Refer to Fact 14.1.1. The market for batteries is ________ and the market for jewellery
is ________.
A) monopolistic competition; an oligopoly
B) a monopoly; monopolistic competition
C) a monopoly; perfectly competitive
D) an oligopoly; monopolistic competition
E) an oligopoly; an oligopoly
When a firm cooperates if the other cooperates, but plays the Nash equilibrium strategy
forever if the other cheats, the strategy is a
A) dominant strategy.
B) trigger strategy.
C) tit-for-tat strategy.
D) wimp’s strategy.
E) cooperative strategy.
In Portugal, the opportunity cost of a bale of wool is 3 bottles of wine. In England, the
opportunity cost of 1 bottle of wine is 3 bales of wool. Given this information,
A) England has an absolute advantage in wine production.
B) Portugal has an absolute advantage in wool production.
C) Portugal has a comparative advantage in wine production.
D) Portugal has a comparative advantage in wool production.
E) no trade will occur.
Refer to Figure 9.3.4. Which graphs show the case where good Y is a normal good?
A) (a) and (b)
B) (c) and (d)
C) (a) and (c)
D) (b) and (d)
E) none of the graphs
One consequence of China operating a crawling peg is that China
A) is accumulating U.S. dollar reserves.
B) will eventually run out of foreign reserves, and the yuan will depreciate.
C) will eventually run out of foreign reserves, and the yuan will appreciate.
D) will become more competitive in the long run.
E) is slowing its economic growth.
Use the information below to answer the following question.
Fact 28.2.1 High Food and Energy Prices Here to Stay
On top of rising energy prices, a severe drought, bad harvests, and a poor monsoon
season in Asia have sent grain prices soaring. Globally, this is the third major food price
shock in five years.
Consider Fact 28.2.1. The news clip is describing ________ inflation.
A) cost-push
B) cost-pull
C) demand-pull
D) demand-push
E) expected
Refer to Figure 14.2.6, which shows the demand curve, marginal revenue curve and
cost curves faced by Gap. Gap maximizes its profit if it charges ________ per jacket.
A) $100
B) $95
C) $75
D) $120
E) $90
Which one of the following is an advantage of a corporation relative to a proprietorship
or partnership?
A) Owners have limited liability.
B) Profits are taxed once.
C) difficult to raise money
D) no principal-agent problems
E) simple management structure
Which one of the following statements describes a market that is monopolistically
competitive?
A) There are significant barriers to entry.
B) The products produced by the firms are identical.
C) Many firms compete by making similar but slightly different products.
D) There is a small number of large firms.
E) The product produced by one firm has no close substitutes.
Arbitrage in the foreign exchange market and international loans markets and goods
markets achieves all of the following except
A) the law of one price.
B) no round-trip profit.
C) interest rate parity.
D) purchasing power parity.
E) depreciation across all currencies.
Consider the Lorenz curves in Figure 19.1.2. Which point indicates that the poorest 20
percent of families earn 9 percent of the income?
A) a
B) b
C) c
D) d
E) the origin
Everything else remaining the same, an increase in foreign income
A) increases Canada’s aggregate supply.
B) increases Canada’s aggregate demand.
C) decreases Canada’s aggregate demand.
D) creates a movement downward along Canada’s aggregate demand curve.
E) decreases Canada’s aggregate supply.
The world distribution of income has become more equal since 1970 because
A) average incomes in poorer countries are rising much faster than average incomes in
rich countries.
B) the distribution of income within most countries has become more equal.
C) foreign aid programs from rich nations have increased in size and especially in
effectiveness.
D) technology is used similarly in all countries.
E) the world population is increasing.
If the number of discouraged searchers increases, everything else remaining the same,
then the
A) unemployment rate will increase.
B) employment-to-population ratio will decrease.
C) labour force participation rate will increase.
D) labour force participation rate will decrease.
E) employment-to-population ratio will increase.
If the quantity of loanable funds supplied exceeds the quantity of loanable funds
demanded, then
A) the real interest rate will rise.
B) the supply of loanable funds increases.
C) people will save more.
D) the real interest rate will fall.
E) the demand for loanable funds increases.
Refer to Figure 27.2.2. Equilibrium expenditure is
A) $100 billion.
B) $300 billion.
C) $250 billion.
D) $200 billion.
E) $400 billion.
Real GDP is $2,560 billion, the quantity of money $800 billion, and the velocity of
circulation is 4. The GDP deflator is
A) 125.
B) 6.4.
C) 1,000.
D) 3,200.
E) 3.2.
