With the Troubled Asset Relief Program (TARP), the Treasury provided funds to banks
in exchange for stock.
If the marginal tax rate is greater than the average tax rate, the tax structure is described
as regressive.
In a Nash equilibrium, all players select non-dominant strategies.
The Soviet Union’s economic growth rate slowed despite rapid increases in capital per
hour worked.
Consumers in a monopolistically competitive market do not receive any consumer
surplus because the price paid for the product exceeds the marginal cost of production.
An increase in expected inflation will shift the short-run Phillips Curve.
In a free market there are virtually no restrictions, or at best few restrictions, on how a
good or service can be produced or sold.
Optimal decisions are made at the point where marginal benefit is maximized.
Which of the following is the best example of a tariff?
A) a limit imposed on the number of sports utility vehicles that the United States can
import from Japan
B) a subsidy granted by the U.S. government to domestic garment manufacturers so
they can compete more effectively with foreign garment manufacturers
C) a tax placed on all sports utility vehicles sold in the domestic market
D) a $5,000 per-car fee imposed on all sports utility vehicles imported into the United
States
If net exports are equal to net foreign investment,
A) the balance of payments is zero.
B) the current account balance is equal to the negative of the financial account balance.
C) net capital inflows are equal to imports minus exports.
D) All of the above are true when net exports are equal to net foreign investment.
Figure 5-3 Figure 5-3 represents the market for
medical services with and without insurance, and the effect of a third-party payer
system on the demand for medical services. If consumers paid the full price of medical
services, the equilibrium quantity would be
A) 400.
B) 800.
C) 1,200.
D) >1,200.
Which of the following statements is true?
A) Individuals who have never been the best at doing anything cannot have a
comparative advantage in producing any product.
B) Individuals who have never been the best at doing anything can still have a
comparative advantage in producing some product.
C) Individuals who have never been the best at doing anything perform all tasks at a
higher opportunity cost than others.
D) Individuals who have never been the best at doing anything must have an absolute
advantage in at least ones task.
Table 2-2
Production choices for Billie’s Bedroom Shop
Assume Billie’s Bedroom Shop only produces pillows and blankets. A combination of 9
pillows and 21 blankets would appear
A) along Billie’s production possibilities frontier.
B) inside Billie’s production possibilities frontier.
C) outside Billie’s production possibilities frontier.
D) at the vertical intercept of Billie’s production possibilities frontier.
In a diagram showing the average total cost and average variable cost curves, the
minimum point of the average total cost is
A) at the same level of output as the minimum point of the average variable cost.
B) at a larger level of output than the minimum point of the average variable cost.
C) at a lower level of output than the minimum point of the average variable cost.
D) at the same level of output as the maximum of the total product curve.
If a German firm produces cars in the United States, that production should count
towards
A) U.S. GNP.
B) German GDP.
C) U.S. GDP.
D) both U.S. GNP and German GDP.
Assuming that the United States is the domestic economy, ________ are goods and
services produced by ________ and purchased by ________.
A) exports; foreign countries; the United States
B) exports; the United States; the United States
C) imports; foreign countries; foreign countries
D) imports; foreign countries; the United States
In what way does long-run equilibrium under monopolistic competition differ from
long-run equilibrium under perfect competition?
A) Firms in perfect competition achieve productive and allocative efficiency while
firms in monopolistic competition achieve neither allocative nor productive efficiency.
B) The only difference is that in a monopolistically competitive market there are many
brands to choose from while in a perfectly competitive market there is one standard
product.
C) Firms in perfect competition achieve productive efficiency while firms in
monopolistic competition achieve allocative efficiency.
D) Firms in perfect competition achieve allocative efficiency while firms in
monopolistic competition achieve brand efficiency.
One would speak of a movement along a supply curve for a good, rather than a change
in supply, if
A) the cost of producing the good changes.
B) supplier expectations about future prices change.
C) the price of the good changes
D) prices of substitutes in production change.
If production displays diseconomies of scale, the long-run average cost curve is
A) above the short-run average total cost curve.
B) above the long-run marginal cost curve.
C) upward sloping.
D) downward sloping.
The typical labor supply curve is upward-sloping but it is possible for the curve to be
backward bending€negatively sloped€at very high wage levels. Which of the following
would cause a backward bending supply curve?
A) This would occur when the income effect from an increase in the wage becomes
larger than the substitution effect.
B) This would occur when the substitution effect from an increase in the wage becomes
larger than the income effect.
C) This would occur if leisure is an inferior good.
D) This would occur when a large number of workers choose leisure rather than
employment at low wages; only a very large increase in the wage will lead these
workers to prefer employment to leisure.
Of the following high-income countries, which has the highest male life expectancy at
age 65?
A) Canada
B) Japan
C) the United Kingdom
D) the United States
How is accounting profit found?
In the following table, fill in the columns for your return on investment if the price of
your house increased or decreased by 40 percent, based on the down payments
specified in the first column. Return on Your Investment From
Suppose the current price of copper is $3 per pound and the quantity supplied is 200
pounds per day. If the price of copper falls to $2.50 per pound, the quantity supplied
drops to 180 pounds per day. Use the midpoint formula to calculate the price elasticity
of supply for copper.
Suppose that the required reserve ratio is 10 percent and you withdraw $25,000 from
Comerica Bank. What is the deposit multiplier? What is the total decrease in deposits in
the banking system? What is the change in the money supply?
The problem typically during a recession is not that there is too little money, but too
little spending. If the problem was too little money, what would be its cause? If the
problem was too little spending, what could be its cause?