How does the decreasing use of DVD players affect the market for prerecorded DVDs?
A) The demand curve for prerecorded DVDs shifts to the right.
B) The quantity of prerecorded DVDs demanded decreases.
C) The quantity of prerecorded DVDs demanded increases.
D) The demand curve for prerecorded DVDs shifts to the left.
By the year 2013, health care spending on Medicare, Medicaid, and other U.S.
government programs as a percentage of GDP had reached a level of
A) 2.2 percent.
B) 6 percent.
C) 17.5 percent.
D) 21.5 percent.
Figure 2-12
Figure 2-12 shows the production possibilities frontiers for Pakistan and Indonesia.
Each country produces two goods, cotton and cashews.
If the two countries have the same amount of resources and the same technological
knowledge, which country has an absolute advantage in the production of cotton?
A) Indonesia
B) They have the same advantage.
C) Pakistan
D) cannot be determined
Figure 4-6 Figure 4-6 shows the
demand and supply curves for the coffee market. The government believes that the
equilibrium price is too low and tries to help almond growers by setting a price floor at
$7.00. What is the value of the deadweight loss after the imposition of the price floor?
A) $600
B) $1,800
C) $2,700
D) $3,300
Studies show that the income elasticity of demand for wine is approximately five. What
does this mean?
A) A 1 percent decrease in the price of wine leads to a 5 percent increase in wine
consumption.
B) A 1 percent increase in income leads to a 5 percent increase in wine consumption.
C) A 5 percent increase in income leads to a 1 percent increase in wine consumption.
D) Wine is a relatively elastic good.
Figure 28-2
Suppose the economy is at point C. If the Fed decreases the money supply so that
inflation falls, the economy will ________ in the long run, holding all else constant.
A) eventually move to point A
B) eventually move to point B
C) stay at point C
D) move to point A and then back to point B
On the 45-degree line diagram, the 45-degree line shows points where real aggregate
expenditure equals
A) unplanned investment.
B) planned investment.
C) real GDP.
D) nominal GDP.
Which of the following statements about positive economic analysis is false?
A) Positive analysis uses an economic model to estimate the costs and benefits of
different course of actions.
B) There is much more disagreement among economists over normative economic
analysis than over positive economic analysis.
C) There is much more disagreement among economists over positive economic
analysis than over normative economic analysis.
D) Unlike normative economic analysis, positive economic analysis can be tested.
Which of the following statements about the Social Security, Medicare, and Medicaid
programs is true?
A) Spending on these three programs will rise from 9.7% of GDP currently to 10.2% of
GDP by 2050.
B) Costs are being driven up by the fact that Americans are living longer and medical
costs are rising substantially.
C) Some economists have argued for decreasing taxes to help with these programs’
funding problems.
D) Some economists have argued for increasing benefits to help with these programs’
funding problems.
When firms analyze the relationship between their level of production and their costs,
they separate the time period involved into
A) morning and evening.
B) 6 months or less; 6 months to 1 year; more than 1 year.
C) a fixed period and a variable period.
D) the short run and the long run.