If the percentage change in quantity demanded is smaller (in absolute value) than the
percentage change in price, then demand is
Which of the following is a potential barrier to entry?
A decrease in the price of a foreign currency is represented graphically as
a. rightward movement along the demand curve for that currency
b. an upward shift of the demand curve
c. a downward shift of the demand curve
d. a horizontal line
e. a vertical line
Which of the following would not be included in government purchases?
a. The purchase of a computer by a government agency
b. Welfare payments
c. Wages of government employees
d. The purchase of a police car
e. Spending on a new missile program
The consumer price index includes all of the following goods and services except
a. bonds of US corporations
b. French wine
c. Japanese VCRs
d. used cars
e. toiletries
Everything else equal, an increase in the supply of loanable funds will
a. lower the interest rate and reduce investment spending
b. lower the interest rate and increase investment spending
c. increase the demand for funds
d. increase the interest rate and reduce investment spending
e. increase the interest rate and increase investment spending
A price ceiling in a perfectly competitive market
An excess supply of money in the economy implies an excess demand for
a. stocks
b. mortgages
c. consumer nondurables
d. consumer durables
e. bonds
The table below describes a lawn mowing company’s revenues from different numbers
of lawn mowers. If the price of a lawn mower is $2,000, how many mowers should the
company buy?
Rebecca and Leah are roommates. Rebecca likes to study with the music playing loudly
and Leah needs quiet when she studies. Rebecca would be willing to pay $5 a night to
hear music while Leah would be willing to pay $10 a night for the quiet. In this
situation
In the classical model, fiscal policy has no demand-side effects on output or
employment..
A market with a negative externality
The Federal Reserve System is under the strict control of
a. the executive branch
b. the legislative branch
c. the judicial branch
d. the International Monetary Fund
e. none of the above
By better utilizing existing resources, an economy can produce at a point outside of its
current production possibilities frontier.
When the Fed increases or decreases the money supply, these actions are called
a. discounting
b. money printing
c. moral suasion
d. open market operations
e. interest payments
Both the supply and demand curves can shift due to changes in income.
Henry decides to quit his job (earning $50,000 per year), take his $60,000 in savings,
and open a dry cleaning store. Figure 8-1 shows the revenues and expenditures for his
first year of operation. If Henry could have earned $3,000 in interest on the money used
to open the store, his accounting profit would have been
Which of the following products is most likely to be produced by a perfectly
competitive firm?
Which of the following would lead to an increase in the supply of Russian rubles?
a. An increase in the dollar price of the ruble
b. An increase in Russian GDP
c. An increase in the U.S. price level relative to the Russian price level
d. A decrease in the dollar-ruble exchange rate
e. Expectation that the price of the ruble will rise.