1) When the actual rate of inflation is less than the expected rate:
A.the unemployment rate will temporarily rise.
B.firms will increase their output to recoup their falling profits.
C.the unemployment rate will temporarily fall.
D.firms will experience rising profits and thus increase their employment.
2) Assume that the short-run cost and demand data given in the table below confront a
monopolistic competitor selling a given product and engaged in a given amount of
product promotion. Compute the marginal cost and marginal revenue of each unit of
output and enter these figures in the table.
(a)At what output level and at what price will the firm produce in the short run? What
will be the total profit?
(b)What will happen to demand, price, and profit in the long run?
3) arthur sells $100 worth of cotton to bob. bob turns the cotton into cloth, which he
sells to camille for $300. camille uses the cloth to make prom dresses that she sells to
donita for $700. donita sells the dresses for $1200 to kids attending the prom. the total
contribution to gdp of this series of transactions is:
a.$1200
b.$500
c.$2300
d.$1100
4) (Consider This) The process of converting turkey entrails and other organic matter
into fuel oil became profitable when conventional oil reached a price of around
_______ per barrel.
A.$40.
B.$60.
C.$80.
D.$100.
5) Suppose that nominal wages fall and productivity rises in a particular economy.
Other things equal, the aggregate:
A.demand curve will shift leftward.
B.supply curve will shift rightward.
C.supply curve will shift leftward.
D. expenditures curve will shift downward.
6)
refer to the above diagram. an improvement in technology will:
a.shift the production possibilities curve from pp1 to pp2.
b.shift the production possibilities curve from pp2 to pp1.
c.move the economy from a to c along pp1.
d.move the economy from a, b, or c on pp1 to d.
7) the following demand schedule:
if the price elasticity of demand for gasoline is 0.20:
a.the demand for gasoline is linear.
b.a rise in the price of gasoline will reduce total revenue.
c.a 10 percent rise in the price of gasoline will decrease the amount purchased by 2
percent.
d.a 10 percent fall in the price of gasoline will increase the amount purchased by 20
percent.
8) Answer the next question(s) using the following budget information for a
hypothetical economy. Assume that all budget surpluses are use to pay down the public
debt.
Refer to the above data. As a percentage of GDP, the:
A.budget deficit was 3.9 percent in year 4.
B.budget surplus was less than 1 percent in year 6.
C.public debt was 3 percent in year 6.
D.public debt was 12.5 percent in year 1.
9) In 1999 and 2000 the Fed increased the Federal funds rate several times. The Fed’s
purpose was to:
A.prevent rising inflation.
B.reduce the unemployment rate.
C.stimulate economic growth.
D.strengthen the international value of the dollar.
10) which of the following constitutes an implicit cost to the johnston manufacturing
company?
a.payments of wages to its office workers
b.rent paid for the use of equipment owned by the schultz machinery company
c.depreciation charges on company-owned equipment
d.economic profits resulting from current production
11) The labor demand curve of a purely competitive seller:
A.slopes downward because the elasticity of demand is always less than unity.
B.slopes downward because of diminishing marginal productivity.
C.is perfectly elastic at the going wage rate.
D.slopes downward because of diminishing marginal utility.