Figure 18-7 Figure 18-7 shows the
Lorenz curve for a hypothetical country. The second lowest 20 percent of households
A) earn 12 percent of the society’s total income.
B) earn 16 percent of the society’s total income.
C) earn 28 percent of the society’s total income.
D) earn 40 percent of the society’s total income.
A supply schedule
A) is a table that shows the relationship between the price of a product and the quantity
of the product supplied.
B) is a curve that shows the relationship between the price of a product and the quantity
of the product supplied.
C) is the relationship between the supply of a good and the cost of producing the good.
D) is a table that shows the relationship between the price of a product and the quantity
of the product that producers and consumers are willing to exchange.
________ occurs when economic benefits are distributed fairly.
A) Productive efficiency
B) Allocative efficiency
C) Equality
D) Equity
Table 9-17
Looking at the table above, real average hourly earnings between 2010 and 2011
changed by
A) 1.2%.
B) 4.5%.
C) 9.9%.
D) 14.5%.
Since 1950 there has been a substantial increase in wheat production. The increase in
production has led to a decrease in the price of wheat because of which of the following
factors?
A) The absolute value of the price elasticity of demand for wheat is less than 1 and the
income elasticity of demand for wheat is greater than 1.
B) The absolute value of the price elasticity of demand for wheat is greater than 1 and
wheat is a close substitute for other food products.
C) The absolute value of the price elasticity of demand for wheat is less than 1 and the
income elasticity of demand for wheat is low.
D) The income elasticity of demand for wheat is high and wheat is an inferior good.
Value added equals the market price of the firm’s product minus
A) wages and salaries.
B) the price of intermediate goods.
C) the price of all factors of production.
D) depreciation on plant and equipment.
According to the short-run Phillips curve, which of the following would result in high
rates of unemployment?
A) strong increases in aggregate supply
B) a lower inflation rate
C) strong increases in aggregate demand
D) a higher inflation rate
One reason that consumers and businesses might not act rationally is
A) it is difficult to obtain enough information about the elasticities of demand and
supply.
B) they may not realize their actions are inconsistent with their goals.
C) consumer tastes change constantly.
D) they do not always value fairness when they make choices.
Which of the following functions of money would be violated if inflation were high?
A) unit of account
B) store of value
C) certificate of gold
D) medium of exchange
Table 9-6
Production and
Consumption Production
Without Trade With Trade
Denmark and Belize can produce both clocks and hats. Table 9-6 shows the production
and consumption quantities without trade, and the production numbers with trade.
Which country has a comparative advantage in producing hats?
A) Denmark
B) Belize
C) both countries
D) neither country
According to ________, the economy is normally at potential GDP.
A) the short-run Phillips curve
B) the adaptive expectations theory
C) new Keynesian economists
D) real business cycle models
Table 17-2
What is the profit-maximizing quantity of labor that the firm should hire?
A) 5 units
B) 4 units
C) 3 units
D) 2 units
If planned aggregate expenditure is above potential GDP and planned aggregate
expenditure equals GDP, then
A) actual inventory investment will be less than planned inventory investment.
B) actual inventory investment will be greater than planned inventory investment.
C) the economy is in an expansion.
D) the economy is at full employment.
Figure 5-13 Figure 5-13
illustrates the market for gasoline before and after the government imposes a tax to
bring about the efficient level of gasoline production. The efficient equilibrium quantity
of gasoline is ________ million gallons per month.
A) 20
B) 32
C) 48
D) 56
The nominal interest rate equals the real interest rate ________ the inflation rate.
A) times
B) divided by
C) plus
D) minus
Table 4-4
Table 4-4 shows the demand and supply schedules for labor market in the city of Pixley.
Suppose that the quantity of labor demanded increases by 40,000 at each wage level.
What are the new free market equilibrium hourly wage and the new equilibrium
quantity of labor?
A) W = $8.50; Q = 550,000
B) W = $12.50; Q = 630,000
C) W = $9.50; Q = 570,000
D) W = $11.50; Q = 610,000
Which of the following statements applies to a monopolist but not to a perfectly
competitive firm at their profit maximizing outputs?
A) Marginal revenue is less than price.
B) Marginal revenue equals marginal cost.
C) Price equals marginal cost.
D) Average revenue equals average cost.
Table 9-2
Sarita and Gabriel own S&G Bakery. Table 9-2 lists the number of pies and cakes Sarita
and Gabriel can each bake in one day. Select the statement that accurately interprets the
data in the table.
A) Sarita has an absolute advantage in baking cakes and Gabriel has an absolute
advantage in baking pies.
B) Sarita has an absolute advantage in baking pies and Gabriel has an absolute
advantage in baking cakes.
C) Sarita has an absolute advantage in baking pies and cakes.
D) Gabriel has an absolute advantage in baking pies and cakes.
The process involved in bringing oil to world markets can take years. Substitutes for
oil-based products such as gasoline are limited. As a result
A) the supply of oil is very elastic and the demand for oil is very elastic over short
periods of time.
B) the supply of oil is very inelastic and the demand for gasoline is inelastic over short
periods of time.
C) the supply of oil and the demand for oil shift to the right over short periods of time.
D) the supply of oil and the demand for oil are both perfectly elastic over short periods
of time.
Which of the following is a macroeconomics question?
A) What determines the growth rate of gross domestic product?
B) How is the production quantity of snowboards determined?
C) What factors determine the price of electronic cigarettes?
D) What determines the salaries of Wall Street executives?