Currency traders expect the dollar to depreciate. What impact will this have on
equilibrium in the foreign exchange market?
A) The dollar will appreciate, and the equilibrium quantity of dollars will decrease.
B) The dollar will depreciate, and the equilibrium quantity of dollars exchanged will
decrease.
C) The dollar will appreciate, and the equilibrium quantity of dollars will increase.
D) The dollar will depreciate, and the change in the equilibrium quantity of dollars
exchanged cannot be determined.
There are two conditions necessary for a consumer to maximize her utility. One is that
the marginal utilities per dollar spent on each good and service consumed are equal.
What is the other condition?
A) Total spending on all goods and services must equal the amount available to be
spent.
B) The consumer must be satisfied with the choices she makes.
C) The total spent on each good and service is the same.
D) The prices of each good and service consumed must not be too high.
A monopolist faces
A) a perfectly elastic demand curve.
B) a perfectly inelastic demand curve.
C) a horizontal demand curve.
D) a downward-sloping demand curve.
If a graph has a line that shows the quantity of flat-screen televisions sold in the last
five years, it is known as
A) a pie chart.
B) a time-series graph.
C) a demand curve for outsourcing.
D) a supply curve of outsourcing.
Figure 4-1
Figure 4-1 shows Arnold’s demand curve for burritos.
What is the total amount that Arnold is willing to pay for 3 burritos?
A) $1.50
B) $6.00
C) $7.00
D) $10.00
Figure 2-8
Figure 2-8 above shows the production possibilities
frontier for Vidalia, a nation that produces two goods, roses and orchids. Suppose
Vidalia is currently producing 120 dozen roses per period. How many orchids is it also
producing, assuming that resources are fully utilized?
A) 20 dozen orchids
B) 32 dozen orchids
C) 44 dozen orchids
D) 68 dozen orchids
Which of the following is a characteristic of stock?
A) Stock represents a promise to repay a fixed amount of funds.
B) The face value or principal plus interest is repaid at a specified period of time.
C) The length of coupon payments is fixed by the stated maturity period.
D) Stock represents ownership in a firm.
Which of the following would result in a trade surplus for the United States?
A) Exports of goods = $725 billion
Imports of goods = $790 billion
Exports of services = $350 billion
Imports of services = $260 billion
B) Exports of goods = $625 billion
Imports of goods = $625 billion
Exports of services = $300 billion
Imports of services = $375 billion
C) Exports of goods = $550 billion
Imports of goods = $575 billion
Exports of services = $275 billion
Imports of services = $300 billion
D) All of the above will result in a trade surplus.
A monopolistically competitive firm earning profits in the short run will find the
demand for its product decreasing and becoming more elastic in the long run as new
firms move into the industry until
A) the original firm is driven into bankruptcy.
B) the firm’s demand curve is perfectly elastic.
C) the firm’s demand curve is tangent to its average total cost curve.
D) the firm exits the market.
A. C. Pigou argued that the government can deal with a positive externality in
consumption by giving consumers a subsidy equal to the value of the externality.
In the circular flow model, the value of total income for an economy ________ the
value of total production.
A) equals
B) is greater than
C) is less than
D) may be greater than or less than