand • […]

Copyright © 2018 Pearson Education, Inc. Economics Today, 19e (Miller) Chapter 19 Demand and Supply Elasticity 19.1 Price Elasticity 1) The price elasticity of demand is a measure of A) the responsiveness of the quantity demanded of a good to […]

Copyright © 2018 Pearson Education, Inc. 61) If the price of a cola increased by 12% and consumers responded by purchasing 24% less cola, the absolute value of price elasticity of demand for cola would be A) 0.20. B) 1.2. […]

Copyright © 2018 Pearson Education, Inc. 2) If the quantity supplied of candy increases by 1% when the price of candy increases by 2%, which of the following is TRUE? A) Supply for candy is elastic, and price elasticity of […]

Copyright © 2018 Pearson Education, Inc. 122) If the absolute price elasticity of demand for a product is greater than 1, then A) the absolute price elasticity of demand is inelastic and consumers are relatively insensitive to price changes. B) […]

Copyright © 2018 Pearson Education, Inc. 28) When the consumer spends a large portion of her income on a good, demand will be A) elastic. B) unit-elastic. C) inelastic. D) elastic, unit-elastic or inelastic depending upon supply. Answer: A Diff: […]

Copyright © 2018 Pearson Education, Inc. 35) If total revenues rise when the market price increases, then we know that A) demand is inelastic. B) demand is elastic. C) demand is unit-elastic. D) its demand has zero elasticity. Answer: A […]

Copyright © 2018 Pearson Education, Inc. 38) The price of A falls by 2 percent, and the quantity demanded of A increases by 2 percent. Meanwhile, the quantity demanded of B increases by 2 percent too. We would conclude that […]

Copyright © 2018 Pearson Education, Inc. 16) The ability to produce a good at a lower opportunity cost than others is known as A) comparative advantage. B) absolute advantage. C) specialization. D) marginal cost production. Answer: A Diff: 1 Topic: […]

©2018 Pearson Education, Inc. individuals who work and involves both mental and physical activities. • 2.3 Discuss why obtaining increasing increments of any particular good typically entails giving up more and more units of other goods • 2.4 Explain why […]

Lecture Extender Examples 513 Chapter 2 Scarcity and the World of Trade-Offs At a college basketball game with only 25 seconds left, the home team, which is behind by 1 point, steals the ball and calls time- fight song to […]

Copyright © 2018 Pearson Education, Inc. 64) When an employee at a grocery store scans the price of your items, bags the groceries, and collects your paper, the individual has provided A) physical capital. B) entrepreneurship. C) a service. D) […]

Copyright © 2018 Pearson Education, Inc. Economics Today, 19e (Miller) Chapter 2 Scarcity and the World of Trade-Offs 2.1 Scarcity 1) Scarcity arises because A) resources are limited and are inadequate to meet all human wants. B) shortages occur in […]

Copyright © 2018 Pearson Education, Inc. 22) The saying that “You cannot have your cake and eat it too” illustrates the economic concept of A) a positive statement. B) a normative statement. C) physical capital. D) opportunity cost. Answer: D […]

Copyright © 2018 Pearson Education, Inc. 105) Explain: “The law of increasing additional cost is an inevitable phenomenon in economics.” Answer: Economic resources are seldom suitable for all types of production. Hence, when society demands more of a particular good […]

Copyright © 2018 Pearson Education, Inc. 53) An efficient point of production is A) a point on the production possibilities curve. B) a point inside the production possibilities curve. C) the point where scarcity no longer exists. D) the point […]

Copyright © 2018 Pearson Education, Inc. 79) What does the slope of the production possibilities curve represent? Explain. Answer: It represents the trade-off between two goods from two points on the PPC. Specifically, as we move from one point to […]

562 Miller Economics Today, Nineteenth Edition Chapter 20 Consumer Choice Virtual Assets Online games played by large numbers of players, called Massively Multiplayer Online Games (MMOG), ave become very popular. Like many games, these MMOG games involve winning assets, such […]

to maximize utility. Therefore, the chapter defines and distinguishes between total and marginal utilities. The law of diminishing marginal utility is discussed and related to the law of demand. The rule for the consumer to maximize total utility is for […]

Copyright © 2018 Pearson Education, Inc. 72) The idea that consumers continue to adjust their purchases until the marginal utility per last dollar spent on all items is equal is called the A) law of increasing costs. B) law of […]

Copyright © 2018 Pearson Education, Inc. 16) The quantities of Good M are plotted on the vertical axis while the quantities of Good N are plotted on the horizontal axis. The prices of both M and N fall. The intercepts […]

Copyright © 2018 Pearson Education, Inc. 16) The consumer optimum (for two goods, A and B) is reached when A) TUA = TUB. B) MUA = MUB. C) TUA/PA = TUB/PB. D) MUA/PA = MUB/PB. Answer: D Diff: 1 Topic: […]

Copyright © 2018 Pearson Education, Inc. 6) A curve that shows a set of consumption alternatives that give the same level of satisfaction is A) a substitution curve. B) a budget line. C) an indifference curve. D) an income curve. […]

Copyright © 2018 Pearson Education, Inc. 63) The total utility of consuming 6 units of a good is 255. The marginal utility of the 6th unit is 45 and the marginal utility of the 5th unit is 65. The total […]

Copyright © 2018 Pearson Education, Inc. 121) As an individual consumes more of a particular good, the total level of utility derived from that consumption usually A) increases at a constant rate. B) increases at an increasing rate. C) increases […]

