If the nominal exchange rate between the American dollar and the New Zealand dollar
is 1.36 New Zealand dollars per American dollar, how many American dollars are
required to buy a product that costs 3.50 New Zealand dollars?
A) $2.14
B) $2.24
C) $2.57
D) $4.76
Figure 10-6
Which diagram demonstrates a decrease in total utility following an increase in the
price of candy?
A) the movement from e to d in Panel A
B) the movement from g to f in Panel B
C) the movement from k to h in Panel C
D) none of the above
The government budget for the country of Economia is in surplus in 2011, and in deficit
in the following year, 2012. We can conclude the
A) government must have raised tax rates or cut spending.
B) government must have cut tax rates or increased spending.
C) government fiscal policy did not change between 2011 and 2012.
D) none of the above
When Congress passed a law that imposed a tax designed to fund its Social Security
and Medicare programs it wanted employers and workers to share the burden of the tax
equally. Most economists who have studied the incidence of the tax have concluded
A) the tax is not high enough to cover the future costs of Social Security and Medicare.
B) the tax on employers is too high because it reduces the employment of low-skilled
workers.
C) the burden of the tax falls almost entirely on workers.
D) the tax rate should be greater for high income workers than for low income workers.
By tying the salaries of top corporate managers to the price of the corporation’s stock,
corporations hope to avoid
A) corporate governance.
B) conflict between the CFO and the CEO.
C) the principal-agent problem.
D) paying high salaries to their managers.
If the price level rose in three consecutive years from 100 to 120 to 140, then the annual
inflation rate over those years would
A) increase.
B) remain the same.
C) decrease.
D) equal 20%.
The word “util” has been used by economists in the past as an objective measure of
utility. Today economists believe that
A) utility cannot be measured objectively.
B) utility can be measured objectively because people can use prices of different goods
to measure utility.
C) all of the important conclusions of the economic model of consumer behavior
depend on utility being measured objectively.
D) the util truly is an objective, rather than a subjective, measure of utility.
An increase in the price of pineapples will result in
A) a smaller quantity of pineapples supplied.
B) a larger quantity of pineapples supplied.
C) a decrease in the demand for pineapples.
D) an increase in the supply of pineapples.
Which of the following statements is true about the U.S. economy?
A) Each year, many new jobs are created, but few existing jobs are destroyed, and the
unemployed find jobs quickly.
B) Each year, few new jobs are created, but few existing jobs are destroyed, keeping
unemployment low.
C) Each year, many new jobs are created and many existing jobs are destroyed.
D) Each year few jobs are created, and therefore it takes the unemployed a long time to
find a new job.
Movie theaters often charge different people different prices for admission. Why don’t
theaters charge different prices for popcorn and other food items?
A) Although the elasticity of demand for admission differs among customers, most
people have the same the elasticity of demand for food items.
B) Concession stand personnel are too busy to ensure that different people pay different
prices for food items.
C) Once people are in the theater, concession stands have monopoly power and can
charge everyone the same high prices for food.
D) It is difficult to limit the resale of food items from those who pay low prices to those
who would have to pay high prices from the concession stand.
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 clock in Belize?
A) 1/6 of a hat
B) 2/3 of a hat
C) 1.5 hats
D) 6 hats
Which of the following exemplifies the tragedy of the commons?
A) Residents on the northern coast of California receive only one public broadcasting
signal which may be eliminated altogether if government funding is cut.
B) The Pleasant Hill community is growing so fast that the city’s only post office is not
able to keep pace with the population growth in the community.
C) Canadian citizens receive free universal health care administered by provincial
governments.
D) The Malaysian tapir, distinguished for its unusual coloration, is a target for poachers
who hunt it for its tough and leathery hide.
If the per-worker production function shifts down,
A) it now takes more capital per hour worked to get the same amount of real GDP per
hour worked.
B) an economy can increase its real GDP per hour worked without changing the level of
capital per hour worked.
C) the per-worker production function becomes steeper.
D) positive technological change has occurred in the economy.
In a closed economy, what is the relationship between saving and investment?
A) Saving is greater than investment.
B) Investment is greater than saving.
C) Investment is equal to saving.
D) Investment may be greater or smaller than saving.