Which of the following is not a consequence of minimum wage laws?
A) Low skilled workers are hurt because minimum wage reduces the number of jobs
providing low skilled workers with training.
B) Employers will be reluctant to offer low-skill workers jobs with training.
C) Producers have an incentive to offer workers non-wage benefits such as health care
benefits and convenient working hours rather than a higher wage.
D) Some workers benefit when the minimum wage is increased.
If the personal assets of the owners cannot be claimed if the business is bankrupt, the
owners are said to have
A) unlimited liability.
B) a proprietorship type of business.
C) limited liability.
D) a partnership type of business.
What can the Federal Reserve do to reduce the natural rate of unemployment?
A) nothing
B) follow expansionary monetary policy that will increase inflation
C) follow expansionary monetary policy that will reduce inflation
D) follow contractionary monetary policy that will increase inflation
If the marginal utility Ida Mae receives from eating chicken wings is negative then
A) her total utility from eating chicken wings has fallen.
B) her total utility from eating chicken wings is negative as well.
C) Ida Mae definitely does not like chicken wings.
D) her total utility has risen, but by less from the last chicken wing than from the next
to last chicken wing.
Figure 10-8
If the price of biscotti is $1.50 and the price of a cappuccino is $3.00, what is the slope
of the budget constraint?
A) -2
B) -(3.00 – 1.50)/(3.00 + 1.50) = -1/3
C) -1/2
D) The slope cannot be determined without the value of income.
Table 9-11 Production and
Consumption Production
Without Trade With Trade
Denmark and Belize can produce both clocks and hats. Table 9-11 shows the production
and consumption quantities without trade, and the production numbers with trade.
Prior to trade, what was the opportunity cost to produce 1 hat in Belize?
A) 1/6 of a clock
B) 2/3 of a clock
C) 1.5 clocks
D) 6 clocks
The marginal revenue curve for a perfectly competitive firm
A) is downward sloping.
B) is the same as its demand curve.
C) is perfectly inelastic.
D) is the same as its marginal cost curve.
The purchase of a new automobile is included in
A) consumption expenditures on services.
B) consumption expenditures on nondurable goods.
C) consumption expenditures on durable goods.
D) investment expenditures.
Table 2-11
Table 2-11 shows the number of labor hours required to produce a motorcycle and a
guitar in Ireland and Scotland.
What is Ireland’s opportunity cost of producing one guitar?
A) 0.2 motorcycle
B) 5 motorcycles
C) 8 motorcycles
D) 32 motorcycles
Table 4-2
The table above lists the highest prices five consumers are willing to pay for a theater
ticket. If the price of one of the tickets is $10
A) everyone will buy a ticket except for Esther.
B) only Anya and Basil will buy tickets.
C) Celeste’s consumer surplus is $25.
D) the total consumer surplus from the purchase of tickets will be $61.
Stagflation occurs when inflation ________ and GDP ________.
A) rises; rises
B) rises; falls
C) falls; rises
D) falls; falls
Which of the following statements is true?
A) Input prices are one of the success factors that firms can control.
B) Consumers will buy a product only if its price is below that of its competitors.
C) Consumers will buy a product only if it meets a need not met by competing
products.
D) Sheer chance can play a significant role in the success or failure of a business.
Table 2-21
This table shows the number of labor hours required to produce a digital cameras and a
bushel of wheat in China and South Korea. a. Which country has an absolute advantage
in the production of digital cameras?
b. Which country has an absolute advantage in the production of wheat?
c. What is China’s opportunity cost of producing one digital camera?
d. What is South Korea’s opportunity cost of producing one digital camera?
e. What is China’s opportunity cost of producing one pound of wheat?
f. What is South Korea’s opportunity cost of producing one pound of what?
g. If each country specializes in the production of the product in which it has a
comparative advantage, who should produce digital cameras?
h. If each country specializes in the production of the product in which it has a
comparative advantage, who should produce wheat?
A monetary growth rule means that
A) the Fed will lower interest rates if it thinks a recession is on the horizon.
B) the Fed will raise interest rates if it thinks the economy is growing faster than
potential.
C) the money supply should grow at a constant rate.
D) the money supply should grow in response to economic conditions.
Figure 10-7
Manuri has $300 to spend on Pilates classes and Yoga classes. The price of a group
Pilates class is $20 and the price of a group Yoga class is $10. Manuri’s optimal bundle
is given by “A” in Figure 10-7. Suppose the price of Pilates sessions rise to $30 while
income and the price of Yoga sessions remain unchanged. The income effect of this
price change is represented by the movement from
A) A to B.
B) B to C.
C) D to B
D) D to C.
Figure 28-1
Suppose that the economy is currently at point A. If the Federal Reserve engaged in
contractionary monetary policy, where would the economy end up in the short run?
A) It would remain at point A.
B) point B
C) point C
D) point D
E) point E
The process of bundling financial assets together and buying and selling these bundles
in a secondary financial market is called
A) open market operations.
B) securitization.
C) fractional reserve lending.
D) seigniorage.
It is necessary for all economic systems to provide people with goods and services and
also restrict them from getting as much of these goods and services as they wish,
because failure to do this could ________ the efficiency of the system by producing
some goods and services that are ________.
A) reduce; not as highly valued as others
B) increase; not as highly valued as others
C) reduce; valued more than others
D) increase; valued more than others
Economists refer a to a market where buying and selling take place at prices that violate
government price regulations as
A) a black market.
B) an outlaw market.
C) a noncompetitive market.
D) a restricted market.