Copyright © 2018 Pearson Education, Inc. Economics Today, 19e (Miller) Chapter 20 Consumer Choice 20.1 Utility Theory 1) In economics, another term for satisfaction is A) scarcity. B) need. C) utility. D) return. Answer: C Diff: 1 Topic: 20.1 Utility […]

Copyright © 2018 Pearson Education, Inc. 35) A decrease in the price of a good causes A) the utility of the good to decrease. B) the marginal utility of the good to decrease. C) purchasing power of a person’s income […]

Copyright © 2018 Pearson Education, Inc. 28) If you own 100 shares of preferred stock, how many regular votes would you get to cast at the next stockholders meeting? A) 500 B) 100 C) 1 D) 0 Answer: D Diff: […]

564 Miller Economics Today, Nineteenth Edition Chapter 21 Rents, Profits, and the Financial Environment of Business Do Entertainment Superstars Make Super Economic Rents? Superstars do very well financially. For example, actress Reese Witherspoon currently makes $28 million a year. How […]

examines the organizational forms, proprietorships, partnerships, and corporations that firms can take and the advantages and disadvantages of each. What follows is an examination of accounting and economic profits. The next section is a discussion of methods of corporate financing […]

Copyright © 2018 Pearson Education, Inc. 59) When a resource has a perfectly elastic supply curve A) the amount of economic rent for the resource is determined by its supply. B) the amount of economic rent for this resource is […]

Copyright © 2018 Pearson Education, Inc. 129) When economic profits are positive, accounting profits A) must be positive. B) will be negative. C) will equal zero. D) could be positive, negative or zero. Answer: A Diff: 1 Topic: 21.2 Firms […]

Copyright © 2018 Pearson Education, Inc. Economics Today, 19e (Miller) Chapter 21 Rents, Profits, and the Financial Environment of Business 21.1 Economic Rent 1) Pure economic rent is A) a payment to a resource owner over and above what is […]

Copyright © 2018 Pearson Education, Inc. 72) A star basketball player signs a contract that newspaper reports say is worth $10 million. The player receives $5 million on signing, and $5 million a year for three years. The contract is […]

Copyright © 2018 Pearson Education, Inc. 55) If the explicit costs to a firm to produce a unit of output are $6 and the firm sells 200,000 units of output for $8 per unit, the accounting profit received by the […]

Copyright © 2018 Pearson Education, Inc. 7) Creditors require collateral in many cases, because A) it helps offset the risks of lending the funds. B) the borrower is a low risk. C) the loan is small. D) none of the […]

Copyright © 2018 Pearson Education, Inc. 24) In the above table, marginal product becomes negative after employing the A) second worker. B) third worker. C) fourth worker. D) fifth worker. Answer: C Diff: 1 Topic: 22.2 A Firm’s Production Learning […]

Copyright © 2018 Pearson Education, Inc. 36) A decrease in long-run average costs resulting from increases in output is A) attributed to economies of scale. B) attributed to diseconomies to scale. C) attributed to constant returns to scale. D) attributed […]

Copyright © 2018 Pearson Education, Inc. 22) Refer to the above table. At an output of 5 units, average total costs are A) $18. B) $19. C) $37. D) $185. Answer: C Diff: 2 Topic: 22.3 Short-Run Costs to the […]

maximum possible output that can be produced with a given amount of inputs. It also • 22.2 Describe production of a firm and explain why the marginal product of labor eventually declines as more units of labor are employed • […]

566 Miller Economics Today, Nineteenth Edition Chapter 22 The Firm: Cost and Output Determination Filling a Truck Is Less Productive Than Sending It Half-Full For years, managers at Procter & Gamble, the consumer products family, told warehouse workers to pack […]

Copyright © 2018 Pearson Education, Inc. Economics Today, 19e (Miller) Chapter 22 The Firm: Cost and Output Determination 22.1 Short Run Versus Long Run 1) Economists generally define the short run as being A) that period of time in which […]

Copyright © 2018 Pearson Education, Inc. 146) If the price of labor is constant and a firm experiences diminishing marginal product, then its A) marginal costs decrease. B) fixed costs increase. C) average variable cost increases. D) total costs decrease. […]

Copyright © 2018 Pearson Education, Inc. 84) In the above table, the average product for 5 workers and the marginal product of the 5th worker is A) 3.6; 2. B) 0.72; 1. C) 2; 0.6. D) 16; 2. Answer: A […]

Copyright © 2018 Pearson Education, Inc. 81) In the above table, when output is 8 units, average variable costs are A) $4.75. B) $3.50. C) $1.25. D) $4.50. Answer: B Diff: 3 Topic: 22.3 Short-Run Costs to the Firm Learning […]

Copyright © 2018 Pearson Education, Inc. 60) The short-run shutdown price occurs where price equals A) MC. B) AVC at any point. C) AVC at the minimum point. D) AFC at the minimum point. Answer: C Diff: 1 Topic: 23.3 […]

Copyright © 2018 Pearson Education, Inc. 78) For a perfectly competitive firm at its long-run equilibrium A) P = MR = MC = AC. B) P = MR > MC. C) accounting profit must be zero. D) there are no […]

Copyright © 2018 Pearson Education, Inc. 119) Factors that cause the short-run supply curve to change are factors that affect A) demand. B) fixed costs. C) variable costs. D) the market but not the individual firm. Answer: C Diff: 2 […]

