If you have trouble finding a job because of a slowdown in the overall economy, we
would say that you are
A) frictionally unemployed.
B) structurally unemployed.
C) cyclically unemployed.
D) seasonally unemployed.
It is difficult to determine if foreign companies are selling their products for prices
below their costs of production because
A) the true costs of production are difficult to calculate.
B) the firms have no legal obligation to reveal this information.
C) costs are calculated in the firms’ local currencies.
D) domestic taxes increase the firms’ costs but it is difficult to determine the incidence
of these taxes.
Assume that the demand curve for DVD players shifts to the left and the supply curve
for DVD players shifts to the right, but the supply curve shifts less than the demand
curve. As a result
A) both the equilibrium price and quantity of DVD players will decrease.
B) the equilibrium price of DVD players will decrease; the equilibrium quantity may
increase or decrease.
C) the equilibrium price of DVD players may increase or decrease; the equilibrium
quantity will increase.
D) the equilibrium price of DVD players will decrease; the equilibrium quantity will
increase.
Most recessions in the United States since World War II have begun with
A) a decline in residential construction.
B) a rapid increase in the price level.
C) a substantial number of bank failures.
D) a stock market crash.
Examples of assets that are included in household wealth would be
A) stocks, bonds, and savings accounts.
B) stocks, loans owed, and savings accounts.
C) stocks, bonds, and mortgages.
D) stocks, credit cards, and savings accounts.
Goods that have been produced but not yet sold are referred to as
A) understocks.
B) inventories.
C) pre-sold goods.
D) capital goods.
If an increase in income leads to in an increase in the demand for sushi, then sushi is
A) a normal good.
B) a neutral good.
C) a complement.
D) a necessity.
Anything of value owned by a person or a firm is
A) an asset.
B) a liability.
C) wealth.
D) owner’s yield.
Jake sells Star Wars memorabilia on eBay. His annual revenue is $42,000 per year, the
explicit costs of his business are $10,000, and the opportunity costs of his business are
$18,000 per year. What is his economic profit?
A) $14,000
B) $24,000
C) $32,000
D) $34,000
The late Hugo Chavez, Venezuela’s former president, proposed that the independence of
the Venezuelan central bank be eliminated. Given the research on the relationship
between central bank independence and inflation, we should expect this event to cause
inflation to ________ and the real exchange rate to ________ between the two counties.
(Assume the nominal exchange does not change, and that the United States is the
domestic country).
A) rise in Venezuela relative to the United States; fall
B) fall in Venezuela relative to the United States; fall
C) rise in Venezuela relative to the United States; rise
D) fall in Venezuela relative to the United States; rise
Table 3-3
Refer to Table 3-3. The table contains information about the sorghum market. Use the
table to answer the following questions.
a. What are the equilibrium price and quantity of sorghum?
b. Suppose the prevailing price is $6 per bushel. Is there a shortage or a surplus in the
market?
c. What is the quantity of the shortage or surplus?
d. How many bushels will be sold if the market price is $6 per bushel?
e. If the market price is $6 per bushel, what must happen to restore equilibrium in the
market?
f. At what price will suppliers be able to sell 36,000 bushels of sorghum?
g. Suppose the market price is $14 per bushel. Is there a shortage or a surplus in the
market?
h. What is the quantity of the shortage or surplus?
i. How many bushels will be sold if the market price is $14 per bushel?
j. If the market price is $14 per bushel, what must happen to restore equilibrium in the
market?
When the price of oil rises unexpectedly, the equilibrium price level ________ and the
unemployment rate ________ in the short run.
A) rises; falls
B) rises; rises
C) falls; falls
D) falls; rises