Gold is an example of
A) commodity money.
B) fiat money.
C) barter money.
D) M1.
If a stock’s dividend is expected to grow at a constant rate of eight percent in the future
and it has just paid a dividend of $1.25 a share, and you have an alternative investment
of equal risk that will earn a 12 percent rate of return, what would you be willing to pay
per share for this stock?
A) $31.25
B) $1.40
C) $1.25
D) $1.12
If firms are more pessimistic and believe that future profits will fall and remain weak
for the next few years, then
A) investment spending will fall.
B) investment spending will rise.
C) investment spending will remain unaffected.
D) investment spending will rise and then fall.
Voluntary exchange between buyers and sellers generates ________ in a market
economy.
A) scarcity
B) allocative efficiency
C) productive efficiency
D) equity
What is the most common type of business?
A) corporation
B) partnership
C) sole proprietorship
D) They are equally represented because of federal laws.
Figure 2-3
Sergio Vignetto raises cattle and llamas on his land. His land is equally suitable for
raising either animal. Which of the graphs in Figure 2-3 represent(s) his production
possibilities frontier?
A) Graph A
B) Graph B
C) Graph C
D) either Graph A or Graph C
E) either Graph B or Graph C
Which of the following is part of the secondary market?
A) New York Stock Exchange
B) the over-the-counter market
C) NASDAQ
D) all of these
Figure 12-16
Which panel best represents the perfectly competitive organic produce market in which
some firms are earning short-run economic profits, and the Surgeon General announces
that switching from non-organic produce to organic produce will add 5 years to the
average life span of consumers?
A) Panel A
B) Panel B
C) Panel C
D) Panel D
Economies of scale occur when
A) a firm’s long-run average total costs fall as it increases the quantity of output it
produces.
B) the marginal product of labor is greater than the average product of labor.
C) short-run marginal cost falls.
D) the demand for a firm’s output increases.
If the Federal Reserve chooses to fight high inflation with contractionary monetary
policy and firms and consumers expect this policy to reduce inflation, which of the
following would you expect to see?
A) a downward shift of the short-run Phillips curve
B) a reduction in the unemployment rate
C) a decrease in the long-run aggregate supply curve
D) an increase in inflationary expectations
If the market price is $25, the average revenue of selling five units is
A) $5.
B) $12.50.
C) $25.
D) $125.