If the average productivity of American firms is rising more quickly than the average
productivity of Indian firms, which of the following would you expect to see? (India’s
currency is the rupee.)
A) an increase in the value of the rupee relative to the dollar
B) a decrease in the prices of Indian products
C) a decrease in the quantity demanded of Indian products relative to American
products
D) an increase in the quantity demanded of Indian products relative to American
products
If a monopolist’s price is $50 at 63 units of output and marginal revenue equals
marginal cost and average total cost equals $43, then the firm’s total profit is
A) $3,150.
B) $2,709.
C) $441.
D) $7.
One of the most widely followed stock indexes in the United States is the Dow Jones
Industrial Average. This index represents
A) the stock prices of 500 large U.S. firms.
B) an over-the-counter market.
C) the stock prices of more than 4,000 U.S. firms.
D) the stock prices of 30 large U.S. corporations.
The minimum point on the average variable cost curve is called
A) the shutdown point.
B) the break-even point.
C) the loss minimizing point.
D) the point of diminishing returns.
Which of the following is a normative economic statement?
A) The price of milk is too high.
B) The current high price of milk is the result of reduced worldwide supply.
C) When the price of milk rises, the quantity of milk purchased falls.
D) When the price of milk rises, the cost of milk-based products rises.
The current account deficits incurred by the United States in the 1980s were caused, in
the opinion of many economists, by
A) federal budget deficits.
B) “flight to quality” as foreign investors favored U.S. investments.
C) a sharp decline in private saving.
D) Both B and C are correct.
In 2013, Caterpillar laid off employees. The employees who were laid off due to the
business cycle would be considered
A) structurally unemployed.
B) frictionally unemployed.
C) seasonally unemployed.
D) cyclically unemployed.
Growth in real GDP per capita for the world economy was greatest during
A) the seventeenth century.
B) the eighteenth century.
C) the nineteenth century.
D) the twentieth century.
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 2006?
A) $3,320
B) $3,690
C) $6,360
D) $7,035
If there is pollution in producing a product, then the market equilibrium price
A) is too high and equilibrium quantity is too low.
B) and equilibrium quantity are too low.
C) and equilibrium quantity are too high.
D) is too low and equilibrium quantity is too high.
If in the market for bananas the supply curve has shifted to the right, then
A) the supply of bananas increased.
B) the quantity of bananas supplied has increased.
C) the supply of bananas has decreased.
D) the quantity of bananas supplied has decreased.
If a natural monopoly regulatory commission sets a price where marginal cost is equal
to demand,
A) the firm would earn monopoly profits.
B) economic efficiency would not be achieved.
C) the firm would incur a loss.
D) the firm would break even.
Table 9-6
Production and
Consumption Production
Without Trade With Trade
Denmark and Belize can produce both clocks and hats. Table 9-6 shows the production
and consumption quantities without trade, and the production numbers with trade. If the
actual terms of trade are 1 hat for 1.8 clocks and 150 hats are traded, how many hats
will Denmark consume?
A) 150
B) 180
C) 270
D) 400
In an economy with ________, there are more prices than in an economy with
________.
A) barter; money
B) money; barter
C) fiat money; commodity money
D) fiat money; barter
Which of the following statements is false?
A) Exports benefit trading countries because exports create jobs. Imports do not benefit
trading countries because they result in a loss of jobs.
B) Each year the United States exports about 50 percent of its wheat crop and 20
percent of its corn crop.
C) Most of the leading exporting countries are large, high-income countries.
D) Not all sectors of the U.S. economy are affected equally by international trade.
Which of the following has occurred as the baby-boom generation ages?
A) The demand for soft drinks has increased in the U.S. market.
B) The demand for soft drinks has decreased in the U.S. market.
C) The global demand for soft drinks has decreased.
D) The global demand for soft drinks has remained relatively low.
If an increase in income leads to in an increase in the demand for peanut butter, then
peanut butter is
A) a neutral good.
B) a normal good.
C) a necessity.
D) a complement.
Which of the following goods is directlycounted in GDP?
A) the lettuce that Subway purchases for its sandwiches
B) the bread that Subway purchases for its sandwiches
C) a 12-inch Subway sandwich purchased by a student
D) the plastic bags that Subway purchases to wrap its sandwiches
Which of the following is an example of a trade restriction?
A) Japan places a tax on all Korean automobiles.
B) Domestic wine is more expensive than wine imported from Chile.
C) The United States, Canada, and Mexico sign the NAFTA agreement.
D) Consumers prefer German beer to domestic beer.
Which of the following could increase unemployment and inflation simultaneously?
A) an increase in oil prices
B) expansionary monetary policy
C) contractionary monetary policy
D) a decrease in the real wage