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Part of the lag in monetary policy effects is due to a. the long political process of monetary policy decisions. b. precise economic forecasts. c. the time required for firms and households to alter their spending plans. d. changes in […]

Suppose you know the value of the consumer price index (CPI) in year 1 as well as the inflation rate in year 2. Which of the following equations is valid for the CPI in year 2? a. CPI in year […]

If a country has net exports of $8 billion and sold $40 billion of goods and services abroad, then it has a. $48 billion of imports and $40 billion of exports. b. $48 billion of exports and $40 billion of […]

The possibility of speculative bubbles in the stock market arises in part because a. stock prices may not depend at all on psychological factors. b. fundamental analysis may be the correct way to evaluate the value of stocks. c. future […]

Table 3-9 Barb and Jim run a business that sets up and tests computers. Assume that Barb and Jim can switch between setting up and testing computers at a constant rate. The following table applies. Minutes Needed to Number of […]

Pessimism Suppose the economy is in long-run equilibrium. Then because of corporate scandal, international tensions, and loss of confidence in policymakers, people become pessimistic regarding the future and retain that level of pessimism for some time. Refer to Pessimism. In […]

A 2009 Chevrolet model has more horsepower than the 2008 version and is included in the BLS basket of goods. BLS attempts to account for this change in the market basket by a. dropping the good from the basket. b. […]

Sonya, a citizen of Denmark, produces boots and shoes that she sells to department stores in the United States. Other things the same, these sales a. increase U.S. net exports and have no effect on Danish net exports. b. decrease […]

During the mid and last part of the 1990’s both inflation and unemployment were low. In general this could have been the result of a. adverse supply shocks that shifted the short-run Phillips curve left. b. adverse supply shocks that […]

Figure 9-11 Refer to Figure 9-11. Producer surplus in this market after trade is a. C. b. C + B. c. A + B + D. d. B + C + D. Which of the following can the Fed do […]

In equilibrium which of the following happens if the U.S. imposes tariffs on leather boots? a. U.S. production of leather boots rise b. U.S. net exports rise c. the exchange rate falls d. All of the above are correct. Which […]

When a tax is placed on the buyers of tennis racquets, the size of the tennis racquet market a. and the price paid by buyers both decrease. b. decreases, but the price paid by buyers increases. c. increases, but the […]

For a country that is considering the adoption of either a tariff or an import quota on a particular good, an important difference is that a. an import quota has no effect on consumer surplus, while a tariff decreases consumer […]

Suppose a government that taxed all interest income changed its tax law so that the first $5,000 of a taxpayer’s interest income was tax free. This would shift the a. supply of loanable funds to the right, causing interest rates […]

The Federal Funds rate is the interest rate a. banks charge each other for short-term loans. b. the Fed charges depository institutions for short-term loans. c. the Fed pays on deposits. d. interest rate on 3 month Treasury bills. According […]

Holding all other factors constant and using the midpoint method, if a calculator manufacturer increases production from 40 to 50 units when price increases by 20 percent, then supply is a. inelastic, since the price elasticity of supply is equal […]

Figure 6-2 Refer to Figure 6-2. The price ceiling a. is binding. b. causes a shortage. c. causes the quantity demanded to exceed the quantity supplied. d. All of the above are correct. If aggregate demand shifts left, then in […]

Figure 7-18 Refer to Figure 7-18. If the price decreases from $22 to $16 due to a shift in the supply curve, consumer surplus increases by a. $120. b. $360. c. $480. d. $600. Bob is looking for work after […]

You put money into an account that earns a 5 percent nominal interest rate. The inflation rate is 3 percent, and your marginal tax rate is 20 percent. What is your after-tax real rate of interest? a. 3.4 percent b. […]

Identify the immediate effect of each of the following events on U.S. GDP and its components. a. James receives a Social Security check. b. John buys an Italian sports car. c. Henry buys domestically produced tools for his construction company. […]

Monetary Policy in Highland Highland has had inflation of 15% for many years. Highland establishes a new central bank, the Bank of Highland, with the hopes of reducing the inflation rate. Refer to Monetary Policy in Highland. The Bank of […]

Suppose that the demand for lava lamps is elastic, and the supply of lava lamps is inelastic. A tax of $2 per lamp levied on lava lamps will increase the price paid by buyers of lava lamps by a. less […]

Figure 3-4 Perry’s Production Possibilities Frontier Jordan’s Production Possibilities Frontier Refer to Figure 3-4. If Perry and Jordan each divides their time equally between writing novels and writing poems, then total production is a. 2 novels and 6 poems. b. […]

Janelle earned a salary of $40,000 in 1996 and $65,000 in 2006. The consumer price index was 160 in 1996 and 266 in 2006. Janelle’s 2006 salary in 1996 dollars is a. $39,097.74. b. $43,062.50. c. $68,900.00. d. $108,062.50. For […]

When opening a print shop you need to buy printers, computers, furniture, and similar items. Economists call these expenditures a. capital investment. b. investment in human capital. c. business consumption expenditures. d. personal saving. The sale of stocks a. and […]

Table 16-1. The information in the table pertains to an imaginary economy. Refer to Table 16-1. What is the M2 money supply? a. $125 billion b. $296 billion c. $351 billion d. $431 billion Suppose there are only two people […]

In the open-economy macroeconomic model, the supply of loanable funds comes from a. national saving. b. private saving. c. domestic investment. d. the sum of domestic investment and net capital outflow. Which of the following is consistent with moving from […]

Other things the same, an increase in the U.S. interest rate causes the quantity of loanable funds supplied to a. rise because net capital outflow and domestic investment rise. b. rise because national saving rises. c. fall because net capital […]

A Texas household receives a Social Security check for $500, which it uses to purchase a $460 television made in Korea by a Korean firm and a $40 dinner at a local restaurant. As a result, U.S. GDP a. does […]

If the Kenyan nominal exchange rate declines, and prices are unchanged in Kenya and abroad, then the Kenyan real exchange rate a. does not change. b. rises. c. declines d. None of the above is necessarily correct. Which of the […]

Figure 7-5 Refer to Figure 7-5. If the government imposes a price floor of $120 in this market, then consumer surplus will decrease by a. $75. b. $125. c. $225. d. $300. Which of the following statements exemplifies a principle […]

If the cross-price elasticity of demand for two goods is 1.25, then a. the two goods are luxuries. b. the two goods are substitutes. c. one of the goods is normal and the other good is inferior. d. the demand […]

