If the United States has a net export surplus, which of the following must be true?
A) The balance on the financial account must equal the balance on the current account.
B) Net foreign investment must be positive as well.
C) Domestic private saving must be greater than net foreign investment.
D) Domestic public saving must be greater than net foreign investment.
If another worker adds 9 units of output to a group of workers who had an average
product of 7 units, then the average product of labor
A) will remain the same.
B) will increase.
C) will decrease.
D) What will happen to it cannot be determined.
Table 2-19
Table 2-19 shows the output per month of two people, Wilma and Betty. They can either
devote their time to making marble statues or making marble benches.
What is Wilma’s opportunity cost of making a bench?
A) 1/3 statue
B) 3 statues
C) 1/2 bench
D) 1.3 statues
Figure 5-8 Consider a
chemical plant that discharges toxic fumes over a nearby community. To reduce the
emissions of toxic fumes the firm can install pollution abatement devices. Figure 5-8
shows the marginal benefit and the marginal cost from reducing the toxic fumes
emissions.
What is the economically efficient level of pollution reduction?
A) 12.5 million tons
B) 9 million tons
C) 8 million tons
D) 0 tons
Which of the following statements is true?
A) Opportunity cost = explicit cost – implicit cost.
B) Total cost = fixed cost + implicit cost.
C) Total cost = fixed cost + variable cost.
D) Variable cost = wages + salaries + benefits.
If the demand for cell phone service is inelastic, then
A) the percentage change in quantity demanded is greater than the percentage change in
price (in absolute value).
B) the percentage change in quantity demanded is equal to the percentage change in
price.
C) the quantity demanded does not change in response to changes in price.
D) the percentage change in quantity demanded is less than the percentage change in
price (in absolute value).
If an industry is made up of five identical firms, the four-firm concentration ratio is
A) 5%.
B) 20%.
C) 80%.
D) 100%.
The wage rate is the opportunity cost of
A) working.
B) working overtime.
C) leisure.
D) consumption.
Figure 2-13 Figure 2-13
shows the production possibilities frontiers for Tahiti and Bora Bora. Each country
produces two goods, milk and honey.
What is the opportunity cost of producing one gallon of honey in Bora Bora?
A) 2/3 gallon of milk
B) 0.9 gallon of milk
C) 1 1/3 gallons of milk
D) 1.5 gallons of milk
If the price of pork rinds falls, the substitution effect due to the price change will cause
A) an increase in the demand for pork rinds.
B) an increase in the demand for corn chips, a substitute for pork rinds.
C) an increase in the quantity of pork rinds demanded.
D) a decrease in the quantity of pork rinds demanded.