Who benefits from imports?
A) domestic consumers
B) domestic producers
C) foreign consumers
D) domestic workers in the industry
E) everyone benefits
Use the figure below to answer the following question.
Figure 14.2.7
Refer to Figure 14.2.7. The figure shows the demand, marginal revenue, and cost curves
for a monopolistically competitive firm in the long run. The firm has excess capacity of
A) 4 units.
B) 8 units.
C) 16 units.
D) $10.
E) $5.
An increase in business investment at a constant price level
A) shifts the AE curve downward and decreases equilibrium expenditure.
B) increases the slope of the AE curve and increases equilibrium expenditure.
C) shifts the AE curve upward and increases equilibrium expenditure.
D) decreases the slope of the AE curve and decreases equilibrium expenditure.
E) has no effect on the AE curve.
Refer to Fact 10.1.1. If Chrysler doesn’t focus on maximizing profit, but instead focuses
their production and pricing decisions to “give customers what they want”, Chrysler
would
A) eventually incur a loss and either leave the market or be taken over by another firm.
B) force foreign competition out of the North American car market.
C) eventually force the other North American car producers out of the North American
car market.
D) definitely and permanently increase market share.
E) lower the prices of their vehicles to the point at which price equals opportunity cost.
Suppose Swiss Chalet in Moncton knows that the demand for their half-chicken meals
is elastic. If the manager wants to increase total revenue from half-chicken meal sales,
he should
A) lower the price of a half-chicken meal.
B) not change the price of a half-chicken meal.
C) raise the price of a half-chicken meal.
D) decrease the supply of half-chicken meals.
E) hire fewer employees.
Unemployment caused by permanently decreased demand for horse-drawn carriages is
an example of
A) cyclical unemployment.
B) old-fashioned unemployment.
C) frictional unemployment.
D) structural unemployment.
E) discouraged unemployment.
If all voters are well informed about national defence, the quantity of national defence
provided by the government will be
A) greater than the efficient quantity.
B) less than the efficient quantity.
C) the least costly quantity.
D) the efficient quantity.
E) the quantity that maximizes the budget of the Department of National Defence.
The output of a (not perfect) price-discriminating monopoly is
A) less than a single-price monopoly.
B) more than a single-price monopoly but less than a perfectly competitive industry.
C) the same amount as a perfectly competitive industry.
D) more than a perfectly competitive industry.
E) less than a single-price monopoly but more than a perfectly competitive industry.
Refer to Figure 29.3.1, which shows the outlays and revenues for the government of
Pianoland. Discretionary expansionary fiscal policy would be shown as
A) a movement from left to right along the revenues curve.
B) a movement from left to right along the outlays curve.
C) an upward shift of the revenues curve.
D) an upward shift of the outlays curve.
E) both A and C
Which one of the following will shift the supply curve of good X leftward?
A) a decrease in the wages of workers employed to produce X
B) an increase in the cost of machinery used to produce X
C) a technological improvement in the production of X
D) a situation where quantity demanded exceeds quantity supplied
E) a decrease in the cost of capital used to produce X
Use the figure below to answer the following questions.
Figure 16.2.1
Refer to Figure 16.2.1. The figure shows the marginal private cost curve, the marginal
social cost curve and the market demand curve. If the market is unregulated, then the
quantity produced is
A) zero.
B) Q1.
C) Q2.
D) Q3.
E) too low.
Use the figure below to answer the following questions.
Figure 3.2.1
Point A in Figure 3.2.1 indicates that
A) $1 is the least that consumers are willing to pay for the 4,000th apple.
B) consumers will not be in equilibrium if the price of an apple is $1.
C) consumers will only pay $1 for any apple.
D) if the price is $1, consumers will plan to buy 4,000 apples.
E) if the price is more than $1, consumers will buy 9,000 apples.
Consider Fact 28.4.1. Choose the statement that is incorrect about the Eurozone
economy.
A) The small rise in inflation brings a movement up along the short-run Phillips curve.
B) The large increase in the natural unemployment rate shifts the short-run Phillips
rightward.
C) The tradeoff between inflation and unemployment became worse as the short-run
Phillips curve shifted rightward.
D) A rise in the expected inflation rate shifts the short-run Phillips curve rightward.
E) The large increase in the natural unemployment rate shifts the long-run Phillips
curve rightward.
Marginal cost equals
A) Q/TVC.
B) ΔTFC/ΔTC.
C) ΔTC/ΔQ.
D) ΔQ/ΔTVC.
E) (TC – TVC)/Q.