Exhibit 28-8
An effective price floor set at W3 would
a. increase employment from Q1 to Q2.
b. increase employment from Q3 to Q4.
c. decrease employment from Q5 to Q2.
d. decrease employment from Q5 to Q4.
It is argued that certain industries should be protected from foreign competition because
they are needed to secure the United States from foreign aggression. This argument is
called the __________ argument.
a. saving domestic-jobs
b. low foreign wages
c. foreign export subsidies
d. national defense
An industry is composed of 10 firms, all with equal sales. The four-firm concentration
ratio in this industry is
a. 0.40.
b. 0.80.
c. 10.00.
d. There is not enough information provided to answer this question.
Economists use the ceteris paribus assumption primarily in order to
a. make their analyses easier for them to conduct.
b. designate what they believe is the correct relationship between two variables.
c. explain why people sometimes consume more of a good when its price rises.
d. explain why those things that come first do not necessarily cause those things that
come later.
e. designate the difference between normative and positive economics.
Which of the following is not an example of a legal barrier to entry?
a. a public franchise
b. economies of scale
c. a government license
d. a patent
If Japanese real interest rates fall relative to real interest rates in the U.S., the yen will
likely appreciate and the dollar will likely depreciate.
a. True
b. False
The face value of a bond is
a. the dollar amount that a person would receive if he or she were to sell the bond.
b. the dollar amount that a person would receive if he or she were to buy the bond.
c. the total value of payments that will be made over the course of the bond’s life.
d. the dollar amount of the bond’s final payment at maturity.
Which of the following statements is false?
a. On occasion, governments have helped to create and maintain cartels.
b. Once a cartel agreement has been made, cartel members have an incentive to cheat
on the agreement.
c. A single cartel member may be better off with a cartel agreement that all members
abide by (including itself) than with no cartel agreement at all.
d. Cartels are easy to form and to maintain.
The process whereby votes are exchanged to gain support for legislation is referred to
as
a. logrolling.
b. rational ignorance.
c. simple majority voting.
d. special interest voting.
e. a and d
If a theory can predict those things that you should observe if it is right and can also
predict those things that you should observe if it is wrong, it is said to have the virtue of
falsifiability.
a. True
b. False
The latest Taylor Swift album is available to be downloaded for $18.99. Is this price a
rationing device?
a. No, the album will be sold to anyone having the required number of dollars.
b. Yes, because the album will only be purchased by people who are willing and able to
pay $18.99.
c. No, for price to be a rationing device, it must be so high that only one unit of the item
is sold.
d. Yes, since that is a reasonable price.
A network good is a good whose value decreases as the expected number of units sold
increases.
a. True
b. False
Exhibit 2-7
Which of the following statements is true?
a. Points B and D are more efficient than points A and C.
b. If the economy’s PPF is represented by PPF1, points A and B are productive efficient,
while C and D are unattainable.
c. If the economy’s PPF is represented by PPF2, points C and D are productive efficient,
while A and B are unattainable.
d. both a and c
Oil producers expect that oil prices next year will be higher than oil prices this year. As
a result, oil producers are most likely to
a. place more oil on the market this year, thus shifting the present supply curve of oil
rightward.
b. hold some oil off the market this year, thus shifting the present supply curve of oil
leftward.
c. place more oil on the market this year, thus increasing the quantity supplied of oil at
lower but not higher prices.
d. hold some oil off the market this year, thus decreasing the quantity supplied of oil at
lower but not higher prices.
An American computer is priced at $1,200. If the exchange rate between the U.S. dollar
and the Mexican peso is $0.09 = 1 peso, approximately how many pesos would a
Mexican buyer pay for the computer?
a. 13,333 pesos
b. 108 pesos
c. 133.50 pesos
d. 15,075 pesos