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978-1319066604 Appendix N Part 1
Page 1 Name: __________________________ Date: _____________ 1. An indifference curve is a line showing all of the consumption bundles that: A) an individual can purchase with a given income. B) yield the same total utility for an individual. C) yield […]
978-1319066604 Appendix N Part 2
Page 21 87. (Figure: Consumer Equilibrium I) Use Figure Consumer Equilibrium I. What is Owen’s marginal rate of substitution of pizza for soda when he is consuming his optimal consumption bundle? A) 0.75 B) 1.5 C) 13.3 D) 20 88. […]
978-1319066604 Appendix N Part 3
Page 41 161. (Figure: Consumer Equilibrium II) Use Figure Consumer Equilibrium II. Ashyra consumes at point G. Ashyra would be able to realize more total utility by choosing point _____, all other things held equal. A) J B) K C) […]
978-1319066604 Appendix N Part 4
Page 53 221. Diminishing marginal utility is the reason most indifference curves: A) slope upward. B) slope downward. C) are vertical. D) are horizontal. Use the following to answer questions 222-224: 222. (Table: Madeline’s Preferences for T-Shirts and Coffee) Use […]
978-1319066604 Chapter 1 Part 1
Page 1 Name: __________________________ Date: _____________ 1. Which topic is studied in macroeconomics? A) the change in automobile sales due to a change in the price of automobiles B) the effect of a tax reduction on the profits of an […]
978-1319066604 Chapter 1 Part 2
Page 21 106. The phrase gains from trade refers to the: A) profits obtained from sales of a good or service. B) increase in total output that is realized when individuals specialize in particular tasks and trade with each other. […]
978-1319066604 Chapter 1 Part 3
Page 33 167. A trade-off involves weighing costs and benefits. A) True B) False 168. Using marginal analysis to decide whether to consume an additional slice of pizza requires making a comparison of the benefits and costs associated with the […]
978-1319066604 Chapter 10 Part 1
Page 1 Name: __________________________ Date: _____________ 1. The relation between an individual’s consumption bundle and her satisfaction is called a _____ function. A) demand B) production C) consumption D) utility 2. To say that you can’t have too much of […]
978-1319066604 Chapter 10 Part 2
Page 21 85. (Figure: Budget Lines for Oranges and Apples) Use Figure: Budget Lines for Oranges and Apples. For some time, Antonio has had $5 per month to spend on oranges and apples. The price of an orange is $0.50 […]
978-1319066604 Chapter 10 Part 3
Page 41 168. (Table: Utility from Milk and Honey) Use Table: Utility from Milk and Honey. The price of milk is $2, and the price of honey is $4. If Max’s income is $16, he buys _____ bottle(s) of milk […]
978-1319066604 Chapter 10 Part 4
Page 57 218. If the marginal utility of hot dogs exceeds the marginal utility of french fries, then the consumer should necessarily adjust their consumption toward eating more hot dogs and fewer french fries. A) True B) False 219. If […]
978-1319066604 Chapter 11 Part 1
Page 1 Name: __________________________ Date: _____________ 1. A _____ is an organization that produces goods or services for sale. A) production function B) firm C) variable input D) fixed input 2. In the short run: A) all inputs are fixed. […]
978-1319066604 Chapter 11 Part 2
Page 21 80. (Table: Production Function for Soybeans) Use Table: Production Function for Soybeans. Assume that the fixed input, capital, is 10 acres of land and a tractor, which have a combined cost of $150 per day. The cost of […]
978-1319066604 Chapter 11 Part 3
Page 41 177. (Figure: Short-Run Costs II) Use Figure: Short-Run Costs II. At 6 units of output, marginal cost is approximately: A) $100. B) $120. C) $250. D) $200. 178. (Figure: Short-Run Costs II) Use Figure: Short-Run Costs II. At […]
978-1319066604 Chapter 11 Part 4
Page 61 262. (Table: Workers and Output) Use Table: Workers and Output. After graduation, you achieve your dream of opening an art shop that specializes in selling mud statues. You pay $10 per day on a loan from your uncle, […]
978-1319066604 Chapter 11 Part 5
Page 78 352. (Table: Tonya’s Production Function for Apples) Use Table: Tonya’s Production Function for Apples. In the short run, Tonya’s variable input(s) is/are: A) land. B) labor. C) land and labor. D) neither land nor labor. 353. (Table: Tonya’s […]
978-1319066604 Chapter 12 Part 1
Page 1 Name: __________________________ Date: _____________ 1. If a California avocado stand operates in a perfectly competitive market, that stand’s owner will be a price: A) maker. B) taker. C) discriminator. D) maximizer. 2. If all firms in an industry […]
978-1319066604 Chapter 12 Part 2
Page 21 110. In the short run, if P < AVC at the quantity where MR = MC and fixed cost is greater than zero, a perfectly competitive firm produces _____ and takes an economic _____. A) output; profit B) […]
978-1319066604 Chapter 12 Part 3
Page 41 180. (Figure: The Perfectly Competitive Firm) Use Figure: The Perfectly Competitive Firm. The figure shows a perfectly competitive firm that faces demand curve d and maximizes profit. If the firm faces a market price of $3, its total […]
978-1319066604 Chapter 12 Part 4
Page 61 262. (Table: Variable Costs for Lots) Use Table: Variable Costs for Lots. During the winter, Alexa runs a snow-clearing service in a perfectly competitive industry. Assume that costs are constant in each interval; so, for example, the marginal […]
978-1319066604 Chapter 12 Part 5
Page 76 Use the following to answer question 326: 326. (Table: Lilly’s Apple Orchard) Use Table: Lilly’s Apple Orchard. Lilly is the price-taking owner of an apple orchard. Her orchard has fixed costs of $30. If the price of a […]
978-1319066604 Chapter 13 Part 1
Page 1 Name: __________________________ Date: _____________ 1. Market structures are categorized by: A) the number and size of the firms. B) whether products are differentiated and the extent of advertising. C) the number of firms and whether products are differentiated. […]
978-1319066604 Chapter 13 Part 2
Page 21 102. (Table: Demand and Total Cost) Use Table: Demand and Total Cost. Lenoia runs a natural monopoly firm producing electricity for a small mountain village. The table shows Lenoia’s demand and total cost of producing electricity. The profit-maximizing […]
978-1319066604 Chapter 13 Part 3
