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1) The mainstream view among economists is that
a.society faces a tradeoff between unemployment and inflation, but only in the short
run.
b.society faces a tradeoff between unemployment and inflation, but only in the long run.
c.society faces a tradeoff between unemployment and inflation, both in the short run
and in the long run.
d.no tradeoff exists between unemployment and inflation, either in the short run or in
the long run.
2) In monopolistically competitive markets, free entry and exit suggests that
a.the market structure will eventually be characterized by perfect competition in the
long run.
b.all firms earn zero economic profits in the long run.
c.some firms will be able to earn economic profits in the long run.
d.some firms will be forced to incur economic losses in the long run.
3) Maxine's Production Possibilities FrontierDaisy's Production Possibilities
Frontier
6) Politicians often point to wage differentials as evidence of labor-market
discrimination against ethnic minorities and women; however, economists argue against
this approach because people differ in the amount of human capital they have and the
kinds of work they are willing and able to do.
a.True
b.False
7) Trade allows a person to obtain goods at prices that are less than that person's
opportunity cost because each person specializes in the activity for which he or she has
the lower opportunity cost.
a.True
b.False
8) In general, demand curves for necessities tend to be price elastic.
a.True
b.False
9) Figure 10-9
a.$2,000
b.$4,000
c.$7,000
d.$12,000
