Which of the following firms is likely to have the greatest market power?
a. an electric company
b. a farmer
c. a grocery store
d. a local electronics retailer
In one year, you meet 52 people who are each unemployed for one week and eight
people who are each unemployed for the whole year. What percentage of the
unemployment spells you encountered was short-term, and what percentage of the
unemployment you encountered in a given week was long-term?
a. 52 percent and 13.3 percent
b. 52 percent and 88.9 percent
c. 86.7 percent and 13.3 percent
d. 86.7 percent and 88.9 percent
A Minnesota farmer buys a new tractor made in Iowa by a German company. As a
result,
a. U.S. investment and GDP increase, but German GDP is unaffected.
b. U.S. investment and German GDP increase, but U.S. GDP is unaffected.
c. U.S. investment, U.S. GDP, and German GDP are unaffected because tractors are
intermediate goods.
d. U.S. investment, U.S. GDP, and German GDP all increase.
A person can benefit from specialization and trade by obtaining a good at a price that is
a. lower than his or her opportunity cost of that good.
b. the same as his or her opportunity cost of that good.
c. higher than his or her opportunity cost of that good.
d. different than his or her opportunity cost of that good.
In an open economy, gross domestic product equals $2,450 billion, consumption
expenditure equals $1,390 billion, government expenditure equals $325 billion,
investment equals $510 and net capital outflow equals $225 billion. What is national
saving?
a. $225 billion
b. $510 billion
c. $735 billion
d. $1,390 billion
An improvement in production technology will
a. increase a firm’s costs and increase its supply.
b. increase a firm’s costs and decrease its supply.
c. decrease a firm’s costs and increase its supply.
d. decrease a firm’s costs and decrease its supply.
For purposes of calculating the CPI, the food & beverages category of consumer
spending includes the cost of
a. food away from home.
b. alcoholic beverages.
c. both food away from home and alcoholic beverages.
d. neither food away from home nor alcoholic beverages because these are included in
the recreation category of consumer spending.
Figure 8-5
Suppose that the government imposes a tax of P3 – P1.
Refer to Figure 8-5. The tax causes a reduction in consumer surplus that is represented
by area
a. A.
b. B+C.
c. C+H.
d. F.
Table 10-1
The table below contains data for country A for the year 2010.
Refer to Table 10-1. What were country A’s exports in 2010?
a. -$32
b. $32
c. $88
d. $120
The inflation tax falls mostly heavily on
a. those who hold a lot of currency and accounts for a large share of U.S. government
revenue.
b. those who hold a lot of currency but accounts for a small share of U.S. government
revenue.
c. those who hold little currency and accounts for a large share of U.S. government
revenue.
d. those who hold little currency but accounts for a small share of U.S. government
revenue.
Table 15-3
2010 Labor Data for Adults (age 16 and older) in Meditor
Refer to Table 15-3. What is the adult population in Meditor?
a. 90 million
b. 160 million
c. 230 million
d. 240 million
If the cost of housing increases by 10 percent, then, other things the same, the CPI is
likely to increase by about
a. 1.7 percent.
b. 3.3 percent.
c. 4.2 percent.
d. 10 percent.
Other things the same, as the price level rises, the real value of a dollar
a. rises, and interest rates rise.
b. rises, and interest rates fall.
c. falls, and interest rates rise.
d. falls, and interest rates fall.
Rapid population growth
a. was hailed by Thomas Robert Malthus as the key to future economic growth.
b. tends to lead to higher levels of educational attainment.
c. is the main reason that less developed nations are poor.
d. may depress economic prosperity by reducing the amount of capital which each
worker has to work with.
Both tariffs and import quotas
a. increase the quantity of imports and raise the domestic price of the good.
b. increase the quantity of imports and lower the domestic price of the good.
c. decrease the quantity of imports and raise the domestic price of the good.
d. decrease the quantity of imports and lower the domestic price of the good.
U.S. net capital outflow
a. is a source of the supply of loanable funds, and the source of the supply of dollars in
the foreign exchange market.
b. is a source of the supply of loanable funds, and a source of the demand for dollars in
the foreign exchange market.
c. is a part of the demand for loanable funds, and the source of the supply of dollars in
the foreign exchange market.
d. is a part of the demand for loanable funds, and a source of the demand for dollars in
the foreign exchange market.
When a supply curve is relatively flat, the
a. sellers are not at all responsive to a change in price.
b. equilibrium price changes substantially when the demand for the good changes.
c. supply is relatively elastic.
d. supply is relatively inelastic.
