An excess supply of rice in a competitive market would indicate that
a. the problem of scarcity has been solved in that market
b. buyers want to purchase more rice at the current price than the sellers want to sell
c. the market will not be able to approach equilibrium
d. the entire supply curve must shift to the left in order to attain equilibrium
e. the current price exceeds the equilibrium price
Assuming that baseball and football cards are substitutes. What might explain the shift
in demand curve for baseball cards from D2 to D1 in Figure 3-6?
a. an increase in the price of baseball cards
b. a decrease in the price of baseball cards
c. an increase in income (assuming that baseball cards are a normal good)
d. an increase in the population
e. a decrease in the price of football cards
The Bureau of :Labor Statistics has been compiling an experimental CPI for the elderly,
called CPI-E.
If there is an increased interest in U.S. goods by Indian consumers, which of the
following will happen in the market for Indian rupees?
a. A rightward shift of the supply curve, a depreciation of the rupee, and a larger
number of rupees traded
b. A rightward shift of the demand curve, a depreciation of the rupee, and a smaller
number of rupees traded
c. A rightward shift of the demand curve, an appreciation of the rupee, and a larger
number of rupees traded
d. A leftward shift of the demand curve, a depreciation of the rupee, and a smaller
number of rupees traded
e. A leftward shift of the supply curve, an appreciation of the rupee, and a smaller
number of rupees traded.
An increase in the price of a particular good, with all other variables constant, causes
a. a movement along a given supply curve to a lower quantity supplied
b. a shift to a different supply curve with lower quantities supplied
c. a movement along a given supply curve to a higher quantity supplied
d. a shift to a different supply curve with higher quantities supplied
e. no movement along a given supply curve unless demand also changes
If the supply curve does not shift, an increase in demand results in a(n)
a. increase in equilibrium price and a decrease in equilibrium quantity
b. decrease in equilibrium price and a decrease in equilibrium quantity
c. increase in equilibrium price and an increase in equilibrium quantity
d. decrease in equilibrium price and an increase in equilibrium quantity
e. increase in supply
Because economists have different values, like everyone else, they
a. tend to be self centered, so positive economics is impossible
b. ignore politics
c. use abstraction to be realistic
d. may disagree, even though economic theory is based on positive statements
e. try to be right all the time
The unemployment rate for the economy as a whole is a(n)
a. normative value judgment
b. positive value judgment
c. microeconomic statistic
d. macroeconomic statistic
e. example of an economic model
Relative to GDP, interest on the national debt
a. has grown at a steady rate during the last 40 years
b. has remained constant in recent decades
c. grew especially rapidly during the 1980s
d. declined slightly during the 1980s
e. fluctuates as retirement portfolios change their allocation of government securities
If the labor supply and demand curves cross at a wage of $20,
a. a wage rate of $10 per hour would lead to an excess demand for labor
b. a wage rate of $10 per hour would lead to an excess supply of labor
c. that wage causes a high rate of cyclical unemployment
d. employees are overpaid
e. a wage rate of $10 per hour would mean there is a significant amount of structural
unemployment
Procter & Gamble Co. is a major soap producer. All of the following, except one, would
shift its supply curve of liquid soap to left. Which is the exception?
a. an increase in the price of bar soap
b. an increase in the price of a key ingredient of liquid soap
c. environmental regulations force Procter & Gamble to use a more costly technology to
produce liquid soap
d. a decrease in the price of liquid soap
e. an increase in the wage rate for factory workers who produce liquid soap
Cyclical unemployment
a. is short-term joblessness experienced by those who are between jobs
b. is joblessness created by a mismatch between available jobs and workers’ skills
c. is joblessness related to regular seasonal events such as holidays or weather changes
d. is joblessness caused entirely by microeconomic forces
e. does not exist when the economy is at full employment
Which of the following would increase the amount of an inferior good that buyers
would like to purchase?
a. an increase in buyers’ incomes
b. an increase in the price of a complement
c. a decrease in the price of a substitute
d. a decrease in buyers’ incomes
e. a decrease in its expected future price
The federal government
a. runs a deficit when tax revenues are greater than government purchases.
b. runs a surplus when tax revenues are smaller than government purchases.
c. runs a deficit when tax revenues are greater than government outlays.
d. runs a surplus when tax revenues are greater than government outlays.
e. runs a surplus when tax revenues are smaller than transfer payments..
The only requirement for short-run equilibrium is that the economy must be on the
aggregate supply curve.
What are the marginal propensity to consume and level of autonomous consumption
spending for a consumption function of the following form: C = 1,200 + 0.5DI?
a. The marginal propensity to consume is 0.5; autonomous consumption spending is
$0.50.
b. The marginal propensity to consume is 0.5; autonomous consumption spending is
$1,200.
c. The marginal propensity to consume is 1,200; autonomous consumption spending is
$0.50.
d. The marginal propensity to consume is 1,200; autonomous consumption spending is
$600.
e. There is insufficient information to answer this.
A shift in the production possibilities frontier from DC to EC in Figure 2-6 could be
due to a
Figure 2-6
a. technological improvement in
the production of ice cream
b. reduction in the rate of unemployment
c. rise in the rate of unemployment
d. technological improvement in the production of frozen yogurt
e. fall in the demand for frozen yogurt
A government-imposed price ceiling set below the market’s equilibrium price for a good
will produce an excess supply of the good.