Copyright © 2018 Pearson Education, Inc. 81) If a firm is producing an output rate at which marginal cost is equal price, the firm A) is maximizing profits. B) should increase its output level. C) should reduce its output level. […]

3. Both buyers and sellers have equal access to all relevant information. ©2018 Pearson Education, Inc. is the explanation of the economist’s concept of zero economic profits playing a role in determining equilibrium. Another objective is to derive the firm’s […]

Lecture Extender Examples 569 Chapter 23 Perfect Competition Why Exits Have Followed Entries at Online Auction Sites Since the mid-1990s, individuals have been using online auction sites such as eBay, uBid, and Yahoo! to sell off old clothes, collectibles, and […]

Copyright © 2018 Pearson Education, Inc. 21) Referring to the diagram, which of the following statements is INCORRECT? A) The equilibrium market price is $5, at which the industry demand and supply curves intersect. B) If the individual firm raises […]

Copyright © 2018 Pearson Education, Inc. 12) If the firm in the above figure produces output level D, it incurs an average fixed cost of production equal to the distance A) DK. B) RN. C) JL. D) KR. Answer: D […]

Copyright © 2018 Pearson Education, Inc. Economics Today, 19e (Miller) Chapter 23 Perfect Competition 23.1 Characteristics of a Perfectly Competitive Market Structure 1) Which of the following is NOT a characteristic of a perfectly competitive market? A) The products sold […]

Copyright © 2018 Pearson Education, Inc. 33) Refer to the above figure. Which panel represents the long-run supply curve for a decreasing- cost industry? A) Panel A B) Panel B C) Panel C D) Panel D Answer: D Diff: 2 […]

Copyright © 2018 Pearson Education, Inc. Economics Today, 19e (Miller) Chapter 24 Monopoly 24.1 Defining and Explaining the Existence of Monopoly 1) Monopoly producers face A) many competitors producing the same product. B) only a few competitors producing the same […]

Copyright © 2018 Pearson Education, Inc. 23) In equilibrium, which of the following conditions is common to both unregulated monopoly and pure competition? A) P = MR B) AR = ATC C) MR = MC D) MC = P Answer: […]

©2018 Pearson Education, Inc. 1. Ownership of Resources without Close Substitutes: If one firm owns the entire supply of raw material input that is essential to production of a particular commodity, then that ownership serves as a barrier to entry […]

572 Miller Economics Today, Nineteenth Edition Chapter 24 Monopoly Stifling Competition for Replacement Ink and Toner Cartridges There are numerous manufacturers of similar printers, fax machines, and copiers, so the markets for these businesses are far from monopolistic. Nevertheless, manufacturers […]

Copyright © 2018 Pearson Education, Inc. 77) In the above figure, what is the profit-maximizing price and output? A) $9, 14 B) $13, 14 C) $11, 16 D) $10, 17 Answer: B Diff: 3 Topic: 24.3 Costs and Monopoly Profit […]

Copyright © 2018 Pearson Education, Inc. 7) Price discrimination is the A) refusal by a firm to sell to all customers. B) selling of a given product at more than one price when the price differences reflect cost differences. C) […]

Copyright © 2018 Pearson Education, Inc. 5) The profit-maximizing quantity of the monopolist compared to the perfectly competitive industry in the above figure are, respectively A) Q1 and Q2. B) Q1 and Q3. C) Q1 and Q5. D) Q2 and […]

62) Which of the following is a characteristic of a monopoly firm? A) horizontal individual demand curve B) barriers to entry C) easy entry and exit D) many buyers and sellers Answer: B Diff: 2 Topic: 24.1 Defining and Explaining […]

Copyright © 2018 Pearson Education, Inc. 45) In order to sell more output units, what must a monopoly do? A) reduce output price B) reduce input price C) increase output price D) increase input price Answer: A Diff: 2 Topic: […]

Copyright © 2018 Pearson Education, Inc. 26) A good that people must actually consume before they can determine qualities is called A) a credence good. B) a search good. C) an experience good. D) a persuasive good. Answer: C Diff: […]

Copyright © 2018 Pearson Education, Inc. 49) A monopolistic competitor is in long-run equilibrium when A) economic profits are equal to zero and the average total cost curve is tangent to the demand curve. B) economic profits are equal to […]

Lecture Extender Examples 575 Chapter 25 Monopolistic Competition What Besides Healthier Teeth Do Toothpastes Have to Offer? Recently, television commercials promoting toothpaste featured a well-known chef expressing satisfaction with the latest in toothpaste flavors, including citrus, herbal, mint, and cinnamon. […]

• 25.2 Contrast the output and pricing decisions of monopolistically competitive firms with those of perfectly competitive firms • 25.3 Explain why brand names and advertising are important features of monopolistically competitive industries • 25.4 Describe the fundamental properties of […]

Copyright © 2018 Pearson Education, Inc. Economics Today, 19e (Miller) Chapter 25 Monopolistic Competition 25.1 Monopolistic Competition 1) Which of the following is NOT a characteristic of monopolistic competition? A) product differentiation B) a large number of entry barriers C) […]

Copyright © 2018 Pearson Education, Inc. 4) The production of information products is characterized by A) relatively low fixed cost. B) relatively low marginal cost. C) diseconomies of operation. D) an upward sloping marginal cost curve. Answer: B Diff: 1 […]

Copyright © 2018 Pearson Education, Inc. 64) Which is NOT a characteristic of monopolistic competition? A) small share of market to each firm B) lack of collusion among firms C) few firms in the industry D) independence of each firm’s […]

