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
Congress passed the ________ in 1996, the purpose of which was to phase out price
floors and return to a free market in agriculture.
A) Rice and Beans Act
B) Smoot-Hawley Act
C) Agribusiness Act
D) Freedom to Farm Act
A person’s wealth
A) is a measure of how much money the person has.
B) equals the value the person’s assets minus his or her liabilities.
C) is measured independent of his or her current and expected future income.
D) All of the above are correct.
Figure 4-3 Figure 4-3 shows Kendra’s
demand curve for ice-cream cones.
If the market price is $4.00, what is the maximum number of ice cream cones that
Kendra will buy?
A) 0
B) 2
C) 3
D) 4
When an investor buys a corporate bond
A) the investor becomes part owner of the corporation.
B) the principal of the bond is a loan to the corporation.
C) the interest made on the bond represents the bondholder’s limited liability in the
company.
D) the face value of the bond is equal to what the investor paid for the bond.
The three most important international financial centers today are
A) New York, Los Angeles, and London.
B) London, Tokyo, and Beijing.
C) San Francisco, Paris, and Mexico City.
D) Tokyo, London, and New York.
Your roommate is having trouble grasping how monetary policy works. Which of the
following explanations could you use to correctly describe the mechanism by which the
Fed can affect the economy through monetary policy? Increasing the money supply
A) lowers the interest rate, and firms increase investment spending.
B) causes people to spend more because they know prices will rise in the future.
C) raises the interest rate and consumers decrease spending on durable goods.
D) lowers the interest rate, raises the value of the dollar, lowers the prices of exports,
and raises net exports.
Investors in which two countries accounted for about 25 percent of all foreign
purchases of U.S. stocks and bonds in 2012?
A) Canada and the Cayman Islands
B) Japan and China
C) China and Canada
D) Japan and the United Kingdom
The productivity slowdown of the mid-1970s can be explained by which of the
following?
A) excessive use of fiscal policy
B) large increases in research and development
C) a decline in labor quality
D) diminishing marginal returns
The Bureau of Labor Statistics would categorize a person as ________ if they were
temporarily away from their job because they were ill.
A) employed
B) unemployed
C) a discouraged worker
D) out of the labor force