Table 8-17
A very simple economy produces three goods: movies, burgers, and bikes. The
quantities produced and their corresponding prices for 2006 and 2013 are shown in the
table above. What is nominal GDP in 2013?
A) $3,320
B) $3,690
C) $6,360
D) $7,035
A change in consumption spending caused by income changes is ________ change in
spending, and a change in government spending that occurs to improve roads and
bridges is ________ change in spending.
A) an induced; an autonomous
B) an expansionary; a contractionary
C) an autonomous; an induced
D) a contractionary; an expansionary
Which of the following is a normative economic statement?
A) Falling global demand for pesticides has led to decreases in the price of pesticides.
B) With falling mortgage rates and falling unemployment rates, the number of new
homes being built has increased.
C) The state of Florida’s unemployment rate dropped when several large companies
relocated to the Miami area.
D) Global warming should be at the top of every economic agenda.
A small economy increased its capital per hour worked (K/L) from $40,000 to $50,000.
As a result, real GDP per worker (Y/L) grew from $20,000 to $25,000. If the economy
increases its capital per hour worked by another $10,000 to $60,000, but there is no
change in technology, by how much more and in what direction will output per worker
change?
A) Output per worker will increase by exactly $5,000.
B) Output per worker will increase by more than $5,000.
C) Output per worker will increase by less than $5,000.
D) Output per worker will fall by more than $5,000.
An oligopoly firm is similar to a monopolistically competitive firm in that
A) both firms face the prisoner’s dilemma.
B) both operate in a market in which there are entry barriers.
C) both firms have market power.
D) both firms are in industries characterized by an interdependent firm.
Which of the following conditions holds in an economically efficient competitive
market equilibrium?
A) The deadweight loss is positive but at a minimum.
B) Producer and consumer surplus are exactly equal in size.
C) There are no positive and no negative external effects from consumption and
production.
D) The marginal benefit of the last unit produced and consumed is maximized.
A carbon tax which is designed to reduce pollution is an example of a
A) command-and-control policy.
B) government administrative rule.
C) noneffective incentive.
D) market-based policy.
In which of the following countries are substantial co-payments typically required as a
part of the health care system?
A) Canada and the United States
B) Japan and Canada.
C) the United States and Japan
D) the United States and the United Kingdom
Average fixed cost is equal to
A) the amount of total cost that does not change as output changes in the short run.
B) fixed cost divided by the quantity of output produced.
C) fixed cost multiplied by the quantity of output produced.
D) average total cost plus average variable cost.
Table 9-11
Suppose an economy has only three goods and the typical family purchases the amounts
given in the table above. If 2005 is the base year, then what is the CPI for 2013?
A) 40.08
B) 100
C) 180
D) 208
Which of the following labor market statistics best indicates the amount of labor that is
available to the economy from a given working-age population?
A) unemployment rate
B) discouraged-worker ratio
C) labor force participation rate
D) the ratio of minimum wage to inflation
Table 2-9
Table 2-9 shows the number of labor hours required to produce a canoe and a sailboat in
Guatemala and Honduras. If the two countries specialize and trade, who should export
canoes?
A) There is no basis for trade between the two countries.
B) Guatemala
C) Honduras
D) They should both be exporting canoes.
Matt’s real wage in 2014 is $26.80. If the price level is 104, what is Matt’s nominal
wage?
A) $30.80
B) $27.87
C) $26.80
D) $25.77
Tax reduction and simplification should ________ long-run aggregate supply and
________ aggregate demand.
A) increase; increase
B) increase; decrease
C) decrease; increase
D) decrease; decrease
The purchase of a new house is included in
A) consumption expenditures.
B) investment expenditures.
C) government purchases.
D) net exports.