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Name: Class: Date: Chapter 01: The Art and Science of Economic Analysis d. the greater the cost of a charitable deed to a benefactor, the more likely he or she is to perform that deed. e. people implicitly calculate the […]

Name: Class: Date: Chapter 01: The Art and Science of Economic Analysis True / False 1. Economics is best defined as the study of how individuals decide to use limited resources in an attempt to satisfy unlimited wants. a. True […]

Name: Class: Date: Chapter 10: Monopolistic Competition and Oligopoly 74. Monopolistically competitive firms do not achieve allocative efficiency in the long run because: a. marginal cost equals marginal revenue. b. marginal cost is greater than marginal revenue. c. marginal cost […]

Name: Class: Date: Chapter 10: Monopolistic Competition and Oligopoly True / False 1. Firms may easily enter a monopolistically competitive market. a. True b. False ANSWER: True 2. Product differentiation helps explain the slope of the demand curve facing a […]

Name: Class: Date: Chapter 11: Resource Markets a. $40 b. $60 c. $400 d. $1,000 e. $300 ANSWER: d 74. The following graph shows the demand and supply curves of a resource. The opportunity cost of the resource in equilibrium […]

Name: Class: Date: Chapter 11: Resource Markets 104. The following table shows the product price of a perfectly competitive firm and the output produced by the firm. From the table, it can be said that diminishing marginal returns become first […]

Name: Class: Date: Chapter 12: Labor Markets and Labor Unions a. The substitution effect will cause the person to work more hours. b. The income effect will cause the person to work less hours. c. The substitution effect will cause […]

Name: Class: Date: Chapter 13: Capital, Interest, Entrepreneurship, and Corporate Finance b. It has no impact on a firm’s investment decision if the firm uses borrowed funds. c. It is indirectly related to the supply of loanable funds. d. It […]

Name: Class: Date: Chapter 14: Transaction Costs, Asymmetric Information, and Behavioral Economics 84. The figure given below shows the marginal cost and the marginal benefit of information curves. In the figure given below, the marginal benefit curve shows that: Figure […]

Name: Class: Date: Chapter 15: Economic Regulation and Antitrust Policy a. The price of taxi rides will decrease. b. The price of taxi rides will increase. c. The income of taxi owners will increase. d. Taxi owners will have greater […]

Name: Class: Date: Chapter 16: Public Goods and Public Choice a. Area bcde b. Area ihgl c. Area dfe d. Area aglo e. Area abeg ANSWER: a 85. The following graph shows the market for a good. Suppose the government […]

Name: Class: Date: Chapter 17: Externalities and the Environment d. the marginal social cost of air quality increases. e. the marginal social benefit of air quality decreases. ANSWER: c 83. If production is characterized by variable technology and generates pollution, […]

Name: Class: Date: Chapter 17: Externalities and the Environment True / False 1. Private property rights are easily assigned to open-access resources. a. True b. False ANSWER: False 2. Pollution occurs because property rights to some open-access resources are well […]

Name: Class: Date: Chapter 18: Poverty and Redistribution True / False 1. The most recent data on the distribution of income in the United States indicates households in the top fifth of the income distribution earn more than ten times […]

Name: Class: Date: Chapter 18: Poverty and Redistribution 88. Social Security was established in the: a. 1930s to provide retirement income to those with a work history. b. 1930s to provide jobs for the unemployed. c. 1930s to provide low-income […]

Name: Class: Date: Chapter 19: International Trade a. c + i + e + f b. i + f c. i d. f e. b + d ANSWER: b 89. Tariffs and quotas: a. reduce consumer surplus and increase producer […]

Name: Class: Date: Chapter 02: Economic Tools and Economic Systems c. h. d. i. e. e. ANSWER: a 103. The figure below shows the production possibilities frontier for Good A and Good B. In the figure below, if all the […]

Name: Class: Date: Chapter 02: Economic Tools and Economic Systems True / False 1. Opportunity cost is the difference between the benefits and the costs of a choice. a. True b. False ANSWER: False 2. Opportunity cost is always measured […]

Name: Class: Date: Chapter 20: International Finance a. the value of the U.S. dollar has increased. b. the value of foreign exchange has decreased. c. fewer U.S. dollars are required to purchase foreign exchange. d. more U.S. dollars are required […]

Name: Class: Date: Chapter 21: Economic Development e. Financial institutions ANSWER: d 89. Dominik Rosen, the finance minister of the country of Glassen, has concluded that entrepreneurs are unable to generate the kind of growth the country needs. His decision […]

Name: Class: Date: Chapter 21: Economic Development True / False 1. In 2014, high-income economies with only about one-fifth of the world’s population produced more than half of the world’s output. a. True b. False ANSWER: True 2. On average, […]

Name: Class: Date: Chapter 03: Economic Decision Makers True / False 1. The movement of households from rural to urban settings reduced the degree of specialization in household production. a. True b. False ANSWER: True 2. As the real wage […]

Name: Class: Date: Chapter 03: Economic Decision Makers 101. The Salvation Army is an example of a(n): a. military organization. b. not-for-profit organization. c. partnership. d. S corporation. e. U.S. government agency. ANSWER: b 102. One thing that is not […]

