Table 17-1
Suppose the output price is $3. If the wage rate is $90, what is the profit-maximizing
quantity of labor that the firm should hire?
A) 7 units
B) 5 units
C) 4 units
D) 3 units
If the required reserve ratio is RR, the simple deposit multiplier is defined as
A) .
B) .
C) change in bank reserves.
D) change in bank reserves.
The midpoint formula is used to measure the elasticity of demand between two points
on a demand curve
A) when demand is elastic.
B) in special cases when the percentage change in the quantity demanded is equal to the
percentage change in price.
C) to ensure that the elasticity has a negative value.
D) to ensure that we have only one value of the price elasticity of demand between two
points on a demand curve.
Figure 2-4
Figure 2-4 shows various points on three Different production possibilities frontiers for
a nation.
A movement from ________ could occur because of additional government restrictions
toward allowing immigrant labor.
A) X to W
B) Y to X
C) V to W
D) W to X
Which of the following is necessary in order for a firm to successfully practice price
discrimination?
A) The firm must practice product differentiation.
B) The demand for the firm’s product is inelastic.
C) The firm must be able to segment the market for the product.
D) The firm’s transactions costs must be zero.
Select the phrase that correctly completes the following statement. “A positive change
in technology caused an increase in the supply of flat-screen televisions. As a result
________.”
A) the price of flat-screen televisions decreased and the demand for flat-screen
televisions increased
B) the equilibrium quantity of flat-screen televisions decreased
C) the price of flat-screen televisions decreased and the quantity demanded of
flat-screen televisions increased
D) the price of flat-screen televisions decreased. The lower price caused the supply of
flat-screen televisions to decrease
During an economic expansion as consumer incomes rise, holding everything else
constant,
A) the demand for most goods, except luxuries, will rise.
B) the demand for luxuries will rise while the demand for inferior goods will fall.
C) the demand for luxuries and inferior goods will rise.
D) the prices of luxuries will fall while the prices of inferior goods will rise.
Which of the following is not an advantage of cost-plus pricing?
A) It is easy to calculate.
B) It requires little information.
C) If a firm is selling multiple products, it ensures that the firm’s prices will cover costs
that are difficult to assign to one product.
D) It ensures that the firm will maximize its profits.
Table 4-7
The equations above describe the demand and supply for Pauline’s Pickled
Pomegranates. The equilibrium price and quantity for Pauline’s Pickled Pomegranates
are $30 and 15 thousand units. What is the value of economic surplus in this market?
A) $50 thousand
B) $112.5 thousand
C) $225 thousand
D) $337.5 thousand
Which of the following is a possible solution when a scarce resource is subject to the
tragedy of the commons?
A) access to the commons can be restricted through community norms and laws
B) offer subsidies to consumers
C) force people to move away from the commons
D) persuade people to use less of the scarce resource through an advertising campaign
Assume a closed economy, that taxes are fixed, and the marginal propensity to consume
is equal to 0.8. What is the government spending multiplier?
A) 10
B) 5
C) 4
D) 3
If cyclical unemployment is eliminated in the economy, then
A) the economy is considered to be at full employment.
B) the unemployment rate is below the natural rate of unemployment.
C) the unemployment rate is above the natural rate of unemployment.
D) the economy is at less than full employment.
Figure 12-16
Which panel best represents the perfectly competitive organic produce market’s
transition to the long run when some firms in the market are earning economic profits?
A) Panel A
B) Panel B
C) Panel C
D) Panel D
Which of the following is not directly counted in GDP?
A) investment expenditures
B) government purchases
C) intermediate goods
D) consumer goods
What is the incentive for a firm to join a cartel?
A) to be able to earn profits in the long run but not in the short run
B) to be able to earn larger profits than if it was not part of the cartel
C) to completely insulate itself from competition
D) to produce a larger amount of output than if it was not part of the cartel
Statistics on real GDP during World War II may give a misleading indication of whether
World War II was a period of prosperity because
A) inflation may have been considerably higher than estimated.
B) most of the increased production was for military goods, not consumption goods.
C) government agents purposely inflated the production numbers to maintain American
support for the war.
D) government agencies were shorthanded and did a particularly poor job of collecting
data.