Table 6-3
Over what range of prices is the demand elastic?
A) over the entire range of prices
B) between $14 and $16
C) between $8 and $16
D) between $2 and $8
Table 2-11
Table 2-11 shows the number of labor hours required to produce a digital camera and a
pound of wheat in China and South Korea.
What is South Korea’s opportunity cost of producing one pound of wheat?
A) 60 digital cameras
B) 20 digital cameras
C) 5 digital cameras
D) 0.05 units of a digital camera
Which of the following does not take place in the direct finance market?
A) Ownership in corporations is sold in the form of common stock.
B) Deposits from savers are accumulated and loans made to borrowers.
C) Ownership in corporations is sold in the form of preferred stock.
D) Corporate bonds are sold to savers.
According to the National Bureau of Economic Research, the United States has
experienced ________ recessions since 1950.
A) 4
B) 7
C) 10
D) 15
Which of the following transactions would be included in Japan’s current account?
A) A Japanese citizen purchases 50 shares of Google stock.
B) An American citizen purchases 50 shares of Toshiba stock.
C) A Japanese citizen purchases a new Toyota made in Japan.
D) An American citizen purchases a new Toyota made in Japan.
Which of the following is an objective of fiscal policy?
A) energy independence from Middle East oil
B) health care coverage for all Americans
C) discovering a cure for AIDs
D) high rates of economic growth
E) homeland security
Assume that Anne has $300 to spend on DVDs and CDs. Her optimal consumption of
DVDs and CDs is illustrated by a tangency between a budget line and an indifference
curve. Now assume that the price of CDs rises but the price of DVDs falls. How can
you show that Anne is made better off by these price changes?
A) Show that the price changes shift Anne’s budget line outward; the budget line is
tangent to a higher indifference curve.
B) Show that the price changes move Anne along her budget line to a higher
indifference curve.
C) Show that Anne can afford to buy the optimal combination of DVDs and CDs at
their original prices; then show that Anne can now reach a higher indifference curve.
D) Show that Anne can now afford to buy more DVDs, which give her greater utility
than CDs.
Assume that both the demand curve and the supply curve for MP3 players shift to the
right but the supply curve shifts more than the demand curve. As a result
A) both the equilibrium price and quantity of MP3 players will decrease.
B) the equilibrium price of MP3 players will decrease; the equilibrium quantity will
increase.
C) the equilibrium price of MP3 players may increase or decrease; the equilibrium
quantity will decrease.
D) the equilibrium price of MP3 players will increase; the equilibrium quantity will
decrease.
An increase in the price level ________ real wealth, which causes consumption to
________.
A) lowers; increase
B) lowers; decrease
C) raises; increase
D) raises; decrease
If a bank receives a $20 million discount loan from the Federal Reserve, then the bank’s
reserves will
A) not change.
B) increase by $20 million.
C) increase by less than $20 million.
D) increase by more than $20 million.
Which of the following is true for a monopolistically competitive firm in long-run
equilibrium?
A) P = ATC and MR = MC.
B) P = ATC and P = MC.
C) P > ATC and P > MR.
D) P > MR and MC = ATC.
If Brazil has a comparative advantage relative to Cuba in the production of sugar cane,
then
A) the average cost of production for sugar cane is lower in Brazil than in Cuba.
B) the implicit costs of production for sugar cane are lower in Brazil than in Cuba.
C) the opportunity cost of production for sugar cane is lower in Brazil than in Cuba.
D) the explicit cost of production for sugar cane is lower in Brazil than in Cuba.
All of the following statements are true of the minimum efficient scale exceptone.
Which one?
A) All possible economies of scale have been exhausted.
B) The short-run average total cost curve’s minimum point is equal to the long-run
average cost curve’s minimum point.
C) Any increase in the scale of operation will encounter diseconomies of scale.
D) An increase in the output level will increase profit.