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
The payroll tax is a tax imposed on ________ that is used to fund Social Security and
Medicare.
A) employers only
B) workers only
C) employers and workers
D) the unemployed
If the price of propane-fueled gas grills was to decrease, then
A) the demand for propane would decrease.
B) the demand for propane would increase.
C) the quantity of propane demanded would increase.
D) the quantity of propane demanded would decrease.
Reserves of a bank equal its
A) vault cash.
B) deposits with the Federal Reserve.
C) vault cash plus deposits with the Federal Reserve.
D) vault cash plus deposits of its customers.
Table 10-6
Table 10-6 lists Jay’s marginal utilities for burgers and Pepsi. Jay has $7 to spend on
these two goods. The price of a burger is $2 and the price of a can of Pepsi is $1. If Jay
can eat all the burgers he wants for free, how many burgers will he consume?
A) 7 burgers
B) 6 burgers
C) 5 burgers
D) 3 burgers
Article Summary. Seeking ways to improve education, Garrett Johnson has
organized technology competitions called hackathons where participants such as
students, teachers, and engineers build applications designed to improve
secondary and higher education systems. These applications can include ways for
teachers to improve skills, more productive study habits for students, improving
school safety, or any number of ideas related to education. Several hackathons
have been planned for around the country, including a virtual hackathon, entry is
free, and each contest will award $5,000 in prizes to the winners.
Source: Nancy Dahlberg, “Hackathon tackling education reform this week,”
Miami Herald, October 7, 2013.
The article addresses education reform by way of newly designed applications.
Education reform could lead to a more skilled and better trained public. A more skilled
and better trained public would
A) cause the market supply curve for labor to shift to the right.
B) cause the market demand curve for labor to shift to the right.
C) not shift the market demand curve for labor.
D) cause both the market demand curve for labor and the market supply curve for labor
to shift to the left.
Scenario 19-1 CANOES-R-US makes canoes. It buys the shell of the canoe from
another firm for $300 and uses its labor and intermediate goods to make the canoe. It
sells the finished canoe to a retail canoe store for $800. The retail canoe store then sells
the canoe to a consumer for $1,200.
The value added of CANOES-R-US for each canoe equals
A) $1,200.
B) $800.
C) $500.
D) $400.
Microeconomics is the study of
A) how households and firms make choices.
B) the economy as a whole.
C) the global economy.
D) topics such as unemployment, inflation, and economic growth.
Real GDP will increase
A) only if the price level rises.
B) only if the price level falls.
C) only if the quantity of final goods and services produced rises.
D) if either the price level rises or the quantity of final goods and services produced
rises.
Discouraged workers are
A) workers who have a part time job but want a full time job.
B) workers who find their current jobs unfulfilling and are considering a job change.
C) workers who have consistently been looking for work for more than 4 weeks.
D) workers who have stopped looking for work because they believe there are no jobs
for them.
Which of the following is evidence of a shortage of walnuts?
A) Firms lower the price of walnuts.
B) The price of cashews is lowered in order to make up for the walnut shortage.
C) The equilibrium price of walnuts falls due to a decrease in demand.
D) The quantity demanded of walnuts is greater than the quantity supplied.
NAFTA refers to a 1994 agreement that eliminated most tariffs among which countries?
A) Canada, the United Kingdom and Mexico
B) the United States, the United Kingdom and Mexico
C) the United States, Canada and Mexico
D) the United States, Mexico and Cuba
If the GDP deflator is less than 100, then for that year nominal GDP ________ real
GDP.
A) equals
B) is greater than
C) is less than
D) may be greater than or less than
Increasing the growth rate of GDP per capita and sustaining this growth rate in an
economy can
A) increase infant mortality.
B) increase standards of living.
C) increase the level of poverty.
D) lower life expectancy.
Compared to other high-income countries, health care spending per person in the
United States has been
A) growing at a faster rate.
B) declining at a faster rate.
C) growing at approximately the same rate.
D) declining at approximately the same rate.
A decrease in Social Security payments will
A) decrease consumption spending.
B) decrease investment spending.
C) decrease government spending.
D) decrease export spending.
There is a difference between who is legally required to send a tax payment to the
government and who bears the burden of the tax. Which of the following would have
the most impact on who bears the burden of an excise tax?
A) whether the tax is imposed by the federal government or a state government
B) whether the tax is based on the ability-to-pay principle or the benefits-received
principle
C) The motive for the tax. If the tax is designed to raise revenue, more of the burden
will fall on firms. If the tax is designed to achieve a social objective (for example, to
discourage smoking) more of the burden will fall on consumers.
D) The elasticity of demand for the item that is taxed.