Crowding out refers to a decline in ________ as a result of an increase in ________.
A) tax revenues; unemployment
B) government purchases; tax rates
C) government purchases; private expenditures
D) private expenditures; government purchases
You have a bond that pays $60 per year in coupon payments. Which of the following
would result in an increase in the price of your bond?
A) Coupon payments on newly-issued bonds rise to $80 per year.
B) The likelihood that the firm issuing your bond will default on debt increases.
C) The price of a share of stock in the company falls.
D) Coupon payments on newly-issued bonds fall to $50 per year.
The federal government debt as a percentage of GDP did not rise
A) during the Great Depression.
B) during World War II.
C) during the 1960s.
D) during the 1980s.
Which of the following would cause an increase in the equilibrium price and decrease
in the equilibrium quantity of watermelon?
A) a decrease in demand and an increase in supply
B) a decrease in supply
C) an increase in demand and an increase in supply greater than the increase in demand
D) an increase in demand and an increase in supply
Price discrimination is a rational strategy for a profit-maximizing firm when
A) it is possible to engage in arbitrage across market segments.
B) it is not possible to segment consumers into identifiable markets.
C) there is no opportunity for arbitrage across market segments.
D) firms want to increase the amount of consumer surplus received by its customers.
Figure 3-4
If the price is $25,
A) there would be a surplus of 300 units.
B) there would be a shortage of 300 units.
C) there would be a surplus of 200 units.
D) there would be a shortage of 200 units.
Which of the following indicates that the U.S. economy has become more stable since
1950?
A) longer recessions
B) shorter expansions
C) less severe fluctuations in real GDP
D) All of the above indicate that the U.S. economy has become more stable since 1950.
Figure 4-8 Figure 4-8 shows the market for
apartments in Springfield. Recently, the government imposed a rent ceiling of $1,000
per month. What is the value of the deadweight loss after the imposition of the ceiling?
A) $50,000
B) $125,000
C) $175,000
D) $260,000
Lionel’s Lawn Care is a company that maintains residential yards. Lionel’s cost for his
standard package of mowing, edging, and trimming is $15, and he charges $25 for this
service. For a total price of $40, Lionel will also trim shrubs, a service that adds an
additional $10 to the total cost of the standard package. What is Lionel’s marginal
benefit if he sells the standard package?
A) $10
B) $15
C) $25
D) $40
A bond is a financial security that represents
A) ownership in a corporation.
B) the portion of profits paid to shareholders.
C) the interest rate paid on a share of stock.
D) a promise to repay a fixed amount of funds.
The three most widely followed stock indexes in the United States include all of the
following except
A) the Dow Jones Industrial Average.
B) the S&P 500.
C) the Fortune 500.
D) the NASDAQ.
If inflation in Russia is higher than it is in the United States,
A) the purchasing power of the ruble in buying Russian goods will rise relative to the
dollar.
B) the value of the dollar will rise in the long run.
C) the value of the ruble will rise in the long run.
D) Both A and C are correct.
China has developed a comparative advantage in the production of clothing. The source
of this comparative advantage is
A) a large supply of natural resources.
B) a large supply of unskilled workers and relatively little capital.
C) investment in capital used to produce clothing.
D) superior process technology.
Figure 2-7
Mercedes Benz recently decided to introduce its B-class automobile in the U.S. market,
an electric car that is has designed and developed in a partnership with Tesla Motors.
Assume Mercedes Benz chooses to produce both electric-engine vehicles and
gasoline-engine vehicles. Figure 2-7 shows changes to its production possibilities
frontier in response to new developments and Different strategic production decisions.
Assume that in 2014, Mercedes reopened one of its factories after an extensive
remodelling which now allows for the production of both types of vehicles. This is best
represented by the
A) movement from E to F in Graph A.
B) movement from H to J in Graph B.
C) movement from L to K in Graph C.
D) movement from J to G in Graph B.