Under autarky, domestic producer surplus is represented by the area
A) above the supply curve and below the equilibrium price.
B) above the supply curve and below the demand curve.
C) below the demand curve and above the equilibrium price.
D) above the demand curve and below the supply curve.
A good is path dependent when
A) consumers get utility from consuming goods that others are consuming, such as
restaurants.
B) the first technology that was adopted has an advantage over a better technology that
came later.
C) people who move location follow the path of people who moved before them.
D) it can only be used in one way.
If, at a firm’s projected sales level, the marginal cost is $125, the average cost is $150
and the markup is 20 percent, then its selling price is
A) $125.
B) $150.
C) $165.
D) $180.
In the utility maximizing model, consumer preferences are assumed to be transitive.
What does this mean?
A) that consumers prefer more of a good to less
B) that consumers have the freedom to change their preferences from time to time
C) that consumers have preferences that are relatively consistent in the time period
under consideration
D) that consumers go through cycles in their consumption behavior
In 2013, Caterpillar laid off employees. The employees who were laid off due to the
business cycle would be considered
A) structurally unemployed.
B) frictionally unemployed.
C) seasonally unemployed.
D) cyclically unemployed.
To combat inflation, Congress and the president should
A) decrease government spending.
B) decrease taxes.
C) raise interest rates.
D) increase transfer payments.
Figure 2-10
Figure 2-10 shows the
production possibilities frontiers for Tahiti and Bora Bora. Each country produces two
goods, milk and honey.
If the two countries have the same amount of resources and the same technological
knowledge, which country has an absolute advantage in the production of milk?
A) Bora Bora
B) They have the same advantage.
C) Tahiti
D) cannot be determined
By the height of the housing bubble in 2005 and early 2006, lenders had greatly
loosened the standards for obtaining a mortgage loan, with many mortgages being
granted to ________ borrowers with flawed credit histories and ________ borrowers
who did not document their incomes.
A) sub-prime; “Alt-A”
B) adjustable rate; shadow-banking
C) “credit crunch”; black market
D) “fresh-start”; prime rate
Which of the following is an example of implicit collusion?
A) product differentiation
B) a retaliation strategy
C) a second-price auction
D) price leadership
Figure 4-1 Figure 4-1 shows Kendra’s
demand curve for ice-cream cones.
If the market price is $3.00, what is the consumer surplus on the first ice cream cone?
A) $0.50
B) $1.00
C) $5.50
D) $9.00
If an increase in autonomous consumption spending of $10 million results in a $50
million increase in equilibrium real GDP, then
A) the MPC is 0.5.
B) the MPC is 0.75.
C) the MPC is 0.8.
D) the MPC is 0.9.
The ________ system of currency exchange was set up in 1944.
A) gold standard
B) Bretton Woods
C) managed float
D) flexible
If the balance on the current account in the United States is $750 billion, which of the
following is most likely to be true?
A) The balance on the financial account is negative.
B) The trade balance is negative.
C) Net foreign investment is negative.
D) The balance on the capital account is positive.
If Callum is consuming his utility maximizing bundle and the price of one good rises,
what happens to the marginal utility per dollar spent on this good (MU/P), and what
should Callum do?
A) MU/P has increased and Callum should buy more of this good.
B) MU/P has increased and Callum should buy less of this good.
C) MU/P has decreased and Callum should buy more of this good.
D) MU/P has decreased and Callum should buy less of this good.