The invention of new mining methods will affect price through the supply side.
a. True
b. False
If a firm shuts down, its
a. fixed costs remain unchanged.
b. revenue will fall to zero.
c. short-run variable costs will fall to zero.
d. All of the above are correct.
An unplanned economy operating under laissez faire
a. allocates resources by market supply and demand.
b. cannot respond to basic questions about production and distribution.
c. shows breakdowns with frequent surpluses and shortages.
d. allocates goods and services under government subsidy.
A recession is a period of time in which real GDP falls.
a. True
b. False
A cartel is a group of sellers of a single product who have joined together in order to
enjoy the advantages of perfect competition.
a. True
b. False
The rate of interest is the price at which money is borrowed and loaned.
a. True
b. False
If an economy is producing inefficiently, it is
a. possible to increase production of all goods simultaneously.
b. possible to increase production of one good at the expense of another.
c. not possible to increase production of any good.
d. not possible to increase economic growth.
e. possible to increase production with no effort.
A recession can best be defined as a period of time in which
a. total output of the economy falls.
b. total output of the economy rises very slowly.
c. total unemployment falls.
d. total international trade fails to rise.
e. Both a and c
As productivity in the manufacturing sector increases, the service sector must keep pace
or it will become more expensive in the long run.
a. True
b. False
Since a monopolist has a unique product, it makes no sense for the firm to advertise.
a. True
b. False
The increasing share of women in the labor force may have contributed to the decrease
in unionization.
a. True
b. False
Suppose that one could determine the amount of income that is pure economic rent. If a
law were passed which taxed 50 percent of that rent, what would happen to the amount
of work that people perform?
a. It would increase as people seek higher income.
b. It would be unchanged.
c. It would decrease as people suffer a loss of income.
d. It would increase for some and decrease for others.
In the U.S., the share of taxes ____ during the early years of George W. Bush’s
presidency and ____ since then.
a. decreased; increased somewhat
b. decreased; further decreased
c. increased; further increased
d. increased; decreased somewhat
e. increased; remained constant
When the interest rate is higher, the difference between the value of money today and
tomorrow is smaller.
a. True
b. False
In the long run under monopoly,
a. the MC curve will lie to the left of the output at which AC and AR meet.
b. MC = MR = P.
c. MC = MR = AR.
d. the MC curve will lie to the right of the output at which AC and AR meet.
The scarcity of physical resources such as fuel means:
a. we should keep our homes cooler in the winter
b. we should keep our homes warmer in the summer
c. we should live close to our jobs to conserve fuel
d. all of these are true.
A consumer will consume the combination of goods at the point of tangency between
the budget line and the indifference curve.
a. True
b. False