At some point during the financial crisis of 2008″2009, people with uninsured deposits
at financial institutions withdrew money from their accounts at those institutions. This
phenomenon characterized which element of the financial crisis?
a. the decline in confidence in financial institutions
b. the credit crunch
c. the economic downturn
d. the decline in asset prices
If expected inflation increases, which of the following shifts right?
a. both the short-run and the long-run Phillips curves
b. the short-run but not the long-run Phillips curve
c. the long-run but not the short-run Phillips curve
d. neither the long-run nor the short-run Phillips curve
Table 11-12. Will’s expenditures on food for three consecutive years, along with other
values, are presented in the table below.
Refer to Table 11-12. Will’s 2009 food expenditures in 2010 dollars amount to
a. $5,500.
b. $5,250.
c. $4,975.
d. $3,625.
Table 6-3
The following table contains the demand schedule and supply schedule for a market for
a particular good. Suppose sellers of the good successfully lobby Congress to impose a
price floor $2 above the equilibrium price in this market.
Refer to Table 6-3. Following the imposition of a price floor $2 above the equilibrium
price, irate buyers convince Congress to repeal the price floor and to impose a price
ceiling $1 below the former price floor. The resulting shortage is
a. 0 units.
b. 2 units.
c. 5 units.
d. 7 units.
In the economy of Ukzten in 2010, consumption was $4000, exports were $800, GDP
was $9500, imports were $200, and investment was $1000. What were Ukzten’s
government purchases in 2010?
a. $3700
b. $3900
c. $5100
d. $5500
The higher a country’s tax rates, the more likely that country will be
a. at the top of the Laffer curve.
b. on the positively sloped part of the Laffer curve.
c. on the negatively sloped part of the Laffer curve.
d. experiencing small deadweight losses.
In 1931, President Herbert Hoover was paid a salary of $75,000. Government statistics
show a consumer price index of 15.2 for 1931 and 215 for 2009. President Hoover’s
1931 salary was equivalent to a 2009 salary of about
a. $5,507.
b. $1,058,388.
c. $1,140,000.
d. $15,525,000.
Government deficits mean that
a. national saving is negative so public saving is negative
b. national saving is negative so public saving is lower than otherwise.
c. public saving is negative so national saving is negative
d. public saving is negative so national saving is lower than otherwise.
With the value of money on the vertical axis, the money supply curve is
a. upward sloping because people supply a larger quantity of money when the value of
money increases.
b. downward sloping because people supply a larger quantity of money when the value
of money decreases.
c. horizontal because we assume the central bank controls the money supply
d. vertical because we assume the central bank controls the money supply.
ABC Company incurs a cost of 50 cents to produce a dozen eggs, while XYZ Company
incurs a cost of 70 cents to produce a dozen eggs. Which of the following price
increases would cause both companies to experience an increase in producer surplus?
a. The price of a dozen eggs increases from 40 cents to 55 cents.
b. The price of a dozen eggs increases from 55 cents to 70 cents.
c. The price of a dozen eggs increases from 55 cents to 75 cents.
d. All of these price increases would cause both companies to experience a loss in
producer surplus.
Figure 22-1. The left-hand graph shows a short-run aggregate-supply (SRAS) curve
and two aggregate-demand (AD) curves. On the right-hand diagram, U represents the
unemployment rate.
Refer to Figure 22-1. Assuming the price level in the previous year was 100, point F
on the right-hand graph corresponds to
a. point A on the left-hand graph.
b. point B on the left-hand graph.
c. point C on the left-hand graph.
d. point D on the left-hand graph.
When quantity demanded increases at every possible price, the demand curve has
a. shifted to the left.
b. shifted to the right.
c. not shifted; rather, we have moved along the demand curve to a new point on the
same curve.
d. not shifted; rather, the demand curve has become steeper.
In an economy that relies upon barter,
a. trade does not require a double coincidence of wants.
b. scarce resources are allocated just as easily as they are in economies that do not rely
upon barter.
c. there is no item in the economy that is widely accepted in exchange for goods and
services.
d. All of the above are correct.
Several studies in the 1990s concluded that the consumer price index overstated
inflation by about
a. 3 percentage points per year, and that number of percentage points likely still applies
now.
b. 3 percentage points per year, but recent improvements to the CPI probably have
reduced the overstatement of inflation to something less than 3 percentage points.
c. 1 percentage point per year, and that number of percentage points likely still applies
now.
d. 1 percentage point per year, but recent improvements to the CPI probably have
reduced the overstatement of inflation to something less than 1 percentage point
An economist claims that changes in information technology and unemployment
insurance have reduced unemployment. Which of these changes affect frictional
unemployment?
a. both the changes in information technology and unemployment insurance
b. only the changes in information technology
c. only the changes in unemployment insurance
d. neither the changes in information technology nor the changes in unemployment
insurance