The market demand curve shows how the quantity demanded of a product, during a
specified time period, changes as the price of that product changes.
a. True
b. False
A bond’s price is sensitive to changes in
a. the interest rate.
b. the accepted rate of return on investment.
c. investor confidence in the stability and credit worthiness of the firm.
d. All of the above are correct.
If demand is elastic, a rise in price will decrease total expenditure.
a. True
b. False
When economies of scale exist,
a. production costs per unit increase as output expands.
b. production costs per unit decline as output expands.
c. total production costs decrease.
d. total production costs increase.
If the demand for softballs increases, one could expect the demand for leather to
increase. This is attributable to the
a. opportunity cost of producing softballs.
b. marginal productivity principle.
c. reduction in the cost of production of softballs.
d. derived demand for an input.
The central question in economics is how to
a. make the best use of scarce resources.
b. use government planning agencies.
c. induce people to want less.
d. increase human knowledge.
As a share of GDP, U.S. spending on education is:
a. comparable to that of other wealthy nations in the OECD
b. about 26% higher than the average of wealthy nations in the OECD
c. about 26% lower than the average of wealthy nations in the OECD
d. rising slowly, but steadily
A horizontal demand curve is perfectly elastic because a change in price will not induce
a change in quantity demanded.
a. True
b. False
Cheap labor is the source of comparative advantages.
a. True
b. False
Jack buys a computer from Sam, knowing fully well that the technology used in it is
obsolete. In this case, the trade is
a. beneficial to both parties.
b. beneficial only to Sam.
c. beneficial only to Jack.
d. not beneficial to either of them.
The price of a depletable natural resource last year rose more than expected. The most
likely explanation is that
a. interest rates fell.
b. an unexpected discovery of reserves was made.
c. the major suppliers formed a cartel.
d. price ceilings were established.
The two primary reasons to adopt measures to restrict trade are that
a. they help keep real wages high in the importing country, and they also permit small
businesses to compete in international markets.
b. they may help the importing country improve its educational system, and they keep
high-technology products from being stolen by foreign competitors.
c. they may help the importing country get better prices for its goods, and they protect
certain industries from foreign competition.
d. they may help advance the political goals of the nation, and they encourage
productivity in domestic industries.
Elasticity computations related to demand carry a minus sign to show that the demand
curve is negatively sloped.
a. True
b. False
The combined incomes of Walmart, ExxonMobil and Chevron total more than the GDP
of:
a. Belgium
b. Denmark
c. Ireland
d. all of these
The market allocates goods to individuals according to the individuals’
a. desire for the good.
b. ability to pay for the good.
c. desire and ability to pay for the good.
d. political influence.