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A drought destroys much of the grape crop. As a result, consumer surplus in the market
for wine:
a. decreases.
b. increases.
c. remains unchanged.
d. depends on the deadweight loss.
Which of the following would not be counted in the U.S. BOP current account?
a. Helen, an American oil engineer, is a paid adviser to Middle Eastern countries in the
area of petroleum extraction.
b. General Motors Corporation owns buildings that are situated in Mexico.
c. France purchases a new jet fighter aircraft from the Boeing Company in the U.S.
d. Martha receives a $50 dividend check on stock she owns in a business in Germany.
e. A wealthy Italian purchases numerous antiques in the United States for his villa.
An analysis of production possibilities curves indicates that the reason why
underdeveloped nations have difficulties increasing their economic growth rates is
because:
a. low population growth rates mean fewer workers to produce food and other
necessities.
b. their production possibilities curves shift in when resources are increased.
c. their production possibilities curves are positively sloped, unlike those in more
developed economies.
d. they must cut back their already meager consumption levels to increase capital
production.
e. the opportunity cost of shifting resources from consumption goods to capital goods is
relatively low.
The circular flow model represents the establishment of market value for:
a. goods and services.
b. wages and salaries.
c. profits and rents.
d. all of these.
If there is a decrease in demand for lettuce, we would expect:
a. both the price and quantity sold to increase.
b. both the price and quantity sold to decrease.
c. the price to decrease and the quantity sold to increase.
d. the price to increase and the quantity sold to decrease.
Losers from inflation include:
a. savers and borrowers.
b. landlords and the government.
c. borrowers and the government.
d. those on a fixed income and borrowers.
e. those on a fixed income and savers.
Exhibit 4-8 Demand and supply curves
In Exhibit 4-8, a movement from A to B in which price has decreased and quantity has
increased is best explained by a(n):
a. increase in supply and demand.
b. decrease in supply and demand.
c. increase in supply that dominates a decrease in demand.
d. increase in demand that dominates a decrease supply.
e. decrease in demand that dominates an increase in supply.
Exhibit 3A-1 Comparison of Market Efficiency and Deadweight Loss
As shown in Exhibit 3A-1, if the market price falls from $2.00 to $1.00, then area ____
appears.
a. ABEFD
b. ABEC
c. EGF
d. BEF
The opportunity cost of your college education is:
a. c and d.
b. d and e.
c. the actual dollar cost of your college education.
d. your best alternative use of the money you spend for a college education.
e. money you could have earned working instead of going to college.
Exhibit 6-1 Business cycle
In Exhibit 6-1, point E represents:
a. recession and a trough.
b. peak and a trough.
c. recession and a peak.
d. recovery and a peak.
The statement of retained earnings accomplishes which of the following?
a. It summarizes income earned and dividends paid over a single period of the business.
b. It accumulates all revenues for the year.
c. It summarizes the balance sheet accounts.
d. It summarizes the capital stock accounts over the life of the business.
Which of the following transactions would be excluded in the capital account?
a. A Japanese citizen purchases a U.S. Treasury bill.
b. A Japanese citizen purchases an office building in Manhattan.
c. A U.S. citizen purchases a share of stock from a Japanese company.
d. An American purchases a Toyota.
Which of the following would cause the U.S. demand curve for Japanese yen to shift to
the right?
a. An increase in the U.S. inflation rate compared to the rate in Japan.
b. A higher real rate of interest on investments in Japan than on investments in the
United States.
c. The popularity of Japanese products increases in the United States.
d. All of these.
Exhibit 2-16 Production possibilities curve
From the information in Exhibit 2-16,
which of the following points on the production possibilities curve are attainable with
the resources and technology currently available?
a. A, B, C, E, U
b. A, B, C, D, W
c. E, U, W
d. B, C, D, U
e. A, B, C, E
Which one of the following will shift the consumption function upward?
a. Higher interest rates.
b. An increase in real assets.
c. Expectations of future economic growth.
d. Lower capacity utilization rates.
e. A tax increase.
If a price ceiling is imposed, then:
a. the market supply curve will shift to the right.
b. the market demand will shift to the left.
c. a shortage of product will result.
d. the government would be required to buy-up the surplus product.
e. the market equilibrium price is below the level the government wishes to achieve.
