Health insurance plans which typically reimburse doctors and hospitals with payment
for each service they provide are known as
A) fee-for-service plans.
B) preferred provider organizations.
C) single-health-payer systems.
D) health maintenance organizations.
When demand is unit-elastic, a change in price causes total revenue to stay the same
because
A) the percentage change in quantity demanded exactly offsets the percentage change in
price.
B) buyers are buying the same quantity.
C) total revenue never changes with price changes.
D) the change in profit is offset by the change in production cost.
A curve that shows all the combinations of two inputs, such as labor and capital, that
will produce the same level of output is called
A) an isoquant.
B) an isocost line
C) a budget line.
D) an optimal input combination curve.
Social Security
A) has not been successful in reducing poverty among elderly Americans.
B) is a system whereby current retirees are paid from taxes collected from current
workers.
C) has a greater number of workers per retiree today as compared to when it started.
D) currently pays retirees benefits equal to what they paid into the system.
A tax imposed by a government on imports of a good into a country is called a
A) tariff.
B) quota.
C) value added tax.
D) sales tax.
If a corporate bond with a face value of $5,000 pays yearly coupon payments of $100,
what is the coupon rate?
A) 2%
B) 5%
C) 10%
D) 20%
Expansionary fiscal policy ________ the price level and ________ equilibrium real
GDP.
A) decreases; increases
B) increases; decreases
C) increases; increases
D) decreases; decreases
According to the law of one price, identical products should sell for the same price
everywhere if
A) consumers have knowledge of the prices charged for products in different markets.
B) transactions costs are zero.
C) firms can prevent consumers from engaging in arbitrage.
D) there are no tariffs or other restrictions on imports or exports.
Money’s most narrow definition is based on its function as a
A) store of value.
B) unit of account.
C) standard of deferred payment.
D) medium of exchange.
E) standard of barter.
If a theatre company expects $250,000 in ticket revenue from five performances and
$288,000 in ticket revenue if it adds a sixth performance, the
A) marginal revenue of the sixth performance is $48,000.
B) marginal revenue of the sixth performance is $38,000.
C) cost of staging the sixth performance is probably higher than the cost of staging the
previous five.
D) company will be making a loss on the sixth performance because its ticket sales will
be less than the average received from the previous five.
The unattainable points in a production possibilities diagram are
A) the points within the production possibilities frontier.
B) the points along the production possibilities frontier.
C) the points of the horizontal and vertical intercepts.
D) the points outside the production possibilities frontier.
Under a floating exchange rate, the exchange rate
A) will change whenever the price of gold changes.
B) is controlled by central bank intervention.
C) is determined by the interaction of supply of the currency and demand for the
currency.
D) is pegged against the euro.
Consumer surplus in a market for a product would be equal to ________ if the market
price was zero.
A) zero
B) the area between the supply curve and the demand curve
C) the area above the supply curve
D) the area under the demand curve
The multiplier effect refers to the series of
A) autonomous increases in consumption spending that result from an initial increase in
induced expenditures.
B) induced increases in consumption spending that result from an initial increase in
autonomous expenditures.
C) autonomous increases in investment spending that result from an initial increase in
induced expenditures.
D) induced increases in investment spending that result from an initial increase in
autonomous expenditures.
Let D = demand, S = supply, P = equilibrium price, Q= equilibrium quantity. What
happens in the market for tropical hardwood trees if the governments restrict the
amount of forest lands that can be logged?
A) D decreases, S no change, P and Q decrease
B) S decreases, D no change, P increases, Q decreases
C) D and S decrease, P and Q increase
D) D no change, S decreases, P increases, Q increases
The U.S. unemployment insurance program
A) increases the amount of time the unemployed spend searching for a job.
B) decreases the level of frictional unemployment.
C) pays the unemployed a benefit equal to twice the average wage.
D) eliminates structural unemployment.
If a country’s real GDP is rising by 3% per year while its population is rising at 5% per
year, which of the following is true?
A) The country’s standard of living is falling.
B) The country’s standard of living is rising.
C) Growth in nominal GDP outweighs growth in the population.
D) Growth in nominal GDP is less than the growth in the population.
The cyclically adjusted budget deficit or surplus measures what the deficit or surplus
would be if the economy was
A) in a recession.
B) in an expansion.
C) at potential GDP.
D) at potential tax revenue.
Logrolling may result in
A) legislation that yields economy-wide benefits, the funding for which is borne
primarily by a few of the smallest states.
B) a majority of Congress supporting legislation that benefits the economic interests of
a few, while harming the economic interests of a much larger group.
C) members of Congress selling their votes on proposed legislation to the highest
bidder.
D) creating limited incentives for policymakers to consider the immediate
consequences of their proposed legislation.