Copyright © 2018 Pearson Education, Inc. 98) Compared with a firm in a perfectly competitive market, the demand curve faced by a monopolistically competitive firm is A) more elastic. B) more inelastic. C) perfectly elastic. D) perfectly inelastic. Answer: B […]

Copyright © 2018 Pearson Education, Inc. 64) If a retail food chain merged with a meat packing company, this would be an example of a A) horizontal merger. B) conglomerate merger. C) vertical merger. D) diagonal merger. Answer: C Diff: […]

578 Miller Economics Today, Nineteenth Edition Chapter 26 Oligopoly and Strategic Behavior Economies of Scale in Payments Processing and the Development of Oligopoly Automated Clearing Houses (ACHs) process both private payments, such as automatic deposits to wage- earners bank accounts, […]

doubling of output results in less than a doubling of total costs. The firm’s average total cost curve will slope downward as it produces more and more output. Average total cost can be reduced by continuing to expand the scale […]

Copyright © 2018 Pearson Education, Inc. Economics Today, 19e (Miller) Chapter 26 Oligopoly and Strategic Behavior 26.1 Oligopoly 1) Which of the following does NOT help explain why oligopolies exist? A) economies of scale B) mergers C) product homogeneity D) […]

Copyright © 2018 Pearson Education, Inc. 54) A game in which all the players are better off at the end of the game is a A) tit-for-tat game. B) dominant strategy game. C) positive-sum game. D) noncooperative game. Answer: C […]

Copyright © 2018 Pearson Education, Inc. 2) For years, your neighbor insisted she had no desire to own a computer. Recently, however, she purchased one and says she did so because all her relatives have computers and she wants to […]

Copyright © 2018 Pearson Education, Inc. 36) The network effect in the TV broadcasting industry results in A) a positive market feedback between the number of advertisers and the size of TV audience. B) a negative market feedback between the […]

Copyright © 2018 Pearson Education, Inc. 6) A game in which players as a group lose at the end of the game is referred to as A) zero-sum game. B) negative-sum game. C) positive-sum game. D) tit-for-tat game. Answer: B […]

Copyright © 2018 Pearson Education, Inc. 70) Regulation of monopolies that allows prices to reflect only the actual cost of production and no monopoly profits is referred to as A) cost-of-service regulation. B) rate-of-return regulation. C) service-opportunity regulation. D) natural […]

Copyright © 2018 Pearson Education, Inc. Economics Today, 19e (Miller) Chapter 27 Regulation and Antitrust Policy in a Globalized Economy 27.1 Forms of Industry Regulation 1) U.S. government regulation of social and economic activity A) only began after World War […]

Lecture Extender Examples 581 Chapter 27 Regulation and Antitrust Policy in a Globalized Economy Why This Cigarette Manufacturer Wants to Be Regulated During the 1990s, the Food and Drug Administration (FDA) launched preliminary efforts to convince Congress to grant the […]

abuses of economic power. A natural monopoly is defined, and the monopolist’s profit-maximizing price and output decision are discussed. Various methods of regulating monopolies (and their attendant problems) are discussed, as are recent trends in regulatory economics. Social regulation is […]

Copyright © 2018 Pearson Education, Inc. 19) The hypothesis that regulators eventually are controlled by the regulated firms and their special interests is the A) share-the-gains, share-the-pains hypothesis. B) capture hypothesis. C) public interest theory. D) control-group hypothesis. Answer: B […]

Copyright © 2018 Pearson Education, Inc. 21) The first antitrust law in the United States was the A) Clayton Act. B) Contestable Markets Act. C) the Federal Trade Commission Act. D) Sherman Antitrust Act. Answer: D Diff: 1 Topic: 27.5 […]

Copyright © 2018 Pearson Education, Inc. 60) Antitrust laws in the United States A) are an attempt to foster competition. B) are not necessary in the twenty-first century. C) have not been used in the past twenty-five years. D) are […]

Copyright © 2018 Pearson Education, Inc. 15) A firm that has taken advantage of economies of scale and expanded to become the only producer in the market is A) a cartel. B) a natural monopoly. C) a monopolistic competitor. D) […]

Copyright © 2018 Pearson Education, Inc. 40) Assume that a perfectly competitive firm faces a fixed wage rate of $4 and a constant per- unit cost of capital of $2. If the marginal product of labor and capital are 16 […]

Copyright © 2018 Pearson Education, Inc. 18) What has been the impact of the widespread adoption of automated teller machines (ATMs) on the demand for bank tellers? A) The demand for tellers has increased. B) The demand for bank tellers […]

Copyright © 2018 Pearson Education, Inc. 122) The additional revenue associated with hiring one additional unit of some factor input, such as labor, is called A) marginal cost. B) marginal revenue product. C) marginal factor cost. D) marginal physical product. […]

584 Miller Economics Today, Nineteenth Edition Chapter 28 The Labor Market: Demand, Supply, and Outsourcing Manufacturing Jobs Disappear Worldwide Political leaders and media commentators often express concern that since 1995, U.S. manufacturing employment has fallen by nearly 12 percent. Their […]

and demand curves are used to show wage rate determination in a competitive market. The chapter then examines the issue of outsourcing and its effects on the economy. It begins by showing outsourcing’s economic effects on a domestic industry in […]

Copyright © 2018 Pearson Education, Inc. 62) Refer to the above table. Suppose the price of the good sold is $10 and the marginal factor cost of labor is $70, how many units of labor will the firm hire? A) […]

