A three-word synonym for the term ceteris paribus is
a. “nothing else changes.”
b. “in my opinion.”
c. “it is proved.”
d. “under this assumption.”
Government can overcome the free rider problem by collecting taxes and using the
funds to provide individuals with nonexcludable public goods that they want to buy but
the market cannot provide.
a. True
b. False
In general, in a given rich country the ______________ the opportunity cost for a
woman of having and raising a child, the _____________ children she will have.
a. higher; fewer
b. higher; more
c. lower; fewer
d. lower; more
e. a and d
Exhibit 4-3
If price P1 is a price ceiling, then
a. there is a surplus in the market for good X.
b. the highest price that can legally be charged in this market is P3.
c. the price at which exchange legally takes place is P2.
d. the price at which exchange legally takes place is P1.
e. both a and b
A potato farmer who signs a futures contract is
a. speculating on the future price of potatoes, hoping it will be higher.
b. speculating on the future price of potatoes, hoping it will be lower.
c. eliminating his exposure to risk from a falling potato price.
d. trying to influence the price of potatoes to rise.
Keynes believed that
a. Say’s law would hold in a laissez-faire economy.
b. the economy would always be near or on its production possibilities frontier.
c. wages and prices are often inflexible in the downward direction.
d. the equilibrium level of output will always be at the full-employment level of output.
The demand for farm goods is income inelastic if the percentage change in quantity
demanded is __________ the percentage change in __________.
a. greater than; income
b. equal to; income
c. less than; income
d. greater than; revenue
e. less than; revenue
Exhibit 3-6
If D1 is the relevant demand curve, an increase in the price of good X may cause
a. demand to shift from D1 to D2.
b. demand to shift from D1 to D3.
c. a movement along D1 from point A to point B.
d. a movement along D1 from point A to point C.
Exhibit 34-8
Assume that the current price of sugar in the United States is $300 per ton (which
includes a $100 per ton tariff on sugar imports). The removal of the $100 per ton tariff
would increase consumers’ surplus by an amount equal to area
a. C.
b. C + G.
c. D + E + F.
d. C + D + E + F + G + H.
e. none of the above
Macroeconomics deals with issues involving large corporations, while microeconomics
exclusively deals with issues involving small businesses.
a. True
b. False
Exhibit 39-4
The price support of $6 per bushel would cost the government
a. $600.
b. $3,000.
c. $3,600.
d. $4,800.
e. $6,600.
Exhibit 16-11
Assume that the starting point is point 1.Suppose that there is a supply-side change
capable of reducing the capacity of the economy to produce.Which of the following
best goes with the diagram shown?
a. New classical theory with policy incorrectly anticipated, bias downward
b. New classical theory with policy incorrectly anticipated, bias upward
c. Real business cycle theory
d. New classical theory with policy unanticipated
e. Policy ineffectiveness proposition (PIP)
When the current state of the economy is such that Real GDP is greater than Natural
Real GDP, the economy is in a(n) ____________________ gap.In this situation, the
(actual) unemployment rate is ___________ than the natural unemployment rate, and
there is a ________________ in the labor market.
a. recessionary; greater; shortage
b. inflationary; less; shortage
c. inflationary; greater; surplus
d. recessionary; greater; surplus
e. recessionary; less; shortage
Exhibit 3-13 —————————–Quantity
Demanded————————————-
Assume that Jose, Kaitlyn, Leah, and Maria are the only buyers in this market. Fill in
blanks (E) and (F) respectively with the market quantity demanded at each given price.
a. 12; 6.75
b. 25; 19
c. 75; 64
d. 48; 27
e. none of the above
Which of the following is not a prediction of the theory on baseball caps and cheating?
a. More people will wear baseball caps on test days than on lecture days.
b. More people will wear baseball caps for multiple choice tests than for essay tests.
c. More people will wear baseball caps when students sit close to each other in class
and are taking a test than when students sit far apart from each other and are taking a
test.
d. Baseball caps are more likely to be worn on backwards (than frontwards) on test days
than on lecture days.
e. none of the above
Look at the following data: The frictional unemployment rate is 3 percent, the natural
unemployment rate is 6.5 percent, and the cyclical unemployment rate is 2.4 percent.
The structural unemployment rate is __________ percent and the actual unemployment
rate (in this economy) is __________ percent.
a. 3; 8.9
b. 3.5; 8.9
c. 3.5; 9.5
d. 5.4; 2.4
e. none of the above
If a U.S. company operates within a competitive environment and chooses to offshore
part of its production process, the resulting change in the firm’s costs should shift the
______________ curve for its product ___________________, thus _____________
the price of the product being produced.
a. supply; leftward; lowering
b. supply; rightward; raising
c. demand rightward; raising
d. supply; rightward; lowering
The chairman of the Board of Governors of the Fed is designated by
____________________ to serve a _______ year term as chairman.
a. the President; four
b. Congress; fourteen
c. the President; twelve
d. Congress; four
Money’s basic advantage as compared to barter is that
a. everybody has money but not everyone has the opportunity to barter.
b. a money system relies on a double coincidence of wants.
c. money reduces transaction costs.
d. money is the only medium you can use to store your wealth.
“Absolute real economic growth” is defined as an increase in __________ from one
period to the next.
a. GDP
b. Real GDP
c. Real GDP per person
d. the inflation rate