Which of the following would NOT be considered a macroeconomic topic?
a. the reasons for a decline in the price of crude oil
b. the cause of a downturn in the economy
c. the effect of the government budget deficit on inflation
d. the causes of inflation and unemployment
Income rises from $3,500 to $4,000 a month and the quantity demanded of good X falls
from 7 to 5 units a month. Income elasticity of demand (for good X) is __________ and
good X is a(n) __________ good.
a. -2.50; inferior
b. 0.40; normal
c. -2.28; inferior
d. 2.50; normal
e. 0.40; normal
Which of the following statements is false?
a. The way a market is defined can have much to say about whether a firm is viewed as
a monopoly or not.
b. In 1945, a court ruled that Alcoa was a monopoly.
c. In the Dupont case in 1956, the market relevant to Dupont was ruled to be the
cellophane market rather than the flexible wrapping materials market.
d. The government eventually dropped its 1969 suit against IBM.
If income elasticity of demand is 2.12, it means that quantity demanded will
__________ by 2.12 percent for every __________ percent __________ in income.
a. rise; 2.12; fall
b. rise; 1.0; rise
c. fall; 1.0; rise
d. fall; 2.12; fall
e. none of the above
The beginnings of the New York Stock Exchange can be traced back to a small group of
men who bought and sold stock in New York in
a. 1792.
b. 1866.
c. 1892.
d. 1929.
Jessica paid $7,000 for a bond with a face value of $6,000. She will be paid $400
annually as long as she holds on to the bond, until the bond’s maturity date. The yield
on the bond is
a. 6.67 percent.
b. 5.71 percent.
c. 15.0 percent.
d. 80.0 percent.
Exhibit 23-8
What is the profit (loss) of firm A at the profit-maximizing (or loss-minimizing) level of
production?
a. $300
b. $270
c. $600
d. $400
e. -$300
In the long run,
a. all costs are variable costs.
b. all costs are fixed costs.
c. there are no variable costs.
d. b and c
Marginal revenue is equal to __________ divided by __________.
a. total revenue; the quantity of output
b. marginal cost; wages
c. the change in total revenue; the quantity of output
d. the change in total revenue; the change in quantity of output
e. the change in quantity of output; the change in total revenue
Exhibit 1-1
If the student whose study habits are illustrated here is currently studying for the 8th
hour, she should
a. cut back on the number of hours she is studying because the marginal benefit of
studying for the 8th hour is less than the marginal cost of doing so.
b. cut back on the number of hours she is studying because the marginal benefit of
studying for the 8th is greater than the marginal cost of doing so.
c. increase the number of hours she is studying because the marginal benefit of studying
for the 8th hour is less than the marginal cost of doing so.
d. increase the number of hours she is studying because the marginal benefit of studying
for the 8th hour is greater than the marginal cost of doing so.
If private property rights were established in the oceans, there would probably be
a. more ocean pollution.
b. less ocean pollution.
c. the same amount of ocean pollution that exists without private property rights in the
ocean.
d. more ocean voyages on cruise ships.
A change in price will lead to a change in __________ and to a change in __________,
while a change in preferences will lead to a change in __________ and a change in the
prices of relevant resources will lead to a change in __________.
a. quantity supplied; demand; income; supply
b. demand; quantity supplied; supply; quantity demanded
c. quantity supplied; supply; quantity supplied; demand
d. quantity supplied; quantity demanded; demand; supply
e. quantity supplied; quantity demanded; supply; demand
Exhibit 26-3
The Justice Department would consider this industry to be
a. concentrated, because the top four firms together control more than 50 percent of the
market share.
b. concentrated, because there are fewer than 15 firms in the industry.
c. unconcentrated, because there are more than 10 firms in the industry.
d. moderately concentrated, because the Herfindahl index is between 1,000 and 1,800.
e. unconcentrated, because the Herfindahl index is less than 1,000.
If demand is __________, price and total revenue are __________ related; if demand is
__________, price and total revenue are directly related.
a. elastic; inversely; inelastic
b. inelastic; inversely; elastic
c. unit elastic; not; elastic
d. inelastic; inversely; unit elastic
e. none of the above
If the cross elasticity of demand coefficient between goods X and Y is negative, then
goods X and Y must be
a. complements.
b. substitutes.
c. normal goods.
d. inferior goods.