Copyright © 2018 Pearson Education, Inc. 22) Explain the implications of outsourcing for employment and wages in the domestic and foreign labor markets. Answer: If domestic firms out source their jobs abroad, then there will be a decrease in the […]

Copyright © 2018 Pearson Education, Inc. Economics Today, 19e (Miller) Chapter 28 The Labor Market: Demand, Supply and Outsourcing 28.1 Labor Demand for a Perfectly Competitive Firm 1) For a perfectly competitive firm, the value of the marginal product of […]

Copyright © 2018 Pearson Education, Inc. 35) Which of the following will NOT lead to a change in the demand for labor? A) a change in demand for the final good B) a change in the supply of labor C) […]

Copyright © 2018 Pearson Education, Inc. 52) The figure supports all of the following statements regarding the marginal factor cost curve for a monopsonist EXCEPT A) the monopsonist firm looks at a marginal cost curve, MFC, which slopes upward and […]

Copyright © 2018 Pearson Education, Inc. Economics Today, 19e (Miller) Chapter 29 Unions and Labor Market Monopoly Power 29.1 Industrialization and Labor Unions 1) The earliest unions in the United States were A) industrial unions. B) craft unions. C) public-sector […]

Copyright © 2018 Pearson Education, Inc. 62) A union shop is a A) strike by a union in sympathy with another union’s strike or cause. B) dispute involving two or more unions over which should have control of a particular […]

Copyright © 2018 Pearson Education, Inc. 3) The most powerful tool unions have at their disposal when bargaining with management is A) the Taft-Hartley Act. B) the ability to strike. C) the secondary boycott. D) the power of pure competition. […]

in order to increase real wages for members and for workers in general. The benefits of unions are then presented. The monopsony model is introduced and applied to labor. The optimal level of employment and wage rate determination for a […]

588 Miller Economics Today, Nineteenth Edition Chapter 29 Unions and Labor Market Monopoly Power In Europe Jobs Can Now Move Farther East Germany has an extensive system of centralized wage bargaining that involves nearly 60,000 different labor agreements. Furthermore, any […]

Copyright © 2018 Pearson Education, Inc. 60) When you see a commercial on TV asking you to “look for the union label,” the union is trying to A) increase worker productivity. B) increase the demand for nonunion goods. C) increase […]

Copyright © 2018 Pearson Education, Inc. 14) According to the above table, if the marginal revenue product is $24, how many workers will the profit maximizing monopsonist hire? A) 4 B) 5 C) 6 D) 7 Answer: A Diff: 2 […]

516 Miller Economics Today, Nineteenth Edition Chapter 3 Demand and Supply Congestion Pricing for San Francisco San Francisco and other cities are examining congestion pricing, which has been successfully used in European and Asian cities, as a way to reduce […]

distinction between a change in demand (supply) and change in quantity demanded (quantity supplied), the law of supply, equilibrium, surpluses, and shortages are introduced. These concepts form the core of the theoretical analysis. It is of equal importance that these […]

Copyright © 2018 Pearson Education, Inc. 56) Refer to the above table. There is an excess quantity supplied of 2,000 units at a price of A) $450. B) $500. C) $600. D) $700. Answer: C Diff: 2 Topic: 3.5 Putting […]

Copyright © 2018 Pearson Education, Inc. 5) According to the above figure for a gasoline market, what happens when the price per gallon of gasoline jumps from $1 to $4? A) A gasoline surplus is replaced by a gas shortage. […]

Copyright © 2018 Pearson Education, Inc. 29) After the price of smartphone apps falls, Justin buys fewer flash drives but he buys a new smartphone. For Justin A) smartphone apps and flash drives are complements, and smartphone apps and smartphones […]

Copyright © 2018 Pearson Education, Inc. 41) State the law of supply and explain it. Answer: The law of supply indicates the direct or positive relationship between price and quantity supplied. This law states that when the price of a […]

Copyright © 2018 Pearson Education, Inc. 102) Which of the following will cause the demand curve for cable TV services to shift to the left? A) a rise in the price of cable TV services B) a decrease in average […]

Copyright © 2018 Pearson Education, Inc. Economics Today, 19e (Miller) Chapter 3 Demand and Supply 3.1 Demand 1) In economics, “demand” refers to A) what people need instead of want without paying for it. B) the minimum amount of a […]

Copyright © 2018 Pearson Education, Inc. 71) Total market demand can be calculated by A) horizontally summing individual demand curves at each and every price level. B) vertically summing individual demand curves at each and every income level. C) adding […]

Copyright © 2018 Pearson Education, Inc. 18) Other things being equal, a national health insurance program would A) decrease the demand for health care. B) decrease moral hazard. C) decrease total health care expenditures. D) reduce individuals’ incentives to make […]

discrimination (two potential determinants of income inequality) are analyzed, and theoretical and empirical evidence concerning the extent to which African Americans and others are discriminated against is presented. The role of investment in human capital in creating income differences is […]

592 Miller Economics Today, Nineteenth Edition Chapter 30 Income, Poverty, and Health Care The U.S. Poverty Level versus Average Incomes Abroad Each year the World Bank issues a report that provides the per capita incomes of about 150 nations. Out […]

Copyright © 2018 Pearson Education, Inc. 32) The official number of poor in the United States A) is higher today than at any other time in our history. B) has risen steadily since 1981. C) was lowest in the late […]

