On an isoquant/isocost graph, the least cost input combination of producing a given
output is
A) any point on the isoquant curve.
B) any point on the isocost curve.
C) given by the tangency between the isoquant curve and the isocost line.
D) one of the intercept values on the graph.
If the federal government implements programs so that the unemployed are more
quickly matched with jobs, then
A) the natural rate of unemployment will increase.
B) the natural rate of unemployment will decrease.
C) the natural rate of unemployment will not change.
D) the natural rate of unemployment could either increase or decrease.
If an American firm opens a production facility in India, the total value of the
production will be included in the
A) gross domestic product of the United States.
B) national income of the United States.
C) gross domestic product of India.
D) national income of India.
If a monopolist’s price is $50 per unit and its marginal cost is $25, then
A) to maximize profit the firm should increase output.
B) to maximize profit the firm should decrease output.
C) to maximize profit the firm should continue to produce the output it is producing.
D) Not enough information is given to say what the firm should do to maximize profit.
If government saving is negative, then
A) T > TR.
B) G > T.
C) T – TR < G.
D) Y + TR < C – T.
Spending on the war in Afghanistan is essentially categorized as government purchases.
How do increases in spending on the war in Afghanistan affect the aggregate demand
curve?
A) They will move the economy up along a stationary aggregate demand curve.
B) They will move the economy down along a stationary aggregate demand curve.
C) They will shift the aggregate demand curve to the left.
D) They will shift the aggregate demand curve to the right.
Zach Greinke and other star baseball players earn millions of dollars annually. These
salaries are due to
A) the greed of players and their agents.
B) the demand and supply of labor in the market for baseball players.
C) the elastic demand for jobs in Major League Baseball.
D) the irrational behavior of team owners.
Which of the following individuals is most likely to purchase a life insurance policy
that pays out an annual income beginning at a certain age until the individual’s death?
A) Ian, who expects to have a short life expectancy because of an illness
B) Bradley who has six young children
C) Avril, a tax attorney who wants to avoid adverse selection
D) Alma, who expects to live a long life, based on her family history
Figure 9-2 Suppose the U.S.
government imposes a $0.40 per pound tariff on rice imports. Figure 9-2 shows the
impact of this tariff. The tariff revenue collected by the government equals the area
A) D + E + F.
B) E.
C) B + D + E + F.
D) C + D + E + F.
The cross-price elasticity between Gillette razors and a related good is -3.4. What
happens to the demand for the related good if the price of Gillette razors falls by 10
percent?
A) The quantity demanded of the related good rises by 3.4 percent.
B) The quantity demanded of the related good falls by 34 percent.
C) The quantity demanded of the related good rises by 34 percent.
D) The quantity demanded of the related good falls by 3.4 percent.
Assume that both the demand curve and the supply curve for DVD players shift to the
left but the supply curve shifts more than the demand curve. As a result
A) both the equilibrium price and quantity of DVD players will decrease.
B) the equilibrium price of DVD players will decrease; the equilibrium quantity may
increase or decrease.
C) the equilibrium price of DVD players may increase or decrease; the equilibrium
quantity will increase.
D) the equilibrium price of DVD players will increase; the equilibrium quantity will
decrease.
In long-run competitive equilibrium, the perfectly competitive firm produces where
price equals minimum average total cost. a. What is this efficiency criterion called?
b. How does it benefit consumers?
If Mort’s House of Flowers sells one dozen roses to different customers at different
prices, economists would consider this an example of
A) price gouging.
B) rational ignorance.
C) arbitrage.
D) price discrimination.
If tablet computers are considered substitutes for e-readers, the decline in the price of
e-readers would, all else equal,
A) increase the demand for tablet computers.
B) decrease the demand for tablet computers.
C) increase the quantity of tablet computers demanded.
D) decrease the quantity of tablet computers demanded.