In the United States in 2012, the percentage of people without any form of health
insurance was about
A) 16%.
B) 29%.
C) 64%.
D) 83%.
________ occurs when actions taken by one party to a transaction are Different from
what the other party expected at the time of the transaction.
A) Adverse selection
B) Risk aversion
C) Fraud
D) Moral hazard
Figure 2-10
Figure 2-10 shows the
production possibilities frontiers for Tahiti and Bora Bora. Each country produces two
goods, milk and honey.
What is the opportunity cost of producing one gallon of milk in Tahiti?
A) 1/2 gallon of honey
B) 5/6 gallon of honey
C) 1.2 gallons of honey
D) 1.5 gallons of honey
Figure 4-3 Figure 4-3 shows Kendra’s
demand curve for ice-cream cones.
If the market price is $3.50, what is Kendra’s consumer surplus?
A) $9.00
B) $7.50
C) $3.50
D) $0
Negative externalities and the tragedy of the commons are problems that have a
common source. What is this common source?
A) self-interest motives of producers and consumers
B) a lack of concern for human rights
C) a lack of competition
D) a lack of clearly defined and enforced property rights
For a firm that is a price taker in the market for labor, the marginal revenue product of
labor equals the
A) marginal product of labor multiplied by the wage rate.
B) marginal product of labor multiplied by the product price.
C) marginal product of labor divided by the wage rate.
D) marginal product of labor multiplied by the marginal cost of production.
If the Fed orders a contractionary monetary policy, describe what will happen to the
following variables relative to what would have happened without the policy:
a. The money supply
b. Interest rates
c. Investment
d. Consumption
e. Net Exports
f. The aggregate demand curve
g. Real GDP
h. The price level
Consider a downward-sloping demand curve. When the price of an inferior good
increases, the income and substitution effects
A) work in the same direction to increase quantity demanded.
B) work in the same direction to decrease quantity demanded.
C) work in opposite directions, and quantity demanded increases.
D) work in opposite directions, and quantity demanded decreases.
Monetary policy can
A) shift the short-run trade-off between inflation and unemployment if it affects
expected inflation.
B) shift the long-run trade-off between inflation and unemployment through changes in
cyclical unemployment.
C) shift neither the short-run nor long-run Phillips curve trade-offs between inflation
and unemployment.
D) shift both the short-run and long-run trade-offs between inflation and unemployment
if changes in policy are credible.
A perfectly competitive firm will maximize its profit at the rate of output where the
vertical distance between its total revenue and total cost is the largest. This is the same
rate of output where
A) average total cost equals marginal revenue.
B) marginal revenue equals marginal profit.
C) marginal revenue equals marginal cost.
D) marginal revenue equals average revenue.
Table 9-11 Production and
Consumption Production
Without Trade With Trade
Denmark and Belize can produce both clocks and hats. Table 9-11 shows the production
and consumption quantities without trade, and the production numbers with trade.
Which country has a comparative advantage in producing clocks?
A) Denmark
B) Belize
C) both countries
D) neither country
Political candidates often hold fund raisers by charging “per plate” for dinner. Wendy
purchased four tickets to a $1,000 per plate dinner for a local city council candidate. Is
this transaction economically efficient?
A) No, political candidates should never be allowed to overcharge for a fund raising
dinner.
B) Yes, it was a voluntary exchange that benefited both parties.
C) No, Wendy paid too much for four dinners.
D) Yes, it is efficient only from the perspective of the candidate but not from the
perspective of Wendy.
In the circular flow diagram, ________ supply the factors of production, and ________
goods and services.
A) households; sell
B) households; buy
C) firms; sell
D) firms; buy
Figure 16-3
Chantal owns a hairdressing salon which caters to two main groups of customers:
residents of “The Chateau,” a retirement community, and other residents in the
neighborhood. Figure 16-3 shows the demand curves for the residents of the retirement
community, labeled Market A, and other residents in the neighborhood, labeled Market
B. The demand curves are not identical. Suppose Chantal practices price discrimination.
Which of the following statements is true?
A) Chantal’s profits will be higher if she has uniform pricing instead of different prices
for different groups of customers.
B) By charging a higher price in market B, Chantal has transferred some of the
consumer surplus from customers in market B to customers in market A.
C) By charging different prices in markets A and B, Chantal can transfer some producer
surplus into economic profit.
D) By charging a higher price in market B, Chantal can convert some consumer surplus
into economic profit.
Which of the following describes the degree of control that the Fed has over the money
supply?
A) The Fed has absolute control over the money supply.
B) The Fed has no control of the money supply.
C) The Fed has substantial control over the money supply.
D) The Fed is not concerned about the level of the money supply, and does not attempt
to control it.
The price elasticity of supply for umbrellas is 2. Suppose you’re told that following a
price increase, quantity supplied increased by 30 percent. What was the percentage
change in price that brought this about?
A) 60 percent
B) 15 percent
C) 6.7 percent
D) impossible to determine without additional information