Proponents of the ________ model argue that the short-run supply curve is vertical.
A) the monetarist model
B) the new classical model
C) the real business cycle model
D) the new Keynesian model
All of the following are examples of public goods except
A) broadcast television with commercials.
B) clean water systems.
C) stock of knowledge in the public domain.
D) crime prevention.
Opera Estate Girls’ School is considering increasing its tuition to raise revenue. If the
school believes that raising tuition will increase revenue
A) it is assuming that the demand for attending the school is inelastic.
B) it is assuming that the demand for attending the school is elastic.
C) it is assuming that the demand for attending the school is unit-elastic.
D) it is assuming that the demand for attending the school is perfectly elastic.
In a closed economy, public saving is equal to which of the following? (Y = GDP, C =
Consumption, G = Government purchases, T = Taxes, and TR = Transfers)
A) Y – C – T
B) Y – G – T
C) T – G – TR
D) Y – C – T + TR
In the 1970s and 1980s, the United States lost its comparative advantage in consumer
electronics goods to Japan. What factor was most responsible for the development of
Japan’s comparative advantage in consumer electronics goods?
A) Japanese firms benefited from external economies.
B) Japan has abundant supplies of labor.
C) Japanese firms excelled in process technology.
D) Japan has abundant supplies of natural resources needed to produce electronics
goods.
Figure 18-1
Italians cut back on smoking and cut their demand for American cigarettes in half.
Assuming all else remains constant, this would be represented as a movement from
A) B to A.
B) D to C.
C) B to C.
D) A to D.
During a(n) ________ many firms experience increased profits, which increases
________ and investment spending.
A) expansion; government spending
B) recession; cash flow
C) expansion; cash flow
D) recession; business confidence
Assume that the four-firm concentration ratio in an industry is 85 percent. Which of the
following statements uses one of the five competitive forces to argue that this industry
may be more competitive than its concentration ratio suggests?
A) The high concentration may be due to patents owned by the largest firms but
competition will increase when patent rights expire.
B) If high concentration is the result of large firms owning much of the available supply
of a key input, the industry will become more competitive when new sources of the
input are discovered by other firms.
C) Even though concentration is high, large firms in the industry may act competitively
by spending large sums on advertising.
D) The threat of entry into this industry can cause firms in the industry to lower their
prices and profits in order to deter entry.
A bank’s liabilities are
A) things owned by or owed to the bank.
B) things the bank owes to someone else.
C) a measure of the bank’s net losses.
D) included as part of the bank’s reserves.
Because consumers who have insurance provided by their employers usually only pay a
deductible for a visit to the doctor’s office,
A) they demand a larger quantity of health care services than they would if they paid a
price that better represented the true cost of providing the service.
B) they demand a smaller quantity of health care services than they would if they paid a
price that better represented the true cost of providing the service.
C) the doctors supply a smaller quantity of health care services than they would if the
consumer paid a price that better represented the true cost of providing the service.
D) the insurance companies provide a larger quantity of health care services than they
would if the consumer paid a price that better represented the true cost of providing the
service.