Which of the following is not a flow in the circular flow model?
A) the flow of goods and services and the flow of resources to produce goods and
services
B) the flow of profit and the flow of revenue
C) the flow of income earned by households and the flow of expenditures incurred by
households
D) the flow of revenue received by producers and the flow of payments to resource
owners
When goods and services are produced at the lowest possible cost, ________ occurs.
A) allocative efficiency
B) productive efficiency
C) equity
D) efficient central planning
When the average total cost is $16 and the total cost is $800, then the number of units
the firm is producing is
A) impossible to determine with the information given.
B) 12,800.
C) 784.
D) 50.
Figure 9-5
Bragabong currently both produces
and imports almonds. The government of Bragabong decides to restrict international
trade in almonds by imposing a quota that allows imports of only 10 million kilos each
year. Figure 9-5 shows the estimated demand and supply curves for almonds in
Bragabong and the results of imposing the quota.
Answer questions a-j .
a. If there is no quota what is the domestic price of almonds and what is the quantity of
almonds demanded by consumers?
b. If there is no quota how many kilos of almonds would domestic producers supply
and what quantity would be imported?
c. If there is no quota what is the dollar value of consumer surplus?
d. If there is no quota what is the dollar value of producer surplus received by producers
in Bragabong?
e. If there is no quota what is the revenue received by foreign producers who supply
almonds to Bragabong?
f. With a quota in place what is the price that consumers of Bragabong must now pay
and what is the quantity demanded?
g. With a quota in place what is the dollar value of consumer surplus? Are consumers
better off?
h. With a quota in place what is the dollar value of producer surplus received by
producers in Bragabong? Are domestic producers better off?
i. Calculate the revenue to foreign producers who are granted permission to sell in
Bragabong after the imposition of the quota.
j. Calculate the deadweight loss as a result of the quota.
Which of the following would explain why economic profit might be less than
accounting profit?
A) A firm’s net income is less than its accounting profit.
B) A firm has only explicit costs.
C) A firm’s net income is greater than its accounting profit.
D) A firm has implicit costs as well as explicit costs.
The decline in the value of the yen after 2012 occurred as a result of the Japanese
central bank, the Bank of Japan, following an expansionary monetary policy. Investors
expected that the result would be lower
nominal Japanese interest rates and a higher inflation rate. In response, investors
________, causing the value of the yen to decline against the dollar.
A) sold Japanese financial assets and bought U.S. financial assets
B) sold Japanese financial assets and sold U.S. financial assets
C) bought Japanese financial assets and sold U.S. financial assets
D) bought Japanese financial assets and bought U.S. financial assets
Figure 3-5
At a price of $15
A) there would be a surplus of 4 units.
B) there would be a shortage of 2 units.
C) there would be a surplus of 6 units.
D) there would be a shortage of 4 units.
An increase in the price level will
A) shift the aggregate demand curve to the left.
B) shift the aggregate demand curve to the right.
C) move the economy up along a stationary aggregate demand curve.
D) move the economy down along a stationary aggregate demand curve.
Mortgages issued to borrowers who fail to document that their incomes are high enough
to afford their mortgage payments are known as ________ mortgages.
A) subprime
B) Alt-A
C) gray market
D) reciprocal
If the price of smartphones was to increase, then
A) the demand for smartphone apps would decrease.
B) the demand for smartphone apps would increase.
C) the quantity of smartphone apps demanded would increase.
D) the quantity of smartphone apps demanded would decrease.
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.
All of the following are sources of comparative advantage except
A) climate and natural resources.
B) relative abundance of labor and capital.
C) a strong foreign currency exchange rate.
D) technology.
The seven members of the Board of Governors of the Federal Reserve are appointed by
A) Congress.
B) the President.
C) the Governors of the States.
D) leaders in the banking industry.
E) the Treasury Department.
The law of one price
A) states that consumers can only buy one good or service at a time.
B) is a law passed by Congress that prohibits firms from selling a product at two
different prices in the same market at the same time.
C) states that consumers will pay any price for a product that has a perfectly inelastic
demand curve.
D) states that identical products should sell for the same price everywhere.
Congressman Gallstone seeks support from his colleagues for a bill he sponsors that
will establish a new national park in his district. He offers to support Congresswoman
Disrail’s proposal to build a new library in her district in exchange for her vote for his
national park bill. This is an example of
A) regulatory capture.
B) logrolling.
C) rational ignorance.
D) government failure.