The ________ is a measure of the price level and is calculated by dividing ________ by
________ and multiplying by 100.
A) CPI; real GDP; nominal GDP
B) GDP deflator; real GDP; nominal GDP
C) GDP deflator; nominal GDP; real GDP
D) PPI; nominal GDP; real GDP
E) PPI; real GDP; nominal GDP
Which of the following countries had the lowest GDP per capita in 2012?
A) France
B) Mexico
C) Democratic Republic of the Congo
D) Argentina
Figure 17-3
InPanel A, at high wages (segment iii),
A) the price of leisure is rising relative to the price of labor.
B) the price of leisure is falling relative to the price of labor.
C) laborers work more as wages increase.
D) labor suppliers take more leisure as wages increase.
Tax incidence is the actual division of the
A) burden of the tax between buyers and sellers in a market.
B) tax revenues between government agencies.
C) tax revenues between the federal government and state governments.
D) population into Different tax brackets.
Which of the following transactions represents the purchase of a final good?
A) Starbucks purchases coffee beans.
B) Delta buys a new European-made jetliner.
C) Apple computer buys computer processors from Intel.
D) Your father buys a new John Deere riding lawn mower.
During the turmoil in the market for subprime mortgages in 2007 and 2008, the Fed
increased the volume of discount loans. The goal of the Fed was to
A) reduce the rate of inflation.
B) stimulate economic growth.
C) reduce unemployment.
D) reassure financial markets and promote financial stability.
E) reduce the current account deficit.
Mr. Peabody chooses to invest in companies that produce goods and services at the
lowest possible cost. Mr. Peabody is investing in companies that are
A) allocatively efficient.
B) productively efficient.
C) guaranteed to make a profit.
D) all of the above.
Suppose the labor market is in equilibrium. Which of the following statements is false?
A) The equilibrium wage rate is equal to the marginal revenue product of labor.
B) At the equilibrium wage, the quantity of labor demanded equals the quantity of labor
supplied.
C) Some workers will earn more than the equilibrium wage.
D) At the equilibrium wage, the demand for labor is equal to the supply of labor.
The demand curve for an individual seller’s product in perfect competition is
A) the same as market demand.
B) downward sloping.
C) vertical.
D) horizontal.
Figure 3-7
Assume that the graphs in this figure represent the demand and supply curves for
Fruitopia, a soft drink. Which panel describes what happens in the market for Fruitopia
when the price of Snapple, a substitute product, decreases?
A) Panel (a)
B) Panel (b)
C) Panel (c)
D) Panel (d)
National income equals gross national product minus
A) imports.
B) depreciation.
C) inventories.
D) changes in inventories.
Table 4-12
The equations above describe the demand and supply for Bubba’s Fried Jellybeans.
What are the equilibrium price and quantity (in thousands) for Bubba’s Fried
Jellybeans?
A) $80 and 40 thousand
B) $60 and 10 thousand
C) $20 and 20 thousand
D) $40 and 5 thousand
The decision about what goods and services will be produced made in a
centrally-planned economy is made by
A) lawmakers in the government deciding on what will be produced.
B) workers deciding to produce only what the boss says must be produced.
C) producers deciding what society wants most.
D) consumers and firms choosing which goods and services to buy or produce.
E) consumers dictating to firms what they need most.
The Federal Reserve responded to the 2008 financial crisis in several ways. Which of
the following is not one of the ways the Fed responded?
A) The Fed made investment banks eligible for discount loans.
B) The Fed lent investment banks Treasury securities in exchange for mortgage-backed
securities.
C) The Fed lowered the required reserve ratio on demand deposit accounts in order to
increase the amount of bank reserves.
D) The Fed helped JP Morgan to acquire Bear Stearns, a nearly bankrupt investment
bank.
An advantage of the personal consumption expenditures price index (PCE) over the
Consumer Price Index (CPI) as a measure of inflation is that the PCE
A) is a more narrow, focused measure of inflation.
B) is a chain-type price index that allows the mix of products to change each year.
C) includes the prices of industrial equipment.
D) includes the prices of goods, but not services.
Table 2-17
Table 2-17 shows the output per week of two people, James and Lucy. They can either
devote their time to making wagons or making tricycles.
What is Lucy’s opportunity cost of making a wagon?
A) 3/4 of a wagon
B) 3 wagons
C) 1 1/3 tricycles
D) 2 tricycles
Figure 14-2
The
government of a developing country plans to award two firms, Gigacom and
Xenophone, the exclusive rights to share the market for high speed Internet service.
Gigacom and Xenophone can both provide the service either via television cable lines
or via direct subscriber line (dbl). Suppose the government is considering a proposal to
delay one firm’s entry into the market on the grounds that it wants to prevent “harmful”
competition. Figure 14-2 shows the decision tree for this game.
If the government delays Gigacom’s entry and Xenophone moves first, is a threat by
Gigacom that it will provide DSL service if Gigacom provides cable service a credible
threat?
A) No, because Gigacom will lose $4.5 million in profits if it carries out its threat.
B) Yes, because Gigacom’s DSL service will drive Xenophone out of business.
C) No, because as a second mover, it has no choice but to abide by the choices of the
first mover.
D) Yes, Xenophone stands to lose $3 million in profit.
In the long run, ________ differences in economic growth rates result in ________
differences in GDP per capita.
A) large; small
B) large; no
C) small; large
D) small; no
As the value of the Gini coefficient approaches zero,
A) income distribution becomes less unequal.
B) income distribution becomes more unequal.
C) the percentage of the population under the poverty line increases.
D) the percentage of the population under the poverty line decreases.