In 2013, ________ of Goodyear’s sales were outside North America.
A) only 11 percent
B) more than 60 percent
C) less than half
D) 95 percent
Table 2-4 Production Choices for Dina’s Diner
Assume Dina’s Diner only produces sliders and hot wings. A combination of 20 sliders
and 60 hot wings would appear
A) along Dina’s production possibilities frontier.
B) inside Dina’s production possibilities frontier.
C) outside Dina’s production possibilities frontier.
D) at the vertical intercept of Dina’s production possibilities frontier.
The profit-maximizing rule for a monopolistically competitive firm is to select the
quantity at which
A) marginal revenue equals marginal cost.
B) average revenue exceeds marginal cost by the greatest amount.
C) price equals marginal cost.
D) average revenue equals average total cost.
The median voter theorem states that the outcome of a majority vote
A) tends to favor the preferences of high income individuals and ignore the median
voter.
B) is likely to represent the preferences of society’s middle-income voter.
C) is likely to represent the preferences of the voter who is in the political middle.
D) is determined by the average consumer and producer in an economy.
Since 1900, real GDP in the United States has grown
A) more rapidly than the population.
B) more slowly than the population.
C) as rapidly as the population.
D) in a random unpredictable manner relative to the population.
Purchases of which of the following goods would be dramatically reduced during a
recession?
A) tomatoes
B) ink pens
C) gasoline
D) refrigerators
Because of the slope(s) of the ________, we can say that a decrease in the price level
leads to a higher level of real GDP demanded.
A) aggregate demand curve
B) short-run aggregate supply curve
C) long-run aggregate supply curve
D) short-run and long-run aggregate supply curves
Which of the following is a normative economic statement?
A) Falling global demand for pesticides has led to decreases in the price of pesticides.
B) With falling mortgage rates and falling unemployment rates, the number of new
homes being built has increased.
C) The state of Florida’s unemployment rate dropped when several large companies
relocated to the Miami area.
D) Global warming should be at the top of every economic agenda.
Figure 15-12
In the dynamic AD–AS model, if the economy is at point A in year 1 and is expected to
go to point B in year 2, the Federal Reserve would most likely
A) increase interest rates.
B) decrease interest rates.
C) not change interest rates.
D) increase the inflation rate.
The smaller the fraction of an investment financed by borrowing,
A) the greater the potential return and potential loss on that investment.
B) the smaller the potential return and potential loss on that investment.
C) the greater the potential return and the smaller the potential loss on that investment.
D) the smaller the potential return and the greater the potential loss on that investment.
If the production possibilities frontier is linear, then
A) opportunity costs are decreasing as more of one good is produced.
B) it is easy to efficiently produce output.
C) opportunity costs are increasing as more of one good is produced.
D) opportunity costs are constant as more of one good is produced.
If a firm charges different consumers different prices for the same product and the
difference cannot be attributed to cost variations, then it is engaging in
A) odd pricing.
B) cost-plus pricing.
C) price discrimination.
D) markup pricing.
Figure 12-4 Figure 12-4 shows the cost
and demand curves for a profit-maximizing firm in a perfectly competitive market. If
the market price is $30, the firm’s profit-maximizing output level is
A) 0.
B) 130.
C) 180.
D) 240.
The efficient level of paper production will occur where the
A) marginal private benefit from consuming paper is equal to the marginal social cost
of production.
B) marginal social benefit from consuming paper is equal to the marginal social cost of
production.
C) economically efficient level of the output of paper is equal to the economically
efficient level of inputs.
D) production of paper no longer produces negative externalities.
A set of actions that a firm takes to achieve a goal is the definition of a
A) business plan.
B) business strategy.
C) business prospectus.
D) business goal.
Because of asymmetric information, most used cars that are offered for sale will be sold
for prices that are greater than their true value. Because of this fact, the used car market
falls victim to
A) the free rider problem.
B) deadweight loss and economic inefficiency.
C) a surplus of used cars.
D) adverse selection.
Between 2007 and 2011 the value of the U.S. dollar fell by more than 60 percent
against the Japanese yen. This fall in the price of the dollar against the yen was
________ for Japanese companies that exported to the United States and ________ for
U.S. companies that exported to Japan.
A) good; good
B) bad; good
C) good; bad
D) bad; bad
Figure 5-8
Consider a chemical plant that discharges toxic fumes over a nearby community. To
reduce the emissions of toxic fumes the firm can install pollution abatement devices.
Figure 5-8 shows the marginal benefit and the marginal cost from reducing the toxic
fumes emissions. What is the economically efficient level of pollution reduction?
A) 12.5 million tons
B) 9 million tons
C) 8 million tons
D) 0 tons
According to the text, there are three ways the government can help increase the
accumulation of knowledge capital. What are they?
A) protecting intellectual property rights, subsidizing research and development, and
subsidizing education
B) increasing taxes on firms, eliminating patents, and increasing the minimum wage
C) encouraging the use of trade secrets, expanding student loan programs, and
increasing the minimum wage
D) reducing taxes on capital, increasing Social Security payments, and lowering the
exchange rate
Which of the following statements is false?
A) An inverse relationship has a negative slope value.
B) A direct relationship has a positive slope value.
C) A curved line has slope values that change at every point.
D) A straight line has a slope of zero.