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Growth in potential GDP in the United States is estimated to be about
A) 8.25% per year.
B) 5.0% per year.
C) 3.2% per year.
D) 1.5% per year.
Figure 7-2 Figure 7-2 represents the market
for vaccinations. Vaccinations are considered a benefit to society, and the figure shows
both the marginal private benefit and the marginal social benefit from vaccinations.
At the market equilibrium,
A) the marginal cost is equal to the marginal benefit.
B) the marginal cost is greater than the marginal benefit.
C) the marginal cost is less than the marginal benefit.
D) the marginal cost is zero.
All of the following are characteristics of game theoryexcept
A) rules that determine what actions are allowable.
B) payoffs that are the results of the interaction among players' strategies.
C) strategies that players employ to attain their objectives.
D) independence among players.
If GDP grows at a rate of 3% per year, approximately how long will it take for GDP to
double in size?
A) 12 years
B) 21 years
C) 23 years
D) 35 years
Figure 30-5
The Chinese government pegs the yuan to the dollar, at one of the specified exchange
rates on the graph, such that it undervalues its currency. Using the figure above, this
would generate
A) a shortage of yuan equal to 400 million.
B) a shortage of yuan equal to 200 million.
C) a surplus of yuan equal to 200 million.
D) a surplus of yuan equal to 400 million.
E) a surplus of yuan equal to 300 million.
When a financial asset is first sold, the sale takes place in the ________ market, and
subsequent sales take place in the ________ market.
A) stock; bond
B) primary; secondary
C) investment; commercial
D) secure; risk
The first discussion of comparative advantage appears in a book written by
A) Adam Smith.
B) Paul Samuelson.
C) David Portugal.
D) David Ricardo.
Which of the following is not an advantage of cost-plus pricing?
A) It is easy to calculate.
B) It requires little information.
C) If a firm is selling multiple products, it ensures that the firm's prices will cover costs
that are difficult to assign to one product.
D) It ensures that the firm will maximize its profits.
Which of the following refers to the increase in the usefulness of a product as the
number of consumers who use it increases?
A) positive externalities
B) network externalities
C) external marginal utility
D) the impact of celebrity endorsements
If cyclical unemployment is eliminated in the economy, then
A) the economy is considered to be at full employment.
B) the unemployment rate is below the natural rate of unemployment.
C) the unemployment rate is above the natural rate of unemployment.
D) the economy is at less than full employment.
The three most important international financial centers today are
A) New York, Los Angeles, and London.
B) London, Tokyo, and Beijing.
C) San Francisco, Paris, and Mexico City.
D) Tokyo, London, and New York.
If a firm is a natural monopoly, competition from other firms cannot be counted on to
force price down to the level where the company earns zero economic profit. How are
prices usually set in natural monopoly markets in the United States?
A) Each natural monopoly is made a public franchise. The public franchise is then
required to set its price equal to its marginal cost.
B) Natural monopolies are privately owned, but prices proposed by the firms must be
approved by the Antitrust Division of the Department of Justice.
C) Natural monopolies are privately owned and allowed to set their own prices.
Government regulation of the firms would result in greater deadweight losses.
D) Local or state regulatory commissions usually set prices for natural monopolies.
If your nominal wage rises more slowly than the price level, we can say your real wage
has ________ and the purchasing power of a dollar has ________.
A) fallen; fallen
B) fallen; risen
C) risen; risen
D) risen; fallen
According to the U.S. Treasury,
A) the government will not accept cash in payment of taxes.
B) creditors do not have to accept cash in payment of debts.
C) firms do not have to accept cash as payment for goods and services.
D) U.S. dollars must be accepted as payment for any good or service sold in the United
States.
Table 2-16
This table shows the number of labor hours required to produce a motorcycle and a
guitar in Ireland and Scotland.
a. Which country has an absolute advantage in the production of motorcycles?
b. Which country has an absolute advantage in the production of guitars?
c. What is Ireland's opportunity cost of producing one motorcycle?
d. What is Scotland's opportunity cost of producing one motorcycle?
e. What is Ireland's opportunity cost of producing one guitar?
f. What is Scotland's opportunity cost of producing one guitar?
g. If each country specializes in the production of the product in which it has a
comparative advantage, who should produce motorcycles?
h. If each country specializes in the production of the product in which it has a
comparative advantage, who should produce guitars?
In the United States in 2012, the percentage of people who received health insurance
through a government program was about
A) 10%.
B) 16%.
C) 36%.
D) 64%.
Which of the following undermines a firm's ability to engage in price discrimination?
A) the seller's market power
B) the inability to prevent resale of the product from one market segment to another
C) buyers having different elasticities of demand for the product
D) the seller's ability to segment the total market