Page 41 190. Many hotel chains offer discounts to senior citizens. This is an example of _____ that is _____ in the United States. A) market power; illegal B) single-price monopoly power; legal C) price discrimination; illegal D) price discrimination; […]
978-1319066604 Chapter 13 Part 4
Page 60 284. A monopolist who engages in perfect price discrimination charges each consumer a price equal to that consumer’s willingness to pay. A) True B) False 285. In perfect price discrimination, consumer surplus is larger than it is in […]
978-1319066604 Chapter 14 Part 1
Page 1 Name: __________________________ Date: _____________ 1. In an oligopoly: A) there are many sellers. B) there are no barriers to entry. C) firms recognize their interdependence. D) total surplus is maximized. 2. The MOST important source of oligopoly in […]
978-1319066604 Chapter 14 Part 2
Page 21 79. (Table: Demand for Crude Oil) Use Table: Demand for Crude Oil. Assume that the crude oil industry is a duopoly and the marginal cost and fixed cost of producing crude oil equals zero. Suppose that the two […]
978-1319066604 Chapter 14 Part 3
146. (Table: Coke and Pepsi Advertising Game) Use Table: Coke and Pepsi Advertising Game. The soft-drink industry is dominated by Coca-Cola and Pepsi, and each firm spends a lot of money on advertising. Suppose each firm is considering a costly […]
978-1319066604 Chapter 14 Part 4
Use the following to answer question 254: 254. (Table: Demand Schedule of Gadgets) Use Table: The Market for Gadgets. Two producers, Margaret and Ray, dominate the market. Each firm can produce gadgets at marginal costs of zero and without fixed […]
978-1319066604 Chapter 15 Part 1
Page 1 Name: __________________________ Date: _____________ 1. Which industry is MOST likely to be monopolistically competitive? A) automobile production B) fresh bagel shops C) corn farming D) electric utility production 2. A monopolistically competitive industry, such as corn snack chips, […]
978-1319066604 Chapter 15 Part 2
Page 21 Use the following to answer questions 102-108: Figure: Profits in Monopolistic Competition 102. (Figure: Profits in Monopolistic Competition) Use Figure: Profits in Monopolistic Competition. In panel (A) of the figure, the profit-maximizing quantity of output is determined by […]
978-1319066604 Chapter 15 Part 3
Page 41 166. Monopolistically competitive firms produce less than the output at which average total cost is minimized in the long run. As a result, there is: A) irrational capacity. B) excess capacity. C) product differentiation. D) zero economic profit. […]
978-1319066604 Chapter 15 Part 4
Page 52 232. A monopolistically competitive firm is operating in the short run at the optimal level of output and is earning positive economic profits. Describe how this industry will adjust in the long run. 233. A monopolistically competitive firm […]
978-1319066604 Chapter 16 Part 1
Page 1 Name: __________________________ Date: _____________ 1. A market economy will produce _____ without any government regulation. A) too little pollution B) too much pollution C) the socially optimal amount of pollution D) the amount of pollution that maximizes total […]
978-1319066604 Chapter 16 Part 2
Page 21 90. (Figure: Three Firms that Pollute) Use Figure: Three Firms That Pollute. In the figure, at what tax rate would firm C produce positive amount of pollution? A) $400 B) $500 C) $700 D) $200 91. Pigouvian taxes […]
978-1319066604 Chapter 16 Part 3
Page 39 154. (Figure: MSB and MSC of Pollution) Use Figure: MSB and MSC of Pollution. Assume that firms are the only beneficiaries of pollution and that costs are borne solely by others in the society. What level of pollution […]
978-1319066604 Chapter 17 Part 1
Page 1 Name: __________________________ Date: _____________ 1. Which example is considered a nonexcludable good? A) health care B) national defense C) education D) ice cream 2. Which example BEST fits the characteristics of a private good? A) a professor giving […]
978-1319066604 Chapter 17 Part 2
Page 21 98. (Figure: An Individual’s Marginal Benefit from a Public Good) Use Figure: An Individual’s Marginal Benefit from a Public Good. Assume that two individuals will share consumption of a public good; each individual has the marginal benefit curve […]
978-1319066604 Chapter 17 Part 3
Page 41 176. Airplane seats are rival in consumption. A) True B) False 177. A good is excludable if nonpayers can be prevented from consuming it. A) True B) False 178. Goods are said to be rival in consumption because […]
978-1319066604 Chapter 18 Part 1
Page 1 Name: __________________________ Date: _____________ 1. Government payments to individuals for which no good or service is exchanged are: A) spending. B) purchases. C) spending on goods and services. D) transfer payments. 2. Which transaction is a transfer payment? […]
978-1319066604 Chapter 18 Part 2
Page 14 75. Some countries, including Canada, have adopted a health care system in which the government pays the medical bills. This is known as a(n) _____ system. A) employment-based B) private health insurance C) means-tested D) single-payer 76. Progress […]
978-1319066604 Chapter 19 Part 1
Page 1 Name: __________________________ Date: _____________ 1. G. Reecy’s Hamburger Joint is a fast-food restaurant. Which factor is associated with production? A) the raw meat used for the hamburgers B) the hamburger buns C) the cook D) the concentrate that […]
978-1319066604 Chapter 19 Part 2
Page 21 97. At Hamill Manufacturing of Pennsylvania, highly skilled senior machinists are paid $70,000, excluding benefits, but the average skilled machinist generates approximately $137,000 in value added. This difference is due to the fact that the: A) marginal productivity […]
978-1319066604 Chapter 19 Part 3
Page 41 177. Lakisha’s labor supply curve is downward sloping for wage rates greater than $40 per hour and upward sloping for wage rates less than $40 per hour. If leisure is a normal good for Lakisha and if the […]
978-1319066604 Chapter 19 Part 4
Page 60 294. Suppose that two police officers are identical in every way. One officer is employed in Chicago, a metropolis of 5 million people, and the other officer is employed in Madison, Indiana, a town of 25,000 people. Which […]
978-1319066604 Chapter 2 Part 1
