1) The rising general level of real wages in the United States has occurred because
growing population has increased the supply of labor relative to the demand for it.
2) Most developed countries have fertility rates less than 2.1.
3) asymmetric information in the health care market has increased the supply of health
care.
4)
refer to the above diagrams. the demand for firm a’s product is perfectly elastic.
5) The nation that has a comparative advantage in a particular product will be the only
world exporter of that product.
6) The idea that the economy will ‘self-correct” when confronted with changes in
aggregate demand is associated with new classical economics.
7) Pollution is a good example of the moral hazard problem.
8) The labor supply curve facing a purely competitive firm is perfectly inelastic.
9) A British Thermal Unit is the amount of energy required to raise the temperature of
one litre of water by one degree Celsius.
10) Tying agreements are contracts by which retailers agree to charge the prices that
manufacturers set on branded goods.
11) The present value of $4000 deposited today at 8 percent interest is $5038.85 three
years from now.
12) an economy with an average growth rate of 10 percent can expect to see its real gdp
double in approximately 7 years.
13) The job of the Fed in limiting the supply of money may be made more complex if
commercial banks initially have substantial excess reserves.
14) The plus items below are “export-type” entries and the minus items are
“import-type” entries in the balance of payments for the hypothetical country of Zippo.
Refer to the above information. The financial account items for Zippo are:
A.1, 2, 3, and 4.
B.1, 3, 4, 5, 7, and 9.
C.6 and 8.
D.1, 2, 4, 7, and 9.
15) An effective expansionary fiscal policy will:
A.reduce a cyclical deficit, but necessarily increase the actual deficit.
B.reduce the standardized deficit.
C.increase the standardized deficit but reduce the cyclical deficit.
D.always result in a balanced actual budget once full-employment is achieved.
16)
refer to the above data. if alpha and omega each were producing at alternatives b before
trade, the gain from specialization and trade would be:
a.30 tons of wheat.
b.15 tons of steel.
c.30 tons of steel and 30 tons of wheat.
d.60 tons of wheat and 60 tons of steel.
17) Unions may increase productivity by:
A.providing an exit mechanism for workers.
B.increasing worker turnover so that younger workers are more likely to be employed.
C.reducing the amount of capital used per worker.
D.providing a voice mechanism for workers.
18) People who buy foreign currency for the sole goal of selling it at a profit are called:
A.numismatics.
B.currency hedgers.
C.currency manipulators.
D.currency speculators.
19) The law of increasing opportunity costs:
A.applies to land-intensive commodities, but not to labor-intensive or capital-intensive
commodities.
B.results in straight-line production possibilities curves rather than curves that are
bowed outward from the origin.
C.refutes the principle of comparative advantage.
D.may limit the extent to which a nation specializes in producing a particular product.
20)
refer to the above graph. using qs for quantity supplied and p for price, which of the
following equations correctly states the supply of this product?
a.p = 4 + .2qs.
b.p = 60/qs.
c.p = 10qs – 2p.
d.p = 2 + .2qs.
21) The following table contains hypothetical data for the 2010 U.S. balance of
payments. Answer the next question(s) on the basis of this information. All figures are
in billions of dollars.
Refer to the above data. The U.S. balance on goods and services is a:
A.$10 billion deficit.
B.$20 billion deficit.
C.$30 billion surplus.
D.$30 billion deficit.
22)
refer to the above diagram for a purely competitive producer. the lowest price at which
the firm should produce (as opposed to shutting down) is:
a.p1.
b.p2.
c.p3.
d.p4.
23) assume that a change in government policy results in greater production of both
consumer goods and investment goods. we can conclude that:
a.the economy was not employing all of its resources before the policy change.
b.the economy’s production possibilities curve has been shifted to the left as a result of
the policy decision.
c.this economy’s production possibilities curve is convex (bowed inward) to the origin.
d.the law of increasing opportunity costs does not apply in this society.
24) the profit-maximizing output of a pure monopoly is economically inefficient
because in equilibrium:
a.price equals minimum average total cost.
b.marginal revenue equals marginal cost.
c.marginal cost exceeds price.
d.price exceeds marginal cost.
25)
refer to the above matrix. a private good is characterized by combination:
a.a.
b.b.
c.c.
d.d.
26) under what circumstances do rates of economic growth understate the growth of
economic well-being?
a.economic growth has occurred because of increased length of the workweek
b.product quality has improved
c.air quality has declined as real gdp has increased
d.population has grown faster than real output.
27) the accompanying table that shows average total costs (atc) for a manufacturing
firm whose total fixed costs are $10:
refer to the above data. the marginal cost of the fourth unit of output is:
a.$2.
b.$12.
c.$37.
d.$16.
28)
ACME Corporation used to produce $50 worth of goods (in year 2000 dollars) per
million BTUs used. Now it produces $60 worth of goods (in year 2000 dollars) per
million BTUs. Based on this, we can conclude:
A.nothing about ACME’s energy efficiency.
B.that ACME’s energy efficiency has declined.
C.that ACME’s energy efficiency has improved.
D.that ACME is using a single energy source and achieving economies of scale in
production.
29) The discount rate is the interest:
A.rate at which the central banks lend to the U.S. Treasury.
B.rate at which the Federal Reserve Banks lend to commercial banks.
C.yield on long-term government bonds.
D.rate at which commercial banks lend to the public.
30) Which of the following are included and which are excluded in calculating this
years GDP? Explain in each instance.
(a)An auto mechanic who fixes his own car at home
(b)Cash received from selling a corporate bond
(c)Spending by a city government on a waste treatment plant
(d)The pleasure that people obtain from working at jobs they like
(e)A veterans payment made to a retired military officer
31) Suppose the price level is fixed, the MPC is .5, and the GDP gap is a negative $80
billion. To achieve full-employment output (exactly), government should:
A.increase government expenditures by $80 billion.
B.reduce government expenditures by $40 billion.
C.reduce taxes by $40 billion.
D.reduce taxes by $80 billion.
32)
Refer to the above data. If government has instead provided a per unit subsidy of $2 to
suppliers of this product, equilibrium price and quantity would be:
A.$9 and 3,000.
B.$7.50 and 2,250.
C.$8.50 and 2,750.
D.$7 and 3,000.
33) the demand for commodity x is represented by the equation p = 10 – 0.2q and
supply by the equation p = 2 + 0.2q.
refer to the above information. if demand changed from p = 10 – .2q to p = 7 – .3q, we
can conclude that:
a.demand has increased.
b.demand has decreased.
c.supply will increase.
d.supply will decrease.
34) What are the effects of a reciprocity strategy on game outcomes?
35) Comment on the statement: Discretionary fiscal policy offers an ideal approach to
dealing with the nations economic problems. It is without problems, criticisms, or
complications.
36) Compare pure competition, pure monopoly, monopolistic competition, and
oligopoly for technological advance in the form of new product development.
37) Explain: An effectively regulated natural monopoly will have trouble attracting
capital to sustain and modernize its facilities.
38) Compare and contrast the short-run Phillips Curve and the long-run Phillips Curve.
39) What conclusions can be drawn from the game theory view of oligopoly?
40) Describe the rationale behind supply and demand analysis for public goods.
41) Describe two historic legal cases to contrast the two different views of antitrust
laws. One case would support the behavioralist view of antitrust laws. The other case
would support the structuralist views of the antitrust laws.
42) What are the four different views of the causes of macroeconomic instability in the
economy?