Recall the Application about the behavior of prices in retail catalogs to answer the
following question(s). Economist Anil Kashyap of the University of Chicago examined
the prices of 12 selected goods from L.L. Bean, REI, and The Orvis Company, Inc.
Kashyap tracked the prices from the companies’ catalogs which were reissued every six
months.This Application examines the concept of
A) the wealth effect.
B) sticky prices.
C) consumer spending habits.
D) stagflation.
If the protection of intellectual property rights were to be reduced, say by shortening
patent terms, it is likely that:
A) funding of research and developing projects would increase, but investment would
decrease.
B) competition would increase but innovation would decrease.
C) information technology would flow freely but prices would be higher.
D) all of the above
A tight-money policy in the short run typically leads to
A) slower money growth.
B) higher interest rates.
C) lower output.
D) all of the above
Table 3.2
Consider two individuals, Rose and Sharon, who produce fish and coconuts. Rose and
Sharon’s hourly productivity are shown in Table 3.2. Rose’s opportunity cost of
producing 1 fish is:
A) 1/3 coconut.
B) 1 1/2 coconuts.
C) 3 coconuts.
D) 6 coconuts.
Which of the following statements is false?
A) The production possibilities curve shows the combinations of goods that can be
consumed by a nation before trade begins.
B) The production possibilities curve shows the combinations of goods that can be
consumed by a nation after trade and specialization begins.
C) The production possibilities curve shows the combinations of goods that can be
produced by a nation before trading begins.
D) The production possibilities curve shows the combinations of goods that can be
produced by a nation after trade and specialization begins.
The case of Airbus, an airplane manufacturing consortium in Europe, which receives
large subsidies from several European countries, best exemplifies which rationale for
protectionist policies?
A) shielding workers from foreign competition
B) protecting infant industries
C) prevention of dumping in local markets
D) helping domestic firms establish monopolies in world markets
Recall Application 4, “Trade, Consumption and Inequality,” to answer the following
questions:
Why did the Application claim that Sam Walton “effectively ran an anti-poverty
program”?
A) because Wal-Mart stocked its shelves with lower priced goods and services imported
from countries like China
B) because Wal-Mart contributed heavily to the “Make a Wish Foundation”
C) because Wal-Mart donated expired grocery items to the poor
D) because the tax generated from sales at Wal-Mart is used to fund anti-poverty
programs
Prices for industrial commodities such as steel rods or machine tools are
A) heavy prices.
B) sticky prices.
C) auction prices.
D) custom prices.
Output in the short run is determined by which of the following factors when an
economy operates at full employment?
A) demand
B) supply
C) the price level
D) the labor force
Money solves the dilemma of a double coincidence of wants by serving as a
A) medium of exchange.
B) store of value.
C) symbol of value.
D) unit of account.
The economic reason why you voluntarily pay tuition to get into the university/college
that you are in right now is because:
A) you believe the value of education is higher than the tuition costs.
B) the marginal benefit of education is positive.
C) the marginal benefit of money is zero.
D) you believe the value of education is lower than the tuition costs.
Governments in developing countries can hinder economic growth by:
A) providing free schooling.
B) stemming population growth.
C) accepting large volumes of foreign aid.
D) promoting policies that tax exports.
Table 6.9 Answer parts (a) through (e) using Table 6.9
and the following information. Arboc has a population (ages 16 and older) of 2,000,000.
The labor-force participation rate is 90%.
(a) Based on the information, calculate the number of workers in the labor force.
(b) Based on the information, calculate the number of workers unemployed in 1997
(c) Based on the information, calculate the number of workers employed in 1999.