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Suppose the demand for hot dogs decreases. In the short run, firms that produce hot
dogs will experience a fall in prices, which will induce them to
A) increase production and increase the number of workers.
B) decrease production and increase the number of workers.
C) decrease production and reduce the number of workers.
D) increase production and reduce the number of workers.
Convergence refers to closing the gap in ________ between poorer countries and richer
countries.
A) real GDP
B) real GDP per capita
C) the growth rate in real GDP
D) the growth rate in real GDP per capita
Recall Application 2, "How Fast to Sail?" to answer the following questions:
Based on the Application, a ship captain will decide to sail a ship slower if:
A) the marginal benefit of a faster sail is less than the marginal cost.
B) the marginal benefit of a faster sail is more than the marginal cost.
C) the marginal benefit of a faster sail is equal than the marginal cost.
D) the marginal benefit of a faster sail is positive.
Which of the following is a question answered with positive economic analysis?
A) If we had more money, should the college offer free parking for students?
B) If we can afford it, should the college provide more financial aid assistance?
C) If the college increased tuition, by how much will class sizes decline?
D) As a result of the recession, should the college cut tuition to stimulate enrollments?
Suppose consumer tastes and preferences shift from tacos to pizzas. In the short run,
these changing tastes will result in pizza restaurants ________ pizza prices and taco
restaurants ________ taco prices.
A) increasing; decreasing
B) decreasing; increasing
C) decreasing; decreasing
D) increasing; increasing
Outside lags occur because
A) firms must change investment plans before monetary policy can be effective.
B) it takes time to identify a problem.
C) once a problem is diagnosed, it still takes time to implement policy changes.
D) once changes are finally diagnosed and implemented, policies are immediately
effective.
Historically, the key role in assisting countries that ran into financial difficulties was
played by
A) Europe.
B) Japan.
C) the United Nations.
D) the IMF.
From time to time, the Federal Reserve sells various quantities of government bonds to
the private sector through a process called
A) bond recall procedures.
B) backflip bond investments.
C) open market sales.
D) voluntary redemption procedures.
Using the rule of 70, if the GDP per capita growth rate in the United States is 3.5
percent, real GDP per capita doubles every
A) 20 years.
B) 24.5 years.
C) 35 years.
D) 70 years.
The principle of diminishing returns occurs:
A) when there is only one input.
B) when there are two or more inputs and at least one input is held fixed.
C) when there are two or more inputs and all inputs are held fixed.
D) when there are two or more inputs and all inputs are allowed to vary.
