Figure 2-8
Figure 2-8 shows the production possibilities frontiers for Costa Rica and Guatemala.
Each country produces two goods, pineapples and coconuts.
Refer to Figure 2-8. What is the opportunity cost of producing 1 ton of pineapples in
Costa Rica?
A) 3/8 of a ton of coconuts
B) 2/3 of a ton of coconuts
C) 1 1/2 tons of coconuts
D) 100 tons of coconuts
Which of the following would increase GNP in the United States?
A) an increase in the production of U.S.-owned General Motors cars made in Mexico
B) an increase in the production of Japanese-owned Toyota cars in Mexico
C) an increase in the production of Japanese-owned Toyota cars in the U.S.
D) an increase in the production of Mexican-owned Grupo Minsa corn in the U.S.
Figure 3-7
Refer to Figure 3-7. Assume that the graphs in this figure represent the demand and
supply curves for laptop computers. Which panel best describes what happens in this
market when the price of computer hard drives falls?
A) Panel (a)
B) Panel (b)
C) Panel (c)
D) Panel (d)
During most of the years of the Great Depression, the actual federal budget was in
________, and the cyclically adjusted budget was in ________.
A) deficit; surplus
B) surplus; surplus
C) deficit; deficit
D) surplus; deficit
If the BLS counted persons that are on active military service in the totals for
employment, the labor force, or the working-age population, this would
A) decrease the measured unemployment rate.
B) decrease the measured labor force participation rate.
C) decrease the number of persons in the labor force.
D) decrease the number of persons in the working-age population.
Figure 3-6
Refer to Figure 3-6. The figure above represents the market for coffee grinders.
Assume that the market price is $21. Which of the following statement is true?
A) There is a shortage that will cause the price to increase; quantity demanded will then
decrease and quantity supplied will increase until the price equals $25.
B) There is a shortage that will cause the price to increase; quantity supplied will then
decrease and quantity demanded will increase until the price equals $25.
C) There will be a shortage that will cause the price to increase; demand will then
decrease and supply will increase until the price equals $25.
D) There is a shortage that will cause the price to decrease; quantity demanded will then
increase and quantity supplied will decrease until the price equals $25.
Which of the following headlines would be more closely related to what
macroeconomists study than what microeconomists study?
A) Avocado prices rise due to a late frost in California.
B) The United Auto Workers sign a contract raising wages and benefits 7% over the
next 3 years.
C) Real GDP grows by 2.3% in the second quarter.
D) Airlines raise ticket prices in response to rising fuel costs.
Growth in aggregate demand will
A) cause deflation.
B) increase unemployment.
C) move the economy to a higher point on the short-run Phillips curve.
D) cause the short-run Phillips curve to shift to the left.
In general, the costs tariffs and quotas impose on consumers are
A) large in total but relatively small per person.
B) small in total but relatively large per person.
C) large in total and large per person.
D) small in total and small per person.
Which of the following is not a cost posed by inflation?
A) Inflation reduces the affordability of goods and services to the average consumer.
B) The money that consumers and firms hold loses its purchasing power.
C) Firms must pay for changing prices on products and printing new catalogs.
D) Banks can lose if they under predict inflation and charge an interest rate that does
not completely compensate for inflation.
The rapid growth of China’s economy relative to the United States has benefitted U.S.
consumers because
A) competition from China has made jobs harder to find in the United States.
B) U.S. consumers can purchase more lower-priced goods made in China.
C) the United States has comparative advantage in more goods than China does.
D) goods made in China are always of higher quality than goods made in the United
States.
If technological change increases the profitability of new investments for firms, then the
________ curve for loanable funds will shift to the ________.
A) supply; right
B) supply; left
C) demand; right
D) demand; left
Suppose a developing country experiences a reduction in machinery and capital
equipment as foreign entrepreneurs decrease the amount of investment in the economy.
As a result,
A) the long-run aggregate supply curve will shift to the right.
B) the long-run aggregate supply curve will shift to the left.
C) the economy will move up along the long-run aggregate supply curve.
D) the economy will move down along the long-run aggregate supply curve.
Based on the following information, what is the balance on the financial account?
Exports of goods and services = $12 billion
Imports of goods and services = $14 billion
Net income on investments = -$4 billion
Net transfers = -$1 billion
Increase in foreign holdings of assets in the United States = $5 billion
Increase in U.S. holdings of assets in foreign countries = -$3 billion
A) $8 billion
B) $2 billion
C) $1 billion
D) -$1 billion
In the United States, health care spending on people ________ is six times greater than
on people ________.
A) under age 3; over age 65
B) aged 18 to 24; 25 to 44
C) over age 65; aged 18 to 24
D) over age 65; aged 25 to 44