Suppose the supply of bicycles is price elastic. This means that
A) consumers will respond significantly to an increase in the quantity supplied of
bicycles.
B) suppliers will increase the quantity supplied of bicycles, but not immediately.
C) suppliers face many substitutes for bicycles.
D) suppliers will respond significantly to changes in the price of bicycles.
Of the different types of businesses, a corporation has the ________ government rules
and the ________ government regulations affecting it.
A) least; least
B) least; most
C) most; least
D) most; most
The DeBeers Company of South Africa was able to block competition through
A) economies of scale.
B) ownership of an essential input.
C) government-imposed barriers.
D) differentiating its product.
If Canada imports fishing poles from Mexico and Mexico imports bacon from Canada,
which of the following would explain this pattern of trade?
A) Mexico has a lower opportunity cost of producing bacon than Mexico, and Mexico
has a comparative advantage in producing fishing poles.
B) The opportunity cost of producing fishing poles in Canada is higher than the
opportunity cost of producing bacon in Mexico.
C) Mexico must have an absolute advantage in producing fishing poles, and Canada
must have an absolute advantage in bacon.
D) Mexico has a higher opportunity cost of producing fishing poles than Canada, and
Canada has a higher opportunity cost of producing bacon.
Both presidents Kennedy and Reagan proposed significant cuts in income taxes.
Opponents of these tax cut proposals argued that
A) the tax cuts would benefit high-income taxpayers.
B) cutting state sales taxes, rather than federal income taxes, would result in greater
economic efficiency.
C) while the tax cuts would result in greater economic efficiency, there was too much
opposition to the tax cuts in Congress. As it turned out, Congress ultimately approved
both tax cut proposals.
D) it would be better to cut taxes on corporate profits.
If real GDP per capita in the United States is $8,000, what will real GDP per capita in
the United States be after 5 years if real GDP per capita grows at an annual rate of
3.2%?
A) $8,520
B) $9,280
C) $9,365
D) $10,560
Table 9-9 Output Per Hour of Work
Table 9-9 shows the output per hour of work for light bulbs and flash drives in Mexico
and in Canada. a. Which country has an absolute advantage in the production of light
bulbs and flash drives?
b. Which country has a comparative advantage in the production of light bulbs?
c. Which country has a comparative advantage in the production of flash drives?
A decrease in the equilibrium price for a product will result
A) when the quantity demanded for the product exceeds the quantity supplied.
B) when there is a decrease in supply and a decrease in demand for the product.
C) when there is an increase in supply and a decrease in demand for the product.
D) when there is a decrease in demand and a decrease in the number of firms producing
the product.
Figure 7-5 Figure 7-5 represents the market for
medical services with and without insurance, and the effect of a third-party payer
system on the demand for medical services. The efficient price of medical services is
A) $40.
B) $55.
C) $65.
D) >$65.
Thailand’s experience with pegging the baht to the dollar failed because the baht was
________ relative to the dollar, and China’s experience with pegging the yuan to the
dollar has run into difficulties because the yuan has been ________ relative to the
dollar.
A) overvalued; overvalued
B) undervalued; overvalued
C) undervalued; undervalued
D) overvalued; undervalued
Inflation that is ________ than what is expected benefits ________ and hurts
________.
A) less; lenders; borrowers
B) less; borrowers; lenders
C) greater; lenders; borrowers
D) greater; lenders; no one