Deflation occurs when
A) there is a sustained increase in the price level.
B) there is a one-time increase in the price level.
C) there is a decline in the price level.
D) there is a decrease in the expected rate of inflation.
Economists assume that
A) individuals behave in unpredictable ways.
B) consumer behavior is explained by the existence of unlimited resources.
C) people put other people’s interests ahead of their own.
D) optimal decisions are made at the margin.
Dumping refers to
A) selling inferior products to unsuspecting consumers.
B) selling a product for a price below its cost of production.
C) exporting products that do not meet domestic safety standards.
D) illegally avoiding tariffs by selling products on the black market.
As women’s wages have risen relative to men’s wages, the opportunity cost to women
of doing housework has ________ than has the opportunity cost to men.
A) increased less
B) increased more
C) decreased more
D) decreased less
Figure 6-12
Suppose the diagram shows the supply curves for a product in the short run and in the
long run. Which supply curve represents supply in the short run and which curve
represents supply in the long run?
A) SB represents supply in the short run, and SA represents supply in the long run.
B) Either SA or SB could represent supply in the short run; in the long run the supply
curve must be a vertical line.
C) Either SA or SB could represent supply in the long run; in the short run the supply
curve must be a horizontal line.
D) SA represents supply in the short run, and SB represents supply in the long run.
Under the Bretton Woods exchange rate system, ________ could sell their dollars to the
American government in exchange for gold.
A) foreign central banks
B) American citizens
C) foreign citizens
D) all of the above
Which of the following goods would have the most inelastic demand?
A) ski vacations
B) bread
C) luxury cars
D) big screen TVs
Table 2-7
Table 2-7 shows the output per month of two people, Fred and Barney. They can either
devote their time to making pogo sticks or making unicycles. What is Barney’s
opportunity cost of making a pogo stick?
A) 1/2 unicycle
B) 2 unicycles
C) 1/3 unicycle
D) 1.4 pogo sticks
According to the short-run Phillips curve, which of the following would result in low
rates of unemployment?
A) weak increases in aggregate supply
B) a lower inflation rate
C) weak increases in aggregate demand
D) a higher inflation rate
Figure 29-3
Consider the market for U.S. dollars against the Japanese yen shown above. An event
which could have caused the changes shown in the graph would be
A) an increase in U.S. real income.
B) speculators expect the dollar to depreciate in value in the near future.
C) an economic expansion in the United States.
D) a decrease in Japanese interest rates.
Table 2-20
Table 2-20 shows the number of labor hours required to produce a wristwatch and a
pound of rice in Japan and Thailand.
If the two countries specialize and trade, who should export rice?
A) There is no basis for trade between the two countries.
B) Japan
C) Thailand
D) They should both be exporting rice.
If the cross-price elasticity of demand between beer and wine is 0.31, then beer and
wine are
A) complements.
B) price inelastic goods.
C) substitutes.
D) necessities.
The absolute value of the slope of an isocost line equals the ratio of
A) the marginal productivities of the two inputs.
B) the prices of the two inputs.
C) the marginal utilities of the two inputs.
D) the quantities of the two inputs.