Recently, Lisa’s wealth increased by $500. If her wealth were to increase by another $500 in the near future, then her utility would increase, but not by as much as it increased with the recent increase to her wealth. Based […]

Which of the following firms is likely to have the greatest market power? a. an electric company b. a farmer c. a grocery store d. a local electronics retailer In one year, you meet 52 people who are each unemployed […]

Scenario 21-1. Take the following information as given for a small, imaginary economy: When income is $10,000, consumption spending is $6,500. When income is $11,000, consumption spending is $7,300. Refer to Scenario 21-1. The marginal propensity to consume for this […]

The price elasticity of demand measures how much a. quantity demanded responds to a change in price. b. quantity demanded responds to a change in income. c. price responds to a change in demand. d. demand responds to a change […]

Table 3-1 Assume that Andia and Zardia can switch between producing wheat and producing beef at a constant rate. Minutes Needed to Make 1 Refer to Table 3-1. Which of the following combinations of wheat and beef could Zardia not […]

If the price of a good has risen over time, a. it must have become more scarce. b. it must have become less scarce. c. it has become more scarce only if the price adjusted for inflation has risen. d. […]

Fortunade Corporation stock has a price of $100 per share, a dividend of $1.60 per share, and retained earnings of $2.00 per share. The dividend yield on this stock is a. 2.8 percent. b. 2.0 percent. c. 1.6 percent. d. […]

According to the classical dichotomy, which of the following is not influenced by monetary factors? a. the price level b. real GDP c. nominal interest rates d. All of the above are correct. If the dollar appreciates, perhaps because of […]

The argument that purchases of minivans cause large families is an example of a. omitted variables. b. normative statements. c. reverse causality. d. bias. Figure 3-9 Uzbekistan’s Production Possibilities Frontier Azerbaijan’s Production Possibilities Frontier Refer to Figure 3-9. Suppose Uzbekistan […]

When a country experiences capital flight, the interest rate a. falls because the demand for loanable funds shifts left. b. falls because the supply for loanable funds shifts right. c. rises because the demand for loanable funds shifts right. d. […]

Figure 7-18 Refer to Figure 7-18. At the equilibrium price, consumer surplus is a. $480. b. $640. c. $1,120. d. $1,280. A rational decisionmaker a. ignores marginal changes and focuses instead on “the big picture.” b. ignores the likely effects […]

Other things the same, as the price level falls, a. the money supply falls. b. interest rates rise. c. a dollar buys more domestic goods. d. the aggregate-demand curve shifts right. Figure 3-4 Perry’s Production Possibilities Frontier Jordan’s Production Possibilities […]

Which of the following is not correct? a. When a union is present in a labor market, wages are not determined by the equilibrium of supply and demand. b. Like any cartel, a union is a group of sellers acting […]

Figure 6-7 Refer to Figure 6-7. Which of the following price controls would cause a surplus of 20 units of the good? a. a price ceiling set at $4 b. a price ceiling set at $5 c. a price floor […]

A U.S. firm buys sardines from Morocco and pays for them with U.S. dollars. Other things the same, U.S. net exports a. increase, and U.S. net capital outflow increases. b. increase, and U.S. net capital outflow decreases. c. decrease, and […]

Treasury Bonds are a. liquid, but not a store of value. b. a store of value, but not liquid. c. both liquid and a store of value. d. neither liquid nor a store of value. Suppose a stock market crash […]

Real GDP per person in rich countries, such as Germany, is sometimes more than 10 times that of poor countries like India. A U.S. firm produces sweatshirts in the first quarter of 2010 and adds them to its inventory. In […]

If muffins and bagels are substitutes, a higher price for bagels would result in a(n) a. increase in the demand for bagels. b. decrease in the demand for bagels. c. increase in the demand for muffins. d. decrease in the […]

In the loanable funds model, an increase in an investment tax credit would create a a. shortage at the former equilibrium interest rate. This shortage would lead to a rise in the interest rate. b. shortage at the former equilibrium […]

Economists build economic models by a. generating data. b. conducting controlled experiments in a lab. c. making assumptions. d. reviewing statistical forecasts. Which of the following events would shift money demand to the left? a. an increase in the price […]

Macroeconomics is the study of a. individual decision makers. b. international trade. c. economy-wide phenomena. d. markets for large products. The theory of efficiency wages provides a possible explanation as to why a. workers form unions. b. firms should try […]

Figure 4-22 Panel (a) Panel (b) Panel (c) Panel (d) Refer to Figure 4-22 Which of the four panels represents the market for winter coats as we progress from winter to spring? a. Panel (a) b. Panel (b) c. Panel […]

Industrial machinery is an example of a. a factor of production that in the past was an output from the production process. b. technological knowledge. c. a production function. d. an item which always has the property called constant returns […]

In which of the following cases is it most likely that an increase in the size of a tax will decrease tax revenue? a. The price elasticity of demand is small, and the price elasticity of supply is large. b. […]

Oil is considered to be a non-renewable energy source. Oil a. is an unlimited resource. b. is a scarce resource. c. is not a productive resource. d. has no opportunity cost. The market for diamond rings is closely linked to […]

Sheamous loses his job and decides to sit on the beach rather than look for work during the next few months. Other things the same, the unemployment rate a. increases and the labor-force participation rate decreases. b. increases and the […]

Which of the following statements is correct for the short run? a. Output is determined by the amount of capital, labor, and technology; the interest rate adjusts to balance the supply and demand for money; the price level adjusts to […]

When a binding price ceiling is imposed on a market, a. price no longer serves as a rationing device. b. the quantity supplied at the price ceiling exceeds the quantity that would have been supplied without the price ceiling. c. […]

One of the widely acknowledged problems with using the consumer price index as a measure of the cost of living is that the CPI a. fails to measure all changes in the quality of goods. b. displays a housing bias. […]

The benefit to buyers of participating in a market is measured by a. the price elasticity of demand. b. consumer surplus. c. the maximum amount that buyers are willing to pay for the good. d. the equilibrium price. Suppose that […]

If, at some interest rate, the quantity of money supplied is greater than the quantity of money demanded, people will desire to a. sell interest-bearing assets, causing the interest rate to decrease. b. sell interest-bearing assets, causing the interest rate […]

Table 4-9 The demand schedule below pertains to sandwiches demanded per week. Refer to Table 4-9. Regarding Harry and Darby, whose demand for sandwiches conforms to the law of demand? a. only Harry’s b. only Darby’s c. both Harry’s and […]

