Increased productivity in the agricultural sector is not always a benefit to farmers
because it is accompanied by
a. lower prices and if demand is inelastic, lower prices mean lower revenues.
b. higher prices and if demand is elastic, higher prices mean lower revenues.
c. lower prices and if demand is elastic, lower prices mean lower revenues.
d. higher prices and if demand is inelastic, higher prices mean lower revenues.
If it is assumed that people vote for the candidate who comes closer to matching their
own views, to win votes in a two-person race
a. one candidate will move to the far right of the political spectrum while the other
moves to the far left.
b. one candidate will move between the middle and far right end of the political
spectrum while the other moves between the middle and the far left end.
c. both candidates will move to the far right end of the political spectrum.
d. both candidates will move to the far left end of the political spectrum.
e. both candidates will move toward the middle of the political spectrum.
“Regulatory lag” refers to the period between the time when
a. the natural monopolist’s costs change and the time the regulatory agency adjusts the
monopolist’s prices.
b. the natural monopolist changes its prices and the time when the regulatory agency
rules on that change.
c. the regulatory agency decides to regulate a firm and the time it actually accomplishes
the task.
d. a firm is initially regulated by an agency and the time the firm “captures” that agency.
e. the regulatory agency decides to deregulate a firm and the time it actually
accomplishes the task.
In the supply-and-demand diagram of the market for peanut butter, the equilibrium
point has moved up and to the right. What could have caused this?
a. a fall in the price of peanuts
b. a rise in the price of peanuts
c. a rise in income, assuming that peanut butter is an inferior good
d. a shift in preferences toward peanut butter
e. none of the above
Professor Simpson earns $80,000 per year teaching at the local college. Due to budget
cutbacks, the college cuts her annual salary to $50,000 per year. Professor Simpson
remains at the college and her behavior at work is not affected by the salary cut. It
follows that
a. Professor Simpson’s entire salary is an economic rent.
b. the $30,000 cut from Professor Simpson’s salary was entirely economic rent.
c. the $30,000 cut from Professor Simpson’s salary was partly economic rent.
d. a and b
Grade inflation in colleges may possibly be a result of college professors being in a
prisoner€s dilemma setting.
a. True
b. False
Which of the following founders of the United States used the infant-industry argument
to support trade restrictions?
a. Thomas Jefferson
b. Alexander Hamilton
c. James Madison
d. John Jay
As the interest rate falls, firms are more inclined to buy capital goods because the
a. present value of the stream of returns the goods will provide in the future increases.
b. present value of the stream of returns the goods will provide in the future decreases.
c. future value of the money paid for the capital goods decreases.
d. none of the above
If the equilibrium exchange rate between U.S. dollars and Japanese yen is $0.008 = 1
yen, but currently the exchange rate is $0.007 = 1 yen, then with flexible exchange rates
the dollar price of a yen will __________, and the dollar will __________.
a. increase; appreciate
b. decrease; appreciate
c. increase; depreciate
d. decrease; depreciate
To an economist, utility means:
a. additional.
b. usefulness.
c. satisfaction.
d. marginal.
In all cases, microeconomics deals with
a. what is.
b. what should be.
c. relatively small units in the economy.
d. the entire economy.
On a supply-and-demand diagram, equilibrium is found
a. where the supply curve intercepts the vertical axis.
b. where the demand curve intercepts the horizontal axis.
c. where the demand and supply curves intersect.
d. at every point on either curve