Someone who is out of work because they are between jobs is experiencing
a. frictional unemployment.
b. structural unemployment.
c. seasonal unemployment.
d. cyclical unemployment.
How does the calculation of GDP include the costs of natural resource depletion that
occurs when output is produced?
a. The value of resource depletion is added to GDP.
b. The cost of resource depletion is not measured in GDP.
c. The cost of resource depletion is added to real but not nominal GDP.
d. Resource depletion causes GDP to overstate well being.
Proponents of deficit reduction argue that the principal effect will be an
a. outward shift of the aggregate supply curve.
b. inward shift of the aggregate supply curve.
c. outward shift of the aggregate demand curve.
d. inward shift of the aggregate demand curve.
Figure 4-5
If the suppliers of a good will sell any amount at $30 but there are no sales, then the
market can best be represented by which graph in Figure 4-5?
a. 1
b. 2
c. 3
d. 4
The subprime mortgage bubble featured ____ leverage and the technology stock bubble
featured ____ leverage.
a. significant; significant
b. significant; limited
c. limited; significant
d. limited; limited
Due to the private nature of bank ownership, there is often a difference between
bankers’ goals and macroeconomic objectives.
a. True
b. False
A bond with a high yield
a. gives investors a high return on their investments.
b. gives investors a low return on their investments.
c. sells for a high price.
d. sells for a low price.
Figure 11-7
The firm in Figure 11-7 is an unregulated monopolist; it will earn long-run profits of
how much?
a. 500
b. 400
c. 300
d. 200
It is true of the demand side of the market for input pricing that
a. the same marginal productivity principle serves as the foundation for the demand
schedule for each type of input.
b. the demand schedule for one input cannot be determined independently of demand
schedules for other inputs.
c. the demand curve is the complete MRP curve.
d. any inward shift in demand for a commodity will result in outward shifts in the
demand curves for the inputs used to produce the commodity.
If the Fed sells a T-bill to a commercial bank, how will this affect the money supply?
a. It will increase the money supply.
b. It will increase bank reserves.
c. It will decrease the money supply.
d. It will have no effect on the money supply.
Which basic approach to environment policy may be the only workable solution in brief
but serious emergencies that do not allow for time to plan and enact a systematic
program?
a. Taxes on pollution
b. Voluntary compliance
c. Tradable emissions permits
d. Direct controls like legal ceilings
Scientific evidence suggests that consumption of foods rich in fiber lowers cholesterol.
As a result, the demand for bran increases at every price by 5,000 bushels and the
supply curve for bran is perfectly price elastic. The quantity of bran consumed will
a. not change.
b. change unless the demand curve is perfectly inelastic.
c. rise by exactly 5,000 bushels.
d. not rise by exactly 5,000 bushels unless the demand curve is perfectly inelastic.
The opportunity cost of increased production of some good can be measured with
a. the slope of a ray to the production possibilities curve.
b. the area under the curve of a production possibilities curve.
c. the area of the rectangle bounded by the axes and the point on the production
possibilities curve.
d. the slope of the production possibilities curve.
e. All of the above are correct.
Aggregate supply can be thought of as
a. a fixed amount of output.
b. unrelated to the price level.
c. a schedule of output at different price levels.
d. the volume of goods at the ends of the production possibilities curve.
The self-correcting mechanism would be expected to be very rapid in an economy with
a. a large multiplier.
b. flexible prices.
c. rigid wages.
d. high labor productivity.
To measure how productive workers in the economy are, the best measure to use would
be
a. real GDP.
b. GDP divided by the population.
c. GDP divided by the nation’s capital stock.
d. GDP divided by hours worked.
The 2002-2008 OPEC price increases caused by conflict in the Middle East caused the
aggregate
a. demand curve to shift outward.
b. demand curve to shift inward.
c. supply curve to shift outward.
d. supply curve to shift inward.
Figure 3-2
In Figure 3-2, at point B
a. it is impossible to increase production of consumer goods.
b. it is impossible to increase production of capital goods.
c. it is possible to increase production of both capital goods and consumer goods
simultaneously.
d. it is impossible to increase production of both capital goods and consumer goods
simultaneously.
During the second Bush administration, environmental fines and prosecutions
a. increased rapidly.
b. declined significantly.
c. grew with the rate of inflation.
d. declined slightly from earlier levels.
Figure 7-2
In Figure 7-2 at an output of 500, marginal cost equals
a. 10.
b. 20.
c. 30.
d. 40.
A country’s level of productivity determines its
a. productivity growth rate.
b. rate of population growth.
c. current standard of living.
d. future income potential.
The excess capacity theorem states that society would clearly benefit from a reduction
in the number of monopolistic competitors.
a. True
b. False
It is true of externalities that they
a. arise when all costs, social and private, are included in production cost.
b. are always beneficial.
c. are always detrimental.
d. None of the above are correct.
Game theory applies to problems that arise in
a. perfect competition.
b. monopolies.
c. oligopolies.
d. pure competition.
Ideally, a free trade policy should be accompanied by
a. a public education program to make the benefits known.
b. open borders and amnesty for all undocumented workers.
c. programs to ensure no one loses a job as a result of foreign competition.
d. programs to assist workers who lose their jobs to foreign competition.
What is true of depletable resources is that
a. increasing scarcity leads to their total disappearance.
b. they are depleted by gradually using up the supply of homogeneous resources, every
unit of which is equally available.
c. generally the most accessible and cheapest sources are used up so that new supplies
become more costly.
d. their prices must rise at the average rate of inflation.
The City Symphony presents three open-air concerts in the city park pavilion during the
spring and summer. Many who attend make donations for symphony expenses, but the
donation is not required. Some who attend make no contributions. Economists would
a. classify the noncontributors as detrimental externalities.
b. call the concerts excludable events.
c. call the noncontributors free riders.
d. call the concerts depletable goods.
Professional baseball teams in the United States use only wooden bats. If aluminum
bats were permitted, the likely result would be a
a. shift in the supply curve for aluminum bats.
b. shift in the supply curve for wooden bats.
c. change in the quantity supplied of aluminum bats.
d. persistent shortage of aluminum bats.
If you purchased shares of common stock in 1990 for $1,000 and sold them for $2,000
in 2001 you would be liable for taxes on
a. $2,000.
b. $1,000 less the rate of inflation.
c. $1,000.
d. $2,000 less the rate of inflation.
Both conservatives and liberals tend to approve of markets because
a. markets are effective in solving many of society’s problems.
b. markets work well in all cases, and can be relied upon to solve problems.
c. their goals are similar enough that they can rely on the same means.
d. production is the most important goal, and market systems are very productive.
e. of all of the above.
According to the ____ view, a nation’s wealth consists of the amount of gold or other
monies at its command.
a. Keynesian
b. free trade
c. mercantilist
d. monetarist
Firms use collective bargaining to set higher market prices for their products.
a. True
b. False
If a nation imposes a tariff on imports, the portion of the tax paid by citizens depends
upon
a. elasticity of demand.
b. elasticity of supply.
c. how important the good is.
d. income elasticity.
e. cross elasticity of demand with domestic products.
Table 22-4
Table 22-4 presents the demand and supply schedules for television sets in Japan and
the United States. If there is no trade between these countries, what are the equilibrium
price and quantity in the United States?
a. P = $100, Q = 100
b. P = $200, Q = 85
c. P = $300, Q = 70
d. P = $500, Q = 50
The U.S. Postal Service engages in price discrimination.
a. True
b. False