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Figure 14-1
In Figure 14-1, a technological breakdown in calculator production would cause which
movement?
a. B to E
b. B to C
c. B to D
d. A to D
There is no way that externalities can be corrected.
a. True
b. False
Which of the following is considered by economists to be the most fundamentally
scarce?
a. money
b. ideas
c. needs
d. food
e. physical resources
The U.S. government restricts the production of peanuts by limiting production
licenses. By also prohibiting imports, the government maintains prices well above
levels peanut farmers would obtain if supply were not restricted. Economists call this
type of program a(n)
a. price ceiling.
b. price floor.
c. opportunity cost.
d. shortage.
e. efficiency move.
For those workers who are given fringe benefits such as health insurance and pensions,
the additional income this amounts to over and above the average hourly wage can be
as much as (for some workers)
a. 10-12%
b. 30-40%
c. 51-62%%
d. 70% or more
Inputs, or factors of production, include
a. labor.
b. machinery.
c. natural resources.
d. all of the above.
A corporation is liable to pay to bondholders the
a. current interest rate in the bond market.
b. current yield on the particular bond.
c. coupon rate on the bond.
d. yield on the bond at maturity.
Discounting allows comparisons of
a. money values and physical values.
b. interest payments on borrowed funds and interest payments on loaned funds.
c. money values received at different times.
d. the quantities of outputs produced by different types of capital goods.
Now, about ____ percent of American married-couple families have two or more wage
earners.
a. 35
b. 50
c. 60
d. 90
If production involves decreasing opportunity cost, the production possibilities curve
a. is "bowed inward."
b. is a straight line.
c. is "bowed outward."
d. is a wavy line.
e. has an unpredictable shape.
The demand curve of the monopoly firm is always the
a. average revenue curve.
b. marginal revenue curve.
c. total revenue curve.
d. marginal cost curve above average variable cost.
In the case study discussed in the chapter, the electronics firm was actually enhancing
its profits by selling calculators at a price that was below average cost.
a. True
b. False
What mechanism assures that firms produce outputs that consumers actually desire?
a. governmental regulations on the mix of outputs
b. altruism
c. the desire for profit
d. a desire to serve others without thought of reward
e. All of the above are correct.
Teenagers generally have high marginal revenue products because they have not
completed their educations and have little job experience.
a. True
b. False
Markets are primarily responsible for the rapid rise in productivity during the twentieth
century.
a. True
b. False
The primary source of corporate financing in the United States is
a. the sale of stock.
b. the sale of bonds.
c. retained earnings.
d. lending from commercial banks.
If the marginal cost of producing steel exceeds the marginal utility of using steel, then
for economic efficiency,
a. the price of steel should fall.
b. society should produce less steel.
c. the price of goods made with steel should fall.
d. society should direct resources toward steel production and away from the production
of other goods.
Most innovations in the economy come from
a. many different industries in a few countries.
b. a few industries in many different countries.
c. many different industries in many different countries.
d. a few industries in a few countries.
e. a few industries in the United States.
The typical American family spends about ____ percent of its budget on goods, and the
remainder on services.
a. 22
b. 34
c. 68
d. 74
If money raised in the issue of new stocks and bonds is used effectively,
a. the income from them is not subject to double taxation.
b. a firm need not meet SEC requirements.
c. the stock is being "watered."
d. they generate the means of repayment.
Under laissez faire, output selection is determined by
a. consumer preferences.
b. production costs.
c. firms' desires to make profits.
d. All of the above are correct.
Figure 22-8
Figure 22-8 has four sets of production possibility curves for two hypothetical
countries. In which case will there be no advantage to trade between the two countries?
a. 1
b. 2
c. 3
d. 4
Economic behavior is always rational.
a. True
b. False
If the price of a good is below the equilibrium price,
a. suppliers will find inventories building; they will cut output and raise prices.
b. suppliers will find inventories being depleted. They will increase production and
raise prices.
c. the demand curve will shift down until an equilibrium is established at the existing
price.
d. the supply curve will shift up until an equilibrium is established at the existing price.
