If your total satisfaction increases when you consume another unit, your marginal utility
must be
A) increasing.
B) decreasing.
C) negative.
D) positive.
In 1995, the General Agreement on Tariffs and Trade (GATT), which was established in
1948, was replaced by the World Trade Organization (WTO). Why did members of the
GATT push for the establishment of the WTO?
A) The GATT agreement only covered trade in goods. The WTO was created to cover
trade in goods, services and intellectual property.
B) The charter of the GATT had run out and a new organization was needed to promote
international trade.
C) The creation of the European Union (EU) made the GATT obsolete. The WTO was
formed to regulate trade between the EU and other nations.
D) By 1995 tariffs had been eliminated. The WTO was created to reduce non-tariff
trade barriers.
During the Chinese experience with pegging the yuan to the dollar, the yuan was
________. As a result, there was a ________ of dollars on the market, and the Chinese
government had to purchase dollars to maintain the peg.
A) overvalued; shortage
B) undervalued; surplus
C) overvalued; surplus
D) undervalued; shortage
If the Fed orders a contractionary monetary policy, describe what will happen to the
following variables relative to what would have happened without the policy:
a. The money supply
b. Interest rates
c. Investment
d. Consumption
e. Net Exports
f. The aggregate demand curve
g. Real GDP
h. The price level
Figure 6-10
A perfectly inelastic supply curve is shown in
A) Panel A.
B) Panel B.
C) Panel C.
D) Panel D.
The equilibrium wage in a local labor market is $6 per hour. If a minimum wage of $8
per hour is imposed, which of the following will occur?
A) There will be an increase in unemployment.
B) There will be an increase in the quantity of labor demanded by firms.
C) There will be a decrease in the quantity of labor supplied by households.
D) All of the above will occur.
Economists usually assume that people act in a rational, self-interested way. In
explaining how consumers make choices, this means that economists believe
A) consumers will always buy goods and services at the lowest possible prices.
B) consumers spend their incomes to order to accumulate the most goods and services.
C) consumers make choices that will leave them as satisfied as possible given their
incomes, tastes and the prices of goods and services available to them.
D) consumers will spend their incomes and time on activities that benefit themselves as
much as possible, without regard to the welfare of others.
At the beginning of 2013, with the tariff on Chinese tires having expired, Goodyear’s
profits ________ compared to the previous year, and Chinese tire imports ________.
A) rose; increased
B) rose; decreased
C) fell; increased
D) fell; decreased
Figure 4-3
Figure 4-3 shows the market for tiger shrimp. The
market is initially in equilibrium at a price of $15 and a quantity of 80. Now suppose
producers decide to cut output to 40in order to raise the price to $18.
What is the value of producer surplus at the equilibrium price of $15?
A) $80
B) $160
C) $240
D) $400
The value you give today to money you will receive in the future is called the future
payment’s
A) time-sensitive value.
B) future value.
C) present value.
D) historical value.
The marginal revenue product of capital is
A) the cost to the firm of renting an additional unit of capital.
B) the change in the firm’s revenue as a result of employing one more unit of capital,
such as a machine.
C) the economic rent received by hiring an additional unit of capital.
D) the revenue generated by substituting capital for labor in the production process.