Figure 10-5
Which of the following statements is true?
A) The consumer gets more utility from bundle than from bundle v.
B) The consumer gets less utility from bundle w than from bundle v.
C) Bundles r, s, t and u all cost the same.
D) Bundlesand w are not affordable.
Expansionary fiscal policy to prevent real GDP from falling below potential real GDP
would cause the inflation rate to be ________ and real GDP to be ________.
A) higher; higher
B) higher; lower
C) lower; higher
D) lower; lower
Which of the following items is likely to have the highest income elasticity of demand?
A) a luxury cruise to several European countries
B) water
C) breakfast cereal
D) a hamburger
Which of the following is not one of the concerns of some policymakers and
economists that the increase in the share of income earned by the 1 percent is damaging
to the country?
A) The higher incomes of the 1 percent may give them disproportionate political
influence through campaign contributions.
B) Countries with high levels of income inequality have lower growth rates than do
countries with more equal distributions of income.
C) further increases in marginal tax rates may reduce work, saving, and investment,
thereby reducing economic growth.
D) Rising income inequality can lead to political unrest.
Figure 1-3
Calculate the area of the trapezoid X.
A) $270
B) $720
C) $810
D) $2,520
If the dollar appreciates, how will aggregate demand in the United States be affected?
A) Aggregate demand will shift to the right as exports increase.
B) Aggregate demand will shift to the right as imports increase.
C) Aggregate demand will shift to the left as imports increase.
D) Aggregate demand will shift to the left as exports increase.
A merger between the Ford Motor Company and General Motors would be an example
of a
A) vertical merger.
B) horizontal merger.
C) conglomerate merger.
D) trust.
Which of the following is an example of adverse selection?
A) The odds of a fire rise after a building is insured because the person with fire
insurance is likely to pay less attention to fire hazards.
B) Someone who did not install fire alarms and a sprinkler system in a building he
owns buys insurance for the building.
C) Someone with automobile insurance drives more recklessly than someone without
insurance.
D) People prefer to buy new cars rather than used cars.
If an economy is growing at a rate of 2.5% per year, how long will it take the economy
to double in size?
A) 60 years
B) 43 years
C) 36 years
D) 28 years
A production possibilities frontier with a bowed outward shape indicates
A) the possibility of inefficient production.
B) constant opportunity costs as more and more of one good is produced.
C) increasing opportunity costs as more and more of one good is produced.
D) decreasing opportunity costs as more and more of one good is produced.