Which of the following is included in M2 but not in M1? a. demand deposits b. corporate bonds c. large time deposits d. money market mutual funds Today’s demand curve for gasoline could shift in response to a change in […]

Unemployment data are collected a. from unemployment insurance claims. b. through a regular survey of about 60,000 households. c. through a regular survey of about 200,000 firms. d. using all of the above. In the long run a reduction in […]

If the cost of producing sofas decreases, then consumer surplus in the sofa market will a. increase. b. decrease. c. remain constant. d. increase for some buyers and decrease for other buyers. Figure 20-2. Refer to Figure 20-2. Point B […]

Which of the following statements about real and nominal interest rates is correct? a. When the nominal interest rate is rising, the real interest rate is necessarily rising; when the nominal interest rate is falling, the real interest rate is […]

Table 3-4 Assume that the farmer and the rancher can switch between producing meat and producing potatoes at a constant rate. Labor Hours Needed to Make 1 Pound of Pounds Produced in 24 Hours Refer to Table 3-4. The farmer […]

At which interest rate is the present value of $360 three years from today equal to about $310 today? a. 4.7 percent b. 5.1 percent c. 5.5 percent d. 5.9 percent Last year country A had a nominal GDP of […]

Figure 13-1. The figure depicts a demand-for-loanable-funds curve and two supply-of-loanable-funds curves. Refer to Figure 13-1. Which of the following events would shift the supply curve from S1 to S2? a. In response to tax reform, firms are encouraged to […]

The efficiency-wage theory of worker health is a. more relevant for explaining unemployment in less developed countries than in rich countries. b. more relevant for explaining unemployment in rich countries than in less developed countries. c. equally relevant for explaining […]

State what, if anything, each of the following does to the supply or demand of loanable funds. a. net capital outflow increases at each interest rate b. domestic investment increases at each interest rate c. the government deficit increases d. […]

Which of the following statements is correct? a. The demand for flat-screen computer monitors is more elastic than the demand for monitors in general. b. The demand for grandfather clocks is more elastic than the demand for clocks in general. […]

Figure 3-3 Arturo’s Production Possibilities Frontier Dina’s Production Possibilities Frontier Refer to Figure 3-3. If Arturo and Dina each divides his/her time equally between the production of tacos and burritos, then total production is a. 200 tacos and 150 burritos. […]

Figure 9-2 Refer to Figure 9-2. As a result of trade, total surplus increases by a. $80. b. $97.50. c. $162.50. d. $495.50. Table 3-12 Labor Hours Needed to Make 1 Pound of: Amount Produced in 40 hours Answer: B […]

Which of the following are effects of an increased budget deficit? a. the supply of loanable funds does not change; a higher interest rate reduces private saving b. the supply of loanable funds does not change; a higher interest rate […]

Accumulated over a long span of time, the tax rate on interest income a. removes all benefits from saving. b. reduces the benefits from saving by a small amount. c. reduces the benefits from saving by a large amount. d. […]

The property of society getting the most it can from its scarce resources is called a. equity. b. efficiency. c. equality. d. efficacy. Figure 7-2 Refer to Figure 7-2. When the price rises from P1 to P2, consumer surplus a. […]

Which of the following is not correct? a. The U.S. economy has never experienced deflation. b. Since 1965, the U.S. nominal interest rate has exceeded the U.S. real interest rate. c. Since 1965, the U.S. economy has experienced rising consumer […]

When the price of a good is $5, the quantity demanded is 100 units per month; when the price is $7, the quantity demanded is 80 units per month. Using the midpoint method, the price elasticity of demand is about […]

U.S. international trade has a. decreased because of a decrease in the trade of goods with a high value per pound. b. decreased because of an increase in the trade of goods with a high value per pound. c. increased […]

Sometimes On Time (SOT) Airlines is considering buying a new jet. SOT would be more likely to buy a new jet if there were either a. a decrease in the price of a new jet or a decrease in the […]

Moving from the late 1960s to 1970-1973, a. inflation remained high while the unemployment rate was lower than in the late 1960s. b. inflation remained high while the unemployment rate was higher than in the late 1960s. c. inflation remained […]

Figure 9-11 Refer to Figure 9-11. The change in total surplus in this market because of trade is a. A, and this area represents a loss of total surplus. b. B, and this area represents a gain in total surplus. […]

The case of perfectly elastic demand is illustrated by a demand curve that is a. vertical. b. horizontal. c. downward-sloping but relatively steep. d. downward-sloping but relatively flat. Which of the following statements is correct for the long run? a. […]

Figure 14-3. The figure shows a utility function for Rob. Refer to Figure 14-3. If most people’s utility functions look like Rob’s utility function, then it is easy to explain why a. people buy various types of insurance. b. we […]

Figure 8-11 Refer to Figure 8-11. The size of the tax is represented by the a. length of the line segment connecting points A and B. b. length of the line segment connecting points A and C. c. length of […]

Right-to-work laws a. guarantee workers the right to form unions. b. give workers in a unionized firm the right to choose whether to join the union. c. prevent employers from hiring permanent replacements for workers who are on strike. d. […]

Food and clothing tend to have a. small income elasticities because consumers, regardless of their incomes, choose to buy relatively constant quantities of these goods. b. small income elasticities because consumers buy proportionately more of both goods at higher income […]

A decrease in quantity supplied a. results in a movement downward and to the left along a fixed supply curve. b. results in a movement upward and to the right along a fixed supply curve. c. shifts the supply curve […]

If interest rates rose more in the U.S. than in Canada, then other things the same a. U.S. citizens would buy more Canadian bonds and Canadian citizens would buy more U.S. bonds. b. U.S. citizens would buy more Canadian bonds […]

Refer to Table 2-5. Table 2-5 shows one set of production possibilities. What is the opportunity cost of an increase in the production of coffee from 350 pounds to 650 pounds? a. 400 dozen cookies b. 300 dozen cookies c. […]

Country A experienced a growth rate of real GDP per person of 4 percent per year throughout the 1900’s. In view of other countries’ experiences during this time country A’s growth was a. exceptionally high. b. moderately high. c. moderately […]

Nominal exchange rates a. vary little over time. b. vary substantially over time. c. appreciate over time for most countries. d. depreciate over time for most countries. In the United States, before OPEC increased the price of crude oil in […]

Ivan, a Russian citizen, sells several hundred cases of caviar to a restaurant chain in the United States. By itself, this sale a. increases U.S. net exports and decreases Russian net exports. b. increases U.S. net exports and has no […]