Page 1 Name: __________________________ Date: _____________ 1. A simplified representation that is used to study a real situation is called a(n): A) model. B) production possibility frontier. C) assumption. D) trade-off. 2. The models that economists construct: A) usually make […]
978-1319066604 Chapter 2 Part 2
Page 21 83. (Figure: Wine and Wheat) Use Figure: Wine and Wheat. If this economy is producing on the production possibility frontier, what would allow it to produce at point C? == A) an improvement in technology B) a decrease […]
978-1319066604 Chapter 2 Part 3
Page 41 Use the following to answer questions 157-164: \\ 157. (Figure: Comparative Advantage) Use Figure: Comparative Advantage. Eastland has an absolute advantage in producing: A) oranges only. B) peaches only. C) both oranges and peaches. D) neither oranges nor […]
978-1319066604 Chapter 2 Part 4
Page 61 252. The financial meltdown in 2008–2009 was partially the result of a faulty economic model that misestimated the value of mortgage-backed securities. A) True B) False 253. The value of a mortgage-backed security is tied to the interest […]
978-1319066604 Chapter 20 Part 1
Page 1 Name: __________________________ Date: _____________ 1. Louis has invested $1,000 in the stock market. At the end of one year, there is a 30% chance that his stock will be worth only $800 and a 70% chance that it […]
978-1319066604 Chapter 20 Part 2
Page 21 70. (Table: Choice with Uncertainty) Use Table: Choice with Uncertainty. Suppose that the probability that the sitcom does not make it to television is 30%, that it makes it to television but is not the most viewed show […]
978-1319066604 Chapter 20 Part 3
142. The Baker family is faced with two possible states. In state 1, they remain healthy and incur no medical expenses. In state 2, their medical expenses will be $8,000. There is a 30% chance that state 1 will occur […]
978-1319066604 Chapter 21 Part 1
Page 1 Name: __________________________ Date: _____________ 1. Choose the best answer. The topics studied in macroeconomics include: A) inflation. B) unemployment. C) economic growth. D) inflation, unemployment, and economic growth. 2. The topics studied in macroeconomics include: A) inflation. B) […]
978-1319066604 Chapter 21 Part 2
Page 16 87. An increase in the nation’s _____ is generally accepted as a long-run indicator of a rising standard of living. A) output per person B) unemployment rate C) inflation rate D) trade deficit 88. Long-run economic growth is […]
978-1319066604 Chapter 22 Part 1
Page 1 Name: __________________________ Date: _____________ 1. The national accounts do NOT keep track of: A) the spending of consumers and the government. B) the sales of producers. C) business investment. D) exchange rates. 2. The national income and product […]
978-1319066604 Chapter 22 Part 2
Page 21 96. Enchanté Inc., a designer clothing company, buys $400 worth of silk and $30 worth of accessories to produce each dress. If the value added by Enchanté is equal to $200, then according to the value-added approach, the […]
978-1319066604 Chapter 22 Part 3
Page 41 198. (Table: Per Capita GDP) Per capita nominal GDP in 2011 was: A) $600. B) $400. C) $300. D) $30. 199. (Table: Per Capita GDP) Use Table: Per Capita GDP. Per capita nominal GDP in 2014 was: A) […]
978-1319066604 Chapter 22 Part 4
Page 61 292. (Table: Real and Nominal Output) Use Table: Real and Nominal Output. The price index in year 1, using year 3 as the base period, is: A) 25. B) 50. C) 100. D) 150. 293. (Table: Real and […]
978-1319066604 Chapter 22 Part 5
Page 76 398. In the circular-flow diagram, the value of household income (the sum of wages, dividends, interest, rental income, and transfer payments) equals the sum of: A) household tax payments. B) consumer spending, private saving, and household tax payments. […]
978-1319066604 Chapter 23 Part 1
Page 1 Name: __________________________ Date: _____________ 1. Employment is the total: A) labor force. B) population of working age. C) number of people actively working, either full time or part time. D) number of people not unemployed. 2. The labor […]
978-1319066604 Chapter 23 Part 2
Page 21 100. Sam, who is 55 years old and has been a steelworker for 30 years, is unemployed because the steel plant in his town closed and moved to Mexico. Sam is _____ unemployed. A) cyclically B) permanently C) […]
978-1319066604 Chapter 23 Part 3
Page 41 207. Deflation is a(n): A) decrease in the purchasing power of a unit of money. B) appreciation of the nation’s currency. C) decrease in the average level of prices. D) increase in the average level of prices. 208. […]
978-1319066604 Chapter 23 Part 4
Page 56 306. If a labor market is in equilibrium at a wage that sets the quantity of labor demanded equal to the quantity of labor supplied, how can there still be unemployment? 307. Minimum wages and efficiency wages are […]
978-1319066604 Chapter 24 Part 1
Page 1 Name: __________________________ Date: _____________ 1. A key input for measuring economic growth is: A) the size of the government’s budget. B) real GDP per capita. C) life expectancy. D) the Dow Jones stock market index. 2. Which factor […]
978-1319066604 Chapter 24 Part 2
Page 21 102. (Figure: Technological Progress and Productivity Growth) Use Figure: Technological Progress and Productivity Growth. If there is a significant increase in human capital per worker (all other factors remaining unchanged), it is BEST indicated by a move from: […]
978-1319066604 Chapter 24 Part 3
Page 41 Use the following to answer questions 207-209: 207. (Figure: Technological Progress and Productivity Growth) Use Figure: Technological Progress and Productivity Growth. Which change in real GDP is MOST likely to have resulted from an increase in the quality […]
978-1319066604 Chapter 24 Part 4
Page 53 283. The value of real GDP divided by population for a given country: A) is the real GDP per capita. B) is always increasing in value for any country. C) remains constant for developing countries. D) is per […]
978-1319066604 Chapter 25 Part 1
Page 1 Name: __________________________ Date: _____________ 1. Amazon’s primary type of investment spending is the purchase of: A) server farms, or arrays of linked computers. B) health care for its employees. C) stock in Yahoo and Google. D) U.S. Treasury […]
978-1319066604 Chapter 25 Part 2
Page 21 Use the following to answer question 94: 94. (Figure: Market for Loanable Funds I) Use Figure: Market for Loanable Funds I. The equilibrium interest rate in the loanable funds market is _____%. A) 2 B) 4 C) 6 […]