Copyright © 2018 Pearson Education, Inc. Economics Today, 19e (Miller) Chapter 30 Income, Poverty, and Health Care 30.1 The Distribution of Income 1) The Lorenz curve shows A) the demand for jobs. B) the supply of jobs. C) the elasticity […]

Copyright © 2018 Pearson Education, Inc. 44) Which of the following is NOT considered a determinant of income differences? A) productivity B) age C) discrimination D) equity or fairness Answer: D Diff: 2 Topic: 30.2 Determinants of Income Differences Learning […]

Copyright © 2018 Pearson Education, Inc. 67) The Lorenz curve shows A) how poverty rates change over time. B) the percentage of population below the poverty line. C) the degree of inequality in the income distribution. D) the ratio of […]

Copyright © 2018 Pearson Education, Inc. 29) Transaction costs are A) the costs associated with making a transaction that is required by the government. B) not true costs since they are often not paid. C) the costs associated with exchanges […]

Copyright © 2018 Pearson Education, Inc. 7) In principle, a cap-and-trade program would A) cause firms to generate more pollution than their allowed limits. B) cause firms to generate less pollution than their allowed limits. C) raise the production costs […]

Copyright © 2018 Pearson Education, Inc. Economics Today, 19e (Miller) Chapter 31 Environmental Economics 31.1 Private versus Social Costs 1) Which of the following statements best defines private costs? A) They are internal in the sense that the buyer or […]

596 Miller Economics Today, Nineteenth Edition Chapter 31 Environmental Economics No Manure, Sherlock The milk cattle produce large amounts of manure, which is liquefied and spread on farmland as fertilizer. A problem arises when it is spread too thickly and […]

defined property rights (the common property resource issue) and/or enforcement costs that are too high for private market problem resolution. If transactions costs are low, private contractual arrangements could arise to eliminate some externalities. The chapter also addresses the issue […]

Copyright © 2018 Pearson Education, Inc. 74) When the total external and internal costs of a transaction are taken into consideration, this is known as A) public costs. B) average total costs. C) social costs. D) marginal costs. Answer: C […]

Copyright © 2018 Pearson Education, Inc. 141) What are social costs? How do they differ from private costs? Answer: Social costs are costs borne by society whenever a resource use occurs. Social costs include private costs plus external costs, so […]

Copyright © 2018 Pearson Education, Inc. 48) The contention that specific sensitive domestic technologies must not be traded freely is A) a national defense concern. B) the infant industry argument. C) dumping. D) to protect domestic jobs. Answer: A Diff: […]

Copyright © 2018 Pearson Education, Inc. 32.4 International Trade Organizations 1) The World Trade Organization is a successor organization to the A) United Nations. B) World Bank. C) International Court of Justice. D) GATT. Answer: D Diff: 1 Topic: 32.4 […]

Copyright © 2018 Pearson Education, Inc. Economics Today, 19e (Miller) Chapter 32 Comparative Advantage and the Open Economy 32.1 Why We Trade: Comparative Advantage and Mutual Gains from Exchange 1) Since World War II, world trade has A) decreased in […]

Copyright © 2018 Pearson Education, Inc. 118) Suppose that opportunity costs are constant and that Fred can either bake a maximum of six pies or three cakes in a day. Ethel can either produce a maximum of eight pies or […]

600 Miller Economics Today, Nineteenth Edition Chapter 32 Comparative Advantage and the Open Economy Power Moves across Borders in South America Most South American nations produce about half of their electricity by burning natural gas to generate electric power. Natural […]

combined output would rise. 28 times what it was in 1950. World GDP has only increased by a factor of 9. Imports as a percentage of GDP for the United States has increased from 4 percent in 1950 to more […]

Copyright © 2018 Pearson Education, Inc. 20) The maximum amount of a good that may be imported during a specified period of time is A) an infant industry agreement. B) an import quota. C) dumping. D) comparative advantage. Answer: B […]

Copyright © 2018 Pearson Education, Inc. 61) In an hour Jane can solder 50 connections or inspect 20 parts while Jim can solder 25 connections or inspect 20 parts in an hour. A) Jane has a comparative advantage over Jim […]

Copyright © 2018 Pearson Education, Inc. Economics Today, 19e (Miller) Chapter 33 Exchange Rates and the Balance of Payments 33.1 The Balance of Payments and International Financial Flows 1) The balance of payments is A) the value of goods and […]

Copyright © 2018 Pearson Education, Inc. 64) A market in which national currencies are traded by households, firms and governments, is referred to as a(n) A) foreign exchange market. B) fed funds market. C) international reserves market. D) gold certificate […]

Copyright © 2018 Pearson Education, Inc. 63) Which of the following statements is TRUE about the role that service exports and imports have in the balance of payments? A) Service exports and imports are not included in the balance of […]

Copyright © 2018 Pearson Education, Inc. 5) The United States was taken off the gold standard by A) President Lyndon Johnson. B) President Richard Nixon. C) President Ronald Reagan. D) President Jimmy Carter. Answer: B Diff: 1 Topic: 33.4 Fixed […]

• 33.3 Outline how exchange rates are determined in the markets for foreign exchange and discuss factors that can induce changes in equilibrium exchange rates • 33.4 Understand how policymakers can go about attempting to fix exchange rates governments and […]

Lecture Extender Examples 603 Chapter 33 Exchange Rates and the Balance of Payments Between 2002 and 2005, French wine exports to the United States dropped by nearly 18 percent. Some wine experts blamed part of the decline on what they […]