A U.S. firm produces nail guns in the first quarter of 2010 and adds them to its inventory. In the second quarter of 2010 the firm sells the nail guns to a U.S. construction company. In which quarter(s) does(do) these […]

A trade policy is a government policy a. directed toward the goal of improving the tradeoff between equity and efficiency. b. that directly influences the quantity of goods and services that a country imports or exports. c. intended to exploit […]

A. W. Phillips’ findings were based on data a. from 1861-1957 for the United Kingdom. b. from 1861-1957 for the United States. c. mostly from the post-World War II period in the United Kingdom. d. mostly from the post-World War […]

When a person engages in detailed analysis of a company to determine its value, he or she is engaging in a. standard deviation analysis. b. informational analysis. c. fundamental analysis. d. efficiency analysis. “When workers have a relatively small quantity […]

In a particular country in 1999, the average worker had to work 20 hours to produce 55 units of output. In that same country in 2009, the average worker needed to work 28 hours to produce 77 units of output. […]

Katie is planning to sell her house, and she is considering making two upgrades to the house before listing it for sale. Replacing the carpeting will cost her $2,500 and replacing the roof will cost her $9,000. Katie expects the […]

A U.S. firm buys bonds issued by a technology center in India. This purchase is an example of U.S. a. foreign portfolio investment. By itself it is an increase in U.S. holdings of foreign bonds and increases U.S. net capital […]

The Fed lowered interest rates in 2001 and 2002. This implies, other things the same, that the Fed a. increased the money supply because it was concerned about unemployment. b. increased the money supply because it was concerned about inflation. […]

An increase in the price of a good would a. increase the supply of the good. b. increase the amount purchased by buyers. c. give producers an incentive to produce more. d. decrease both the quantity demanded of the good […]

Mario was laid off two months ago. He has not searched for other work because he is expecting to be recalled to work. In the U.S. labor force statistics Mario is counted as a. unemployed and in the labor force. […]

Babe Ruth, the famous baseball player, earned $80,000 in 193 Today, the best baseball players can earn more than 400 times as much as Babe Ruth earned in 193 However, prices have also risen since 193 We can conclude that […]

Which of the following accounts for about two-thirds of the decline in output during a recession? a. the decline in consumption expenditures on consumer durables alone b. the decline in total consumption spending alone c. the decline in investment spending […]

The Laffer curve relates a. the tax rate to tax revenue raised by the tax. b. the tax rate to the deadweight loss of the tax. c. the price elasticity of supply to the deadweight loss of the tax. d. […]

Figure 21-2. On the left-hand graph, MS represents the supply of money and MD represents the demand for money; on the right-hand graph, AD represents aggregate demand. The usual quantities are measured along the axes of both graphs. . Refer […]

Suppose that monetary neutrality and the Fisher effect both hold. An increase in the money supply growth rate increases a. the inflation rate and growth of real GDP. b. the inflation rate but not the growth rate of real GDP. […]

Figure 14-4. The figure shows a utility function for Dexter. Refer to Figure 14-4. Suppose Dexter begins with $1,300 in wealth. Starting from there, a. the pain of losing $500 of his wealth would equal the pleasure of adding $500 […]

Other things the same, a higher real interest rate raises the quantity of a. domestic investment. b. net capital outflow. c. loanable funds demanded. d. loanable funds supplied. The Earned Income Tax Credit is an example of a a. minimum-wage […]

A likely effect of government policies that redistribute income and wealth from the wealthy to the poor is that those policies a. enhance equality. b. reduce efficiency. c. reduce the reward for working hard. d. All of the above are […]

Scenario 13-1. Assume the following information for an imaginary, closed economy. GDP = $120,000; consumption = $70,000; private saving = $9,000; national saving = $12,000. Refer to Scenario 13-1. For this economy, investment amounts to a. $4,000. b. $9,000. c. […]

One problem with the consumer price index stems from the fact that, over time, consumers tend to buy larger quantities of goods that have become relatively less expensive and smaller quantities of goods that have become relatively more expensive. This […]

The slow growth of U.S. incomes during the 1970s and 1980s can best be explained by a. unstable economic conditions in Eastern Europe. b. increased competition from abroad. c. a decline in the rate of increase in U.S. productivity. d. […]

A pharmaceutical company unexpectedly announces that it just developed an important new drug. This news should a. raise the price of the corporation’s stock; if it does not the stock is overvalued. b. raise the price of the corporation’s stock; […]

Two of the economy’s most important financial intermediaries are a. suppliers of funds and demanders of funds. b. banks and the bond market. c. the stock market and the bond market. d. banks and mutual funds. A roll of duct […]

In the circular-flow diagram, in the markets for a. goods and services, households and firms are both sellers. b. goods and services, households are sellers and firms are buyers. c. the factors of production, households are sellers and firms are […]

Sari puts $100 into an account with an interest rate of 10 percent. According to the rule of 70, about how much does she have at the end of 21 years? a. $210 b. $300 c. $800 d. $1,010 When […]

Figure 3-5 Hosne’s Production Possibilities Frontier Merve’s Production Possibilities Frontier Refer to Figure 3-5. If Hosne and Merve switch from each person dividing her time equally between the production of purses and wallets to each person spending all of her […]

All else equal, what happens to consumer surplus if the price of a good decreases? a. Consumer surplus increases. b. Consumer surplus decreases. c. Consumer surplus is unchanged. d. Consumer surplus may increase, decrease, or remain unchanged. In the early […]

Suppose that the adult population is 4 million, the number of unemployed is 0.25 million, and the labor-force participation rate is 75%. What is the unemployment rate? a. 6.25% b. 8.3% c. 9.1% d. 18.75% If a bank posts a […]

Figure 17-1 Refer to Figure 17-1. When the money supply curve shifts from MS1 to MS2, a. the demand for goods and services decreases. b. the economy’s ability to produce goods and services increases. c. the equilibrium price level decreases. […]

Suppose the world had only two countries and domestic residents of country A purchased $50 billion of assets from country B and country B purchased $30 billion of assets from country A. What would the net capital outflows of both […]

An increase in the price level and a reduction in output would result from a. an increase in the money supply. b. an increase in government expenditures. c. a fall in stock prices. d. bad weather in farm states. Which […]

The labor-force participation rate measures the percentage of the a. total adult population that is in the labor force. b. total adult population that is employed. c. labor force that is employed. d. labor force that is either employed or […]

