If the GDP deflator is less than 100, then for that year nominal GDP ________ real
GDP.
A) equals
B) is greater than
C) is less than
D) may be greater than or less than
The process of rapidly adjusting prices based on information gathered on consumers’
preferences and their responsiveness to changes in price is called
A) yield management.
B) elasticity management.
C) brand management.
D) marketing.
Which of the following is not an assumption of perfectly competitive markets?
A) There are many sellers and many buyers, all of which are small relative to the
market.
B) Each firm produces a similar but not identical product.
C) There are no barriers to new firms entering the market.
D) The products sold by all firms in the market are identical.
Last year, Joan bought 50 pounds of hamburger when her household income was
$40,000. This year, her household income was only $30,000 and Joan bought 60 pounds
of hamburger. Holding everything else constant, Joan’s income elasticity of demand for
hamburger is
A) positive, so Joan considers hamburger to be an inferior good.
B) negative, so Joan considers hamburger to be an inferior good.
C) positive, so Joan considers hamburger to be a normal good and a necessity.
D) negative, so Joan considers hamburger to be a normal good.
Which of the following is the best example of a firm that competes in a
monopolistically competitive market?
A) the U.S. Postal Service
B) Microsoft
C) a movie theater
D) an automobile manufacturer
An outward shift of a nation’s production possibilities frontier represents
A) economic growth.
B) rising prices of the two goods on the production possibilities frontier model.
C) an impossible situation.
D) a situation in which a country produces more of one good and less of another.
Comparable worth legislation
A) will eliminate the earnings gap between men and women.
B) mandates that employers pay the same wages to workers, regardless of their gender,
for jobs that have comparable worth.
C) mandates that potential employers demonstrate that they are worth the wages they
expect to earn.
D) guides markets toward the economically efficient wage.
Increases in real GDP since 1900 can actually underestimate growth in the standard of
living for Americans since 1900 because
A) the level of pollution in 1900 was much higher than it is today.
B) the crime rate was higher in 1900 than it is today.
C) goods and services are more expensive today as compared to 1900.
D) the quality of health care that exists today was not available in 1900.
Which one of the following is not a possible barrier to entry high enough to keep
competing firms out of a monopoly industry?
A) The monopoly firm has control of a key resource necessary to produce a good.
B) There are important network externalities in supplying a good or service.
C) large economies of scale that result in a natural monopoly
D) a high concentration ratio
Figure 5-4 Suppose there are several paper
mills producing paper for a market. These mills, located upstream from a fishing
village, discharge a large amount of wastewater into the river. The waste material
affects the number of fish in the river, and the use of the river for recreation and as a
public water supply source. Figure 5-4 shows the paper market. Use this Figure to
answer the following question(s). What is the economically efficient output level?
A) Q1
B) Q2 minus Q1
C) Q2
D) Q1 plus Q2
The demand for durable goods
A) has decreased over time.
B) declines by a greater percentage than does GDP during a recession.
C) declines by a smaller percentage than does GDP during a recession.
D) rises by a greater percentage than does GDP during a recession.
International trade
A) harms consumers but helps exporting firms.
B) helps consumers but harms exporting firms and their workers.
C) helps consumers but hurts firms that are less efficient than their foreign competitors.
D) helps consumers and firms that compete with their foreign competitors.
A decrease in which of the following would decrease the tax wedge?
A) marginal tax rate
B) money supply
C) national debt
D) federal budget deficit
Figure 4-9
Suppose the market is initially in equilibrium at price P1 and now the government
imposes a tax on every unit sold. Which of the following statements best describes the
impact of the tax? For demand curve D1
A) the producer bears a greater share of the tax burden if the supply curve is S2.
B) the producer bears a greater share of the tax burden if the supply curve is S1.
C) the producer’s share of the tax burden is the same whether the supply curve is S1or
S2.
D) the producer bears the entire burden of the tax if the supply curve is S1 and the
consumer bears the entire burden of the tax if the supply curve is S2.