The size of a deadweight loss in a market is reduced by
A) government legislating a ceiling price.
B) government legislating a price floor.
C) market price being close to marginal cost.
D) creative destruction.
Figure 16-5
Suppose the firm represented in the diagram decides to use a two-part pricing strategy
such that it charges a fixed fee and a per-unit price equal to the competitive price. (This
is also called an optimal two-part tariff.) What is the total revenue it can expect to
collect from the fixed fee portion of the price?
A) $2,560
B) $5,760
C) $7,870
D) $10,240
The short-run Phillips curve will not shift unless there is
A) an increase in the unemployment rate.
B) an increase in inflation that is unanticipated.
C) a decrease in inflation that is unanticipated.
D) a change in inflation expectations.
If the required reserve ratio (RR) is 20 percent, the simple deposit multiplier is
A) 2.
B) 5.
C) 10.
D) 20.
Governments can increase the consumption of a product that creates positive
externalities by
A) subsidizing the production of the product so that the supply is increased and market
price is reduced.
B) taxing the production and consumption of the product.
C) convincing everyone to consume the good.
D) assigning property rights to the producers of the product.
What is the natural rate of unemployment?
A) the unemployment rate that exists when the economy is at potential GDP
B) the unemployment rate that exists when the economy is at a trough in a business
cycle
C) an unemployment rate of 0%
D) any unemployment rate that is above the inflation rate
You are planning to open a new Italian restaurant in your hometown where there are
three other Italian restaurants. You plan to distinguish your restaurant from your
competitors by offering northern Italian cuisine and using locally grown organic
produce. What is likely to happen in the restaurant market in your hometown after you
open?
A) Your competitors are likely to change their menus to make their products more
similar to yours.
B) The demand curve facing each restaurant owner shifts to the right.
C) The demand curve facing each restaurant owner becomes more elastic.
D) While the demand curves facing your competitors becomes more elastic, your
demand curve will be inelastic.
Figure 15-6 Figure 15-6 shows the
cost and demand curves for a monopolist.
The monopolist’s total cost is
A) $1,116.
B) $1,240.
C) $1,660.
D) $1,726.40.
The prices college students and faculty members pay for Apple computers are lower
than the prices Apple charges on its Website and in retail stores. Apple charges lower
prices to college students and faculty members because
A) college students and faculty members have a more elastic demand for computers
than the general public.
B) Apple can deduct from its federal taxes some of the costs of the computers it sells to
college students and faculty members.
C) college students and faculty members have a more inelastic demand for computers
than the general public.
D) college students and faculty members typically buy more supplies from Apple (print
cartridges, paper, etc.) than the general public.
Although the Federal Reserve had traditionally made discount loans only to commercial
banks, in response to the financial crisis in 2008 the Fed made ________ eligible for
discount loans as well.
A) the Treasury Department
B) mortgage brokers
C) savings banks
D) primary dealers
Because leisure is a normal good, an increase in the wage rate will result in
A) an increase in the quantity of labor supplied because of both the substitution effect
and the income effect.
B) a decrease in the quantity of labor supplied because of the substitution effect and an
increase in the quantity of labor supplied because of the income effect.
C) an increase in the quantity of labor supplied because of the substitution effect and a
decrease in the quantity of labor supplied because of the income effect.
D) an increase in the quantity of labor supplied because of the substitution effect. At
low wages the income effect causes an increase in the quantity of labor supplied, but at
high wages the income effect causes a decrease in the quantity of labor supplied as the
wage rises.
Included on the board of directors of Microsoft are Dina Dublon, former chief financial
officer of JP Morgan Chase , the president of Harvey Mudd college Maria M. Klawe,
and the vice chairman of Bank of America Charles H. Noski. These three board
members do not have a direct management role with Microsoft and are therefore
referred to as
A) inside directors.
B) outside directors.
C) competitive directors.
D) honorary directors.
The average price of goods and services in the economy is also known as
A) the price level.
B) the inflation rate.
C) a market basket.
D) the cost of living.
Which of the following has occurred as the baby-boom generation ages?
A) The demand for soft drinks has increased in the U.S. market.
B) The demand for soft drinks has decreased in the U.S. market.
C) The global demand for soft drinks has decreased.
D) The global demand for soft drinks has remained relatively low.
If, due to a recession, foreign workers begin to leave the United States to search for
temporary work in their home countries until the recession has ended, this will
A) shift the short-run aggregate supply curve of the home country to the left.
B) shift the short-run aggregate supply curve of the home country to the right.
C) move the home country’s economy up along a stationary short-run aggregate supply
curve.
D) move the home country’s economy down along a stationary short-run aggregate
supply curve.
Figure 15-15
Figure 15-15 shows the cost and demand curves for the Erickson Power Company. The
profit-maximizing price is
A) P1.
B) P2.
C) P3.
D) P4.
From 1983-2013, ________ for the United States were negative.
A) planned inventories
B) net exports
C) unplanned inventories
D) transfer payments