If it costs Hobie $900 to produce 5 lamps and $1,200 to produce 6 lamps, then the
difference of $300 is the marginal cost of producing the 5th lamp.
Over the last three decades in the United States, services have become a smaller
fraction of GDP relative to goods.
A rising price level decreases consumption by decreasing the real value of household
wealth.
The Fed can directly lower the inflation rate.
If aggregate expenditure is less than GDP, then inventories rise and GDP falls.
The main goal of monetary policy for recent Fed Chairmen has been to maintain high
employment in labor markets.
If the rate of growth in real GDP exceeds the rate of growth in the money supply, the
quantity theory of money predicts a price deflation.
The total amount of producer surplus in a market is equal to the area above the market
supply curve and below the market price.
As population declines, scarcity eventually disappears.
Housing is the largest component of the U.S. CPI market basket.
Any output combination inside a production possibility frontier is associated with
unused or underutilized resources.
In a two-good, two country world, if one country has an absolute advantage in the
production of both goods, it can still benefit by trading with the other country.
An increase in the level of structural unemployment will shift the long-run Phillips
curve.
Members of management serving on the board of directors of a corporation are referred
to as outside directors.
Price ceilings result in shortages.
How does the owner of a corporation relate to the business?
A) The owners of the business have a separate legal distinction from the business.
B) The owners of the business have no separate legal distinction from the business.
C) The personal assets are part of the corporation’s assets.
D) None of these describe the legal relationship of corporate owners to the business.
The decision about what goods and services will be produced made in a
centrally-planned economy is made by
A) lawmakers in the government deciding on what will be produced.
B) workers deciding to produce only what the boss says must be produced.
C) producers deciding what society wants most.
D) consumers and firms choosing which goods and services to buy or produce.
E) consumers dictating to firms what they need most.
A firm’s net income is also its
A) economic profit.
B) balance sheet.
C) accounting profit.
D) opportunity cost.
________ exists because unlimited wants exceed the limited resources available to
fulfill those wants.
A) Scarcity
B) Productive efficiency
C) The command economy
D) Economic growth
In a small economy in 2013, aggregate expenditure was $800 million while GDP that
year was $850 million. Which of the following can explain the difference between
aggregate expenditure and GDP that year?
A) Aggregate expenditure is always less than GDP in developed countries.
B) Firm investment in inventories was less than anticipated in 2013.
C) Firm investment in inventories was greater than anticipated in 2013.
D) Aggregate expenditure is always less than GDP in developing countries.
Unlike firms that sell stock in financial markets, which are known as ________ firms,
companies which do not sell stock in financial markets are known as ________ firms.
A) public; private
B) open; closed
C) corporate; proprietary
D) stock market; bond market
When Toyota introduced its 2010 Prius, it announced that the average retail price of the
2010 model would be lower than the average retail price was for the equivalent 2009
model. Which of the following would explain the price differential?
A) The demand for the Prius had increased, and the supply of the Prius remained
unchanged.
B) The supply of the Prius had decreased, and the demand for the Prius remained
unchanged.
C) The demand for the Prius had decreased, and the supply of the Prius had increased.
D) The demand for the Prius had increased, and the supply of the Prius had decreased.
New growth theory
A) states that the rate of technological change is determined outside the working of the
market system.
B) does not adequately explain the factors that determine productivity.
C) states that the rate of technological change is caused by economic incentives.
D) states that the rate of technological change is unaffected by economic incentives.
Consider the following statements:
a. Soda drinkers purchase more soda from a grocery store that sells soda at a lower
price than other rival grocery stores in the area.
b. Homeowners do not take steps to increase security even though they believe it is
more costly to allow burglaries than to install security monitoring equipment.
c. Manufacturers produce less of a particular cell phone when its selling price rises.
Which of the above statements demonstrates that economic agents respond to
incentives?
A) a only.
B) b only.
C) c only.
D) a and b.
E) a, b, and c.
In preparing their estimates of the stimulus package’s effect on GDP, Obama
administration economists estimated a government purchases multiplier of 1.57.
Economist Robert Barro argues that during wartime, the government purchases
multiplier would be ________ the administration’s estimate, and economists Lawrence
Christiano, Martin Eichenbaum, and Sergio Rebelo argued that when short-term interest
rates are near zero, the multiplier would be ________ the administration’s estimate.
A) higher than; lower than
B) lower than; higher than
C) higher than; equal to
D) equal to; lower than
What problems can high inflation rates cause for the economy?
Describe the pattern of growth rates in real GDP per hour worked in the United States
since the early nineteenth century. Has output per hour worked consistently increased at
the same rate? Explain.
Outline the various actions the government sector could take to promote growth.
How are efficiency and inefficiency represented on a production possibilities frontier?
Mortgage lenders often resell mortgages in secondary markets. How might this make
lenders act differently than if they intended to hold the mortgages themselves?
How do unlimited and limited liability differ?