Figure 5-13
Figure 5-13 illustrates the
market for gasoline before and after the government imposes a tax to bring about the
efficient level of gasoline production.
The market equilibrium quantity of gasoline is ________ million gallons per month.
A) 20
B) 32
C) 48
D) 56
Consider a downward-sloping demand curve. When the price of a normal good
increases, the income and substitution effects
A) work in the same direction to increase quantity demanded.
B) work in the same direction to decrease quantity demanded.
C) work in opposite directions and quantity demanded increases.
D) work in opposite directions and quantity demanded decreases.
The United States
A) currently is one of the most corrupt countries.
B) has never had a significant problem with corruption.
C) had a significant problem with corruption in the 1930s.
D) currently ranks among the least corrupt countries.
The law of one price holds exactly only if
A) antitrust laws are being enforced.
B) buyers have complete information.
C) transactions costs are zero.
D) it is impossible for buyers to resell the good.
A monopoly is a seller of a product
A) with many substitutes.
B) without a close substitute.
C) with a perfectly inelastic demand.
D) without a well-defined demand curve.
In July, market analysts predict that the price of gold will rise in August. What happens
in the gold market in July, holding everything else constant?
A) The supply curve shifts to the right.
B) The supply curve shifts to the left.
C) The quantity demanded and the quantity supplied of gold increase.
D) The demand curve shifts to the left.
The marginal productivity theory of income states that a person’s total income is
determined by
A) the amount and productivity of factors of production the individual owns.
B) how much the individual works.
C) how profitable the firm the individual works for is.
D) how much the individual has inherited.
Table 7-6 Production and
Consumption Production
Without Trade With Trade
Estonia and Morocco can produce both swords and belts. Table 7-6 shows the
production and consumption quantities without trade, and the production numbers with
trade. If the actual terms of trade are 1 belt for 1.5 swords and 70 belts are traded, how
many belts will Estonia consume?
A) 50
B) 70
C) 90
D) 120
The value of the four-firm concentration ratio that many economists consider indicative
of the existence of an oligopoly in a particular industry is
A) anything greater than 10 percent.
B) anything greater than 20 percent.
C) anything greater than 30 percent.
D) anything greater than 40 percent.
Figure 9-1
Figure 9-1 shows the U.S. demand and supply for
leather footwear. Suppose the government allows imports of leather footwear into the
United States. What will be the quantity of imports?
A) 5 units
B) 10units
C) 15 units
D) 20 units
Figure 12-3
Suppose the prevailing price is P1 and the firm is currently producing its
loss-minimizing quantity. Identify the area that represents the loss.
A) P2deP1
B) P3cbP1
C) P3caP0
D) 0P1bQ1
According to projections for 2013 by the Tax Policy Center, the 20 percent of U.S.
taxpayers who make the highest incomes
A) use loopholes and tax exemptions to reduce their share of federal income taxes to
less than 20 percent.
B) pay almost 68 percent of federal income taxes.
C) pay about 92 percent of federal income taxes but only about 20 percent of Social
Security and Medicare payroll taxes.
D) pay more in excise and other taxes than they pay in Social Security and Medicare
payroll taxes.
Which of the following is part of an economic model?
A) norms
B) hypotheses
C) opinions
D) preferences of economic agents
Which of the following models focuses on how productivity shocks explain fluctuations
in real GDP?
A) the monetarist model
B) the new classical model
C) the real business cycle model
D) the new Keynesian model
A common belief among political analysts is that someone running for his or her party’s
nomination for president of the United States must choose a different strategy once the
nomination is secured. To be nominated, the candidate must appeal to voters from one
party – Democrat or Republican – but in a general election a party’s nominee must
appeal to voters from both parties as well as independent voters. Which of the following
offers the best explanation for this change in strategy?
A) the Arrow impossibility theorem
B) the voting paradox
C) the median voter theorem
D) rent seeking
The federal funds rate is
A) the interest rate the Fed charges commercial banks.
B) the interest rate a bank charges its best customers.
C) the interest rate banks charge each other for overnight loans.
D) the interest rate on a Treasury Bill.
Which of the following would cause an increase in the equilibrium wage?
A) The supply of labor increases more than the demand for labor.
B) The supply of jobs increases more than the demand for jobs.
C) The demand for labor increases faster than the supply of labor.
D) The supply of labor increases and the demand for labor decreases.