a. Define the term “globalization.”
b. Describe the benefits of globalization.
c. Who is likely to oppose globalization and why?
Which of the following items is likely to have the highest income elasticity of demand?
A) a luxury cruise to several European countries
B) water
C) breakfast cereal
D) a hamburger
Which of the following is an implicit cost of production?
A) the loss in the value of capital equipment due to wear and tear
B) the salary you pay yourself for running your business
C) the utility bill paid to water, electricity, and natural gas companies
D) the interest you pay your mother for the money she loaned you to start your business
A firm’s efforts to increase profit by price discrimination can be undermined by
A) arbitrage by buyers.
B) consumer ignorance.
C) differences in elasticity of demand.
D) seller market power.
The body that is responsible for dating the beginning and ending dates for a recession is
A) the Fed.
B) the Congress.
C) the National Bureau of Economic Research.
D) the Bureau of Economic Analysis.
Figure 15-14
In the figure above, if the economy in Year 1 is at point A and expected in Year 2 to be
at point B, then the appropriate monetary policy by the Federal Reserve would be to
A) lower interest rates.
B) raise interest rates.
C) lower income taxes.
D) raise income taxes.
A marginal tax rate is calculated as
A) total taxable income · by taxes paid.
B) taxes paid · total taxable income.
C) change in taxes paid · the change in total taxable income.
D) change in taxable income · change in taxes paid.
Table 13-2
Eco Energy is a monopolistically competitive producer of a sports beverage called
Power On. Table 13-2 shows the firm’s demand and cost schedules. What is the output
(Q) that maximizes profit and what is the price (P) charged?
A) P = $55; Q = 5 cases
B) P = $50; Q = 6 cases
C) P = $45; Q = 7 cases
D) P = $40; Q = 8 cases
Last week, six Swedish kronor could purchase one U.S. dollar. This week, it takes eight
Swedish kronor to purchase one U.S. dollar. This change in the value of the dollar will
________ exports from the United States to Sweden and ________ U.S. aggregate
demand.
A) increase; increase
B) decrease; decrease
C) increase; decrease
D) decrease; increase
Since the 1950s,
A) the United States has not experienced a business cycle.
B) U.S. business cycle fluctuations have becomes more volatile.
C) U.S. business cycle fluctuations have become milder.
D) U.S. business cycle fluctuations have not changed.
Optimal decisions are made
A) in the marketplace.
B) if information about prices and marginal utilities is known.
C) when marginal utility is minimized.
D) at the margin.
An oligopolist’s demand curve is
A) identical to that of a perfectly competitive firm.
B) identical to that of a monopolistically competitive firm.
C) vertical on a price quantity diagram.
D) unknown because a response of firms to price changes by rivals is uncertain.
The Congressional Budget Office estimates that the additional taxes and fees enacted
under the ACA will not even cover half of the true cost of the ACA.
The largest government-run health care system in the world, with 1.7 million
employees, is the National Health Service (NHS) in the United Kingdom. The NHS
receives its funding primarily from
A) tariffs.
B) the World Health Organization.
C) income taxes.
D) private businesses.
What is economic profit?
A) gross revenue minus explicit costs
B) gross revenue minus implicit costs
C) gross revenue minus explicit and implicit costs
D) the same as accounting profit
Who owns a corporation?
A) the board of directors
B) the stockholders
C) the employees
D) the CEO
According to census figures and the Congressional Budget Office, the number of people
________ is projected to increase and the number of people ________ is projected to
decrease by the year 2020.
A) who are uninsured; who are insured
B) who are uninsured; age 65 and older
C) age 65 and older; who are uninsured
D) who are insured; age 65 and older
Laura’s Pizza Place incurs $800,000 per year in explicit costs and $100,000 in implicit
costs. The restaurant earns $1.3 million in revenues. Based on this information, what is
accounting profit for Laura’s Pizza Place?
A) $200,000
B) $400,000
C) $500,000
D) $900,000
Markets promote
A) equity and competition.
B) voluntary exchange and equality.
C) equity and equality.
D) competition and voluntary exchange.