The government sometimes creates an excess demand for a product by setting a
maximum price at which the product may be sold to consumers. This is sometimes
called a
A) price ceiling.
B) price floor.
C) tax.
D) subsidy.
If the number of beer producers decreases:
A) the demand for beer increases.
B) the demand for beer decreases.
C) the supply of beer increases.
D) the supply of beer decreases.
Table 11.2 Refer to Table 11.2. At an aggregate output level of $200, what will change
in order to bring the economy to equilibrium?
A) Output must increase.
B) Investment must decrease.
C) Inventories must increase.
D) Consumption must decrease.
Figure 1.1
Refer to Figure 1.1. If income at zero hours worked increases in Figure 1.1, then the
relationship:
A) becomes flatter.
B) becomes steeper.
C) shifts upward and to the left.
D) shifts down and to the right.
Which of the following is true when the US dollar depreciates against the euro?
A) It takes more dollars to buy the euro.
B) It becomes more expensive for Americans to buy goods from Germany.
C) It takes fewer euros to buy the dollar.
D) All of the above are correct.
According the short-run aggregate supply curve, the level of overall economic activity:
A) is positively affected by increases in the price level.
B) is not affected by increases in the price level.
C) is negatively affected by increases in the price level.
D) is not affected by increases in aggregate demand.
The Consumer Price Index (CPI) differs from a chain-weighted price index in that the
CPI
A) requires calculation of GDP, while the chain-weighted index does not.
B) measures the costs of a typical fixed basket of goods over time, while the
chain-weighted index does not.
C) allows for the goods consumed in an economy to change over time, while the
chain-weighted index does not.
D) compares the prices of all goods in one year to the prices of all goods in other years.
The purchase of a U.S. asset by a foreign resident is a
A) deficit item on the current account.
B) surplus item on the current account.
C) deficit item on the financial account.
D) surplus item on the financial account.
Tariffs ________ prices for domestic consumers and import quotas ________ prices for
domestic consumers.
A) raise; lower
B) lower; raise
C) raise; also raise
D) lower; also lower
Figure 4.6
David’s Supply Schedule Celeste’s Supply Schedule Refer to Figure 4.6, which
shows David’s and Celeste’s individual supply curves for flower arrangements per
week. Assuming David and Celeste are the only producers in the market, what is the
market quantity supplied at a price of $30?
A) 200
B) 250
C) 300
D) 350
Figure 4.4
Figure 4.4 illustrates the demand for guitars. Assume guitars are an inferior good. An
increase in income would bring about a movement from:
A) point B to point C.
B) point B to point A.
C) D1 to D0.
D) D1 to D2.
Table 11.1
Refer to Table 11.1. If exports increase by 20 (X = 100), what is the new equilibrium
level of output?
A) 1,825
B) 2,425
C) 7,300
D) 9,700
Recall Application 1, “Global Warming, Rich Countries and Poor Countries,” to answer
the following questions:
Based on what you learned from the application, in what way can we improve the
standard of living in poor countries?
A) Promote policies that defer global warming further into the future.
B) Promote policies that accelerate global warming.
C) Promote more international trade between poor and rich countries.
D) Promote policies that develop air conditioning industries in poor countries.
Recall Application 1, “Don’t Forget the Costs of Time and Invested Funds,” to
answer the following questions.
Using figures from the Application, $5000 (which is the market alue of all your
equipment) is the:
A) invested capital.
B) opportunity cost of the invested capital.
C) the opportunity cost of running the business.
D) opportunity cost of your time.
Figure 4.3 illustrates the demand for tacos. A decrease in the demand for tacos is
represented by the movement from
A) point a to point .
B) point c to point .
C) D2 to D1.
D) D0 to D1.
Table 3.1
Based on the data in Table 3.1, if Jesse and April choose to specialize and trade, then
A) April will specialize in painting kites and trade kites for snowboards.
B) April will specialize in painting snowboards and trade snowboards for kites.
C) Jesse will specialize in painting snowboards and trade snowboards for kites.
D) None of the above; specialization and trade are not beneficial for Jesse and April.
In order to estimate the level of full-employment output, economists typically:
A) estimate potential output when the unemployment rate is equal to the natural rate of
unemployment.
B) subtract cyclical unemployment from the level of potential output.
C) estimate potential output when the unemployment rate is equal to the cyclical rate of
unemployment.
D) estimate potential output when there is no idle capital stock.
Personal income measures the amount of:
A) income that flows to households.
B) income that flows to households, less social security benefits.
C) income households retain after paying taxes.
D) income of households, less all transfer payments.
If a economy’s planned expenditures turn out to be less than production, then
inventories will be:
A) increasing, prompting firms to decrease production in the future.
B) increasing, prompting firms to increase production in the future.
C) decreasing, prompting firms to decrease production in the future.
D) decreasing, prompting firms to increase production in the future.