Refer to Exhibit 34-1. The opportunity cost of one unit of X in country B is
Exhibit 34-1
a. 1 unit of Y.
b. 0.33 units of Y.
c. 2 units of Y.
d. 20 units of Y.
Refer to Exhibit 2-6. Which graph depicts a technological breakthrough in the
production of good Y only?
Exhibit 2-6
a. (1)
b. (2)
c. (3)
d. (4)
e. none of the above
A person tends to be ______________ likely to lose her temper with a boss than with a
friend because the opportunity cost of losing her temper with her boss tends to be
_____________ than the opportunity cost of losing her temper with her friend.
a. less; higher
b. more; higher
c. less; lower
d. more; lower
If the market supply of labor increases, the total wage income will increase if the
a. demand for labor is elastic.
b. demand for labor is inelastic.
c. supply of labor is elastic.
d. supply of labor is inelastic.
Refer to Exhibit 35-4. Under a fixed exchange rate system, at the exchange rate of E3,
the dollar is __________ and there is a __________.
Exhibit 35-4
a. overvalued; surplus of dollars
b. undervalued; shortage of pesos
c. overvalued; shortage of dollars
d. undervalued; surplus of pesos
A man moves from a large city to a small town.In the small town he seems like a very
different person than the person he was in the big city.For instance, he is more polite in
the small town than he was in the big city.This could be because
a. the costs of his being impolite are higher in the big city than in the small town.
b. the costs of his being impolite are higher in the small town than in the big city.
c. he is a happier person in the small town and it could be that happier people are more
polite.
d. b and c
e. a and c
Which of the following statements is false?
a. As the price paid for a bond rises, the yield declines.
b. If you purchase stock from an individual that currently owns the stock, you are
buying it in the secondary market.
c. The yield on a bond is another term for the coupon rate on a bond.
d. A rating of Aaa from Moody’s is the highest bond rating given by that rating agency.
Suppose that a firm produces hard candies using both machines and labor, and that its
quantity of machines is currently fixed but it can vary the number of workers. As more
workers are added to operate the machines, output increases. Is this a refutation of the
law of diminishing marginal returns?
a. Yes, because the law definitely states that output will decrease as more workers are
added.
b. No, because we must be observing output in the long run if the stated scenario is
occurring.
c. Yes, because the only way that this could occur is if the number of machines being
used is also increasing.
d. No, because it is entirely possible for output to increase even when the law is in
operation.
Government provides a nonexcludable public good that no one wants.This situation is
most closely related with:
a. government solving a market failure.
b. government failure.
c. market failure.
d. the market solving a government failure.
In 2009, the top fifth of households in the U.S. received approximately 50 percent of
the total money income.
a. True
b. False
When congestion occurs on the freeway (because of a shortage of freeway space), the
economist would most likely explain this by saying that it is because
a. the freeway has too few miles of roadway.
b. there are too many cars.
c. the price of driving on the freeway is below the equilibrium price.
d. a and c
Suppose you borrow $1,000 today with the promise to pay back $1,050 one year from
today. Then the interest rate is __________, and the interest is __________.
a. $50; 5 percent
b. 5 percent; $1,050
c. 5 percent; $50
d. $100; 10 percent
e. 10 percent; $100
Some economists contend that in-kind transfers should be included in the calculation of
an individual’s income because
a. in-kind items do not cost anything.
b. simple money income is not a complete measure of one’s command over goods and
services.
c. in-kind items make a person “better off” than the person’s actual money income
would lead us to believe.
d. b and c
The law of diminishing marginal returns holds for a situation in which
a. all inputs are variable.
b. all inputs are fixed.
c. some inputs are variable and some inputs are fixed.
d. all inputs are increased in the same proportion.
In the case of a positive externality, the entire demand curve lies
a. above the entire marginal social benefit curve.
b. below the entire marginal social benefit curve.
c. above the entire supply curve.
d. below the entire supply curve.
e. b and c
If the Gini coefficient is one (1), this means that there is
a. perfect income equality.
b. some income inequality.
c. complete income inequality.
d. no area between the line of perfect income equality and the actual Lorenz curve.
e. c and d
A disappearing middle class necessarily connotes a world of only the rich and the poor.
a. True
b. False
If the average income per U.S. worker decreases while that of Japanese workers
remains unchanged, then the demand curve for Japanese yen will shift __________,
which will cause the equilibrium exchange rate of the dollar price per yen to
__________, which is the same thing as saying that the dollar will __________.
a. rightward; rise; appreciate
b. leftward; fall; appreciate
c. rightward; rise; depreciate
d. leftward; fall; depreciate
e. rightward; fall; depreciate
The gap between the higher equilibrium tuition and lower student tuition is $4,000 at
university A and $10,000 at university B.It follows that
a. if the supply of openings at each university is the same, then the demand to attend
university B must be higher than the demand to attend university A.
b. the supply of openings is necessarily larger at university A than B.
c. instructors at university B are likely to be more punctual for their office hours than
instructors at university A.
d. instructors at university A are more likely to be punctual for their office hours than
instructors at university B.
e. none of the above
In the theory of perfect competition,
a. sellers of the product are not influenced by other sellers and therefore have virtually
complete control over the production and pricing of their product.
b. buyers of the product may have a preference as to whom they purchase from based
on brand loyalty.
c. buyers and sellers of the product know everything that there is to know about the
product.
d. it can be quite expensive for a firm to enter this type of market, but once the firm is
established, it will be a profitable venture.
An industry is composed of 10 firms, all with equal sales. The four-firm concentration
ratio in this industry is
a. 0.40.
b. 0.80.
c. 10.00.
d. There is not enough information provided to answer this question.