Figure 8-1 Refer to Figure 8-1. Suppose the government imposes a tax of P’ – P”’. The area measured by J+K+I represents a. consumer surplus after the tax. b. consumer surplus before the tax. c. producer surplus after the tax. […]

What does the Fed auction at the Term-Auction Facility? a. government bonds of a quantity it sets b. government bonds with the quantity determined at the auction c. loans of a quantity it sets d. loans with the quantity determined […]

When a tax is placed on the buyers of lemonade, the a. sellers bear the entire burden of the tax. b. buyers bear the entire burden of the tax. c. burden of the tax will be always be equally divided […]

Figure 4-12 Refer to Figure 4-12. If Producer A and Producer B are the only producers in the market, then the market quantity supplied when the price is $4 is a. 4 units. b. 8 units. c. 12 units. d. […]

Consider the following traders who meet. Which, if any, pairs of traders has a double coincidence of wants? a. Bob with Alice b. Ted with Alice c. Bob with Mary, Ted with Bob, and Ted with Alice d. None of […]

The price paid by buyers in a market will decrease if the government a. increases a binding price floor in that market. b. increases a binding price ceiling in that market. c. decreases a tax on the good sold in […]

Suppose the government imposes a 20-cent tax on the sellers of artificially-sweetened beverages. The tax would shift a. demand, raising both the equilibrium price and quantity in the market for artificially-sweetened beverages. b. demand, lowering the equilibrium price and raising […]

In a competitive market, the quantity of a product produced and the price of the product are determined by a. buyers. b. sellers. c. both buyers and sellers. d. None of the above is correct. Table 4-2 Refer to Table […]

When demand is inelastic, an increase in price will cause a. an increase in total revenue. b. a decrease in total revenue. c. no change in total revenue but an increase in quantity demanded. d. no change in total revenue […]

The historical rise in living standards of American workers is primarily a result of a. the influence of labor unions in America. b. tariff protection imposed by the American government. c. the enactment of minimum-wage laws in America. d. the […]

Figure 9-10. The figure applies to Mexico and the good is rifles. Refer to Figure 9-10. Mexico’s gains from trade are represented by the area that is bounded by the points a. (0, P0), (Q0, P0), (Q2, P1), and (0, […]

When quantity supplied increases at every possible price, we know that the supply curve has a. shifted to the left. b. shifted to the right. c. not shifted; rather, we have moved along the supply curve to a new point […]

If a country raises its budget deficit, the net capital outflow a. rises, so the supply of its currency shifts right in the market for foreign currency exchange. b. rises, so the demand for its currency shifts right in the […]

The supply curve for a good is a line that relates a. profit and quantity supplied. b. quantity supplied and quantity demanded. c. price and quantity supplied. d. price and profit. Figure 5-12 Refer to Figure 5-12. Total revenue when […]

In general, elasticity is a measure of a. the extent to which advances in technology are adopted by producers. b. the extent to which a market is competitive. c. how firms’ profits respond to changes in market prices. d. how […]

Figure 3-2 Peru’s Production Possibilities Frontier Refer to Figure 3-2. Suppose Madagascar is willing to trade 40 rubies to Peru for each emerald that Peru produces and sends to Madagascar. Which of the following combinations of emeralds and rubies could […]

In January the price of dark chocolate candy bars was $2.00, and Willy’s Chocolate Factory produced 80 pounds. In February the price of dark chocolate candy bars was $2.50, and Willy’s produced 110 pounds. In March the price of dark […]

Other things the same, as the price level rises, a. the dollar depreciates. b. the interest rate falls. c. people feel less wealthy. d. All of the above are correct. Figure 3-4 Perry’s Production Possibilities Frontier Jordan’s Production Possibilities Frontier […]

Table 7-2 This table refers to five possible buyers’ willingness to pay for a case of Vanilla Coke. Refer to Table 7-2. Which of the following is not true? a. At a price of $9.00, no buyer is willing to […]

Most economists view the United States’ experience with trade as a. one from which no firm conclusions about the virtues of free trade can be reached, due to the relatively short history of international trade in the U.S. b. one […]

Table 16-4. The First Bank of Roswell Refer to Table 16-4. Suppose the bank faces a reserve requirement of 10 percent. Starting from the situation as depicted by the T-account, a customer deposits an additional $50,000 into his account at […]

Figure 7-20 Refer to Figure 7-20. At equilibrium, producer surplus is measured by the area a. ACG. b. AFG. c. KBG. d. CFG. Following the implementation of laws requiring automobiles to have seat belts, which of the following occurred? a. […]

The term used to describe a situation in which markets do not allocate resources efficiently is a. economic meltdown. b. market failure. c. equilibrium. d. the effect of the invisible hand. Monetary policy affects employment a. only in the long […]

Figure 7-20 Refer to Figure 7-20. If 10 units of the good are produced and sold, then a. the marginal cost to sellers exceeds the marginal value to buyers. b. producer surplus is maximized. c. total surplus is minimized. d. […]

Economists have helped modify the debate over the environment a. by pointing out that nature is invaluable. b. by focusing discussion on issues of resource allocation. c. by lobbying Congress for acid rain legislation. d. by arguing against tradeable permits […]

A COLA automatically raises the wage when a. GDP increases. b. taxes increase. c. the consumer price index increases. d. the producer price index increases. Figure 3-3 Arturo’s Production Possibilities Frontier Dina’s Production Possibilities Frontier Refer to Figure 3-3. Arturo […]

Supply-side economists focus more than other economists on a. how fiscal policy affects consumption. b. the multiplier affect of fiscal policy. c. how fiscal policy affects aggregate supply. d. the money supply. A country reported nominal GDP of $200 billion […]

Suppose you are deciding whether or not to buy a particular bond for $2,990.08. If you buy the bond and hold it for 5 years, then at that time you will receive a payment of $5,000. You will buy the […]

If a country’s saving rate increases, then in the long run a. productivity is higher but real GDP per person is not higher. b. real GDP per person is higher but productivity is not higher. c. productivity and real GDP […]

If the quality of a good improves while its price remains the same, then the value of a dollar a. rises and the cost of living increases. b. rises and the cost of living decreases. c. falls and the cost […]

Which of these statements does not apply to market economies? a. Prices prevent decentralized decision making from degenerating into chaos. b. Prices coordinate the actions of millions of people with varying abilities and desires. c. Prices ensure that anyone who […]

