If it is assumed that people vote for the candidate who comes closer to matching their
own views, then
a. candidates will label themselves as right-wingers.
b. candidates will label themselves as left-wingers.
c. candidates will label their opponents as middle-of-the-roaders.
d. candidates will discuss the means to accomplishing ends.
e. a candidate who is trailing in the polls will modify his or her position to become
more like his or her opponent.
If you thought the share price of a stock was going to fall, would you be more likely to
buy a call option or a put option?
a. a call option
b. a put option
c. a call option and a put option
d. There is not enough information given to answer this question.
Which of the following statements is true?
a. Special interest groups are more likely to push for policies that increase the size of
the economic pie than to increase their slice of the pie.
b. Special interest groups are likely to push for policies that increase the size of their
slice of the economic pie even if it means that the overall size of the economic pie will
shrink.
c. Special interest groups are more likely to favor policies that increase the size of their
slice of the economic pie than policies that favor economic growth.
d. a and c
e. b and c
Refer to Exhibit 3-16. If there are empty seats for a basketball game at the price P*, the
situation is best depicted on graph
Exhibit 3-16
a. (1), with P* = P1.
b. (2), with P* = P3.
c. (3), with P* = P2.
d. (3), with P* = P3.
e. (4), with P* = P1.
Refer to Exhibit 23-8. What is the total revenue of firm B at profit-maximizing (or
loss-minimizing) level of output?
Exhibit 23-8
a. $300
b. $700
c. $1,050
d. $400
Refer to Exhibit 34-2. The U.S. demand and supply for a good are shown. Under a
policy of free trade, where imports are permitted, the world price is PW. If there is a
policy change such that imports are prohibited, the price becomes PN, consumers’
surplus equals __________ and producers’ surplus equals __________.
Exhibit 34-2
a. PNAB; PNBE
b. BCD; PNDE
c. PNAD; BCD
d. PNAD; PWBDE
e. none of the above
Refer to Exhibit 4-9.Suppose that the government imposes a price ceiling at a price of
$10._________ units would be exchanged in a free market, and ____________ units
would be exchanged with the price ceiling in effect.
a. 150; 220
b. 150; 70
c. 110; 180
d. 150; 90
A Gini coefficient of 1 means there is
a. perfect income equality.
b. perfect income inequality.
c. a more equal distribution of income than before.
d. a less equal distribution of income than before.
e. the same distribution of income as before.
In general, all markets equilibrate at the same speed.
a. True
b. False
The median voter model predicts that
a. both candidates in a two-person race will definitely move toward the middle of the
political spectrum as the election approaches.
b. the candidate (in a two-person race) closer to the middle of the political spectrum
(closer to the median voter) on election day will win the election.
c. conservatives have a higher probability of winning elections than liberals.
d. liberals have a higher probability of winning elections than conservatives.
e. voters will often be rationally ignorant of important political issues.
Refer to Exhibit 38-1. The yield on bond D is approximately
a. 11percent.
b. 3 percent.
c. 6.4 percent.
d. 0.064 percent
Jessica paid $7,000 for a bond with a face value of $6,000. She will be paid $400
annually as long as she holds on to the bond, until the bond’s maturity date. The yield
on the bond is
a. 6.67 percent.
b. 5.71 percent.
c. 15.0 percent.
d. 80.0 percent.
If the marginal productivity of labor is falling, it follows that
a. the average productivity of labor is rising.
b. marginal cost is falling.
c. marginal cost is rising.
d. average productivity of labor is falling.
e. c and d
Economies of scale are said to exist when inputs are increased by some percentage and
output increases by a(n) __________ percentage, causing unit costs to __________.
a. greater; fall
b. smaller; fall
c. greater; rise
d. smaller; rise
e. equal; fall
If an international currency speculator expects that country A will soon be forced to
devalue its currency, the speculator will
a. buy as much of that currency as possible.
b. sell all of his holdings of that currency.
c. not be concerned because the devaluation will affect only the domestic prices of
goods within country A’s borders, not international prices.
d. not be concerned because only a revaluation will affect his or her profits.
Which of the following statements is true?
a. Ceteris paribus, the longer the term of a loan, the lower the interest rate.
b. The nominal interest rate is the interest rate adjusted for expected inflation.
c. Loans that cost more to process and administer will come with higher interest rates
than loans that cost less to process.
d. a and b
e. none of the above
For a price taker, market equilibrium price is $100. At 50 units, MR = MC, ATC = $80,
and AVC = $70. This price taker will
a. earn $100 profits if it produces 50 units of the good.
b. earn $1,000 profits if it produces 50 units.
c. shut down its operation and by doing this minimize its losses.
d. maximize its profits if it produces fewer than 50 units.
e. maximize its profits if it produces more than 50 units.
If the price of good X is $100 and the price of good Y is $40, it follows that the relative
price of one unit of good Y is ___________ unit(s) of good X.
a. 0.40
b. 0.20
c. 2.50
d. 4.00
e. There is not enough information to answer the question.
An American computer is priced at $1,200. If the exchange rate between the U.S. dollar
and the Mexican peso is $0.09 = 1 peso, approximately how many pesos would a
Mexican buyer pay for the computer?
a. 13,333 pesos
b. 108 pesos
c. 133.50 pesos
d. 15,075 pesos
The market demand curve for a given product may be downward sloping even if no
person in that market has a downward sloping demand curve.
a. True
b. False
In a foreign exchange market diagram with dollars per peso on the vertical axis, the
quantity of __________ would be on the horizontal axis, and the U.S. demand for
Mexican goods would help to determine the __________ curve.
a. dollars; demand
b. dollars; supply
c. pesos; demand
d. pesos; supply