Copyright © 2018 Pearson Education, Inc. 7) Assume that $1 equals 100 yen (¥). A Japanese visitor to the United States wants to pay her $400 hotel bill. How many yen should she exchange in order to have enough dollars […]

Copyright © 2018 Pearson Education, Inc. 21) If equilibrium price falls and the equilibrium quantity of the good purchased decreases, what has happened to either the supply curve or to the demand curve? A) Supply increased. B) Demand decreased. C) […]

Copyright © 2018 Pearson Education, Inc. Economics Today, 19e (Miller) Chapter 4 Extensions of Demand and Supply Analysis 4.1 The Price System and Markets 1) An economic system in which relative prices change to reflect changes in supply and demand […]

examining the effects of simultaneous changes in supply and demand. The fact that changes in equilibrium usually take time, in practice, is addressed, and that prices may not even be equilibrium ones for quite some time in a free market […]

518 Miller Economics Today, Nineteenth Edition Chapter 4 Extensions of Demand and Supply Analysis OPEC and Oil Prices In July 2008, the price of oil increased to $147 per barrel. By October, it had fallen to around $60 per barrel. […]

Copyright © 2018 Pearson Education, Inc. 112) Rent control is an example of A) a price floor. B) a price ceiling. C) the rationing function of prices not working. D) the government increasing the demand for certain products. Answer: B […]

Copyright © 2018 Pearson Education, Inc. 90) If both supply and demand simultaneously decrease A) the market clearing price definitely rises, and the equilibrium quantity definitely falls. B) the market clearing price definitely rises, and the effect on the equilibrium […]

Copyright © 2018 Pearson Education, Inc. 26) Why does a sports car cost more than a truck? A) because sports car manufacturers are greedier than truck manufacturers B) because sports cars are priced higher in order to make them attractive […]

Copyright © 2018 Pearson Education, Inc. 34) Refer to the above figure. A minimum wage has been set at WM. The amount of unemployment is A) zero. B) at Qe. C) QS minus QD. D) not computable from the information […]

Copyright © 2018 Pearson Education, Inc. 51) In the above figure, a shortage could be caused by a government price ceiling set at A) $1.00. B) $2.00. C) $2.50. D) $3.00. Answer: A Diff: 2 Topic: 4.4 Price Ceilings Learning […]

Copyright © 2018 Pearson Education, Inc. 141) What is an effluent fee? Graphically, show how an effluent fee can correct an externality. Answer: An effluent fee is a charge to a polluter that gives the right to discharge into the […]

©2018 Pearson Education, Inc. promotion of personal freedom, and prevention of coercion of buyers and sellers by the existence of competition. A price system can also produce market failure. government can deal with this problem. The other economic functions of […]

Lecture Extender Examples 521 Chapter 5 Public Spending and Public Choice Trying to Lay Claim to Trees That Sop Up Pollution American Electric Power (AEP) owns power plants around the United States that together release about 3 percent of U.S. […]

Copyright © 2018 Pearson Education, Inc. Economics Today, 19e (Miller) Chapter 5 Public Spending and Public Choice 5.1 Market Failures and Externalities 1) Which of the following terms describes the situation in which all resources are able to move to […]

Copyright © 2018 Pearson Education, Inc. 40) Medicare is an example of a third-party payment for medical services that A) causes providers to supply less of medical services than they would without the payment. B) causes buyers to consume more […]

Copyright © 2018 Pearson Education, Inc. 39) According to the textbook, what are the two key political functions of government in a market economy? Answer: The two functions of government that are political rather than economic include (1) the regulation […]

Copyright © 2018 Pearson Education, Inc. 64) The free-rider problem plagues public goods because A) public goods are not produced by profit-maximizing firms and hence can be produced only at a loss to society. B) once public goods are produced […]

Copyright © 2018 Pearson Education, Inc. 76) A subsidy is sometimes used by government to correct the problems associated with A) negative externalities. B) positive externalities. C) internal benefits. D) external benefits. Answer: B Diff: 1 Topic: 5.1 Market Failures […]

524 Miller Economics Today, Nineteenth Edition Chapter 6 Funding the Public Sector How State Trucking Fees Push Up Highway Maintenance Costs Oregon is the only state that bases highway fees charged to truckers on the amount of weight carried per […]

©2018 Pearson Education, Inc. income that must be paid in taxes. The average tax rate is defined as the total tax payment divided by total income. It is the proportion of total income paid in taxes. • 6.3 Understand the […]

Copyright © 2018 Pearson Education, Inc. Economics Today, 19e (Miller) Chapter 6 Funding the Public Sector 6.1 Paying for the Public Sector: Systems of Taxation 1) The fact that every dollar that the government spends or transfers must ultimately be […]

Copyright © 2018 Pearson Education, Inc. 20) Refer to the above figure. A unit tax has been placed on the good. What is the total amount of the tax? A) 0 B) P2 – P0 C) P2 – P1 D) […]

Copyright © 2018 Pearson Education, Inc. 5) Suppose you purchased 100 shares of stock in 2016 for $25 a share and you sell them today for $30 a share. If the capital gains tax is 30 percent, your tax liability […]

Copyright © 2018 Pearson Education, Inc. 30) According to dynamic tax analysis, continually increasing the tax rate will eventually A) cause an increase in the tax base. B) have no impact on the tax base. C) cause a decrease in […]

