In reference to the federal income tax system, a tax bracket is
A) the estimated amount of federal income tax firms withhold from their employees’
paychecks.
B) the formula the federal government uses to determine the dollar amount of the
personal exemption and the amounts taxpayers are allowed for deductions from their
incomes.
C) used to determine the average tax rate.
D) the income range within which a tax rate applies.
Cyclical unemployment is the result of
A) a persistent mismatch between the skills and characteristics of workers and the
requirements of the jobs.
B) the search process of matching workers with jobs.
C) the ups and downs in inflation.
D) a slowdown in the economy.
Figure 2-14
Figure 2-14 shows the production possibilities frontiers for Costa Rica and Guatemala.
Each country produces two goods, pineapples and coconuts. If the two countries have
the same amount of resources and the same technological knowledge, which country
has an absolute advantage in the production of both pineapples and coconuts?
A) Guatemala
B) neither country
C) Costa Rica
D) cannot be determined
Which of the following statements is consistent with the views of Joseph Schumpeter?
A) Research and development by competitive firms is responsible for most
technological changes.
B) An economy benefits from firms having market power because these firms are more
likely to be able to commit funds for research and development.
C) Enforcement of antitrust laws is necessary to promote competition among firms.
D) A lack of competition discourages firms from developing new technologies.
Which of the following statements is trueabout scarcity?
A) Scarcity refers to the situation in which unlimited wants exceed limited resources.
B) Scarcity is not a problem for the wealthy.
C) Scarcity is only a problem when a country has too large a population.
D) Scarcity arises when there is a wide disparity in income distribution.
Which of the following is not a reason why the Industrial Revolution occurred when
and where it did?
A) The British government was committed to upholding private property rights.
B) The British government was able to eliminate arbitrary increases in taxes.
C) The British government was able to more easily seize wealth.
D) Institutional changes by the British government helped protect wealth.
What is a secondary market?
A) a market where factory seconds and damaged merchandise are sold
B) a market where newly issued bonds are sold to initial buyers by the borrowing firm
C) a market where a newly issued stocks are sold to initial buyers by the borrowing
firm
D) a market where you can sell any stocks you own as a private investor
All of the following are examples of spending on goods and services in the circular
flow model except
A) Amanda purchases a new electric guitar to pursue her hobby seriously.
B) Chaitanya buys a new spa pedicure chair for her expanding nail salon business.
C) Hernan buys a pizza at Papa C’s.
D) Lenny buys a new digital camera to take pictures at his son’s graduation.
Figure 17-2
At which point is the unemployment rate equal to the natural rate of unemployment?
A) A
B) B
C) C
D) There is insufficient information on the graph to answer this question.
A private good is
A) a good that is rival and nonexcludable.
B) a good that is nonrival and nonexcludable.
C) a good that is rival and excludable.
D) a good that is nonrival and excludable.
Figure 9-5 Suppose the U.S. government
imposes a $0.75 per pound tariff on coffee imports. Figure 9-5 shows the impact of this
tariff. Without the tariff in place, the United States consumes
A) 12 million pounds of coffee.
B) 26 million pounds of coffee.
C) 33 million pounds of coffee.
D) 45 million pounds of coffee.
Table 6-5
Katie Graham owns a kayak rental service in Santa Barbara. Table 6.3 below shows her
estimated demand schedule for kayak rentals per week. She would like to increase her
sales revenue by changing the price she charges for rentals. At present she charges $75.
Based on the information in the table, Katie
A) is not able to increase her revenue by changing her price because the demand for
kayak rentals is unit-elastic.
B) should lower her price to $60 to increase her revenue because the demand for kayak
rentals is price elastic.
C) should raise her price to $80 to increase her revenue because the demand for kayak
rentals is price inelastic.
D) should raise her price to earn the most revenue.
Table 3-5
The table contains information about the corn market. Use the table to answer the
following questions. a. What are the equilibrium price and quantity of corn?
b. Suppose the prevailing price is $9 per bushel. Is there a shortage or a surplus in the
market?
c. What is the quantity of the shortage or surplus?
d. How many bushels will be sold if the market price is $9 per bushel?
e. If the market price is $9 per bushel, what must happen to restore equilibrium in the
market?
f. At what price will suppliers be able to sell 22,000 bushels of corn?
g. Suppose the market price is $21 per bushel. Is there a shortage or a surplus in the
market?
h. What is the quantity of the shortage or surplus?
i. How many bushels will be sold if the market price is $21 per bushel?
j. If the market price is $21 per bushel, what must happen to restore equilibrium in the
market?
When a firm experiences a positive technological change
A) the price of a share of the firm’s stock rises.
B) the firm is able to produce more output using the same inputs, or the same output
using fewer inputs.
C) the value of the firm’s assets rises.
D) the firm will hire additional workers in order to increase production.
When firms price their products by adding a percentage markup to their average costs
of production, this is called
A) average cost pricing.
B) rounding up.
C) break-even pricing.
D) cost-plus pricing.
The United States abandoned the Bretton Woods system of exchange rates in
A) the 1920s.
B) the 1940s.
C) the 1970s.
D) the 1990s.
Which of the following is not an example of a transfer payment?
A) unemployment insurance payments
B) health insurance payments to an army private
C) social security payments to retirees
D) social security payments to disabled persons
An increase in the government budget deficit will shift the ________ curve for loanable
funds to the ________ and the equilibrium real interest rate will ________.
A) supply; right; fall
B) supply; left; rise
C) demand; right; rise
D) demand; left; fall
Figure 13-4 Figure 13-4 shows
short-run cost and demand curves for a monopolistically competitive firm in the market
for designer watches. What is the area that represents the total variable cost of
production?
A) 0P0aQa
B) 0P1bQa
C) P0abP1
D) P1bdP3