One goal a firm tries to achieve when it advertises a product is to
A) make the demand curve for the product more elastic.
B) shift the demand curve for the product to the left.
C) make the demand curve for the product unitary elastic.
D) make the demand curve for the product more inelastic.
On a balance sheet
A) total assets must equal total liabilities plus equity.
B) total assets plus equity must equal total liabilities.
C) total assets plus total liabilities must equal zero.
D) total assets plus total liabilities plus equity must equal zero.
In order to prove that Motrin and Ibuprofen are substitutes, one should measure the
________ and get a ________.
A) cross-price elasticity; positive number
B) cross-price elasticity; negative number
C) price elasticity of demand; number greater than 1 (in absolute value)
D) price elasticity of demand; number less than 1 (in absolute value)
Figure 4-1
Figure 4-1 shows Arnold’s demand curve for burritos.
If the market price is $1.00, what is the maximum number of burritos that Arnold will
buy?
A) 1
B) 2
C) 3
D) 4
An increase in public saving has what impact on the market for loanable funds?
A) The supply of loanable funds increases.
B) The demand for loanable funds increases.
C) The supply of loanable funds decreases.
D) The demand for loanable funds decreases.
One argument advanced in favorof not increasing the income tax on individuals with
high income is that
A) increasing income tax increases wealth which contributes to increases in GDP.
B) increasing the income tax on these individuals will reduce economic efficiency.
C) increasing the income tax affects mostly middle-income and low-income individuals
who are already paying heavy income taxes.
D) not increasing income taxes will discourage corporations from increasing
investment.
College students and faculty members have a more elastic demand than the general
public for Apple’s iMac desktop computers. From this we can conclude that
A) Apple will charge college students and faculty members higher prices than it charges
the general public.
B) Apple will charge college students and faculty members lower prices than it charges
the general public.
C) the general public will earn arbitrage profits by buying iMac desktop computers
from Apple and reselling them to college students and faculty members.
D) Apple will earn economic profits from the computers it sells to the general public
but will break even on the computers it sells to college students and faculty members.
A Federal Reserve publication proclaimed that “Trade is a win-win situation for all
countries that participate.” This statement is
A) false since it ignores the workers who lose their jobs as result of international trade.
B) false since not all countries participate in international trade.
C) true because it refers to countries; individuals may be losers as a result of
international trade.
D) true because all consumers and workers benefit from international trade.
The real rate of interest is
A) the nominal interest rate plus the inflation rate.
B) the nominal interest rate minus the inflation rate.
C) the interest rate determined by the supply and demand in the money market.
D) the nominal interest rate.
Which of the following statements about commission systems of compensation is false?
A) They increase the risk to workers because sometimes output declines for reasons not
connected to the worker’s effort.
B) During sluggish periods, an employer’s payroll expenses will decline along with
sales.
C) If workers are paid on the basis of the number of units produced, they may become
less concerned about quality.
D) The lack of income stability will induce the more productive workers to leave in
search of more secure employment.
Which of the following products allows the seller to identify different groups of
consumers (segment the market) and practice price discrimination?
A) clothing items sold through Macy’s Department Store
B) a hamburger sold at Burger King
C) a cafe latte sold at Starbucks
D) tickets to matinee shows at a movie theatre
With a monopolist engages in perfect price discrimination, the quantity produced and
sold
A) is lower than the quantity produced and sold if it adopted a single price.
B) is larger than the quantity produced and sold if it adopted a single price.
C) is the same level as that produced and sold if it adopted a single price.
D) could be lower, higher or the same as that produced and sold if it adopted a single
price.
Table 4-6
The equations above describe the demand and supply for Chef Ernie’s Sushi-on-a-Stick.
The equilibrium price and quantity for Chef Ernie’s sushi are $60 and 20 thousand units.
What is the value of producer surplus?
A) $100 thousand
B) $200 thousand
C) $600 thousand
D) $800 thousand
If there are no externalities a competitive market achieves economic efficiency. If there
is a negative externality, economic efficiency will not be achieved because
A) too little of the good will be produced.
B) too much of the good will be produced.
C) a deadweight loss will occur that is equal to the area under the demand curve for the
good.
D) economic surplus is maximized.
The balance of payments includes all of the following accounts except
A) the current account.
B) the financial account.
C) the capital account.
D) the national debt account.
Figure 5-1 Figure 5-1 represents the market
for vaccinations. Vaccinations are considered a benefit to society, and the figure shows
both the marginal private benefit and the marginal social benefit from vaccinations. The
market equilibrium quantity is ________ thousand vaccinations.
A) 200
B) 400
C) 600
D) >600