An increase in population shifts the production possibility frontier inwards over time.
Ceteris paribus, an increase in the government budget deficit increases interest rates in
the United States and causes a real appreciation of the dollar.
If the income effect of a wage increase equals the substitution effect, the labor supply
curve is horizontal at the equilibrium wage.
The United Kingdom has a health care system under which the government owns most
of the hospitals and employs most of the doctors.
A modern example of the tragedy of the commons is the forests in many poor countries.
Perfect price discrimination will lead a firm to produce up to the point where price
equals marginal cost, the efficient level of output.
The income effect explains why there is a direct relationship between the price of a
product and the quantity of the product demanded.
An important reason why diseconomies of scale arise is because firms may have to hire
lower skilled workers as firms expand.
A product is considered to be excludable if it is jointly owned by all members of a
community.
A borrower defaults on a loan when he stops making payments on the loan.
If additional units of a good could be produced at a constant opportunity cost, the
production possibility frontier would be bowed outward (concave).
U.S. currency continues to be backed by the gold standard to this day.
Consider a country that produces only two goods: kayaks and coconuts. Suppose it is
possible for this country to increase its production of kayaks without producing fewer
coconuts. In this case, its current output combination is efficient.
U.S. currency continues to be backed by the gold standard to this day.
Technological advancements have led to lower prices and an increase in the sale of
color laser printers. How does this affect the market for traditional inkjet printers?
A) The demand curve for inkjet printers shifts to the right.
B) The demand curve for inkjet printers shifts to the left.
C) The quantity of inkjet printers demanded increases.
D) The quantity of inkjet printers demanded decreases.
Figure 3-1
An increase in taste or preference would be represented by a movement from
A) A to B.
B) B to A.
C) D1 to D2.
D) D2 to D1.
Monopolistically competitive firms have downward-sloping demand curves. In the long
run, monopolistically competitive firms earn zero economic profits. These two
characteristics imply that in the long run,
A) monopolistically competitive markets achieve productive efficiency.
B) monopolistically competitive markets achieve allocative efficiency.
C) monopolistically competitive firms earn economic profits.
D) monopolistically competitive firms have excess capacity.
As a result of the tariff on Chinese tires, U.S. consumers are estimated to have spent
________ on imported tires and ________ on U.S.-produced tires.
A) more; more
B) more; less
C) less; more
D) less; less
Because Whirlpool produces durable goods, the demand for their goods
A) is likely to increase during recession.
B) declines when incomes in the economy are rising.
C) is consistently high, regardless of the state of the economy.
D) tends to follow the business cycle.
If the Federal Reserve attempts to continue reducing unemployment by manipulating
monetary policy, which of the following would you expect to see?
A) The Fed will follow deflationary monetary policies.
B) The Fed will follow inflationary monetary policies.
C) The rate of inflation will fall as Fed tries to reduce the unemployment rate.
D) The Fed will reduce the natural rate of unemployment.
Figure 9-3 Since 1953 the
United States has imposed a quota to limit the imports of peanuts. Figure 9-3 illustrates
the impact of the quota. Without the quota, the domestic price of peanuts equals the
world price which is $2.00 per pound. What is the quantity of peanuts demanded by
domestic consumers in the absence of a quota?
A) 10 million pounds
B) 28 million pounds
C) 30 million pounds
D) 40 million pounds
Figure 15-9
Figure 15-9 shows
the demand and cost curves for a monopolist. What is the difference between the
monopoly output and the perfectly competitive output?
A) 140 units
B) 240 units
C) 340 units
D) 560 units
To offset the effect of households and firms deciding to hold less of their money in
checking account deposits and more in currency, the Federal Reserve could
A) raise the required reserve ratio.
B) buy Treasury securities.
C) raise the discount rate.
D) lower bank taxes.
People hold money as opposed to financial assets because money
A) earns interest.
B) is perfectly liquid.
C) earns no interest.
D) earns a higher return than other financial assets.
Table 9-1
Consider the data above for a simple economy.
The labor force participation rate for this simple economy equals
A) (1,000/1,100) 100.
B) (1,000/15,000) 100.
C) (1,100/15,000) 100.
D) (1,100/20,000) 100.
Long-run equilibrium under monopolistic competition is similar to that under perfect
competition in that
A) firms produce at the minimum point of their average cost curves.
B) price equals marginal cost.
C) firms earn normal profits.
D) price equals marginal revenue.
According to a study by economists Raymond Fisman and Edward Miguel, as the level
of corruption in a country increases,
A) so does the number of parking violations by the country’s United Nations delegates.
B) so does the size of the country’s population.
C) the levels of foreign direct investment and foreign portfolio investment decrease.
D) the levels of real GDP per capita and real income per capita increase.
According to the National Bureau of Economic Research, the recession that began in
December 2007
A) lasted 12 months.
B) lasted 18 months.
C) lasted 27 months.
D) had not ended by December 2011.
Explain the relationship between price elasticity of demand and total revenue.
Fill in the missing values in the table of data collected in the household survey for
November, 2009. The working-age population, employment, unemployment, and labor
force are measured in thousands. Show your work.
Given Table 23-8 below, fill in the values for saving. Assume there are no taxes. Table
23-8
Central Grocery in New Orleans is famous for its muffaletta, a large round sandwich
filled with deli meats and topped with a tangy olive salad. Suppose the following table
represents cost and revenue data for Central Grocery.
Illustrate this data by graphing the demand, MR, MC, and ATC curves. Identify the
profit-maximizing price and quantity, and show the area representing the total profit
received by Central Grocery.
Can the Federal Reserve achieve both low inflation and low levels of unemployment?
Explain.
Does the short-run Phillips curve have a positive or negative slope? Explain how this
slope is derived.
Briefly describe the Sarbanes-Oxley Act and explain why it was passed.
Racial discrimination and other forms of discrimination based on irrelevant factors are
illegal. Can price discrimination be illegal as well?
How is accounting profit found?