What does the Herfindahl-Hirschman Index value near 10,000 imply about the market?
a. Pure monopoly
b. Perfect competition
c. Monopolistic competition
d. Oligopoly
The statement “Resources employed in producing X are better suited to making Y” is
another way of saying resources
a. are specialized.
b. are scarce.
c. are used inefficiently.
d. are unproductive.
e. have no opportunity cost.
The discount rate is the rate that the
a. Treasury pays on savings bonds.
b. Fed charges member banks.
c. Fed charges on government securities.
d. Fed charges the Treasury for sales of securities.
In the U.S., health care may be expensive, but Americans enjoy the longest
life-expectancy of any nation.
a. True
b. False
Given its size, the United States does not have to worry about limitations on resources.
a. True
b. False
In perfect competition, an increase in fixed costs will eventually cause all except
a. reduction in industry output.
b. reduction in a firm’s output.
c. reduction in the number of firms.
d. decrease in industry supply.
A firm’s total profit is the difference between its sales and what it pays out in costs.
a. True
b. False
The sales tax is generally considered to be a regressive tax.
a. True
b. False
The short-run supply curve for a perfectly competitive firm is that portion of the MC
curve above the AVC curve.
a. True
b. False
Teenage unemployment rates tend to be substantially higher than the overall
unemployment rate.
a. True
b. False
Which of the following might limit the money creation process to an amount less than
the potential amount?
a. bank pursuit of profits
b. public holding some cash
c. business demand for loan
d. increased use of credit cards
An industry supply curve is the horizontal summation of the supply curves of all of the
individual firms.
a. True
b. False
Which of the following is not part of the investment component of GDP?
a. residential construction
b. plant, equipment, and software
c. net imports
d. business structures
Marginal land is land
a. that is unprofitable under any circumstances.
b. that is the most productive in the area.
c. that is on the borderline of profitability.
d. of average productivity.
By 2012, the poverty line for a typical family of four stood at about $23,250.
a. True
b. False
If a 10-year Treasury bond pays 1.5% and a 10-year corporate bond pays 6.0%, what is
the interest rate spread on this particular corporate bond?
a. 4.0%
b. 4.5%
c. 7.5%
d. 9.0%
From the mid-1980s until late 2007, the less world’s less volatile economies were
probably due, at least in part, to good luck.
a. True
b. False
In a market with only one firm (a pure monopoly), the Herfindahl-Hirschman Index
(HHI) would equal 10,000.
a. True
b. False
What is the approximate number of Americans who have jobs?
a. 144 million
b. 200 million
c. 290 million
d. 310 million
e. 3.1 billion
Crowding out can best be defined as:
a. private investment increases growth rates and decreases deficits.
b. restrictive monetary policy raises interest rates and decreases investment.
c. government deficits increase interest rates and decrease investment.
d. consumption spending increases interest rates and decreases investment.
When workers purchase more leisure and work less at higher wages, the supply curve
a. is vertical.
b. is horizontal.
c. is positively sloped.
d. is backward bending.
A look at the historical data indicates that velocity for M1
a. has been more variable than the velocity for M2, but both have been fairly constant
for the past 65 years.
b. and M2 have both trended downward, but velocity for M2 has been more erratic than
velocity for M11.
c. has been fairly constant for the past 65 years, but velocity for M2 has trended
downward.
d. has trended upward in the past 65 years, but velocity for M2 has been more constant.
Labor contracts often fix wages for more than one year.
a. True
b. False
Increasing concentration always means an industry has become effectively
monopolized.
a. True
b. False
The price of a currency will decrease when quantity demanded is less than quantity
supplied.
a. True
b. False
Human capital is the amount of
a. capital available to workforce.
b. skill embodied in the workforce.
c. output the labor force can produce.
d. healthy work force in the total population.
Figure 7-17
Which of the following statements must be true when a firm makes choices that put it at
point A in Figure 7-17?
a. The firm is minimizing its cost of producing 100 units of output.
b. The ratio of the marginal physical products of labor and of land equals the ratio of the
prices of labor and of land.
c. The firm first decided how much output to produce and then decided how to produce
it.
d. All of the above are true.
The Troubled Asset Relief Program (TARP) totaled ____ and the fiscal stimulus
package of 2009 totaled ____.
a. $1.4 trillion; $800 billion
b. $1.4 trillion; $700 billion
c. $700 billion; $800 billion
d. $700 billion; $1.4 trillion
The actions of speculators in a market tend to shift the ____ when the price of the good
is low and thereby ____ the price.
a. demand curve out; raise
b. demand curve in; lower
c. supply curve out; lower
d. supply curve in; raise
The relationships between elasticity and total revenue hold because:
a. total revenue equals price divided by quantity demanded
b. total revenue equals price times quantity demanded
c. a drop in price has two opposing effects on the two components of the formula
d. both b and c
Which of the following would lead you to predict an upward shift in the consumption
function?
a. a decrease in the value of real wealth
b. a decrease in disposable income
c. an increase in the value of real wealth
d. an increase in the price level
The demand for labor is a derived demand.
a. True
b. False
Who among the following is most likely to favor an appreciation of the U.S. dollar?
a. a German professor visiting Chicago
b. an American farmer who depends on exports
c. an American professor on a tour of Austrian universities
d. Disney World in Orlando, Florida, a popular destination for foreign tourists
A strong dollar helps U.S. exporters and hurts importers.
a. True
b. False
Currently, college graduates are earning about ____ more than high school grads over
the course of their careers.
a. $100,000
b. $1,000,000
c. 25%
d. 60%