If the marginal benefit of reducing emissions of some air pollutant is less than the
marginal cost,
A) further reductions will make society better off.
B) further reduction will make society worse off.
C) pollution taxes should be imposed on producers to pay for further reductions.
D) economic efficiency will be increased if further reductions are made.
The key characteristics of a monopolistically competitive market structure include
A) few sellers.
B) sellers selling similar but differentiated products.
C) high barriers to entry.
D) sellers acting to maximize revenue.
A major source of inefficiency in barter economies is that they require
A) a standard of deferred payment to make trade possible.
B) a double coincidence of wants in exchange.
C) more liquid stores of value than do monetary economies.
D) All of the above are correct.
Compared to other high-income countries, health care spending per person in the
United States has been
A) growing at a faster rate.
B) declining at a faster rate.
C) growing at approximately the same rate.
D) declining at approximately the same rate.
Which of the following is a positive economic statement?
A) People should use public transportation more often.
B) The government should ban diesel engines in automobiles.
C) Due to a decrease in state funding, university tuition has risen.
D) Foreign citizens should not be allowed to work without a work visa.
An example of an intermediate good would be
A) the bread that goes into a sub sandwich that is sold by Quiznos.
B) the soda pop sold by Quiznos.
C) a sub sandwich sold by Quiznos.
D) the potato chips sold by Quiznos.
Table 7-6 Production and
Consumption Production
Without Trade With Trade
Estonia and Morocco can produce both swords and belts. Table 7-6 shows the
production and consumption quantities without trade, and the production numbers with
trade. If the actual terms of trade are 1 belt for 1.5 swords and 70 belts are traded, how
many belts will Morocco consume?
A) 40
B) 50
C) 70
D) 120
Suppose you have surveyed a few industries and obtained information about the income
elasticity of demand for their products. If you expect that the economy is headed for a
long recession, you would advise people to look for jobs in an industry with
A) a high positive income elasticity coefficient such as 5.
B) a low positive income elasticity coefficient such as 0.8.
C) a “high” negative income elasticity coefficient such as -4.
D) a “low” negative income elasticity coefficient such as -0.2.
The economic growth model predicts that
A) GDP per capita of rich countries will grow more rapidly than in poor countries.
B) GDP per capita of poor countries will grow more rapidly than in rich countries.
C) Governments must centrally direct the economy for growth to occur.
D) GDP per capita of poor countries will never change.
Lowering the discount rate will
A) decrease reserves, encourage banks to make fewer loans, and decrease the money
supply.
B) decrease reserves, encourage banks to make fewer loans, and increase the money
supply.
C) increase reserves, encourage banks to make more loans, and increase the money
supply.
D) increase reserves, encourage banks to make more loans, and decrease the money
supply.
Oligopolies are difficult to analyze because
A) the firms are so large.
B) demand and cost curves do not exist for these types of industries.
C) how firms respond to a price change by a rival is uncertain.
D) oligopolies are a recent development so economists have not had time to develop
models.
If an American firm opens a production facility in India, the total value of the
production will be included in the
A) gross domestic product of the United States.
B) national income of the United States.
C) gross domestic product of India.
D) national income of India.
The purchase by an individual or firm of stock or bonds issued in another country is
called
A) foreign exchange arbitrage.
B) foreign direct investment.
C) foreign portfolio investment.
D) global stock exchange.
If the number of unemployed workers is 200 million, the number of employed workers
is 300 million, and the working-age population is 800 million, what is the labor force
participation rate?
A) 12.5%
B) 37.5%
C) 40%
D) 62.5%
New growth theory states that increases in ________ capital will result in ________ at
the ________ level.
A) knowledge; increasing returns to scale; firm
B) physical; decreasing returns to scale; firm
C) knowledge; decreasing returns to scale; economy
D) knowledge; increasing returns to scale; economy
It is difficult for a private market to provide the economically efficient quantity of a
public good because
A) by law governments cannot use cost-benefit analysis to determine this quantity.
B) public goods produce positive and negative externalities.
C) individual preferences are not revealed in the market for the good.
D) it is too expensive to produce the necessary amount of the good.
If the implied exchange rate between Big Mac prices in the United States and Poland is
2.13 zlotys per dollar, but the actual exchange rate between the United States and
Poland is 3.16 zlotys per dollar, which of the following would you expect to see?
A) an appreciation of the dollar
B) an increase in the demand for zlotys
C) an increase in the demand for dollars
D) Both A and C are correct.