The sticky-wage theory of the short-run aggregate supply curve says that when the price level is lower than expected, a. production is more profitable and employment rises. b. production is more profitable and employment falls. c. production is less profitable […]

In one day Alpha Cabinet Company made 40 cabinets with 320 hours of labor. What was Alpha Cabinet Company’s productivity? a. 1/8 cabinet per hour b. 8 hours per cabinet c. 40 cabinets d. None of the above is correct. […]

If Robert is risk-averse, then he will always a. choose not to play a game where he has a 50 percent chance of winning $1 and a 50 percent chance of losing $1. b. choose not to play a game […]

The introduction of a union into an industry a. raises wages and employment in that industry. b. lowers wages and employment in that industry. c. lowers wages and raises employment in that industry. d. raises wages and lowers employment in […]

Suppose the government eliminates all environmental regulations and, as a result, the production of goods and services increases, but there is considerably more pollution. Based on this scenario, which of the following statements is correct? a. GDP would definitely increase, […]

Which of the following is included in M1 and M2? a. traveler’s checks b. savings deposits c. money market mutual funds d. small time deposits Sheri, a U.S. citizen, builds and operates a bookstore in Spain. This action is an […]

To increase the money supply, the Fed could a. sell government bonds. b. increase the discount rate. c. decrease the reserve requirement. d. None of the above is correct. In the open-economy macroeconomic model, which of the following increases net […]

Figure 8-1 Refer to Figure 8-1. Suppose the government imposes a tax of P’ – P”’. The area measured by J represents a. consumer surplus after the tax. b. consumer surplus before the tax. c. producer surplus after the tax. […]

If the reserve ratio is 20 percent, the money multiplier is a. 2. b. 4. c. 5. d. 8. Figure 9-12 Refer to Figure 9-12. Equilibrium price and equilibrium quantity without trade are a. $27 and 400. b. $27 and […]

Cleo promises to pay Jacques $1,000 in two years. If the interest rate is 6 percent, how much is this future payment worth today? a. $883.60 b. $887.97 c. $890.00 d. None of the above are correct to the nearest […]

If velocity = 3.5, the quantity of money = 15,000, and the price level = 1.2, then the real value of output is a. 3,571.43. b. 4,285.71. c. 5,142.86. d. 43,750.00. The “natural” rate of unemployment is the unemployment rate […]

If banks and speculators in the U.S. decided to exchange U.S. dollars for the foreign currencies of other countries, but foreigners do not desire to increase their holdings of U.S. dollars, then U.S. net exports would a. rise and aggregate […]

Morgan, a financial advisor, has told her clients the following things. Which of her statements is not correct? a. “U.S. government bonds generally pay a higher rate of interest than corporate bonds.” b. “The interest received on corporate bonds is […]

Which of the following concepts is most helpful in explaining why investment increases when the interest rate falls? a. deadweight loss b. present value c. economic growth d. financial intermediation Figure 7-21 Refer to Figure 7-21. If the government mandated […]

Table 16-5. Bank of Pleasantville Refer to Table 16-5. Assume the Fed’s reserve requirement is 9 percent and all banks besides the Bank of Pleasantville are exactly in compliance with the 9 percent requirement. Further assume that people hold only […]

Table 16-3. The First Bank of Fairfield Refer to Table 16-3. If $1,000 is deposited into the First Bank of Fairfield, and the bank takes no other actions, its a. reserves will increase by $200. b. liabilities will decrease by […]

Phillips found a a. positive relation between unemployment and inflation in the United Kingdom. b. positive relation between unemployment and inflation in the United States. c. negative relation between unemployment and inflation in the United States. d. negative relation between […]

A decrease in supply is represented by a a. movement downward and to the left along a supply curve. b. movement upward and to the right along a supply curve. c. rightward shift of a supply curve. d. leftward shift […]

Equilibrium quantity must decrease when demand a. increases and supply does not change, when demand does not change and supply decreases, and when both demand and supply decrease. b. increases and supply does not change, when demand does not change […]

Figure 8-7 The vertical distance between points A and B represents a tax in the market. Refer to Figure 8-7. Which of the following statements summarizes the incidence of the tax? a. For each unit of the good that is […]

Which of the following would do the most to reduce a trade deficit? a. increase domestic saving b. increase domestic political stability and respect of property rights c. other countries reduce their trade restrictions d. raise tariffs If the government […]

A market supply curve shows a. the total quantity supplied at all possible prices. b. the average quantity supplied by producers at all possible prices. c. how quantity supplied changes when consumer income changes. d. suppliers’ responses, in terms of […]

Real GDP a. moves in the same direction as unemployment. b. is not adjusted for inflation. c. measures economic activity and real income. d. All of the above are correct. Which of the following lists includes only changes that shift […]

A risk-averse person has a. a utility function whose slope gets flatter as wealth rises. This means they have increasing marginal utility of wealth. b. a utility function whose slope gets flatter as wealth rises. This means they have diminishing […]

Figure 9-4. The domestic country is Nicaragua. Refer to Figure 9-4. With trade, Nicaragua a. imports 150 calculators. b. imports 250 calculators. c. exports 100 calculators. d. exports 250 calculators. Figure 8-3 The vertical distance between points A and C […]

Permanent tax cuts shift the AD curve a. farther to the right than do temporary tax cuts. b. not as far to the right as do temporary tax cuts. c. farther to the left than do temporary tax cuts. d. […]

If U.S. exports are $300 billion and U.S. imports total $350 billion, which of the following is correct? a. The U.S. has a trade surplus of $350 billion. b. The U.S. has a trade surplus of $50 billion. c. The […]

Suppose that M is fixed. According to the quantity equation, which of the following would make the price level lower? a. Y or V rise b. Y or V fall c. Y rises or V falls d. Y falls or […]

Other things the same, if the capital stock increases, then in the long run a. both output and prices are higher. b. output is higher and prices are lower. c. output is lower and prices are higher. d. both output […]

Table 11-2 The table below pertains to Iowan, an economy in which the typical consumer’s basket consists of 3 pounds of pork and 4 bushels of corn. Refer to Table 11-2. If 2009 is the base year, then the CPI […]

A decrease in the price of a good would a. increase the supply of the good. b. increase the quantity demanded of the good. c. give producers an incentive to produce more to keep profits from falling. d. shift the […]

In the circular-flow diagram, firms produce a. goods and services using factors of production. b. output using inputs. c. factors of production using goods and services. d. Both (a) and (b) are correct. Figure 17-2. On the graph, MS represents […]

