Inflation is measured
A) using the level of the consumer price index.
B) as the percentage change in the consumer price index.
C) using the level of real GDP.
D) as the percentage change in real GDP.
Figure 5-3
The private profit maximizing output level is
A) Qm.
B) Q.
C) Qo.
D) Qo– Qm.
Table 14-2
Table 14-2 shows the
payoff matrix for Wal-Mart and Target from every combination of pricing strategies for
the popular PlayStation 3. At the start of the game each firm charges a low price and
each earns a profit of $7,000. For each firm, is there a better outcome than the current
situation in which each firm charges the low price and earns a profit of $7,000?
A) Yes, the firms can implicitly collude and agree to charge a higher price.
B) No, there is no incentive for each firm to consider any other strategy.
C) No, any other strategy hurts consumers.
D) Yes, each firm can implicitly agree to increase output and not to deviate from a low
price.
Table 19-5
Consider the table above showing three stages of production of an automobile.
The value of each automobile in gross domestic product equals
A) $7,000.
B) $15,000.
C) $18,000.
D) $25,000.
Economists Cade Massey and Richard Thaler analyzed whether teams in the National
Football League distributed salaries efficiently. Massey and Thaler found that
A) the first few players selected in first round of the NFL draft are paid much higher
salaries relative to their marginal products than players drafted later in the first round.
B) rookies are paid salaries greater than their marginal products; veteran players are
paid salaries less than their marginal products.
C) veteran players who sign as free agents are paid more relative to their marginal
products than rookie players selected in the first round of the draft.
D) both rookie players and veteran players are paid less than the value of their marginal
products because of the lack of competition among teams.
Marv Pilson has $50 worth of groceries in a shopping cart at his local Shop ‘n Save.
Assume that the marginal utility per dollar of the liter bottles of soft drink in Marv’s cart
equals 50. The marginal utility per dollar of the boxes of cereal in Marv’s cart equals 20.
Marv has only $50 to spend, but has not yet paid for his groceries. How can Marv
increase his total utility without spending more than $50?
A) Marv should substitute his favorite soft drink or the cereal in his cart for generic
brands that have lower prices.
B) Marv should buy more boxes of cereal and fewer bottles of soft drink.
C) Marv should buy fewer boxes of cereal and more bottles of soft drink.
D) Marv should buy fewer boxes of cereal and fewer bottles of soft drink. He can then
spend more on other items.
The United States has a trade ________ with all its major trading partners and a trade
________ with every region of the world except for Latin America.
A) deficit; deficit
B) deficit; surplus
C) surplus; deficit
D) surplus; surplus
E) deficit; balance
The core personal consumption expenditures price index excludes
A) food and energy prices.
B) food and housing prices.
C) energy and housing prices.
D) housing and health care prices.
Economists assume that rational people do all of the following except
A) use all available information as they act to achieve their goals.
B) undertake activities that benefit others and hurt themselves.
C) weigh the benefits and costs of all possible alternative actions.
D) respond to economic incentives.
Figure 11-1
The marginal product of the 3rd worker is
A) 57.
B) 19.
C) 15.
D) 11.
If workers and firms raise their inflation expectations,
A) unemployment will fall.
B) actual inflation will fall to match expected inflation.
C) the short-run Phillips curve will be vertical.
D) the short-run Phillips curve will shift upward.
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. With
trade, what is the total gain in clock production?
A) 150
B) 300
C) 2,100
D) 2,250
Table 2-5 Production choices for Nadia’s Neckware
Assume Nadia’s Neckware only produces ascots and bowties. A combination of 24
ascots and 12 bowties would appear
A) along Nadia’s production possibilities frontier.
B) inside Nadia’s production possibilities frontier.
C) outside Nadia’s production possibilities frontier.
D) at the horizontal intercept of Nadia’s production possibilities frontier.
The costs in time and other resources that parties incur in the process of agreeing to and
carrying out an exchange of goods or services are called
A) exchange costs.
B) implicit costs.
C) transactions costs.
D) selling costs.
When an investor buys a corporate bond, the ________ the bond is a loan to the
corporation.
A) interest on
B) face value of
C) coupon payment on
D) dividend payment on
As a result of slow economic growth following the recession of 2007-2009, many
companies including Cisco Systems, Lockheed Martin, and Cracker Barrel Old Country
Store cut production and employment as a result of the sluggish growth in the total
amount of spending in the economy. The total amount of spending in the economy is
known as
A) deficit spending.
B) planned investment spending.
C) aggregate expenditure.
D) equilibrium spending.
The Buda Agri Corporation is the sole employer in rural Hungary. In the labor market,
Buda Agri is a
A) monopolistic competitor.
B) monopsony.
C) monopoly.
D) perfect competitor.
Where does the short-run Phillips curve intersect the long-run Phillips curve?
A) at the point where the rate of inflation and the unemployment rate are equal
B) at the natural rate of inflation
C) at the point where actual inflation is equal to expected inflation
D) There is no intersection between the short-run and long-run Phillips curves.
If the demand for the yen increases relative to the dollar, which of the following would
occur?
A) The dollar will appreciate.
B) The yen will depreciate.
C) The dollar will depreciate.
D) The demand for the dollar will increase.