Which of the following characterizes the market that Starbucks competes in?
A) All coffeehouses face horizontal demand curves.
B) Coffeehouses sell identical products.
C) Barriers to entry are low.
D) There are a small number of firms.
The demand curve for canned peas is downward sloping. If the price of canned peas, an
inferior good, rises
A) the income effect which causes you to reduce your canned peas purchases is smaller
than the substitution effect which causes you to increase your purchases, resulting in a
net increase in quantity demanded.
B) the income effect which causes you to increase your canned peas purchases is
smaller than the substitution effect which causes you to reduce your purchases,
resulting in a net decrease in quantity demanded.
C) both the income and substitution effects reinforce each other to decrease the quantity
demanded.
D) the income and substitution effects offset each other but the price effect of an
inferior good leads you to buy more canned peas.
U.S. net export spending falls when
A) the price level in the United States falls relative to the price level in other countries.
B) the growth rate of U.S. GDP is faster than the growth rate of GDP in other countries.
C) the value of the U.S. dollar decreases relative to other currencies.
D) the inflation rate is lower in the United States relative to other countries.
Two of the firms involved in the accounting scandals of the early 2000s were
A) Arthur Anderson and NBC.
B) Western Digital and General Motors.
C) WorldCom and Enron.
D) DuPont and Lehman Brothers.
Table 9-2
Sarita and Gabriel own S&G Bakery. Table 9-2 lists the number of pies and cakes Sarita
and Gabriel can each bake in one day. Select the statement that accurately interprets the
data in the table.
A) Sarita has an absolute advantage in baking cakes and Gabriel has an absolute
advantage in baking pies.
B) Sarita has an absolute advantage in baking pies and Gabriel has an absolute
advantage in baking cakes.
C) Sarita has an absolute advantage in baking pies and cakes.
D) Gabriel has an absolute advantage in baking pies and cakes.
Identify the one statement that does not demonstrate how social effects influence
consumer choice.
A) Students in an Economics class are required to purchase a textbook assigned by the
professor.
B) There is utility gained from consuming goods or services that others are consuming.
C) Some products that people consume are determined by the social popularity of the
products.
D) Companies such as Zappos.com and Netflix invite their consumers to write reviews
about their experience with their products which are then posted on the internet for
others to see.
Table 2-20
Table 2-20 shows the number of labor hours required to produce a wristwatch and a
pound of rice in Japan and Thailand.
Does either Japan or Thailand have an absolute advantage and if so, in what product?
A) Thailand has an absolute advantage in rice.
B) Japan has an absolute advantage in rice.
C) Thailand has an absolute advantage in both products.
D) Japan has an absolute advantage in wristwatches.
Following the recession of 2007-2009, the employment-population ratio
A) remained virtually unchanged for the next 36 months.
B) was even lower four years after the end of the recession.
C) began to slowly increase back to its pre-recession level.
D) began to quickly increase back to its pre-recession level.
Assume that a monopolist practices perfect price discrimination. The firm will produce
an output rate
A) that is less than the efficient level of output.
B) that is greater than the efficient level of output.
C) that is equal to the efficient level of output.
D) that converts consumers surplus into a deadweight loss.
How much is a bond that pays $50 in coupon payments for 3 years and $1,000 at the
end of the third year worth if the interest rate is 10%?
A) $876
B) $952
C) $1,045
D) $1,150
If you liquidate $3,000 of your mutual fund and transfer the funds to your checking
account, then initially, M1 will ________ and M2 will ________.
A) not change; decrease
B) increase; decrease
C) increase; not change
D) not change; not change
Table 11-8
Elegant Settings manufactures stainless steel cutlery. Table 11-8 shows the company’s
cost data.
Elegant Settings experiences
A) economies of scale up to an output level of 400.
B) diminishing returns up to an output level of 400.
C) increasing returns beyond an output level of 400.
D) economies of scale at an output of 300 or less and diseconomies of scale at an output
level above 400.
The National Restaurant Association states that the restaurant industry has economic
effect of more than $1.7 trillion annually in the United States, with every dollar spent in
restaurants generating an estimated total of $2.05 in spending in the economy. This
indicates that the spending multiplier for the restaurant industry is equal to
A) 1.21.
B) 1.70.
C) 2.05.
D) 4.25.
If the Commerce Department adjusts the growth rate of GDP downward for the first
quarter of 2014, and the Bureau of Labor Statistics adjusts the number of hours worked
upward for the first quarter of 2014, what will the Bureau of Labor Statistics do in
terms of revising the figures on the growth rate of labor productivity for the first quarter
of 2014?
A) The BLS will adjust the growth rate downwards.
B) The BLS will adjust the growth rate upwards.
C) The BLS will not change the growth rate of productivity.
D) The BLS will adjust the level of labor productivity upward and the growth rate
downward.
What is the voting paradox?
A) the observation that less than 60 percent of those eligible to vote actually vote
B) the observation that majority voting may not always result in consistent choices
C) the idea that wealthy corporations are able to sway politicians to act in ways contrary
to the desires of the majority
D) people are aware that their votes will not change the political outcome since these
outcomes are predetermined by a group of influential politicians
A consumer is willing to purchase a product up to the point where
A) he spends all of his income.
B) the marginal benefit is equal to the price of the product.
C) the quantity demanded is equal to the quantity supplied.
D) he is inDifferent between consuming and saving.
If the price of pineapple juice was $4.50 a gallon and it is now $5.75 a gallon, what is
the percentage change in price?
A) 7.8 percent
B) 12.5 percent
C) 27.7 percent
D) 57.5 percent
A corporation is
A) the easiest type of business to set up.
B) the least expensive type of business to set up.
C) the most Difficult type of business to set up.
D) the least profitable type of business to set up.
Table 13-3
Table 13-3 shows the demand and cost schedules for a monopolistically competitive
firm.
What are the profit-maximizing/loss-minimizing output level and price?
A) Q = 0 (firm should not produce)
B) Q = 3; P = $18
C) Q = 4; P = $17
D) Q = 5; P = $16
If the nominal rate of interest is 6.5% and the inflation rate is 3.0%, what is the real rate
of interest?
A) -9.5%
B) -3.5%
C) 1.5%
D) 3.5%
E) 9.5%