978-1319066604 Chapter 25 Part 3
Page 41 186. A financial asset is: A) a physical asset like a car. B) a claim that entitles the owner to future income from the seller. C) the value of accumulated savings. D) another term for capital. 187. A […]
978-1319066604 Chapter 25 Part 4
Page 61 311. When households invest their wealth in financial markets, they purchase financial assets. A) True B) False 312. The primary function of the financial system is to channel funds from savers to investors. A) True B) False 313. […]
978-1319066604 Chapter 25 Part 5
Page 72 391. Alison lends $100 to Vanessa for one year. Alison expects that inflation will be 10%. If Alison wishes to maintain the real value of her $100, she should expect payment from Vanessa in the amount of: A) […]
978-1319066604 Chapter 26 Part 1
Page 1 Name: __________________________ Date: _____________ 1. The changes in the economy of Finland in 2016 provide an example of: A) the risk associated with an agricultural economy. B) illustrating the way booms and busts happen for the economy as […]
978-1319066604 Chapter 26 Part 2
Page 21 100. If aggregate consumption equals $100 million + 0.75* YD, then the marginal propensity to consume is: A) 0.75. B) 0.25. C) $75 million. D) $100 million. 101. If aggregate consumption equals $100 million + 0.75* YD, then […]
978-1319066604 Chapter 26 Part 3
Page 41 209. The slope of the consumption function equals the slope of the: A) 45-degree line. B) aggregate expenditure line. C) aggregate demand curve. D) short-run aggregate supply curve. 210. Whenever real GDP exceeds planned aggregate expenditure, unplanned investment […]
978-1319066604 Chapter 26 Part 4
Page 61 299. Autonomous spending occurs in the second round of spending increases caused by the multiplier. A) True B) False 300. Autonomous spending is an initial change in the desired level of spending by firms, households, or government at […]
978-1319066604 Chapter 26 Part 5
Page 72 370. The belief that a higher rate of growth in real GDP will lead to higher planned investment spending is known as: A) the accelerator principle. B) the multiplier effect. C) fiscal policy with an emphasis on government […]
978-1319066604 Chapter 27 Part 1
Page 1 Name: __________________________ Date: _____________ 1. Stagflation is a combination of _____ unemployment and _____ inflation. A) increasing; increasing B) decreasing; decreasing C) increasing; decreasing D) decreasing; increasing 2. The economic slump in the 1970s looked different from the […]
978-1319066604 Chapter 27 Part 2
Page 21 101. The short-run aggregate supply curve is: A) upward sloping. B) vertical. C) horizontal. D) downward sloping. 102. When short-run aggregate supply increases, it means that the short-run aggregate supply curve shifts to the _____ and the quantity […]
978-1319066604 Chapter 27 Part 3
Page 41 199. (Figure: Policy Alternatives) Refer to Figure: Policy Alternatives. Assume that the economy depicted in panel (a) is in short-run equilibrium with AD1 and SRAS1. If the economy is left to correct itself: A) real interest rates will […]
978-1319066604 Chapter 27 Part 4
Page 60 282. The purchasing power of money increased during the oil crisis of 1979 because the aggregate price level increased but the growth rate of the money supply was faster than the increase in the price level. A) True […]
978-1319066604 Chapter 28 Part 1
Page 1 Name: __________________________ Date: _____________ 1. Sources of federal tax revenue do NOT include: A) the personal income tax. B) sales taxes. C) social insurance taxes. D) the corporate profits tax. 2. The federal government’s LARGEST source of revenue […]
978-1319066604 Chapter 28 Part 2
Page 21 94. (Figure: Fiscal Policy Options) Refer to Figure: Fiscal Policy Options. If the aggregate demand curve is ADʺ, the most appropriate discretionary fiscal policy is to _____ government transfer payments and _____ income tax rates. A) decrease; increase […]
978-1319066604 Chapter 28 Part 3
Page 41 196. If the government’s revenues are less than its expenditures, then it has a budget: A) deficit. B) surplus. C) balance. D) equality. 197. If the government’s revenues are greater than its expenditures, then it has a budget: […]
978-1319066604 Chapter 28 Part 4
Page 59 309. There are very few U.S. states with rules that require a balanced budget. A) True B) False 310. When the Great Recession struck, the U.S. federal government’s budget deficit increased from just $160 billion to $2 trillion. […]
978-1319066604 Chapter 29 Part 1
Page 1 Name: __________________________ Date: _____________ 1. Money is anything that: A) serves as a medium of exchange for goods and services. B) can be converted to silver with relatively little loss in value. C) can be converted to gold […]
978-1319066604 Chapter 29 Part 2
Page 21 114. Suppose that initially a bank has excess reserves of $800 and the reserve ratio is 20%. Then Andy deposits $1,000 of cash in his checking account and the bank lends $600 to Molly. That bank can lend […]
978-1319066604 Chapter 29 Part 3
Page 41 215. If the Fed conducts an open-market sale, bank reserves _____ and the money supply is likely to _____. A) increase; increase B) increase; decrease C) decrease; increase D) decrease; decrease 216. Most of the Fed’s income comes […]
978-1319066604 Chapter 29 Part 4
Page 61 331. If a bank has $2,000 in excess reserves and a 10% reserve requirement, the maximum potential increase in the money supply is $20,000. A) True B) False 332. The monetary base is currency in circulation plus bank […]
978-1319066604 Chapter 29 Part 5
Page 76 442. Traveler’s checks and checkable deposits are: A) part of M1. B) considered near-moneys. C) part of the monetary base. D) not considered part of the M grouping. 443. M2 is made up of: A) M1 plus near-moneys. […]
978-1319066604 Chapter 3 Part 1
Page 1 Name: __________________________ Date: _____________ 1. The market for corn in Kansas is considered to be competitive. This means there are _____ buyers and _____ sellers of corn in Kansas. A) many; few B) few; many C) many; many […]
978-1319066604 Chapter 3 Part 2
Page 21 97. (Figure: The Demand and Supply of Wheat) Use Figure: The Demand and Supply of Wheat. If there is a decrease in supply of 2,000 bushels per period at each price, the equilibrium price and quantity will be […]
