An increase in the price of good B caused an increase in the demand for good C. This
indicates that goods B and C are
a. complements.
b. substitutes.
c. neither substitutes nor complements.
d. normal goods.
The Gini coefficients for countries A and B are 0.25 and 0.30, respectively. We can
definitely conclude that
a. the lowest 20 percent family income groups in A and B receive 25 percent and 30
percent of total income, respectively.
b. the lowest 50 percent family income groups in A and B receive 25 percent and 30
percent of total income, respectively.
c. the lowest 20 percent family income group receives a greater share of total income in
country A than in country B.
d. the lowest 20 percent family income group receives a greater share of total income in
country B than in country A.
e. none of the above
Refer to Exhibit 24-4.What dollar amounts go in blanks (T), (U) and (V), respectively?
Exhibit 24-4
a. $25; $30; and $40
b. $16; $19.50; and $23.60
c. $30; $40; and $29
d. $23; $15; and $28
A tariff is imposed on strawberries.The tariff will ___________ the price of
strawberries in the domestic market, _____________ the quantity of strawberries
imported in the domestic market, and ____________ consumers’ surplus.
a. raise; lower; lower
b. lower; raise; lower
c. raise; lower; raise
d. lower; lower; raise
In the long run, only variable costs exist.
a. True
b. False
Brain researchers think that the best reason the brain might weight the present high and
the future low when faced with a present-future tradeoff is that:
a. responding quickly and definitively to present rewards might have come with an
evolutionary advantage.
b. people are naturally short-run thinkers.
c. the future is harder to visualize than the present.
d. people naturally think they may die in the future.
e. a and c
Refer to Exhibit 5-2. If the tuition is set at $40, there will need to be some kind of
non-price rationing device used for
Exhibit 5-2
a. 8 a.m. classes.
b. 10 a.m. classes.
c. a and b
d. none of the above
A rising marginal cost curve is a reflection of a
a. rising marginal physical product curve.
b. falling marginal physical product curve.
c. falling average fixed cost curve.
d. rising average variable cost curve.
In collective bargaining, a labor union
a. discusses the job description of each member with the firm the member is employed
by.
b. bargains with management on behalf of all its members.
c. usually tries to get each of its members to join a training program that can increase
his or her productivity.
d. b and c
e. a, b, and c
Special interest groups are usually
a. well informed on all political issues.
b. well informed on all economic issues.
c. well informed on issues of interest to them.
d. not well informed on any issues, but appear to be.
The current international monetary system is best described as a
a. fixed exchange rate system.
b. flexible exchange rate system.
c. managed flexible exchange rate system.
d. dollar standard.
e. gold standard.
Refer to Exhibit 1-2.According to the data provided in this table, what is the slope of
the line between points C and D, if these data were graphed with X on the horizontal
axis and Y on the vertical axis?
Exhibit 1-2
a. -4.00
b. -0.25
c. 4.00
d. 0.25
e. none of the above
Refer to Exhibit 25-3. Which of the following points represents the profit-maximizing
quantity and price of a monopolistic competitor?
Exhibit 25-3
a. A
b. B
c. C
d. D
e. E
Refer to Exhibit 2-5. The economy is currently operating at point F. The opportunity
cost of moving to point E is approximately
Exhibit 2-5
a. 35 televisions.
b. 55 televisions.
c. zero televisions.
d. 40 televisions.
For a good where network externalities are present, having an early lead in the race for
customers may be the only lead necessary to ultimately win the race for dominance in
the good’s market.
a. True
b. False
A bond is
a. a claim on the assets of a corporation such that the purchaser has an ownership right
in the corporation.
b. anything of value to which the firm has a legal claim.
c. a means of assuring that the business firm will pay its debts or fulfill other legal
obligations.
d. a promise to pay for the use of someone else’s money.
If an economy can produce a maximum of 10 units of good X and the opportunity cost
of 1X is always 2Y, then what is the maximum units of good Y the economy can
produce?
a. 5
b. 200
c. 20
d. 500
e. none of the above
Many years ago someone developed an item that was simply a small rock inside a box
with holes. The person earned large profits from selling “pet rocks.” Which of the
following theories on the source of profits best describes the reason behind this
success?
a. Uncertainty is a source of profits.
b. Profit is the reward for alertness to arbitrage opportunities.
c. Profit is the return to the entrepreneur as innovator.
d. There’s a sucker born every minute.
e. Sometimes all that it takes is to be in the right place at the right time.
Which of the following statements is false?
a. Microeconomics is the branch of economics that deals with human behavior and
choices as they relate to relatively small units-an individual, a firm, an industry, and a
single market.
b. Macroeconomics is the branch of economics that deals with human behavior and
choices as they relate to highly aggregate markets.
c. Positive economics attempts to determine what is.
d. Normative economics addresses what should be.
e. Positive and normative economics both address what should be.
Refer to Exhibit 25-3. What level of output is productively efficient?
Exhibit 25-3
a. Q1
b. Q2
c. Q3
d. It is not labeled on the diagram.
e. It is not determinable without more information.
As the marginal physical product of U.S. workers _________________, the marginal
cost of goods produced in the U.S. ______________ and unit costs
_____________.This makes American goods ________________ competitive in the
global marketplace.
a. rises; falls; fall; less
b. falls; falls; fall; more
c. rises; falls; fall; more
d. rises; falls; fall; more
Suppose that the exchange rate between the U.S. dollar and the Mexican peso starts out
at $0.11 per peso.If the exchange rate then changes to $0.08 per peso, there will be a(n)
__________ in the quantity demanded of dollars by Mexicans, and therefore there will
be a(n) __________in the quantity supplied of pesos to the foreign exchange market.
a. decrease; decrease
b. decrease; increase
c. increase; decrease
d. increase; increase
Theory A predicts that the higher the opportunity cost of having a child, the fewer
children a woman will have.Which of the following is evidence against the theory if
opportunity cost is measured in terms of foregone salary?
a. women with high-paying jobs have more children than women with low-paying jobs.
b. women with low-paying jobs have more children than women with high-paying jobs.
c. men married to women with high-payingjobs want more children than men married
to women with low-paying jobs.
d. the mothers of women with high-paying jobs will want their daughters to have
children more than the mothers of women with low-paying jobs will want their
daughters to have children.
e. none of the above
Refer to Exhibit 2-8. For Maya, the opportunity cost of producing one unit of good X is
___________ unit(s) of good Y.
Exhibit 2-8
a. 2.00
b. 1.00
c. 10.00
d. 0.50