A shift in the demand curve occurs when
a. suppliers place more goods on the market.
b. the price of a good rises.
c. consumers want to buy more or less than before at a given price.
d. the price of the good falls.
A worker’s marginal revenue product depends upon his average product.
a. True
b. False
Figure 11-3
In Figure 11-3, which line represents the change in the consumption schedule caused by
a cut in the personal income tax as advocated by President George W. Bush in 2001?
a. C1 in graph (a)
b. C2 in graph (a)
c. C1 in graph (b)
d. C2 in graph (b)
A horizontal demand curve is perfectly elastic because a change in price will not induce
a change in quantity demanded.
a. True
b. False
At an equilibrium price for gasoline,
a. everyone with the desire and the income to buy gasoline at that price can do so.
b. surpluses are inevitable.
c. inherent market forces will eventually change the quantities demanded and supplied.
d. suppliers must be using the most efficient oil-drilling equipment available.
Capital gains are profits that you earn on the sale of your
a. labor.
b. money.
c. financial asset.
d. economics textbook.
If the aggregate supply curve shifts outward, then unemployment
a. and inflation will both decrease.
b. and inflation will both increase.
c. will increase and inflation will decrease.
d. will decrease and inflation will increase.
A higher price level leads to:
a. lower real wealth
b. lower real income
c. a lower consumption function
d. All of the above.
e. All of the above except b.
On the surface, usury laws are designed to protect consumers from exorbitant interest
rates.
a. True
b. False
The production possibilities frontier illustrates
a. the constant rate of technological progress.
b. the fundamental concept of scarcity.
c. the rapid growth of the U.S. economy.
d. that guns always trade for butter.
Currently, in the United States, you can expect the discount rate to be
a. used often to change the money supply.
b. raised in periods of recession.
c. fixed at the bank rate.
d. adjusted to follow market rates of interest.
A large tax cut in the United States should lead to an increase in the trade deficit.
a. True
b. False
Figure 9-1
In Figure 9-1,
a. the 45-degree line represents all points where spending equals output.
b. to the left of equilibrium GDP, inventories will fall.
c. to the right of equilibrium GDP, inventories will rise.
d. All of the above are correct.
Figure 11-9
In Figure 11-9, which of the following is true?
a. MC = P
b. MC = MR
c. MU > MR
d. MU < MC
Equilibrium in a market is
a. a situation in which there are no inherent forces that produce change.
b. the natural state of affairs in the market.
c. the actual price and quantity that will exist in a market.
d. the best price and quantity that can exist in a market.
e. All of the above are correct.
Throughout the period from 1996 to 2010, U.S. Real GDP growth has been
a. constant.
b. declining.
c. steadily increasing.
d. fluctuating.
The demand curve depicts quantities demanded that have been gathered as prices have
changed over time.
a. True
b. False
Modern antitrust policy began in response to
a. abuses of market power in the oil industry.
b. the inability of railroads to compete effectively with the new trucking industry.
c. the charge that the rights of big business were not adequately protected.
d. attempts by business leaders to pack Congress with corrupt legislators.
The main advantage of money market deposit accounts over traditional checking
accounts is the ease of check writing.
a. True
b. False
Capital is a flow of resources into the production of investment goods.
a. True
b. False
When bond prices rise,
a. stock prices must fall.
b. interest rates must fall.
c. interest rates must rise.
d. bankruptcies generally increase.
Takeovers and takeover attempts waste valuable capital.
a. True
b. False
When the housing bubble burst, prices fell particularly severely in
a. Georgia.
b. Nevada.
c. Pennsylvania.
d. West Virginia.
A sales-maximizing firm produces the output level at which
a. MR = P.
b. MR = MC.
c. MR = AC.
d. MR = 0.
The rule that states that the marginal revenue product equal to price does not hold when
there are more than two inputs.
a. True
b. False
After a number of acquisitions, Air American controls 75 percent of the U.S. market. It
has been charged with “monopolizing” the U.S. air markets by the Justice Department.
In its defense, the airline would want to introduce evidence that
a. cross elasticities for air and rail travel were very high.
b. income elasticities for air and rail travel were very high.
c. price elasticity for air, rail, and auto travel were negative.
d. management always considered the public interest when setting prices.
Over the course of the twentieth century there has been no pronounced tendency for
concentration in the United States to increase.
a. True
b. False
“People who make more money should pay higher taxes” is an example of
a. the benefits principle.
b. horizontal equity.
c. vertical efficiency.
d. the ability-to-pay principle.
If American imports run chronically above our exports, a trade deficit develops.
a. True
b. False
If the price falls below minimum SRAVC, the quantity supplied by the firm will be
a. the quantity at minimum MC.
b. zero.
c. the quantity at the point where MC intersects AC.
d. the quantity at minimum AC.