Which of the following is the best example of a perfectly competitive industry?
A) wheat production
B) steel production
C) electricity production
D) airplane production
The rules of accounting generally require that ________ costs be used for purposes of
keeping a company’s financial records and for paying taxes. These costs are sometimes
called ________ costs.
A) economic; legal
B) real; explicit
C) total; economic
D) explicit; accounting
Consider the market for opticians. What is likely to happen to the equilibrium wage and
quantity of opticians if more and more people turn to laser eye surgery instead of
wearing glasses or contact lens?
A) The equilibrium wage and the equilibrium quantity of opticians rise.
B) The equilibrium wage and the equilibrium quantity of opticians fall.
C) The equilibrium wage rises and the equilibrium quantity of opticians falls.
D) The equilibrium quantity falls and the equilibrium wage of opticians rises.
Suppose that you deposit $2,000 in your bank and the required reserve ratio is 10
percent. The maximum loan your bank can made as a direct result of your deposit is
A) $200.
B) $1,800.
C) $2,000.
D) $20,000.
If the Fed orders an expansionary monetary policy, describe what will happen to the
following variables relative to what would have happened without the policy:
a. The money supply
b. Interest rates
c. Investment
d. Consumption
e. Net Exports
f. The aggregate demand curve
g. Real GDP
h. The price level
Fiat money has
A) little to no intrinsic value but is backed by the quantity of gold held by the central
bank.
B) little to no intrinsic value and is authorized by the central bank or governmental
body.
C) value, because it can be redeemed for gold by the central bank.
D) a great intrinsic value that is independent of its use as money.
Table 9-4
Rob Crusoe and Bill Friday spent their week-long vacation on a desert island where
they had to find and make their own food. Rob and Bill spent one day each fishing and
picking berries. The table lists the pounds of output Rob and Bill produced. Use the
table above to select the statement that accurately interprets the data in the table.
A) Bill has a comparative advantage in catching fish.
B) Rob has a comparative advantage in picking berries.
C) Rob has a comparative advantage in catching fish and picking berries.
D) Bill has a comparative advantage in picking berries.
Which of the following is not a way by which price discriminating firms can segment a
market?
A) on the basis of time of purchase, for example long-distance calling
B) by requiring an advance purchase, for example air tickets
C) on basis of the buyer’s location, for example requiring out-of-state students to pay
higher tuition
D) on the basis of the supplier’s marginal cost of production, for example requiring
customers to pay a premium for customizing options
A carbon tax which is designed to reduce pollution is an example of a
A) command-and-control policy.
B) government administrative rule.
C) noneffective incentive.
D) market-based policy.
A movement along the demand curve for toothpaste would be caused by
A) a change in the price of toothbrushes.
B) a change in consumer income.
C) a change in the price of toothpaste.
D) a change in population.
Table 11-7
Table 11-7 shows cost data for Lotus Lanterns, a producer of whimsical night lights.
What is the average total cost of production when the firm produces 120 lanterns?
A) $1,680
B) $72
C) $14
D) $12.30
Which of the following is a disadvantage of trademarking a firm’s product?
A) A trademark differentiates a firm’s product.
B) A trademark conveys information about the product to the public.
C) A trademark may become so widely used to denote a particular type of product that
the trademark may no longer be a legally protected brand name.
D) A trademark does not affect demand for the firm’s product.
If a consumer always buys goods rationally, then
A) the total utilities of the different goods consumed will be equal.
B) the average utilities of the different goods consumed will be equal.
C) the marginal utility per dollar spent on all goods will be equal.
D) the marginal utility of the different goods consumed will be equal.
Figure 4-9
Figure 4-9 shows the demand and
supply curves for the almond market. The government believes that the equilibrium
price is too low and tries to help almond growers by setting a price floor at Pf. What
area represents the deadweight loss after the imposition of the price floor?
A) C + D + G
B) F + G
C) C + D
D) C + D + F + G
Which of the following statements is true?
A) Consumer surplus under perfect price discrimination is greater than under
single-price monopoly pricing.
B) Consumer surplus under an optimal two-part tariff is greater than that under
single-price monopoly pricing.
C) Although consumers reap some consumer surplus under a single-price monopoly,
society is better off with optimal two-part tariff pricing.
D) Of the three pricing schedules, single-price monopoly, an optimal two-part tariff and
perfect price discrimination, profit is highest under single-price monopoly pricing.
Which of the following correctly comments on the following statement? “The only way
to increase the revenue from selling a product is to increase the product’s price.”
A) It is not true. Revenue will increase as the price of the product increases only if
demand is elastic.
B) This statement is not true. Revenue will increase as the price of the product increases
only if demand is inelastic.
C) The statement is true.
D) This statement is not true. Revenue will decrease as the price of the product
increases because quantity demanded will fall.
A bank holds its reserves as ________ and ________.
A) securities; loans
B) securities; deposits at the Federal Reserve
C) vault cash; deposits at the Federal Reserve
D) vault cash; loans
The supply of loanable funds has a ________ slope because the greater the interest rate,
the ________ the reward to saving, and the ________ the quantity of loanable funds
supplied.
A) positive; lesser; lesser
B) positive; greater; lesser
C) negative; lesser; greater
D) positive; greater; greater