Figure 2-4
Figure 2-4 shows various points on three Different production possibilities frontiers for
a nation.
A movement from ________ could occur because of an influx of immigrant labor.
A) W to V
B) X to W
C) W to Z
D) Y to W
A full-time student who is not working is categorized as
A) unemployed.
B) employed.
C) not in the labor force.
D) a discouraged worker.
E) frictionally unemployed.
Robert Lucas, a Nobel laureate in economics, argues that there are ________ returns to
human capital.
A) increasing
B) decreasing
C) constant
D) negative
If a country passes a labor law limiting the number of hours of work per week, GDP
would ________ and leisure would ________.
A) decrease; increase
B) increase; increase
C) decrease; decrease
D) increase; decrease
Figure 2-4
Figure 2-4 shows various points on three Different production possibilities frontiers for
a nation.
Consider the following movements:
a. from point V to point W
b. from point W to point Y
c. from point Y to point Z Which of the movements listed above represents economic
growth?
A) a, b, and c
B) b and c only
C) a only
D) b only
When every good or service is produced up to the point where the last unit provides a
marginal benefit to society equal to the marginal cost of producing it, ________ occurs.
A) allocative efficiency
B) productive efficiency
C) equity
D) efficient central planning
Before 1980, most U.S. corporations raised funds
A) in U.S. and foreign banks.
B) in U.S. stock and bond markets or in U.S. banks.
C) in U.S. stock and bond markets or in foreign capital markets.
D) in U.S. banks or in foreign capital markets.
Figure 4-21
The figure above represents demand and supply in the market for cigarettes. Use the
diagram to answer the following questions.
a. How much is the government tax on each pack of cigarettes?
b. What portion of the unit tax is paid by consumers?
c. What portion of the unit tax is paid by producers?
d. What is the quantity sold after the imposition of the tax?
e. What is the after-tax revenue per pack received by producers?
f. What is the total tax revenue collected by the government?
g. What is the value of the excess burden of the tax?
h. Is this cigarette tax efficient?
How are the fundamental economic decisions determined in China?
A) Individuals, firms, and the government interact in a market to make these economic
decisions.
B) These decisions are made by the country’s elders who have had much experience in
answering these questions.
C) The government decides because China is a centrally planned economy.
D) The United Nations decides because China is a developing economy.
Article Summary. Since 2008, the United States has been involved in trade
negotiations over the Trans-Pacific Partnership (TPP), a free trade agreement with
11 other countries on both sides of the Pacific Ocean. One area of the negotiations
involves patents and intellectual property rights in the pharmaceutical industry. A
number of developing countries have ignored international agreements concerning
patents and intellectual property rights as a way to benefit their domestic
pharmaceutical industries, to the detriment of those companies which have spent
considerable time and money developing new medicines. For every 5,000 to 10,000
experimental drugs contemplated, only one will typically gain FDA approval, and
this occurs only after up to 15 years of research at an average cost of more than $1
billion. Also, 30 percent of the U.S. workforce is either directly or indirectly
employed in the pharmaceutical industry, so protection of these intellectual
property rights is very important for the U.S. economy.
Source: Doug Schoen, “Intellectual Property Rights Matter,” Forbes, September
24, 2013. If these developing countries continue to ignore the international agreements
which protect intellectual property rights, all of the following would most likely occur
except
A) pharmaceutical companies would decrease investment in the development of more
experimental drugs.
B) pharmaceutical companies would consider expanding operations to these developing
countries.
C) fewer patents would be issued to pharmaceutical companies.
D) fewer dollars would be spent on the development of new medicines.
In a closed economy, what is the relationship between saving and investment?
A) Saving is greater than investment.
B) Investment is greater than saving.
C) Investment is equal to saving.
D) Investment may be greater or smaller than saving.
If disposable income falls by $40 billion and consumption falls by $30 billion, then the
slope of the consumption function is
A) 1.33.
B) 0.75.
C) 0.4.
D) 0.3.