978-1319066604 Chapter 3 Part 3
Page 41 172. You notice that the price of Blu-ray players falls and the quantity of Blu-ray players sold increases. You suspect that _____ Blu-ray players shifts to the _____. A) demand for; right. B) demand for; left. C) supply […]
978-1319066604 Chapter 3 Part 4
Page 55 244. Markets that are characterized by many buyers and many sellers are: A) inefficient. B) competitive. C) foreign. D) monopolies. 245. Alice goes to the local supermarket to purchase one package of kale. She often pays $1.50 for […]
978-1319066604 Chapter 30 Part 1
Page 1 Name: __________________________ Date: _____________ 1. The Federal Reserve can influence financial crises because it: A) determines tax rates. B) determines government spending. C) conducts monetary policy. D) is responsive to the people who elected its members to office. […]
978-1319066604 Chapter 30 Part 2
Page 21 108. Monetary policy affects aggregate demand through changes in: A) government spending. B) consumer and investment spending. C) tax receipts. D) export demand. 109. Expansionary monetary policy does NOT increase: A) aggregate demand. B) GDP and the price […]
978-1319066604 Chapter 30 Part 3
Page 41 199. Expansionary monetary policy causes _____ in interest rates in the short run and _____ in interest rates in the long run. A) a fall; no change B) a fall; a fall C) no change; a fall D) […]
978-1319066604 Chapter 30 Part 4
Page 58 283. One advantage of inflation targeting over the Taylor rule is that with inflation targeting, because the public knows the target in advance, uncertainty is reduced. A) True B) False 284. One advantage of inflation targeting over the […]
978-1319066604 Chapter 31 Part 1
Page 1 Name: __________________________ Date: _____________ 1. What distinction did Zimbabwe achieve in June 2008? A) It was the first African nation to become a democracy. B) It ended apartheid. C) It had the world’s highest inflation rate. D) It […]
978-1319066604 Chapter 31 Part 2
Page 21 103. Suppose that a fall in commodity prices causes a supply shock. The short-run Phillips curve will: A) shift down. B) show a movement along the same curve. C) not be affected at all. D) shift up. 104. […]
978-1319066604 Chapter 31 Part 3
Page 36 170. (Figure: Short-Run Phillips Curve) Refer to Figure: Short-Run Phillips Curve. SRPC2 is based on an expected inflation rate of: A) zero. B) 1%. C) 2%. D) 5%. 171. (Figure: Short-Run Phillips Curve) Refer to Figure: Short-Run Phillips […]
978-1319066604 Chapter 32 Part 1
Page 1 Name: __________________________ Date: _____________ 1. Which year is often described as the worst year of the Great Depression? A) 1913 B) 1933 C) 1953 D) 1973 2. Prior to the 1930s, the _____ model dominated thinking about how […]
978-1319066604 Chapter 32 Part 2
Page 21 100. The concept of the monetary policy rule is based on the assumption that: A) discretionary fiscal policy crowds out investment spending. B) the natural rate of unemployment is constant in the long run. C) monetary policy lags […]
978-1319066604 Chapter 32 Part 3
Page 41 203. Nearly all economists agree that increases in money supply can _____ aggregate _____. A) increase; supply B) decrease; supply C) decrease; demand D) increase; demand 204. Nearly all economists agree that decreases in money supply can _____ […]
978-1319066604 Chapter 32 Part 4
Page 54 289. The economy is in a recession. The head of the President’s Council of Economic Advisers is an ardent proponent of the real business cycle theory. What will this real business cycle economist recommend or not recommend? Explain. […]
978-1319066604 Chapter 33 Part 1
Page 1 Name: __________________________ Date: _____________ 1. When the dollar value of the Swiss franc was very high following the financial crisis in 2008: A) Swiss exports were more expensive in the United States. B) Swiss exports were less expensive […]
978-1319066604 Chapter 33 Part 2
Page 21 102. When a currency appreciates, the prices of its exports to other countries will: A) increase. B) decrease. C) remain constant. D) fluctuate randomly. 103. When a currency depreciates, the prices of its exports to other countries will: […]
978-1319066604 Chapter 33 Part 3
Page 41 197. If a government wants to increase the value of its currency in foreign exchange markets, it can: A) use contractionary monetary policy. B) use expansionary monetary policy. C) decrease interest rates. D) sell its currency. 198. Which […]
978-1319066604 Chapter 33 Part 4
Page 61 313. Assume the nominal exchange rate is £0.593 per dollar, the price level in the United States is 250, and the price level in Britain is 225. The real exchange rate is £0.659 per dollar. A) True B) […]
978-1319066604 Chapter 33 Part 5
Page 77 436. If the country’s balance of payments on the current account is positive: A) the balance of payments on the financial account is also positive. B) the balance of payments on the financial account is negative, so that […]
978-1319066604 Chapter 4 Part 1
Page 1 Name: __________________________ Date: _____________ 1. A consumer’s willingness to pay reflects the: A) maximum price at which he or she would buy a given good or service. B) minimum price at which he or she would buy a […]
978-1319066604 Chapter 4 Part 2
Page 21 70. (Table: Producer Surplus) Use Table: Producer Surplus. If the price of a ticket to see The Nutty Nutcracker is $50, then Dudley’s producer surplus is: A) $0. B) $25. C) $60. D) $240. 71. (Table: Producer Surplus) […]
978-1319066604 Chapter 4 Part 3
141. (Table: Pumpkin Market) There are two consumers, Andy and Ben, in the market for pumpkins. Their willingness to pay for each pumpkin is shown in the table Pumpkin Market. There are two producers of pumpkins, Cindy and Diane, and […]
978-1319066604 Chapter 4 Part 4
Page 55 Use the following to answer questions 210-211: 210. (Figure: The Market for Books) Look at the figure The Market for Books. At the equilibrium price of $24, find the total surplus in the market for books. 211. (Figure: […]
978-1319066604 Chapter 5 Part 1
Page 1 Name: __________________________ Date: _____________ 1. A price control is: A) control of the price of a good by the firm that produces it. B) a legal restriction on how high or low a price in a market may […]
978-1319066604 Chapter 5 Part 2
