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Table 11.1
Refer to Table 11.1. If exports decrease by 30, what is the new equilibrium level of
output?
A) 1,700
B) 2,300
C) 6,800
D) 9,200
Trade results from
A) comparative advantage.
B) absolute advantage.
C) self-sufficiency.
D) diminishing returns.
Deposits are examples of a bank's
A) assets.
B) liabilities.
C) net worth.
D) balance sheet.
Recall Application 5, "The Role of Political Factors in Economic Growth," to answer
the following questions:
According to the application, which of the following is an example of authoritarian
institutions?
A) limited-monarchies
B) tightly controlled oligarchies
C) democracies
D) All of the above are correct.
Recall Application 1, "Increasing Life Expectancy and Aging Populations Spur Costs of
Entitlement Programs," to answer the following questions:
According to the application, estimates of the size of spending for Social Security,
Medicare and Medicaid is approximately ________ percent of GDP by 2075.
A) 22
B) 9
C) 18
D) 7
Let S =y - (150 + 0.6y). Assume no government or foreign sectors. What is the
consumption function?
A) C = -150 + 0.4y
B) C = 150 + 0.4y
C) C = 150 + 0.6y
D) C = -150 - 0.6y
When the price of peanuts falls:
A) the demand for peanuts decreases.
B) the demand for peanuts increases.
C) the quantity demanded of peanuts decreases.
D) the quantity demanded of peanuts increases.
An increase in government spending or a decrease in taxes will cause:
A) the aggregate demand curve to the left.
B) the aggregate demand curve to the right.
C) the SR aggregate supply curve to the left.
D) the SR aggregate supply curve to the right.
Table 2.4 Refer to Table 2.4. The
marginal product of the 2nd tank of fertilizer is:
A) 41.5 truckloads of fruit.
B) 10 truckloads of fruit.
C) 20 truckloads of fruit.
D) 5 truckloads of fruit.
A firm produces its product using both capital and labor. When it does not change its
capital usage, but doubles its labor input, its output increases by less than 50 percent.
Which of the following is the most likely explanation of this finding?
A) the principle of opportunity cost
B) the principle of diminishing returns
C) the marginal principle
D) the spillover principle
Owners' equity is:
A) assets - liabilities.
B) assets + capital.
C) assets - capital.
D) assets + liabilities.
In a production function that is graphed with output on the y-axis and labor on the
x-axis, an increase in the capital stock is illustrated as:
A) an upward shift in the production function.
B) an upward movement along the production function.
C) a downward shift in the production function.
D) a downward movement along the production function.
Recall Application 1, "How to Fight a Liquidity Trap," to answer the following
questions:
According to Larry Ball, what was the reason why Bernanke resisted buying long-term
government bonds?
A) group thinking
B) lack of support from the President
C) fear of long-term inflation
D) the total cost of the purchase of the bonds