According to the theory of liquidity preference, if the interest rate rises a. people want to hold more money. This response is shown by moving to the right along the money demand curve. b. people want to hold more money. […]

When the actual change in the price level differs from its expected change, which of the following can explain why firms might change their production? a. both menu costs and mistaking a price level change for a change in relative […]

Suppose that the country of Aquilonia has an inflation rate of about 5 percent per year and a real growth rate of about 5 percent per year. Suppose also that it has nominal GDP of about 200 billion units of […]

Low rates of inflation are generally associated with a. low rates of government spending. b. small or nonexistent government budget deficits. c. low rates of productivity growth. d. low rates of growth of the quantity of money. The marginal benefit […]

Figure 8-2 The vertical distance between points A and B represents a tax in the market. Refer to Figure 8-2. Consumer surplus without the tax is a. $6, and consumer surplus with the tax is $1.50. b. $6, and consumer […]

Figure 9-6 Refer to Figure 9-6. The amount of deadweight loss caused by the tariff equals a. $100. b. $200. c. $400. d. $500. Table 7-11 Answer: B Refer to Table 7-11. Both the demand curve and the supply curve […]

A decrease in the price of large tractors imported into the United States from Russia a. leaves the GDP deflator unchanged but decreases the consumer price index. b. decreases the GDP deflator but leaves the consumer price index unchanged. c. […]

Which of the following changes would not shift the demand curve for a good or service? a. a change in income b. a change in the price of the good or service c. a change in expectations about the future […]

In which case(s) does(do) a country’s demand for loanable funds shift left? a. both an increase in the budget deficit and capital flight b. an increase in the budget deficit, but not capital flight c. capital flight, but not an […]

Which, if any, of the present values below are computed correctly? a. A payment of $100 to be received one year from today, with a 2 percent interest rate, has a present value of $98.81. b. A payment of $200 […]

Suppose a Starbucks tall latte cost $4.00 in the United States and 3.20 euros in the Euro area. Also, suppose a McDonald’s Big Mac costs $3.50 in the United States and 2.45 euros in Euro area. If the nominal exchange […]

If velocity = 5, the price level = 1.5, and the real value of output is 2,500, then the quantity of money is a. 333.33. b. 750.00. c. 1,050.00. d. 8,333.33. If the discount rate is raised then banks borrow […]

Figure 9-5 Refer to Figure 9-5. With trade, the price of wagons in this country is a. $8, with 70 wagons produced in this country, 20 of which are exported. b. $8, with 90 wagons produced in this country, 50 […]

Figure 6-1 Panel (a) Panel (b) Refer to Figure 6-1. The price ceiling shown in panel (b) a. is not binding. b. creates a surplus. c. creates a shortage. d. Both a) and b) are correct. Figure 8-13 Answer: C […]

Unemployment insurance a. reduces search effort which raises unemployment. b. reduces search effort which lowers unemployment. c. increases search effort which raises unemployment. d. increases search effort which decreases unemployment. Which of the following would cause prices to rise and […]

Figure 4-5 Refer to Figure 4-5. Suppose that the federal government is concerned about obesity in the United States. Congress is considering two plans. One would require “junk food” producers to include warning labels on all junk food. The other […]

The Stock Market Boom of 2015 Imagine that in 2015 the economy is in long-run equilibrium. Then stock prices rise more than expected and stay high for some time. Refer to Stock Market Boom 2015. In the long run, the […]

Total surplus in a market is equal to a. consumer surplus + producer surplus. b. value to buyers – amount paid by buyers. c. amount received by sellers – costs of sellers. d. producer surplus – consumer surplus. When a […]

If your firm’s production function has constant returns to scale, then if you double all your inputs, your firm’s output will a. double and productivity will rise. b. double but productivity will not change. c. more than double and productivity […]

Which of the following shifts aggregate demand to the right? a. both an investment tax credit and a decrease in income tax rates b. an investment tax credit but not a decrease in income tax rates c. a decrease in […]

Which of the following events would cause both the equilibrium price and equilibrium quantity of number two grade potatoes to increase if number two grade potatoes are an inferior good? a. an increase in consumer income b. a decrease in […]

The marginal propensity to consume (MPC) is defined as the fraction of a. extra income that a household consumes rather than saves. b. extra income that a household either consumes or saves. c. total income that a household consumes rather […]

Figure 9-1 The figure illustrates the market for wool in Scotland. Refer to Figure 9-1. From the figure it is apparent that a. Scotland will experience a shortage of wool if trade is not allowed. b. Scotland will experience a […]

Suppose the price index was 100 in 2004, 118 in 2005, and the inflation rate was lower between 2005 and 2006 than it was between 2004 and 2005. This means that a. the price index in 2006 was lower than […]

Almost all variation in living standards is attributable to differences in countries’ a. population growth rates. b. productivity. c. systems of public education. d. taxes. Tim mows the yard for his neighbors. He spends $1 on gas and charges them […]

Table 3-10 Juanita and Shantala run a business that programs and tests cellular phones. Assume that Juanita and Shantala can switch between programming and testing cellular phones at a constant rate. The following table applies. Minutes Needed to Number of […]

One bag of flour is sold for $1.00 to a bakery, which uses the flour to bake bread that is sold for $3.00 to consumers. A second bag of flour is sold for $1 to a grocery store who sells […]

Which of the following is correct concerning recessions? a. They come at fairly regular and predictable intervals. b. They are associated with comparatively large declines in investment spending. c. They are any period when real GDP growth is less than […]

Figure 19-1 Refer to Figure 19-1. In the Figure shown, if the real interest rate is 2 percent, there will be a a. surplus of $20 billion. b. surplus of $40 billion. c. shortage of $20 billion. d. shortage of […]

If a U.S. resident purchases a foreign bond, her transactions are included a. in the U.S. supply of loanable funds and the supply of dollars in the market for foreign-currency exchange. b. in the U.S. supply of loanable funds and […]

The nominal interest rate for a consumer loan lasting from 2007 to 2008 is 8.5 percent and the real interest rate is 4.5 percent. If the consumer price index was 200 in 2007, what would the consumer price index value […]

If a country has $2.4 billion of net exports and purchases $4.8 billion of goods and services from foreign countries, then it has a. $7.2 billion of exports and $4.8 billion of imports. b. $7.2 billion of imports and $4.8 […]

Since World War II, GATT has been responsible for reducing the average tariff among member countries from about a. 40 percent to about 5 percent. b. 40 percent to about 20 percent. c. 80 percent to about 20 percent. d. […]