Page 21 77. (Figure: Supply and Demand) Use Figure: Supply and Demand. A binding price floor is represented by: A) P1. B) P2. C) P3. D) point C. 78. All else equal, if a price floor above the equilibrium is […]
978-1319066604 Chapter 5 Part 3
Page 41 136. (Table: The Market for Taxi Rides) Use Table: The Market for Taxi Rides. If a government quota limit at 6 million rides is imposed, the quota rent accruing to the owner of a taxi medallion will be […]
978-1319066604 Chapter 5 Part 4
Page 52 196. (Table: The Market for Hamburger Flippers) Use Table: The Market for Hamburger Flippers. For hamburger flippers with a minimum wage of $8 per hour, can you imagine a scenario in which the deadweight loss from the minimum […]
978-1319066604 Chapter 6 Part 1
Page 1 Name: __________________________ Date: _____________ 1. The price elasticity of demand measures the responsiveness of the change in the: A) quantity demanded to a change in the price. B) price to a change in the quantity demanded. C) slope […]
978-1319066604 Chapter 6 Part 2
Page 21 98. If the quantity demanded of agricultural output is very unresponsive to a fall in price, the demand for agricultural output is: A) price-elastic. B) price-inelastic. C) positively sloped. D) horizontal. 99. Total revenue will decrease if the […]
978-1319066604 Chapter 6 Part 3
Page 41 203. (Table: Johnson’s Income and Expenditures) Use Table: Johnson’s Income and Expenditures. For Johnson, pizzas are a(n) _____ good. A) inferior B) positive C) neutral D) normal 204. Suppose the income of canned pinto bean consumers rises. All […]
978-1319066604 Chapter 6 Part 4
Page 59 275. The price elasticity of demand for milk has been estimated to be somewhere between 0.49 and 0.63. If a new system of feeding and milking cows yields a 15% increase in the production of milk throughout the […]
978-1319066604 Chapter 7 Part 1
Page 1 Name: __________________________ Date: _____________ 1. Suppose the government imposes a $10 excise tax on the sale of sweaters by charging suppliers $10 for each sweater sold. If the demand curve is downward-sloping and the supply curve is upward-sloping: […]
978-1319066604 Chapter 7 Part 2
Page 21 87. (Figure: The Market for Hamburgers) Use Figure: The Market for Hamburgers. If the market is originally in equilibrium and the government imposes an excise tax of $0.80 per unit of the good sold, consumer surplus will be […]
978-1319066604 Chapter 7 Part 3
Page 41 192. The two most important sources of federal revenue are the _____ taxes. A) FICA and personal income B) corporate income and FICA C) excise and personal income D) Social Security and excise 193. _____ tax is NOT […]
978-1319066604 Chapter 7 Part 4
Page 55 267. Producers in a particular market will bear the greater burden of an excise tax: A) the more price-elastic the demand is relative to supply. B) the less price-elastic demand is relative to supply. C) if demand has […]
978-1319066604 Chapter 8 Part 1
Page 1 Name: __________________________ Date: _____________ 1. Goods and services purchased from abroad are _____, while goods and services sold abroad are _____. A) always been positive. B) always been negative. C) shown an increase in exports as a ratio […]
978-1319066604 Chapter 8 Part 2
Page 21 86. (Figure: The Production Possibilities for Two Countries) Use Figure: The Production Possibilities for Two Countries. Trade will NOT take place if 1 microchip trades for _____ tire(s). A) 0.25 B) 1 C) 1.5 D) 1.75 87. (Figure: […]
978-1319066604 Chapter 8 Part 3
Page 41 157. (Figure: The Market for Laptops) Use Figure: The Market for Laptops. Assume that S and D are the domestic supply and demand curves and the world price is PW. Identify the area of government tax revenue when […]
978-1319066604 Chapter 8 Part 4
Page 56 234. The United States and the European Union levy heavy import tariffs on agricultural products, which hurt many poor farmers from the very poorest countries in the world. A) True B) False 235. When a country joins the […]
978-1319066604 Chapter 9 Part 1
Page 1 Name: __________________________ Date: _____________ 1. Jacquelyn is a student at a major state university. Which factor is NOT an explicit cost of her attending college? A) Opportunity cost may be larger than monetary cost. B) Opportunity cost includes […]
978-1319066604 Chapter 9 Part 2
Page 21 92. (Table: Marginal Analysis of Sweatshirt Production I) Use Table: Marginal Analysis of Sweatshirt Production I. The optimal quantity of sweatshirts to produce is: A) 2. B) 3. C) 4. D) 5. 93. (Table: Marginal Analysis of Sweatshirt […]
978-1319066604 Chapter 9 Part 3
Page 36 148. If a decision maker chooses an option that leaves him or her worse off than choosing another available option, he or she is: A) using bounded rationality. B) basing the decision on risk aversion. C) making an […]
Economics Chapter 1 In Each Of The Following Situations Identify Which Of The Twelve Principles Is At Work
interactive activity Chapter 1 First Principles 1. In each of the following situations, identify which of the twelve principles is at work. a. You choose to purchase your textbooks online through Chegg rather than paying a higher price for the […]
Economics Chapter 10 Interactive Activity Savings Investment Spending And The Financial System Given The
interactive activity Chapter 10 Savings, Investment Spending, and the Financial System 1. Given the following information about the closed economy of Brittania, what is the level of investment spending and private savings, and what is the budget balance? What is […]
Economics Chapter 10 Interactive Activity The Rational Consumer For Each The Following Situations Decide
interactive activity Chapter 10 The Rational Consumer 1. For each of the following situations, decide whether Al has diminishing mar- ginal utility. Explain. a. The more economics classes Al takes, the more he enjoys the subject. And the more classes […]
Economics Chapter 10a For Each Of The Following Situations Draw A Diagram Containing Three Of Isabella’s Indifference Curves
S-159 interactive activity Appendix 10 Consumer Preferences and Consumer Choice 1. For each of the following situations, draw a diagram containing three of Isabella’s indifference curves. a. For Isabella, cars and tires are perfect complements, but in a ratio of […]
Economics Chapter 11 Interactive Activity Income And Expenditure Due Increase Consumer Wealth There Billion
