If the demand for agricultural products is price inelastic and the supply is dependent
upon weather conditions, then
a. price changes are likely to be small, and farm revenues are likely to be highly
volatile.
b. price changes are likely to be large, and farm revenues are likely to be highly
volatile.
c. prices are likely to be constant, and farm revenues are likely to be constant.
d. prices are likely to be constant, and farm revenues are likely to be highly volatile.
e. price changes are likely to be small, and farm revenues are likely to be constant.
Suppose the AD curve and the SRAS curve intersect to the left of the LRAS curve.
Which of the following is true?
a. The economy is in a recessionary gap.
b. The economy is in an inflationary gap.
c. The economy is in a long-run equilibrium.
d. This situation is actually impossible.
For Alex, the opportunity cost of producing one unit of good B is ____________ unit(s)
of good A.
a. 3.00
b. 0.33
c. 0.75
d. 1.33
If consumption is $1,230 when disposable income is $1,420, and consumption is $1,400
when disposable income is $1,620, then the marginal propensity to consume (MPC) is
a. 1.15.
b. 0.15.
c. 6.67.
d. 0.85.
During the twentieth century, the U.S. farm sector experienced
a. large increases in its ability to produce output.
b. relatively little improvement in its ability to produce output.
c. a marked decrease in its ability to produce output.
d. relatively stable demand for its output.
e. increasing relative prices for its output.
If the Fed purchases government securities from a commercial bank, which of the
following will happen?
a. The Fed will increase the bank’s reserves on deposit at the Fed.
b. The Fed will decrease the bank’s reserves on deposit at the Fed.
c. The assets (government securities) of the Fed will decrease.
d. The assets (government securities) of the Fed will increase.
e. a and d
Exhibit 16-2
Suppose the economy starts at point A. The AD curve shifts from AD1 to AD2 and the
public perfectly anticipates this. Under new Keynesian macroeconomic assumptions,
the most likely short-run equilibrium point will be
a. point B.
b. point E.
c. somewhere on the line between point D and point B.
d. somewhere on the line between point E and point B.
A “flat tax” is another term for a regressive tax.
a. True
b. False
Exhibit 3-11
Fill in blanks (C) and (D) respectively with “Exchange” or “No Exchange” to indicate
whether or not exchange would take place at the given prices.
a. Exchange; Exchange
b. Exchange; No Exchange
c. No Exchange; Exchange
d. No Exchange; No Exchange
According to classical economists,
a. spending equals saving.
b. saving equals income.
c. income equals wealth.
d. none of the above
Exhibit 34-6
The opportunity cost of 1 unit of cheese in terms of units of wine is __________ for
country A.
a. 1/2
b. 2
c. 10
d. 5
e. none of the above