1) price discrimination will result in consumers with more elastic demand purchasing
more of the good than when a single price is charged to all consumers in the market.
2) Balance sheets always balance because reserves must always equal liabilities plus net
worth
3) A monopsonistic employer may sell its product in a competitive market.
4) if price and total revenue are directly related, demand is inelastic.
5) an annual rate of inflation of 7 percent will double the price level in about 15 years.
6) The short-run aggregate supply curve is vertical and the long-run aggregate supply
curve is horizontal.
7) welfare payments to immigrants have steadily increased since 1996.
8) An expansionary monetary policy is one that reduces the supply of money.
9) import quotas are taxes or duties on imported products.
10) About one-half of U.S. electricity is generated using coal.
11) The twelve Federal Reserve Banks are governmentally owned but privately
controlled.
12) In the insider-outsider theory, insiders are agents and outsiders are principals.
13) A rightward shift of the AD curve in the very flat part of the upsloping AS curve
will:
A.increase real output by more than the price level.
B.increase the price level by more than real output.
C.reduce real output by more than the price level.
D.reduce the price level by more than real output.
14) if the price of product y is $25 and its marginal cost is $18:
a.y is being produced with the least-cost combination of resources.
b.society will realize a net gain if less of y is produced.
c.resources are being underallocated to y.
d.resources are being overallocated to y.
15) suppose that mux/px exceeds muy/py. to maximize utility the consumer who is
spending all her money income should buy:
a.less of x only if its price rises.
b.more of y only if its price rises.
c.more of y and less of x.
d.more of x and less of y.
16) a profit-maximizing monopolist will set its price:
a.as far above atc as possible.
b.along the elastic portion of its demand curve.
c.where the marginal cost curve intersects the demand curve.
d.as close as possible to the minimum point of atc.
17) gdp is the:
a.national income minus all non-income charges against output.
b.monetary value of all final goods and services produced within the borders of a nation
in a particular year.
c.monetary value of all economic resources used in producing a year’s output.
d.monetary value of all goods and services, final and intermediate, produced in a
specific year.
18) Which of the following is least likely to be found in a collective bargaining
agreement (work agreement)?
A.a union status clause
B.a clause specifying where new plants, if any, will be located
C.seniority rules that affect promotions and layoffs
D.grievance procedures
19) suppose that two groups of people are each offered plates of sugar cookies. for the
first group, the cookies are of identical taste and appearance. for the second group, the
cookies all taste the same, but they are of different colors. based on the m&m
experiments, behavioral economists would expect:
a.the second group to eat more cookies because of the variety of colors offered.
b.the second group to eat fewer cookies because of aversion to the variety of colors
offered.
c.no difference in the consumption of cookies between the two groups.
d.people to consume too many cookies because they are offered free of charge.
20) which of the following statements, if any, is correct for a nation that is producing
only consumer and capital goods?
a.other things equal, the more consumer goods a nation produces, the greater will be its
future growth rate.
b.other things equal, the more capital goods a nation produces, the greater will be its
future growth rate.
c.there is no general relationship between the current division of output between
consumer and capital goods and the future growth rate.
d.none of these statements is correct.
21) in 2007, personal saving comprised what portion of u.s. household income?
a.negative 2 percent.
b.positive 1 percent
c.positive 5 percent
d.positive 12 percent
22) the price elasticity of demand for health care is such that an increase in the price of
health care will:
a.decrease total health care expenditures.
b.increase total health care expenditures.
c.shift the demand for health care rightward.
d.shift the demand for health care leftward.
23) Define the reserve ratio.
24) Define the equilibrium level of output.
25) What is the extent of income inequality among nations? Explain, citing relevant
data on incomes received by populations and total GDP in the United States and
developing nations.
26) What rationale does rational expectations theory provide for the ineffectiveness of
discretionary policies?
27) What is meant by the term business cycle? List the four phases of the business
cycle.
28) In the current presidential election, one candidate argues: The government is
extremely inefficient. To fix this, government spending should be substantially reduced.
Evaluate this statement.
29) How does monetary policy affect equilibrium GDP? How can it address the
problem of recession or slow growth? Inflation?
30) After looking at this years Census figures on income, your friend Eddie remarks
disgustedly, Income inequality is such a major problem in this country. How might you
use the consideration of time to temper his statement?
31) Why is the difference between the actual and expected rates of inflation important
for explaining disinflation?