S-147 interactive activity Chapter 11 Income and Expenditure 1. Due to an increase in consumer wealth, there is a $40 billion autonomous increase in consumer spending in the economies of Westlandia and Eastlandia. and 0.75 in Eastlandia. What do your […]
Economics Chapter 11 Changes In The Prices Of Key Commodities Have A Significant Impact On A Company’s Bottom Line
interactive activity Chapter 11 Behind the Supply Curve: Inputs and Costs 1. Changes in the prices of key commodities have a significant impact on a compa- ny’s bottom line. For virtually all companies, the price of energy is a substantial […]
Economics Chapter 11a Interactive Activity Deriving The Multiplier Appendix Algebraically Complete The Following Table Calculating
S-159 interactive activity Appendix 11 Deriving the Multiplier Algebraically 1. Complete the following table by calculating the value of the multiplier and iden- tifying the change in Y* due to the change in autonomous spending. How does the value of […]
Economics Chapter 12 Interactive Activity Aggregate Demand And Aggregate Supply Fall The Value The
S-161 interactive activity Chapter 12 Aggregate Demand and Aggregate Supply 1. A fall in the value of the dollar against other currencies makes U.S. final goods and services cheaper to foreigners even though the U.S. aggregate price level stays the […]
Economics Chapter 12 Interactive Activity Perfect Competition And The Supply Curve For Each The
interactive activity Chapter 12 Perfect Competition and the Supply Curve 1. For each of the following, is the business a price-taking producer? Explain your answers. a. A cappuccino café in a university town where there are dozens of very similar […]
Economics Chapter 13 Interactive Activity Fiscal Policy The Accompanying Diagram Shows The Current Macroeconomic
S-177 interactive activity Chapter 13 Fiscal Policy 1. The accompanying diagram shows the current macroeconomic situation for the economy of Albernia. You have been hired as an economic consultant to help the economy move to potential output, YP. AD1 SRAS […]
Economics Chapter 13 Each Of The Following Firms Possesses Market Power
S-201 interactive activity Chapter 13 Monopoly 1. Each of the following firms possesses market power. Explain its source. a. Merck, the producer of the patented cholesterol-lowering drug Zetia 1. a. Merck has a patent for Zetia. This is an example […]
Economics Chapter 13a An economy has a marginal propensity to consume
interactive activity Appendix 13 Taxes and the Multiplier 1. An economy has a marginal propensity to consume of 0.6, real GDP equals $500billion, and the government collects 20% of GDP in taxes. If government purchases increase by $10 billion, show […]
Economics Chapter 14 Interactive Activity Money Banking And The Federal Reserve System For Each
S-195 interactive activity Chapter 14 Money, Banking, and the Federal Reserve System 1. For each of the following transactions, what is the initial effect (increase or decrease) on M1? On M2? 1. a. Shares of stock are not a component […]
Economics Chapter 14 The Accompanying Table Presents Market Share Data For The U.S. Breakfast Cereal
interactive activity Chapter 14 Oligopoly 1. The accompanying table presents market share data for the U.S. breakfast cereal market. Company Market share Kellogg 28% General Mills 28 PepsiCo (Quaker Oats) 14 Kraft 13 Private Label 11 Other 6 Data from: […]
Economics Chapter 15 Interactive Activity Monetary Policy Access The Discovering Data Exercise For
interactive activity Chapter 15 Monetary Policy 1. Access the Discovering Data exercise for Chapter 15 Problem 1 online to answer the following questions. a. What is the target federal funds rate? b. Is the target federal funds rate different from […]
Economics Chapter 15 Use The Three Conditions For Monopolistic Competition
interactive activity Chapter 15 Monopolistic Competition and Product Differentiation 1. Use the three conditions for monopolistic competition discussed in the chapter to decide which of the following firms are likely to be operating as monopolistic competitors. If they are not […]
Economics Chapter 15a Interactive Activity Reconciling The Two Models Appendix The Interest Rate Using Figure
interactive activity Appendix 15 Reconciling the Two Models of the Interest Rate 1. Using a figure similar to Figure 15A-1, explain how the money market and the loanable funds market react to a reduction in the money supply in the […]
Economics Chapter 16 Interactive Activity Inflation Disinflation And Deflation The Economy Scottopia Policy Makers
interactive activity Chapter 16 Inflation, Disinflation, and Deflation 1. In the economy of Scottopia, policy makers want to lower the unemployment rate and raise real GDP by using monetary policy. Using the accompanying diagram, show why this policy will ultimately […]
Economics Chapter 16 What Type Of Externality (Positive Or Negative) Is Present In Each Of The Following Examples
S-239 interactive activity Chapter 16 Externalities 1. What type of externality (positive or negative) is present in each of the following examples? Is the marginal social benefit of the activity greater than or equal to the marginal benefit to the […]
Economics Chapter 17 Interactive Activity Macroeconomics Events And Ideas Since The Crash Its Stock
interactive activity Chapter 17 Macroeconomics: Eventsand Ideas 1. Since the crash of its stock market in 1989, the Japanese economy has seen little economic growth and some deflation. The accompanying table from the Organization for Economic Cooperation and Development (OECD) […]
Economics Chapter 17 The Government Is Involved In Providing Many Goods And Services
S-247 interactive activity Chapter 17 Public Goods and Common Resources 1. The government is involved in providing many goods and services. For each of the goods or services listed, determine whether it is rival or nonrival in consumption and whether […]
Economics Chapter 18 Interactive Activity International Macroeconomics How Would The Following Transactions Categorized The
interactive activity Chapter 18 International Macroeconomics 1. How would the following transactions be categorized in the U.S. balance of pay- ments accounts? Would they be entered in the current account (as a payment to or from a foreigner) or the […]
Economics Chapter 18 The Accompanying Table Contains Data On The U.S. Economy For The Years 1983 And 2015
