Changes in the health of the average person are relatively unimportant as an indicator of
changes in the standard of living.
International flows of capital increase both efficiency and growth in countries around
the world.
Transfer payments are subtracted from national income to get to personal income.
The model of purchasing power parity is the only way to determine whether a country’s
currency is undervalued or overvalued.
If the government wants to minimize the welfare loss of a tax, it should tax goods with
more inelastic demands or supplies.
The key to sustained economic growth is increasing labor productivity.
Figure 15-9 Figure
15-9 shows the demand and cost curves for a monopolist.
What is the economically efficient output level?
A) 600 units
B) 800 units
C) 940 units
D) 1160 units
Which of the following is a positive economic statement?
A) The standard of living in the United States is too low.
B) If the price of beef falls, a larger quantity of it will be bought.
C) The government should implement a national consumption tax.
D) The U.S. government should increase regulations on the banking industry.
How is a stock’s price-earnings ratio found?
A) by dividing the dividend by the closing price of the stock
B) by dividing the dividend by the firm’s earnings per share
C) by dividing current market price of the stock by the firm’s earnings per share
D) by subtracting the firm’s earnings per share from the closing price of the stock
Figure 17-9
A supply shock, such as rising oil prices, would be depicted as a movement from
A) A to D to C.
B) C to B to A.
C) C to D to A.
D) C to E to B.
E) A to B to C.
The demand for labor is described as a derived demand because
A) it is derived by workers seeking to earn income to fund the consumption of goods
and services.
B) it is derived by producers seeking to make profits by starting new businesses.
C) it is derived from the demand for products that use labor in the production process.
D) it is derived from government institutions which rely on labor markets for the
purpose of raising tax revenue.
Which of the following is a government expenditure, but is not a government purchase?
A) The federal government buys a Humvee.
B) The federal government pays the salary of an FBI agent.
C) The federal government pays out an unemployment insurance claim.
D) The Federal government pays to support research on Aids.
Table 4-14
The equations above describe the demand and supply for Pauline’s Pickled
Pomegranates. The equilibrium price and quantity for Pauline’s Pickled Pomegranates
are $30 and 15 thousand units. What is the value of economic surplus in this market?
A) $50 thousand
B) $112.5 thousand
C) $225 thousand
D) $337.5 thousand
With perfect price discrimination, the marginal revenue curve
A) is below the demand curve.
B) is above the demand curve.
C) is equal to the demand curve.
D) is horizontal.
Although the pegged exchange rate between the yuan and the dollar has ________ the
yuan, China has been reluctant to abandon the peg for fear that abandoning the peg
would ________.
A) undervalued; reduce exports
B) undervalued; reduce imports
C) overvalued; increase imports
D) overvalued; reduce exports
Table 20-8
Suppose that the data in the table above reflect the price levels in the economy. What is
the inflation rate in between 2012 and 2013?
A) 2%
B) 5%
C) 10%
D) 12%
E) 20%
List the Fed’s four main monetary goals.
Suppose a doctor can earn an additional $25,000 in revenue per year by keeping her
office open on Sundays. At what additional cost would keeping the office open on
Sundays not be considered economically rational?
Explain why a centrally-planned economy might not grow as rapidly as a market
economy.
Suppose you hit a progressive jackpot on a slot machine in a casino in Atlantic City and
are given the choice of the following prizes:
Prize 1: $150,000 to be received right away, with three additional payments of $150,000
to be received each year for the next three years.
Prize 2: $500,000 to be received right away. If the interest rate is 5 percent, what is the
present value of each prize?
Who is the seller in a primary market and who is the seller in a secondary market?