If the price level in the United States is 110, the price level is 135 in Mexico, and the
nominal exchange rate is 12.5 pesos per dollar, what is the real exchange rate from the
U.S. perspective?
A) 8.8
B) 10.2
C) 10.8
D) 11.4
If the price of music downloads was to decrease, then
A) the demand for MP3 players would decrease.
B) the demand for MP3 players would increase.
C) the supply of MP3 players would increase.
D) the quantity demanded of MP3 players would decrease.
Figure 6-2
The absolute value of the price elasticity of demand at points a and is 1. What is the
value of P?
A) $50
B) $40
C) $30
D) $20
Figure 13-13
If the diagram represents a typical firm in the market, what is likely to happen to its
average cost of production in the long run?
A) It will probably fall since the firm must be cost efficient to remain competitive.
B) It will probably fall since the firm will be selling less than its current amount.
C) It will probably rise since the firm will be producing less than its current amount.
D) It will probably rise since its long-run demand is likely to be higher.
Figure 2-10
Figure 2-10 shows the
production possibilities frontiers for Tahiti and Bora Bora. Each country produces two
goods, milk and honey.
Which country has a comparative advantage in the production of honey?
A) Bora Bora
B) They have equal productive abilities.
C) Tahiti
D) neither country
What do economists call the situation where a hired manager does not have the same
interests as the owners of the business?
A) conquest and control
B) a financial problem
C) a principal-agent problem
D) a financial intermediary problem
Health insurance plans which typically reimburse doctors mainly by paying ________
are known as health maintenance organizations.
A) a fee for each individual service provided
B) a fee for each individual office visit
C) an escalating fee based on the number of patients being treated
D) a flat fee per patient
OPEC periodically meets to agree to restrict the cartel’s oil output, and yet almost every
member of OPEC produces more than its own output quota. This suggests that OPEC
has
A) a cooperative equilibrium.
B) a noncooperative equilibrium.
C) new potential entrants.
D) a threat of substitute goods.
A perfectly competitive firm’s supply curve is its
A) marginal cost curve.
B) marginal cost curve above its minimum average total cost.
C) marginal cost curve above its minimum average variable cost.
D) marginal cost curve above its minimum average fixed cost.
Which of the following is an example of a quasi-public good?
A) cable television
B) organic apples
C) stock of knowledge in the public domain
D) crime prevention
Select the phrase that correctly completes the following statement. “A decrease in the
expected future price caused an increase in the supply of smartphones. As a result,
A) the price of smartphones decreased and the demand for smartphones increased.”
B) the equilibrium quantity of smartphones decreased.”
C) the price of smartphones decreased and the quantity demanded of smartphones
increased.”
D) the price of smartphones decreased. The lower price caused the supply of
smartphones to decrease.”
Which of the following describes how a negative externality affects a competitive
market?
A) The externality causes a Difference between the private cost of production and the
social cost.
B) The externality causes a Difference between the private cost of production and the
private benefit from consumption.
C) The externality causes consumer surplus to exceed producer surplus.
D) The externality causes a Difference between the private cost of production and the
equilibrium price.
After the recession of 2007-2009, the unemployment rate peaked at 10.0 percent in
October 2009. Eighteen months later, it had
A) dropped by 50 percent.
B) declined by only 1 percentage point.
C) remained at 10.1 percent.
D) fallen to the natural rate of unemployment.
Figure 3-2
A decrease in the price of the product would be represented by a movement from
A) A to B.
B) B to A.
C) S1 to S2.
D) S2 to S1.