Copyright © 2018 Pearson Education, Inc. 37) The purchasing power of money increases when A) the inflation rate increases. B) there is inflation. C) there is deflation. D) there are more dollars in the economy. Answer: C Diff: 2 Topic: […]

Copyright © 2018 Pearson Education, Inc. 49) The real interest rate is A) the nominal interest rate plus the anticipated inflation rate. B) the nominal interest rate minus the anticipated inflation rate. C) the nominal interest rate plus a COLA. […]

Copyright © 2018 Pearson Education, Inc. 51) In 2014, some European countries were dealing with a recession. Workers who were laid off in those countries due to the economic downturn would be A) frictionally unemployed. B) structurally unemployed. C) cyclically […]

concepts are somewhat arbitrary. Economists have agreed upon definitions of the terms that may differ from their popular meanings. One should be aware that these differences exist and be extremely careful when discussing these terms because each of these words […]

526 Miller Economics Today, Nineteenth Edition Chapter 7 The Macroeconomy: Unemployment, Inflation, and Deflation The Nobel Prize for Economics and the Natural Unemployment Rate The winner of the Nobel Prize for economics in 2006 was Edmund Phelps, who developed the […]

Copyright © 2018 Pearson Education, Inc. 61) The definition of the adult population is those who are 16 years and older and who are A) employed or unemployed. B) in the labor force. C) in the labor force or not […]

Copyright © 2018 Pearson Education, Inc. 122) “Discouraged workers” A) would be considered as unemployed. B) would not be considered as unemployed. C) would be considered as part of the labor force. D) would only be considered as underemployed. Answer: […]

Copyright © 2018 Pearson Education, Inc. 96) How are inflation and the purchasing power of money related? Answer: Inflation is the situation in which the average price of all goods and services is rising. The purchasing power of money is […]

Copyright © 2018 Pearson Education, Inc. Economics Today, 19e (Miller) Chapter 7 The Macroeconomy: Unemployment, Inflation, and Deflation 7.1 Unemployment 1) Which of the following is TRUE of unemployment? A) It is defined as the number of people actively looking […]

Copyright © 2018 Pearson Education, Inc. 50) The largest category of gross domestic income is A) interest. B) rent. C) wages. D) profits. Answer: C Diff: 1 Topic: 8.3 Two Main Methods of Measuring GDP Learning Outcome: Macro-2: Explain the […]

Copyright © 2018 Pearson Education, Inc. 5) If nominal Gross Domestic Product (GDP) in 2001 was $1 trillion, nominal Gross Domestic Product (GDP) in 2018 was $2 trillion, and the 2001 and 2018 price indexes were 100 and 250 respectively […]

Copyright © 2018 Pearson Education, Inc. 15) Intermediate goods are NOT included in Gross Domestic Product (GDP) calculations because A) they are used in the production of final goods and would then be counted twice. B) they are produced overseas. […]

Lecture Extender Examples 529 Chapter 8 How the Internet Has Contributed to a Lower U.S. Inventory-to-Sales Ratio In the 1990s, there was widespread adoption of just-in-time inventory techniques by U.S. businesses, which are techniques that companies use to keep inventories […]

examine the concepts and methods of national income accounting. The various measures of income and output such as gross domestic product, net domestic product, national income, personal income, and disposable personal income are explained in this section. The second objective […]

Copyright © 2018 Pearson Education, Inc. Economics Today, 19e (Miller) Chapter 8 Measuring the Economy’s Performance 8.1 The Simple Circular Flow 1) The simple circular flow of income shows that the total income in an economy equals A) total profits […]

Copyright © 2018 Pearson Education, Inc. 87) Using above table, how much is contributed to the GDP from the production of the textbook? A) $118.90 B) $32.00 C) $78.90 D) $40.00 Answer: D Diff: 2 Topic: 8.2 National Income Accounting […]

Copyright © 2018 Pearson Education, Inc. 7) The total factor payments to all resource owners is called A) net domestic product. B) personal income. C) national income. D) gross domestic income. Answer: C Diff: 2 Topic: 8.4 Other Components of […]

Copyright © 2018 Pearson Education, Inc. 111) When considering international trade, which of the following would be most conducive to domestic economic growth? A) a closed economy B) an economy in which its domestic industries are protected by tariffs C) […]

Copyright © 2018 Pearson Education, Inc. Economics Today, 19e (Miller) Chapter 9 Global Economic Growth and Development 9.1 How Do We Define Economic Growth? 1) An increase in growth rates will cause the production possibilities curve to A) shift inward. […]

Copyright © 2018 Pearson Education, Inc. 69) Which of the following would typically be considered a cost of economic growth? A) increased illiteracy B) decreased levels of health C) increased poverty D) urban congestion Answer: D Diff: 2 Topic: 9.1 […]

Lecture Extender Examples 531 Chapter 9 Global Economic Growth and Development Productivity Growth in the United States since 2002 Productivity is the major driver of economic growth in the United States, accounting for about half of the increase in real […]

human capital, population, and property rights. Some empirical measurements of these determinants as they pertain to growth are presented. An introduction to development economics is presented, followed by a discussion on the recent growth patterns of the United States and […]

Copyright © 2018 Pearson Education, Inc. 9) The study of factors that contribute to the economic development of a country is A) population growth economics. B) development economics. C) the theory of technological advancements. D) the new technology theory. Answer: […]

Copyright © 2018 Pearson Education, Inc. 50) Countries with higher rates of saving A) experience lower growth rates in the future. B) have a large population. C) have a greater number of poor people. D) have higher rates of growth. […]