Figure 22-8. The left-hand graph shows a short-run aggregate-supply (SRAS) curve and two aggregate-demand (AD) curves. On the right-hand diagram, “Inf Rate” means “Inflation Rate.” Refer to Figure 22-8. A significant increase in the world price of oil could explain […]

Which of the following is correct? In the 1990’s a. the Fed maintained low inflation because it had to follow a policy rule. b. the Fed maintained low inflation even without being required to follow a policy rule. c. the […]

A positive economic statement such as “Pollution taxes decrease the quantity of pollution generated by firms” a. would likely be made by an economist acting as a policy advisor. b. would require values and data in order to be evaluated. […]

Which of the following would tend to shift the supply of dollars in the market for foreign-currency exchange in the open-economy macroeconomic model to the right? a. The exchange rate rises. b. The exchange rate falls. c. The expected rate […]

If there is an adverse supply shock, then a. unemployment rises and the short-run Phillips curve shifts right. b. unemployment rises and the short-run Phillips curve shifts left. c. unemployment falls and the short-run Phillips curve shifts right. d. unemployment […]

Table 3-6 Assume that Maya and Miguel can switch between producing mixers and producing toasters at a constant rate. Hours Needed To Make 1 Amount Produced in 40 Hours Refer to Table 3-6. Assume that Maya and Miguel each has […]

Which of the following is true? a. Kremer argued that with greater population, society would generate more ideas so that growth of real GDP per person could continue. Malthus argued that increasing population would outstrip agricultural production. b. Kremer argued […]

Economists have found that union workers earn what percent more than similar nonunion workers? a. 0 to 5 b. 5 to 10 c. 10 to 20 d. 20 to 30 Which of the following agencies calculates the CPI? a. the […]

Suppose that policymakers are considering placing a tax on either of two markets. In Market A, the tax will have a significant effect on the price consumers pay, but it will not affect equilibrium quantity very much. In Market B, […]

If a country has negative net capital outflows, then its net exports are a. positive and its saving is larger than its domestic investment. b. positive and its saving is smaller than its domestic investment. c. negative and its saving […]

Figure 6-16 Refer to Figure 6-16. Suppose a tax of $5 per unit is imposed on this market. How much will sellers receive per unit after the tax is imposed? a. $5 b. between $5 and $10 c. between $10 […]

A central bank that accommodates an aggregate supply shock a. increases the money supply, making the inflation rate rise. b. increases the money supply, making the inflation rate fall. c. decreases the money supply, making the inflation rate rise. d. […]

Table 10-4 The country of Caspir produces only cereal and milk. Quantities and prices of these goods for the last several years are shown below. The base year is 2008. Prices and Quantities Refer to Table 10-4. In 2010, this […]

When an economy is operating at a point on its production possibilities frontier, then a. consumers are content with the mix of goods and services that is being produced. b. there is no way to produce more of one good […]

If the natural rate of unemployment falls, a. both the short-run and long-run Phillips curves shift left. b. the short-run Phillips curve shifts left, the long-run Phillips curve is unchanged. c. the short-run Phillips curve is unchanged, the long-run Phillips […]

The production possibilities frontier is a graph that shows the various combinations of output that an economy a. should produce. b. wants to produce. c. can produce. d. demands. Figure 3-4 Perry’s Production Possibilities Frontier Jordan’s Production Possibilities Frontier Refer […]

Scenario 21-1. Take the following information as given for a small, imaginary economy: When income is $10,000, consumption spending is $6,500. When income is $11,000, consumption spending is $7,300. Refer to Scenario 21-1. For this economy, an initial increase of […]

Suppose the demand for macaroni is inelastic, the supply of macaroni is elastic, the demand for cigarettes is inelastic, and the supply of cigarettes is elastic. If a tax were levied on the sellers of both of these commodities, we […]

If the demand for light bulbs increases, producer surplus in the market for light bulbs a. increases. b. decreases. c. remains the same. d. may increase, decrease, or remain the same. A nonbinding price floor (i) causes a surplus. (ii) […]

Suppose the price index was 110 in 2004, 120 in 2005, and 125 in Which of the following statements is correct? a. The economy experienced inflation between 2004 and 2005 and between 2005 and 2006. b. The inflation rate was […]

A transfer payment is a. a payment for moving expenses a worker receives when he or she is transferred by an employer to a new location. b. a payment that is automatically transferred from your bank account to pay a […]

Miller’s Dairy produces 960 gallons of milk per day. Each milker at the dairy works 8 hours per day and produces the same number of gallons of milk per hour. If the Dairy’s productivity is 12 gallons of milk per […]

If a 40% change in price results in a 25% change in quantity supplied, then the price elasticity of supply is about a. 0.63, and supply is elastic. b. 0.63, and supply is inelastic. c. 1.60, and supply is elastic. […]

A tariff on a product makes a. domestic sellers better off and domestic buyers worse off. b. domestic sellers worse off and domestic buyers worse off. c. domestic sellers better off and domestic buyers better off. d. domestic sellers worse […]

Efficiency wages create a labor a. surplus and so increase unemployment. b. surplus and so decrease unemployment. c. shortage and so increase unemployment. d. shortage and so decrease unemployment. When we move along a given demand curve, a. only price […]

Figure 2-3 Refer to Figure 2-3. Inefficient production is represented by which point(s)? a. J, L b. J, L, M c. K, N d. M A bagel shop sells fresh baked bagels from 5 a.m. until 7 p.m. every day. […]

Which of the following is not correct? a. The economy contains many labor markets for different types of workers. b. The impact of the minimum wage depends on the skill and experience of the worker. c. The minimum wage is […]

According to purchasing power parity what should the nominal exchange rate between the U.S. and another country be equal to? a. 1 b. the real exchange rate between the U.S. and that country c. the price level in the U.S. […]

Suppose a country increases trade restrictions. This country would be pursing an a. inward policy, which most economists believe has beneficial effects on the economy. b. inward policy, which most economists believe has adverse effects on the economy. c. outward […]

Welfare economics is the study of how a. the allocation of resources affects economic well-being. b. a price ceiling compares to a price floor. c. the government helps poor people. d. a consumer’s optimal choice affects her demand curve. The […]

What will happen in the artichoke market now if buyers expect higher artichoke prices in the near future? a. The demand for artichokes will increase. b. The demand for artichokes will decrease. c. The demand for artichokes will be unaffected. […]