What is Different about buying stocks and buying bonds?
A) A stock can possibly pay dividends forever, but bonds have a fixed number of
payments.
B) Differences of opinion about a stock’s future may vary considerably but there is less
Difference about a bond’s future.
C) The future growth of a stock is more uncertain than the payments of a bond.
D) All these are Differences between stocks and bonds.
Table 9-12 Production and
Consumption Production
Without Trade With Trade
Estonia and Morocco can produce both swords and belts. Table 9-12 shows the
production and consumption quantities without trade, and the production numbers with
trade.
If the actual terms of trade are 1 belt for 1.5 swords and 70 belts are traded, how many
belts will Estonia gain compared to the “without trade” numbers?
A) 10
B) 20
C) 50
D) 70
If the price of muffins, a normal good you enjoy, rises,
A) the income and substitution effects offset each other, but the price effect leads you to
buy fewer muffins.
B) both the income and substitution effects lead you to buy fewer muffins.
C) the substitution effect which causes you to decrease your muffin consumption
outweighs the income effect which causes you to increase your muffin consumption,
resulting in fewer muffins purchased.
D) the income effect which causes you to decrease your muffin consumption outweighs
the substitution effect which causes you to increase your muffin consumption, resulting
in fewer muffins purchased.
Figure 5-6
Figure 5-6 shows the market for measles vaccinations, a product whose use generates
positive externalities. What is the deadweight loss resulting from producing at the
market equilibrium?
A) B + C
B) E + C
C) F
D) C
If the amount you owe on your house is less than the price of the house, you have
A) positive equity in your house.
B) an adjustable-rate mortgage on your house.
C) negative equity in your house.
D) a reverse mortgage on your house.
Figure 12-3
Suppose that investment spending increases by $10 million, shifting up the aggregate
expenditure line and GDP increases from GDP1 to GDP2. If the MPC is 0.9, then what
is the change in GDP?
A) $9 million
B) $10 million
C) $90 million
D) $100 million
Table 2-3 Production Choices for Dina’s Diner
Assume Dina’s Diner only produces sliders and hot wings. A combination of 120 sliders
and 100 hot wings would appear
A) along Dina’s production possibilities frontier.
B) inside Dina’s production possibilities frontier.
C) outside Dina’s production possibilities frontier.
D) at the vertical intercept of Dina’s production possibilities frontier.
Table 2-2 Production choices for Billie’s Bedroom Shop
Assume Billie’s Bedroom Shop only produces pillows and blankets. A combination of 5
pillows and 21 blankets would appear
A) along Billie’s production possibilities frontier.
B) inside Billie’s production possibilities frontier.
C) outside Billie’s production possibilities frontier.
D) at the vertical intercept of Billie’s production possibilities frontier.
Which of the following would result in a trade surplus for the United States?
A) Exports of goods = $450 billion
Imports of goods = $400 billion
Exports of services = $200 billion
Imports of services = $250 billion
B) Exports of goods = $450 billion
Imports of goods = $450 billion
Exports of services = $200 billion
Imports of services = $250 billion
C) Exports of goods = $450 billion
Imports of goods = $460 billion
Exports of services = $200 billion
Imports of services = $100 billion
D) Exports of goods = $450 billion
Imports of goods = $490 billion
Exports of services = $200 billion
Imports of services = $100 billion
Brand management refers to
A) picking a brand name for a new product that will attract attention.
B) the efforts to maintain the differentiation of a product over time.
C) efforts to reduce the cost of production.
D) selling the right to use a brand name in a particular market.
Table 10-3
The table above shows Lee’s marginal utility per dollar from consuming ice cream
cones and cans of Lime Fizz Soda. The price of an ice cream cone is $2 and the price of
Lime Fizz Soda is $1. Use this information to select the correct statement.
A) We cannot determine how many ice cream cones and cans of Lime Fizz Soda Lee
will consume without knowing what his income is.
B) To maximize his utility Lee should consume 1 ice cream cone and 5 cans of Lime
Fizz Soda.
C) We cannot determine how many ice cream cones and cans of Lime Fizz Soda will
maximize Lee’s utility because we are given only the marginal utility per dollar values.
We also need to know the marginal utility for each quantity.
D) If Lee has an unlimited budget he will maximize his utility by buying only Lime
Fizz Soda.
The demand curve for an individual seller’s product in perfect competition is
A) the same as market demand.
B) downward sloping.
C) vertical.
D) horizontal.
A(n) ________ in private expenditures as a result of a(n) ________ in government
purchases is called crowding out.
A) increase; decrease
B) decrease; decrease
C) decrease; increase
D) increase; increase
To maximize profit a monopolist will produce where
A) marginal revenue is equal to marginal cost.
B) demand for its product is unit-elastic.
C) revenue per unit is maximized.
D) average total cost is equal to average revenue.