Name: Class: Date: Chapter 06: Consumer Choice and Demand e. play more golf because it costs less. ANSWER: c 86. Basil maximizes his utility by allocating his budget between tea and crumpets. If the marginal utility of his last cup […]

Name: Class: Date: Chapter 06: Consumer Choice and Demand True / False 1. Different people may have different tastes, but their tastes normally do not change rapidly over time. a. True b. False ANSWER: True 2. Marginal utility can be […]

Name: Class: Date: Chapter 07: Production and Cost in the Firm d. four e. three ANSWER: d 86. Table 7.4 shows labor, total product, and marginal product for a firm. In the table below, marginal returns begin to diminish with […]

Name: Class: Date: Chapter 08: Perfect Competition a. $28 b. $12 c. $40 d. $20 e. $24 ANSWER: a 76. The figure given below shows the demand and the cost curves of a perfectly competitive firm. Total revenue at the […]

Name: Class: Date: Chapter 08: Perfect Competition True / False 1. An industry consists of all firms that supply output to a particular market. a. True b. False ANSWER: True 2. If a perfectly competitive firm raises its price, its […]

Name: Class: Date: Chapter 09: Monopoly a. e × f b. d × f c. c × g d. a × f e. b × g ANSWER: b 107. If a monopolist that does not practice price discrimination is operating […]

Name: Class: Date: Chapter 09: Monopoly Price ($) Quantity Total cost ($) 16 0 5.00 15 1 7.00 14 2 8.80 13 3 10.40 12 4 12.20 11 5 14.20 10 6 16.40 9 7 18.80 8 8 21.40 7 […]

interest means we choose the option that maximizes expected benefits with a given cost. People will give more to charities when the contribution is tax deductible. The lower the personal cost of helping others, the more we are willing to […]

the same. Note that this is the equilibrium real wage and corresponds to potential output. There is no frictional unemployment associated at this real wage. The money wage at point c is higher than that at point a. The reason […]

employment, the price level, and economic growth. a. A decrease in government purchases decrease real GDP. b. An increase in net taxes decrease real GDP. c. A reduction in transfer payments decrease real GDP. d. A decrease in the marginal […]

unemployment benefits rise. Also, many entitlement programs are indexed to inflation, so expenditures automatically rise. Inflation forecasts are therefore necessary to estimate expenditures. Interest on the national debt also depends on the state of the economy—whether interest rates rise or […]

b. token money c. legal tender d. unit of account © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a […]

can make is ($4,000−$1,000 required reserves) = $3,000. The excess reserves would be ($3,000 − $1,000 required reserves) = $2,000. © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except […]

vertical line. At point a, the intersection of the supply of money, Sm, and the demand for money, Dm, determines the market interest rate, i. Following an increase in the money supply to S′m, the quantity of money supplied exceeds […]

© 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website […]

food production because the opportunity cost of producing one more unit of food in Fredonia is equal to the cost of one-seventh of a unit of clothing, compared with a cost of one-fourth of a unit of clothing in the […]

b. Merchandise import c. Merchandise import d. Net unilateral transfers e. Capital inflows f. Service imports g. Service exports © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for […]

with labor, such as capital and natural resources. The key to a rising standard of living is increased productivity. To foster productivity, developing nations must stimulate investment, support education and training programs, provide sufficient infrastructure, and foster supportive rules of […]

stayed home, the opportunity cost of going to Florida would total $1,000: the $700 cost of going to Florida plus the net value of what you could have earned—$300 ($400 in earnings less expenses of $100)—if you stayed home. company […]

b. This would reduce household production because of the high price of land as well as other opportunity costs. c. This would increase household production because the high sales tax on food increases the cost of buying food. d. This […]

b. Substitutes c. Substitutes d. Unrelated e. Complements inferior), a change in the price of a related good (an increase in the price of a substitute or a decrease in the price of a complement), the expectation of a higher […]

that individual item demanded and supplied. Aggregate demand and aggregate supply describe the relationship between the average price level of all goods and services and the total quantities of goods and services demanded and supplied throughout the entire economy. b. […]

b. Net Domestic Product = GDP − depreciation = 280 − 10 = $270 billion c. Net investment = Gross investment − depreciation = 40 − 10 = $30 billion d. Net exports = X − M = 30 − […]

b. Cyclical c. Structural d. Frictional insurance provides a safety net for some and that’s good, but it may also reduce incentives to find work, as is the case in Europe, and that’s an unintended consequence. Research suggests that those […]

© 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website […]

© 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website […]

Name: Class: Date: Chapter 05: Elasticity of Demand and Supply a. Demand is inelastic. b. Total revenue is increasing. c. Total revenue is positive. d. Demand is elastic. e. Demand elasticity decreases as total revenue increases. ANSWER: d 83. A […]

Name: Class: Date: Chapter 04: Demand, Supply, and Markets 84. Which of the following would shift the supply curve of a good to the left? a. An increase in the price of that good b. A decrease in the price […]