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 Estonia gain compared to the “without trade” numbers?
A) 10
B) 20
C) 50
D) 70
In a small economy, gross investment in 2013 is $1,500, consumption spending is
$6,000, net investment is $200, government spending is $1,500, exports are $2,000 and
imports are $1,000. What is GDP for this economy in 2013?
A) $10,700
B) $10,300
C) $10,200
D) $10,000
Total utility is maximized in the consumption of two goods by
A) equating the marginal utility for each good consumed.
B) equating the marginal utility per dollar for each good consumed.
C) equating the total utility of each good divided by its price.
D) maximizing expenditure on each good.
If Dawson prefers pizza to hamburgers and hamburgers to hot dogs, then if preferences
are transitive
A) at times she could be indifferent among the three items.
B) she must prefer pizza to hot dogs.
C) she could prefer hamburgers to pizza on some occasions but not hot dogs to pizza.
D) she could prefer hot dogs to pizza on some occasions but not hamburgers to hot
dogs.
Network externalities
A) can only exist when there are economies of scale.
B) prevent the dominance of a market by one firm.
C) exist when the usefulness of a product increases with the number of consumers who
use it.
D) are created when celebrity endorsements of products lead to a surge in the demand
for those products.
Although the Federal Reserve had traditionally made discount loans only to commercial
banks, in response to the financial crisis in 2008 the Fed made ________ eligible for
discount loans as well.
A) the Treasury Department
B) mortgage brokers
C) savings banks
D) primary dealers
In response to accounting scandals in 2002, the federal government passed legislation
requiring that corporate directors have a certain level of expertise with financial
information and mandating that chief executive officers personally certify the accuracy
of financial statements. What is the name of this legislation?
A) the Accountant Reliability Act
B) the 24th amendment to the Constitution
C) the Kennedy-Lott Act
D) the Sarbanes-Oxley Act
A corporation is the type of business has ________ government rules and regulations
affecting it.
A) no
B) the fewest
C) the most
D) only federal
Figure 12-1
If the firm is producing 700 units, what is the amount of its profit or loss?
A) loss of $280
B) loss equivalent to the area A
C) profit equivalent to the area A
D) There is insufficient information to answer the question.
Figure 4-18 Figure 4-18 shows the market
for cigarettes. The government plans to impose a unit tax in this market.
For each unit sold, the price sellers receive after the tax (net of tax) is
A) $12.
B) $8.
C) $4.40.
D) $3.
Which is not one of the criteria necessary for a commodity to make a suitable medium
of exchange?
A) It should be durable.
B) It should be of standardized quality.
C) It should be valuable relative to its weight.
D) It should have intrinsic value.
Figure 27-11
If government purchases increase by $100 billion and lead to an ultimate increase in
aggregate demand as shown in the graph below, the difference in real GDP between
point A and point B will be
A) $100 billion.
B) less than $100 billion.
C) more than $100 billion.
D) There is insufficient information given here to draw a conclusion.
Table 18-6
Table 18-6 shows the income tax brackets and tax rates for single taxpayers in
Calpernia. Calculate the income tax paid by Sasha, a single taxpayer with an income of
$60,000.
A) $22,800
B) $14,399
C) $13,800
D) $13,642
Soldiers in a World War II prisoner-of-war camp
A) used gold as a fiat money.
B) used cowrie shells as money.
C) used cigarettes as money.
D) used U.S. dollars as a commodity money.
Which of the following questions or statements regarding medical school is normative?
A) How do changes in expected future incomes affect the decisions of medical students
about which specialty to choose?
B) Medical students who enter specialized fields make a larger contribution to society
than do student who enter primary care.
C) What role does tuition play in a student’s decision about whether to attend medical
school?
D) Have tuition increases had a large effect or a small effect on the number of
applications to medical school?