interactive activity Chapter 18 The Economics of the Welfare State 1. The accompanying table contains data on the U.S. economy for the years 1983 and 2015. The second column shows the poverty threshold. The third column shows the consumer price […]
Economics Chapter 19 In 2015 National Income In The United States Was $15,665.3 Billion
interactive activity Chapter 19 Factor Markets and the Distribution of Income 1. In 2015, national income in the United States was $15,665.3 billion. In the same year, 148.8 million workers were employed, at an average wage, including benefits, of $62,187 […]
Economics Chapter 19a Leandro Has 16 Hours Per Day That He Can Allocate To Work Or Leisure
interactive activity Appendix 19 Indifference Curve Analysis of Labor Supply 1. Leandro has 16 hours per day that he can allocate to work or leisure. His job pays a wage rate of $20. Leandro decides to consume 8 hours of […]
Economics Chapter 2 Two Important Industries On The Island Of Bermuda Are Fishing And Tourism
S-9 interactive activity Chapter 2 Economic Models: Trade-offs and Trade 1. Two important industries on the island of Bermuda are fishing and tourism. According to data from the Food and Agriculture Organization of the United Nations and the Bermuda Department […]
Economics Chapter 20 For Each Of The Following Situations Calculate The Expected Value
interactive activity Chapter 20 Uncertainty, Risk, and Private Information 1. For each of the following situations, calculate the expected value. a. Tanisha owns one share of IBM stock, which is currently trading at $80. There is a 50% chance that […]
Economics Chapter 2a Study The Four Accompanying Diagrams
S-21 interactive activity 2 Appendix Graphs in Economics 1. Study the four accompanying diagrams. Consider the following statements and indicate which diagram matches each statement. Which variable would appear on the horizontal and which on the vertical axis? In each […]
Economics Chapter 3 Interactive Activity Supply And Demand Study Conducted Yahoo Revealed That Chocolate
interactive activity Chapter 3 Supply and Demand 1. A study conducted by Yahoo! revealed that chocolate is the most popular flavor of ice cream in America. For each of the following, indicate the possible effects on demand, supply, or both […]
Economics Chapter 4 Determine The Amount Of Consumer Surplus
interactive activity Chapter 4 Consumer and Producer Surplus 1. Determine the amount of consumer surplus generated in each of the following situations. a. Leon goes to the clothing store to buy a new T-shirt, for which he is willing to […]
Economics Chapter 5 Interactive Activity Price Controls And Quotas Meddling With Markets Order Ingratiate
interactive activity Chapter 5 Price Controls and Quotas: Meddling with Markets 1. In order to ingratiate himself with voters, the mayor of Gotham City decides to lower the price of taxi rides. Assume, for simplicity, that all taxi rides are […]
Economics Chapter 6 Interactive Activity Elasticity You Think The Price Elasticity Demand For Ford
S-87 interactive activity Chapter 6 Elasticity 1. Do you think the price elasticity of demand for Ford sport-utility vehicles (SUVs) will increase, decrease, or remain the same when each of the following events occurs? Explain your answer. 2. In the […]
Economics Chapter 6 Interactive Activity Macroeconomics The Big Picture Which The Following Questions Are
interactive activity Chapter 6 Macroeconomics: The Big Picture 1. Which of the following questions are relevant for the study of macroeconomics and which for microeconomics? a. How will Ms. Martin’s tips change when a large manufacturing plant near the restaurant […]
Economics Chapter 7 Interactive Activity Gdp And The Cpi Tracking The Macroeconomy Below Simplified
interactive activity Chapter 7 GDP and the CPI: Tracking the Macroeconomy 1. Below is a simplified circular-flow diagram for the economy of Micronia. (Note that there is no investment spending and no transfers in Micronia.) a. What is the value […]
Economics Chapter 7 The United States Imposes An Excise Tax On The Sale Of Domestic Airline Tickets
interactive activity Chapter 7 Taxes 1. The United States imposes an excise tax on the sale of domestic airline tickets. Let’s assume that in 2015 the total excise tax was $6.10 per airline ticket (consist– ing of the $3.60 flight […]
Economics Chapter 8 Interactive Activity International Trade Both Canada And The United States Produce
interactive activity Chapter 8 International Trade 1. Both Canada and the United States produce lumber and footballs with constant opportunity costs. The United States can produce either 10 tons of lumber and no footballs, or 1,000 footballs and no lumber, […]
Economics Chapter 8 Interactive Activity Unemployment And Inflation Each Month Usually The First Friday
interactive activity Chapter 8 Unemployment and Inflation 1. Each month, usually on the first Friday of the month, the Bureau of Labor Statistics releases the Employment Situation Summary for the previous month. Go to www.bls.gov and find the latest report. […]
Economics Chapter 9 Interactive Activity Longrun Economic Growth The Accompanying Table Shows Data From
Chapter 9 interactive activity Long-Run Economic Growth 1. The accompanying table shows data from the World Bank, World Development Indicators, for real GDP per capita in 2010 U.S. dollars for Argentina, Ghana, South Korea, and the United States for 1960, […]
Economics Chapter 9 Jackie Owns And Operates A Website Design Business
S-129 interactive activity Chapter 9 Decision Making by Individuals and Firms 1. Jackie owns and operates a website design business. To keep up with new tech- nology, she spends $5,000 per year upgrading her computer equipment. She runs the business […]
Economics Chapter 9a Suppose That A Major City’s Main Thoroughfare
S-141 interactive activity 9 Appendix How to Make Decisions Involving Time: Understanding Present Value 1. Suppose that a major city’s main thoroughfare, which is also an interstate highway, will be completely closed to traffic for two years, from January 2018 […]
Economics Suggested Solution Suggested Solutions For Business Case Questions For Thought This Section Offers Suggested
BCS-1 Krugman_Econ_5e_BCS_BCS1-BCS16_v1.indd 1 30/01/18 1:52 am Suggested Solutions for Business Case Questions for Thought This section offers suggested answers to the Questions for Thought at the end of each chapter’s Business Case. CHAPTER 1 1. Explain how each of […]