1) The M2 money supply may be larger or smaller than the M1 money supply
depending on the size of small time deposit balances and Money Market Mutual Fund
balances held by individuals.
2) In 2002, the United States announced its “Global Climate Change” initiative to
reduce greenhouse gases per dollar of GDP by 18 percent by 2012.
3)
refer to the above diagram for a nondiscriminating monopolist. the profit-maximizing
price for this firm is j
4) the current, on-going round of trade negotiations is called the doha round.
5) A side benefit of international trade is that it links national interests and increases the
opportunity costs of war.
6) the guiding function of prices tends to keep resources flowing toward their most
highly valued uses.
7) The marginal revenue product curve of a purely competitive seller declines solely
because of the law of diminishing returns.
8) in a purely competitive industry competition centers more on advertising and sales
promotion than on price.
error! hyperlink reference not valid.
9) growth is a widely held economic goal primarily because it creates a more equal
distribution of wealth and income.
10) a pure monopolist will maximize profits by producing at that output where price
and marginal cost are equal.
11)
refer to the above diagram for a nondiscriminating monopolist. at output q average
variable cost is qj.
12) A firm hiring labor in a perfectly competitive labor market faces a:
A.downward sloping labor supply curve and upward sloping labor demand curve.
B.upward sloping labor supply curve and downward sloping labor demand curve.
C.upward sloping labor supply curve and horizontal labor demand curve.
D.horizontal labor supply curve and downward sloping labor demand curve.
13) the following output data for a firm. assume that the amounts of all non-labor
resources are fixed.
refer to the above data. diminishing marginal returns become evident with the addition
of the:
a.sixth worker.
b.fourth worker.
c.third worker.
d.second worker.
14) gdp can be calculated by summing:
a.consumption, investment, government purchases, exports, and imports.
b.investment, government purchases, consumption, and net exports.
c.consumption, investment, wages, and rents.
d.consumption, investment, government purchases, and imports.
15) because of unseasonably cold weather, the supply of oranges has substantially
decreased. this statement indicates that:
a.the demand for oranges will necessarily rise.
b.the equilibrium quantity of oranges will rise.
c.the amount of oranges that will be available at various prices has declined.
d.the price of oranges will fall.
16) net exports are:
a.that portion of consumption and investment goods sent to other countries.
b.exports plus imports.
c.exports less imports.
d.imports less exports.
17)
Refer to the above diagram where curves (a) through (d) are for five different countries.
Income is equally distributed in:
A.none of the countries shown.
B.country b.
C.countries a and e.
D.country a.
18) Monetarists believe that:
A.prices and wages are inflexible or sticky.
B.both product and resource markets are monopolistic.
C.velocity is relatively stable.
D.the economy is more stable when active fiscal and monetary policy are used.
19) As it relates to the R&D decision, the interest-rate-cost-of-funds curve:
A.usually slopes downward.
B.is the marginal cost element in the MB = MC decision framework.
C.indicates a constant rate of return, r.
D.reflects the interest rate on bank loans, but not the implicit interest rate on the use of
retained earnings.
20) suppose that an industry’s long-run supply curve is downsloping. this suggests that:
a.it is an increasing-cost industry.
b.relevant inputs have become more expensive as the industry has expanded.
c.technology has become less efficient as a result of the industry’s expansion.
d.it is a decreasing-cost industry.
21) refer to the above data sets. which of the data sets would graph as an upsloping
line?
a.1 only.
b.1, 2, and 3 only.
c.4 and 5 only.
d.1, 2, and 5 only.
22) most output in the united states is produced by:
a.cooperatives.
b.partnerships.
c.sole proprietorships.
d.corporations.
23) real per capita gdp in the united states in 2007 was approximately:
a.$28,500
b.$36,800
c.$38,200
d.$11.6 trillion
24)
Refer to the above diagram for the corn market. What effect will a price support of B
have on the gross income of farmers?
A.Gross income will be unchanged, although profits will rise.
B.Gross income will increase from 0MFG to 0BKL.
C.Gross income will increase from 0AJH to 0BCG.
D.Gross income will decrease from 0BCG to 0BKL.
25) The multiple by which the commercial banking system can expand the supply of
money is equal to the reciprocal of:
A.the MPS.
B.its actual reserves.
C.its excess reserves.
D.the reserve ratio.
26)
Refer to the above diagrams. Other things equal, an interest rate decrease will:
A.shift curve A to the right and shift curve B upward.
B.shift curve A to the left and shift curve B downward.
C.leave curve A in place but shift curve B downward.
D. leave curve A in place but shift curve B upward.
27) Give the approximate importance of productivity as a source of economic growth in
the United States and list the various sources which account for this productivity growth
and their relative importance.
28) Explain the difference between a money-market deposit account and a
money-market mutual fund.
29) What policies might DVCs undertake to promote economic growth?
30) Is the downward price inflexibility applicable to todays economy? Why or why not?
31) What is the Phillips Curve? What concept does it illustrate?
32) What happens to inventories when prices are sticky and there is a demand shock?
Explain.