Figure 7-4 Figure 7-4 represents the
market for medical services with and without insurance, and the effect of a third-party
payer system on the demand for medical services.
With insurance and a third-party payer system, what is the amount of the deadweight
loss?
A) $0
B) $1,500
C) $3,000
D) $9,500
Which of the following is not a function of the Federal Reserve System, or the “Fed”?
A) acting as a lender of last resort
B) acting as a banker’s bank
C) performing check clearing services
D) insuring deposits in the banking system
E) taking actions to control the money supply
Marginal cost is the
A) change in average cost when an additional unit of output is produced.
B) the additional output when total cost is increased by one dollar.
C) additional cost of producing an additional unit of output.
D) change in the price of inputs if a firm buys more inputs to produce an additional unit
of output.
How do changes in income tax policies affect aggregate demand?
A) Higher taxes increase disposable income, consumption, and aggregate demand.
B) Higher taxes reduce disposable income, consumption, and aggregate demand.
C) Higher taxes increase corporate investment and aggregate demand.
D) Higher taxes increase aggregate supply and thus increase aggregate demand as well.
________ are financial securities that represent promises to repay a fixed amount of
funds.
A) Stocks
B) Bonds
C) Interest rates
D) Mutual funds
Workers expect inflation to fall from 4% to 1% next year. As a result, this should
A) shift the short-run aggregate supply curve to the left.
B) shift the short-run aggregate supply curve to the right.
C) move the economy up along a stationary short-run aggregate supply curve.
D) move the economy down along a stationary short-run aggregate supply curve.
Compared to monopoly pricing, an optimal two-part tariff
A) reduces economic efficiency.
B) eliminates the deadweight loss.
C) equates marginal revenue and average revenue.
D) increases consumer surplus.
Figure 4-8 Figure 4-8 shows the market for
apartments in Springfield. Recently, the government imposed a rent ceiling of $1,000
per month. Suppose that instead of a rent ceiling, the government imposed a price floor
of $2,000 per month for apartments. What is the value of the deadweight loss after the
imposition of the price floor?
A) $50,000
B) $125,000
C) $175,000
D) $260,000
Auctions in recent years have resulted in higher prices paid for letters written by John
Wilkes Booth than those written by Abraham Lincoln. What is a reason for this
Difference in price?
A) There is a surplus of letters written by Booth and a shortage of letters written by
Lincoln.
B) Many people are more fascinated by villains and anti-heroes than by heroic figures.
C) There are more letters available for collectors to buy that were written by Lincoln
than there are letters that were written by Booth.
D) Booth was a well-known actor; the demand for his letters rose as wealthy actors
attempted to buy them.
One difference between the labor market and markets for goods and services is
A) the demand in the labor market is inelastic; the demand for goods and services may
be elastic or inelastic.
B) the supply of labor is perfectly inelastic because the quantity supplied is constant.
The elasticity of supply for goods and services is different in different markets.
C) concepts of fairness arise more frequently in labor markets than in the markets for
goods and services.
D) in the labor market, firms are suppliers while households are demanders.
Table 2-9
Table 2-9 shows the number of labor hours required to produce a wristwatch and a
pound of rice in Japan and Thailand. Thailand has a comparative advantage in the
production of
A) rice.
B) wristwatches.
C) both products.
D) neither product.
Table 9-14
The table above reports the nominal average hourly earnings in private industry and the
consumer price index for 1965 and 2010. The real average hourly earnings for 1965 in
1982-1984 dollars equal
A) $1.28.
B) $6.49.
C) $8.28.
D) $15.45.
Figure 4-3 Figure 4-3 shows Kendra’s
demand curve for ice-cream cones.
If the market price is $2.50, what is the consumer surplus on the third ice cream cone?
A) $0
B) $0.50
C) $1.50
D) $2.50
The resource income earned by those who supply ________ is called wages.
A) labor
B) capital
C) natural resources
D) entrepreneurship
Two of the firms involved in the accounting scandals of the early 2000s were
A) Arthur Anderson and NBC.
B) Western Digital and General Motors.
C) WorldCom and Enron.
D) DuPont and Lehman Brothers.