In which of the following countries does health insurance not pay for most preventive
care procedures?
A) Canada
B) Japan
C) the United Kingdom
D) the United States
Table 10-2
Using the table above, what is the approximate growth rate of real GDP from 2012 to
2013?
A) -2%
B) -1%
C) 1%
D) 2%
A decrease in individual income taxes ________ disposable income, which ________
consumption spending.
A) increases; increases
B) increases; decreases
C) decreases; increases
D) decreases; decreases
Figure 2-15 Figure
2-15 shows the production possibilities frontiers for Greenland and Iceland. Each
country produces two goods, snow cones and popsicles. What is the opportunity cost of
producing 1 snow cone in Greenland?
A) 2/3 of a popsicle
B) 5/6 of a popsicle
C) 1 1/5 popsicles
D) 200 popsicles
Suppose in Belize, the opportunity cost of producing a sailboat is 5 hang gliders. In
Honduras, the opportunity cost of producing a sailboat is 8 hang gliders.
a. What is the opportunity cost of producing a hang glider for Belize?
b. What is the opportunity cost of producing a hang glider for Honduras?
c. Which country has a comparative advantage in the production of hang gliders?
d. Which country has a comparative advantage in the production of sailboats?
Figure 3-7
Assume that the graphs in this figure represent the demand and supply curves for
blu-ray discs. Which panel best describes what happens in this market if there is a
substantial increase in the price of blu-ray players?
A) Panel (a)
B) Panel (b)
C) Panel (c)
D) Panel (d)
If price = marginal cost at the output produced by a perfectly competitive firm and the
firm is earning an economic profit, then
A) marginal revenue is less than price.
B) average total cost is at a minimum.
C) total revenue equals total cost.
D) price exceeds average total cost.
Financial securities that represent promises to repay a fixed amount of funds are known
as
A) bonds.
B) stocks.
C) pension funds.
D) insurance premiums.
Figure 9-3
Since 1953 the United States
has imposed a quota to limit the imports of peanuts. Figure 9-3 illustrates the impact of
the quota. What is the area that represents revenue to foreign producers who are granted
permission to sell in the U.S. market when there is a quota?
A) I + J
B) E + I + J + M
C) I + J + K+ L
D) G + H + I + J
In the United States in 2013, the Bureau of Economic Analysis began counting
spending by firms and individuals on developing entertainment products as investment.
This change will
A) take away from GDP.
B) add to GDP.
C) not change GDP.
D) only change GDP if the development occurs within the borders of the United States.
Which of the following would be the source of a “real” business cycle?
A) changes in technology
B) anticipated expansionary monetary policy
C) unanticipated expansionary monetary policy
D) unanticipated contractionary monetary policy
In the countries that have adopted inflation targeting, the inflation rate has typically
A) increased.
B) decreased.
C) decreased to zero.
D) not changed.
An increase in the expected inflation rate will
A) shift the short-run Phillips curve to the right.
B) shift the short-run Phillips curve to the left.
C) reduce the inflation rate.
D) reduce the unemployment rate.
Holding everything else constant, the absolute value of the price elasticity of demand
for Saucony tennis shoes is ________ the price elasticity of demand for tennis shoes.
A) less than
B) equal to
C) twice as great as
D) greater than
What would happen in the market for laser eye surgery if insurance companies started
to cover a portion of the price of voluntary procedures?
A) Demand will increase, but this will not shift the supply curve.
B) Supply will increase, but this will not shift the demand curve.
C) Demand and supply will both increase.
D) Demand will increase and supply will decrease.
Discuss the likely impact of each of the following on the unemployment rate:
a. The length of time workers are eligible to receive unemployment insurance payments
is cut in half.
b. The government passes a law making labor unions illegal.
c. The minimum wage is raised by 50 percent.
d. The government funds an Internet site where companies can post job openings at no
charge.
Even though it often does not result in profit maximization, some small firms use a
cost-plus pricing strategy anyway because
A) it is easy to use.
B) they do not understand what marginal revenue and marginal cost mean.
C) it is expensive to hire an economist who can determine what the profit-maximizing
price is.
D) they sell several products, each of which sells for a different price. The time and
expense involved in finding the profit-maximizing price for each product are not worth
the effort.
Figure 5-3
The private profit maximizing output level is
A) Qm.
B) Q.
C) Qo.
D) Qo– Qm.
Which of the following is correct about the economic decisions consumers, firms, and
the government have to make?
A) Governments may face the problem of shortages but not scarcity in making
economic decisions.
B) Only individuals face scarcity; firms and the government do not.
C) Firms and the government face scarcity, individuals only face shortages.
D) Each faces the problem of scarcity which necessitates trade-offs in making economic
decisions.
A baseball hat worn by the Boston Red Sox Hall of Fame outfielder Ted Williams was
auctioned on eBay. The three highest bidders and their bids were:
Roger Bulava $5,000
Tony Millasiti $4,900
Joe Albano $4,200 What price did Roger have to pay for the Ted Williams hat?
A) $4,200
B) $4,700 (the average of the three highest bids)
C) $4,900
D) $5,000