During a business cycle expansion, total production ________ and total employment
________.
A) increases; increases
B) increases; decreases
C) decreases; increases
D) decreases; decreases
Classifying a good as excludable means
A) that someone can be barred from consuming the good based on race, creed or some
other irrelevant characteristic.
B) that anyone who does not pay for the good cannot consume it.
C) that consumption of the good causes no externalities.
D) that a producer with patent or copyright protection can exclude any other producer
from selling his product.
Consider the following statements about the signaling hypothesis of education:
a. The signaling hypothesis of education is based on the idea that college graduates are
more productive than non-college graduates.
b. The signaling hypothesis of education suggests that firms rely on human capital
requirements to ensure worker quality.
c. Employers rely on certain signals, such as a college diploma, to gauge a potential
employee’s abilities because it could lower the cost of acquiring information about the
person that is not easily observed. Which of the statements above is true about the
signaling hypothesis of education?
A) a, b, and c
B) a and b only
C) b and c only
D) a and c only
The purchase by a household in China of a CD produced in the United States is
included in U.S.
A) consumption expenditures.
B) investment expenditures.
C) government purchases.
D) net exports.
Which of the following are separate flows in the circular flow model?
A) the flow of goods and the flow of services
B) the flow of costs and the flow of revenue
C) the flow of income earned from the sale of resources and the flow of expenditures on
goods and services.
D) the flow of income received by households and the flow of tax revenues paid by
households
A characteristic of the long run is
A) there are fixed inputs.
B) all inputs can be varied.
C) plant capacity cannot be increased or decreased.
D) there are both fixed and variable inputs.
Common resources Differ from public goods in that
A) common resources are non-excludable while public goods are excludable to those
who do not pay for the good.
B) unlike public goods, common resources are rival in consumption.
C) common resources are collectively owned by a group of people while public goods
are government owned.
D) common resources are resources that cannot be renewed, but the production of
public goods can be increased any time.
How can a proprietorship or partnership raise funds for expansion?
A) borrow from someone or an institution willing to lend the funds
B) reinvest profit back into the business
C) take on a partner or more partners
D) Any of these would generate funds for expansion.
A proprietorship or partnership can raise funds for expansion in all of the following
ways except
A) borrowing from someone or an institution willing to lend the funds.
B) reinvesting profit back into the business.
C) taking on a partner or more partners.
D) issuing stock through financial markets.
If a doctor knows that an insurance company will pay for most of a patient’s bill, the
doctor has more of an incentive to require additional medical procedures and tests, even
if the patient may not require them. This is an example of
A) moral hazard.
B) the principle-agent problem.
C) asymmetric information.
D) adverse selection.
By 2013, how many European countries were members of the European Union?
A) 12
B) 17
C) 28
D) 57
Figure 2-4
Figure 2-4 shows various points on three different production possibilities frontiers for
a nation. Consider the following events:
a. an increase in the unemployment rate
b. a decrease in a nation’s money supply
c. a war that kills a significant portion of a nation’s population Which of the events
listed above could cause a movement from Y to W?
A) a, b and c
B) a and b only
C) a and c only
D) a only
E) c only