What is an inside director?
A) a movie director who also appears in the movie
B) a member of a corporate board of directors that is also a manager of the business
C) the CEO that is selected by the corporation’s board of directors
D) a board of director chair who has been in the job for at least three years
Which of the following would shift a nation’s production possibilities frontier outward?
A) discovering a cheap way to convert sunshine into electricity
B) an increase in demand for the nation’s products
C) a decrease in the unemployment rate
D) a law requiring workers to retire at age 50
Some economists have argued that path dependence and switching costs can lead to
market failure. Which of the following is an example of this argument?
A) Costly celebrity endorsements lead many consumers to buy a product even though it
is more expensive or less effective than a product that is not endorsed by a celebrity.
B) A consumer who won a lottery for a Super Bowl ticket refuses to sell it for $3,000
even though he would not have paid $3,000 for a ticket if he had not won the lottery.
C) While playing the ultimate game, an allocator decides to share $20 equally with a
recipient rather than keep the $20 for herself.
D) VHS video recorders became more popular with consumers than Sony Betamax
recorders even though the Betamax recorders embodied a superior technology.
Table 19-27
The components of national income for an economy are represented in Table 19-27
above. All values are in billions of dollars.
What is the level of personal income for this economy?
A) $1,140 billion
B) $1,010 billion
C) $990 billion
D) $860 billion
The central bank of the European Union is called the
A) Bundesbank.
B) Banco Europe.
C) Federal Reserve.
D) European Central Bank.
Figure 1-4
Which of the following statements is false?
A) The slope of the tangent at E is positive.
B) The slope of the tangent at F is negative.
C) The slope of the tangent at E and the slope of the tangent at F are equal.
D) Neither the slope of the tangent at E nor the slope of the tangent at F are equal to
zero.
According to the short-run Phillips curve, the unemployment rate and the inflation rate
are
A) unrelated.
B) positively related.
C) negatively related.
D) unaffected by monetary policy.
According to the real business cycle model, ________ in aggregate demand ________
GDP.
A) increases; decrease
B) increases; increase
C) increases; do not affect
D) decreases; increase
The person hired by a corporation’s board of directors to run the day-to-day operations
of the corporation is known as the
A) chairman of the board.
B) chief executive officer.
C) owner-manager.
D) corporate governor.
Gretchen expects the price level to rise from 104 this year to 108 next year, and she is
able to incorporate these expectations into her wage contract. If the price level rises to
106 next year instead of 108, which of the following will occur?
A) Gretchen’s real wage will be unchanged.
B) Gretchen’s real wage will fall.
C) Gretchen’s real wage will rise.
D) Gretchen’s real wage may rise or fall, depending on the unemployment rate.
What is the term that describes a situation in which one party to an economic
transaction has less information than the other party?
A) inefficient market hypothesis
B) asymmetric information
C) unequal market structure
D) monopsony
Congress and the president carry out fiscal policy through changes in
A) interest rates and the money supply.
B) taxes and the interest rate.
C) government purchases and the money supply.
D) government purchases and taxes.
Economic efficiency is achieved when there is a market outcome in which the marginal
benefit to consumers of the last unit produced is equal to its marginal cost of production
and
A) economic surplus plus consumer surplus equals producer surplus.
B) consumer surplus plus producer surplus is maximized.
C) economic surplus is minimized.
D) the Difference between consumer surplus and producer surplus is maximized.
If you burn your trash in the back yard in spite of regulations against it, then you are
A) acting economically irrationally and creating a social cost.
B) avoiding the private costs associated with disposing your trash some other way and
creating a social cost.
C) acting rationally and creating a positive externality.
D) saving landfill space and creating a social benefit.
Table 15-4
Shakti Inc. has been granted a patent for its Arnica toothache balm. Table 15-4 shows
the demand and the total cost schedule for the firm.
What is the amount of Shakti’s profit?
A) $68
B) $72
C) $124
D) $192
Many people sell goods through eBay at prices that are higher than the prices they paid
for these goods. Economists consider these transactions as
A) examples of zero sum games, since the value of the goods sold is exactly equal to
the prices paid for them.
B) unproductive since the goods sold have been produced in the past.
C) examples of exploitation of buyers of the goods by the sellers.
D) examples of arbitrage.
If society decides it wants more of one good and all resources are fully utilized, then
A) it is unable to do this unless technology advances.
B) additional resource supplies will have to be found.
C) it has to give up some of another good and incur some opportunity costs.
D) more unemployment will occur.
One reason why the average salary of Major League Baseball players is higher than the
average salary of college professors is
A) the careers of most baseball players are much shorter than the careers of most
college professors.
B) the marginal revenue product of baseball players is greater than the marginal
revenue product of college professors.
C) college professors accept lower salaries in exchange for better working conditions.
D) competition among baseball club owners forces player salaries to be much higher
than the players’ marginal revenue products.
Which of the following will raise consumer expenditures?
A) an increase in interest rates
B) a general decline in housing prices
C) an increase in expected future income
D) an increase in the price level