Table 9-11 Production and
Consumption Production
Without Trade With Trade
Denmark and Belize can produce both clocks and hats. Table 9-11 shows the production
and consumption quantities without trade, and the production numbers with trade.
Which country has an absolute advantage in producing hats?
A) Denmark
B) Belize
C) both countries
D) neither country
Structural unemployment is the result of
A) a persistent mismatch between the skills and characteristics of workers and the
requirements of the jobs.
B) the search process of matching workers with jobs.
C) the ups and downs in inflation.
D) a slowdown in the economy.
Into which category of aggregate expenditure would each of the following transactions
fall?
a. Sandra MacMillian purchases a new Ford Focus.
b. The city of Richardson buys 5 new garbage trucks.
c. Adrian Garcia buys a newly constructed townhome.
d. A consumer in Latvia orders an iPhone from Apple.
e. Ford Motor Company buys 300 new iPhones from Apple.
A Big Mac costs $4.00 in the United States and 9.00 reals in Brazil. If the exchange rate
is 2 reals per dollar, what is the dollar cost of a Big Mac in Brazil?
A) $0.89
B) $2.25
C) $4.50
D) $8.00
Figure 9-4 Figure 9-4 shows the U.S.
demand and supply for leather footwear.
Under autarky, the producer surplus is area
A) S + V.
B) T + W + X.
C) V.
D) S + T + V + W + X.
Figure 7-1 Figure 7-1 shows the U.S.
demand and supply for leather footwear. Under autarky, the producer surplus is area
A) S + V.
B) T + W+ X.
C) V.
D) S + T + V + W + X.
Dividing the current market price of a stock by the firm’s earnings per share gives the
firm’s
A) price-earnings ratio.
B) year-to-date percentage change.
C) dividend yield.
D) stock coupon maturity yield.
A consequence of increasing marginal costs of producing laptop computers in the
United States is
A) the United States will import laptop computers from countries that don’t experience
increasing marginal costs.
B) the United States will stop short of complete specialization in the production of
laptop computers.
C) the United States will not export laptop computers.
D) the United States will likely impose trade restrictions on imported laptop computers.
Some individuals seek to use government action to make themselves better off at the
expense of others. The actions of these individuals
A) are examples of fraud; but these individuals usually avoid prosecution because of
logrolling and rational ignorance.
B) are examples of rent seeking.
C) offer proof that Adam Smith’s “invisible hand” is not valid.
D) are evidence of the voting paradox.
Figure 17-9
A follower of the new classical macroeconomics would argue that a contractionary
monetary policy to lower inflation after a supply shock, like that pursued by Volcker in
1979, would result in a movement from
A) A to D to C.
B) A to B.
C) C to D to A.
D) C to A.
E) A to C.
Which factors explain labor productivity?
A) technological change; the quantity of labor per hour worked
B) diminishing returns; the quantity of labor per hour worked
C) diminishing returns; the quantity of capital per hour worked
D) technological change; the quantity of capital per hour worked
Countries that abandoned the gold standard early in the Great Depression suffered an
average decline in production of 3 percent between 1929 and 1934. Countries that
stayed on the gold standard until 1933 or later suffered an average decline in production
of
A) 12 percent.
B) 18 percent.
C) 24 percent.
D) > 30 percent.
When someone takes out a mortgage loan to buy a house, the mortgage lender can take
possession of the house and sell it if the borrower defaults by failing to make payments
on the loan because the house is being pledged as ________ for the loan.
A) goodwill
B) a liability
C) insurance
D) collateral
Pierre can produce either a combination of 20 bow ties and 30 neckties or a
combination of 35 bow ties and 15 neckties. If he now produces 35 bow ties and 15
neckties, what is the opportunity cost of producing an additional 15 neckties?
A) 2 bow ties
B) 15 bow ties
C) 20 bow ties
D) 35 bow ties