If society decides it wants more of one good and all resources are fully utilized, then
A) it is unable to do this unless technology advances.
B) additional resource supplies will have to be found.
C) it has to give up some of another good and incur some opportunity costs.
D) more unemployment will occur.
Shifts in the supply of oil have caused large changes in price since the 1970s because
A) the supply of oil is very inelastic while the demand for oil is very elastic over short
periods of time.
B) the supply of oil is very elastic while the demand for oil is inelastic over short
periods of time.
C) both the supply of oil and the demand for oil are inelastic over short periods of time.
D) the supply of oil and the demand for oil are perfectly elastic over short periods of
time.
Vinny consumes tacos and chicken wings. To keep his utility constant, he must
consume more tacos if he consumes fewer chicken wings. This means that
A) Vinny’s indifference curve for tacos and chicken wings must have a negative slope.
B) the prices Vinny pays for tacos and chicken wings are always the same.
C) Vinny’s marginal utility from each good must be constant along his convex
indifference curves for tacos and chicken wings.
D) Vinny’s marginal rate of substitution must be constant along his indifference curves
for tacos and chicken wings.
Suppose the required reserve ratio is 20 percent. If banks are conservative and choose
not to loan all of their excess reserves, the real-world deposit multiplier is
A) less than 5.
B) equal to 5.
C) greater than 5.
D) equal to 20.
Which two factors make regulating mergers complicated?
A) First, firms may lobby government officials to influence their decision to approve
the merger. Second, by the time the government officials reach a decision regarding the
merger, the firms often decide not to merge.
B) First, the time it takes to reach a decision to approve a merger is so long that the
firms often have new owners and managers. Second, by law, government officials are
not allowed to consider the impact of foreign trade (exports and imports) on the degree
of competition in the markets of the merged firms.
C) First, the Federal Trade Commission and the Antitrust Division of the U.S.
Department of Justice must both approve mergers. Second, the concentration ratios that
are used to evaluate the degree of competition the merged firms face are flawed.
D) First, it is not always clear what market firms are in. Second, the newly merged firm
might be more efficient than the merging firms were individually.
Figure 5-15
Figure 5-15 shows the market for
Atlantic salmon, a common resource. The current market equilibrium output of Q1 is
not the economically efficient output. The economically efficient output is Q2.
Identify the area that shows the deadweight loss from overfishing.
A) egh
B) ekh
C) efh
D) eghk
The primary purpose of labor unions is to
A) ensure that workers receive adequate safety training.
B) ensure that all members earn identical incomes.
C) negotiate with employers about wages and working conditions.
D) endorse candidates and donate money to them.
The price level in the economy between 2012 and 2013 rose from 100 to 110. Between
2013 and 2014, the price level rose from 110 to 121. How does the short-run Phillips
curve predict the unemployment rate will change as a result?
A) The unemployment rate will decrease since inflation decreased.
B) The unemployment rate will decrease since inflation increased.
C) The unemployment rate will increase since inflation increased.
D) The unemployment rate will not change since there is no change in the rate of
inflation.
In 2013, Kendall Ford, an automobile dealership, spent $20,000 on a new car lift for its
repair shop, $2,000 on a new copy machine for its sales division, and $600,000 on Ford
Motor company stock. Unsold cars and trucks were valued at $400,000 on January 1,
2013 and unsold cars and trucks were valued at $900,000 on December 31, 2013. What
is Kendall Ford’s total investment spending in 2013?
A) $22,000
B) $322,000
C) $522,000
D) $1,022,000
Digital video recorders (DVRs) were introduced to the market in 1999, and new
technology has allowed for the cost of manufacturing the recorders to decline
significantly since the initial introduction. How did this change in technology affect the
market for DVRs?
A) The new technology caused an increase in the supply of DVRs and a decrease in
price of DVRs.
B) The new technology caused an increase in the supply of DVRs and an increase in
price of DVRs.
C) The new technology caused a decrease in the demand for DVRs.
D) The new technology caused an increase in the quantity of DVRs supplied.
Mr. Peabody chooses to invest in companies that produce goods and services based on
consumer preferences. Mr. Peabody is investing in companies that are attempting to be
A) allocatively efficient.
B) productively efficient.
C) guaranteed to make a profit.
D) all of the above
Figure 6-5
The section of the demand curve labeled “A” represents
A) the inelastic section of the demand curve.
B) the unit-elastic section of the demand curve.
C) the elastic section of the demand curve.
D) the perfectly elastic section of the demand curve.
In a natural monopoly, throughout the range of market demand
A) marginal cost is above average total cost and pulls average total cost upward.
B) average total cost is above marginal cost and pulls marginal cost upward.
C) marginal cost is below average total cost and pulls average total cost downward.
D) there are diseconomies of scale.
An economic growth model explains
A) changes in real GDP per capita in the long run.
B) how changes in the money supply affect real interest rates.
C) changes in government tax policies over time.
D) the growth rate of the price level over time.
Liquidity refers to
A) the ease with a stock can be traded for a bond.
B) the ease with which a financial security can be traded for cash.
C) the number of times a dollar changes hands in the creation of GDP in an economy.
D) the number of shares of stock a corporation issues.
Of the following high-income countries, which has the highest male life expectancy at
age 65?
A) Canada
B) Japan
C) the United Kingdom
D) the United States
A ‘stockout” occurs when
A) brokers run out of shares of stock to sell of a particular company.
B) a disruption due to a power outage, etc., causes a temporary production shutdown.
C) a company holds too many goods in inventories.
D) a firm loses sales because goods consumers want are not available.