Henry decides to quit his job, take his $60,000 in savings, and open a dry cleaning
store. Figure 8-1 shows the revenues and expenditures for his first year of operation.
Which of the following items would be included in the calculation of the shop’s
economic profit and not included in the accounting profit?
The height of the market supply curve
Which of the following might explain why the government would create a price ceiling
for a certain good?
In perfect competition,
Another expression for disposable income would be
a. income left over after subtracting deductions such as 401Ks and health insurance
b. income left over after subtracting taxes
c. income left over after subtracting fixed payments like rent or car payments
d. income left over after subtracting all required spending items such as food, utilities,
etc.
e. income left over after subtracting transfer payments
All cash within the geographical boundaries of the United States is counted as part of
the U.S. money supply.
If disposable income decreased, which of the following changes in the
consumption-function line would occur?
a. A rightward movement along the line
b. A leftward movement along the line
c. The entire line would shift upward
d. The entire line would shift downward
e. The entire line would shift downward and there would be a rightward movement
along the new line
Rich countries (measured by GDP per capita) tend to have __________ infant mortality
rates, __________ life expectancies at birth, and __________ adult literacy rates than
poor countries.
a. higher; higher; higher
b. lower; higher; higher
c. lower; lower; higher
d. lower; lower; lower
e. lower; higher; lower
Which of the following would most likely cause a job to command a compensating
wage differential?
Which of the following impacts of a Gulf hurricane would not show up as a direct loss
to GDP?
a. The reduction in crude oil production
b. The reduction in oil refining
c. The loss of oil production facilities
d. The loss of restaurant business in coastal communities
e. The reduction in agricultural production
In which of the following situations would a worker have the greatest real income?
a. She receives a pay cut and her nominal wage falls by 5 percent, while the CPI falls
by 20 percent.
b. She receives a pay cut and her nominal wage falls by 5 percent, while the CPI
increases by 10 percent.
c. Her nominal wage remains the same, as does the CPI.
d. She receives a raise and her nominal wage increases by 5 percent, while the CPI
increases by 10 percent.
e. She receives a raise and her salary increases by 5 percent, while the CPI falls by 5
percent.
During recessions, GDP falls and unemployment increases. Why might the actual
output produced not fall as much as officially measured GDP during recessions?
a. There is an increase in involuntary part-time employment during recessions, the
output from which is not accounted for in GDP
b. Workers who became unemployed during the recession may produce goods in the
underground economy
c. Unemployment benefits to laid off workers are included in GDP
d. Laid off workers may start their own businesses, but profit income from
self-employment is not accounted for in GDP
e. Unemployed workers have more leisure time to enjoy.
Once a nation has been producing a good or service for some time,
a. its supply curve for that product is vertical
b. its supply curve for that product is horizontal at the world price
c. it often develops a comparative advantage in producing that good or service
d. its moves along its production possibilities frontier and produces more of it
e. its production possibilities frontier shifts outward