The typical shape of an isoquant is
A) convex towards the origin.
B) concave towards the origin.
C) linear and downward sloping.
D) linear and upward sloping.
Table 2-11
Table 2-11 shows the number of labor hours required to produce a digital camera and a
pound of wheat in China and South Korea.
China has a comparative advantage in the production of
A) wheat.
B) digital cameras.
C) both products.
D) neither product.
The ________ effect of a price change refers to the impact of a change in the price of a
good on a consumer’s purchasing power.
A) income
B) substitution
C) demographics
D) ceteris paribus
Figure 4-1 Figure 4-1 shows Kendra’s
demand curve for ice-cream cones.
If the market price is $2.50, what is the consumer surplus on the second ice cream
cone?
A) $0.50
B) $1.50
C) $3.00
D) $10.50
The demand and supply equations for the apple market are:
Demand: P = 12 – 0.01Q
Supply: P = 0.02Q
where P= price per bushel, and Q=quantity. a. Calculate the equilibrium price and
quantity.
b. Suppose the government guaranteed producers a price of $10 per bushel. What would
be the effect on quantity supplied? Provide a numerical value.
c. By how much would the $10 price change the quantity of apples demanded? Provide
a numerical value.
d. Would there be a shortage or surplus of apples?
e. What is the size of this shortage or surplus? Provide a numerical value.
The first important law regulating monopolies in the United States was
A) the Grant Act, which was passed in 1890.
B) the Clayton Act, which was passed in 1890.
C) the Sherman Act, which was passed in 1890.
D) the Federal Trade Commission Act, which was passed in 1914.
Households
A) purchase final goods and services in the factor market.
B) purchase final goods and services in the product market.
C) purchase resources in the product market.
D) purchase resources in the factor market.
When you open a checking account at Bank of America, Bank of America
A) has more reserves and more excess reserves.
B) has more reserves, but excess reserves remain unchanged.
C) has more deposits and less in excess reserves.
D) has more deposits, but excess reserves remain unchanged.
Which of the following can a firm do in the long run but not in the short run?
A) decrease the size of its physical plant
B) reduce its rate of output by laying off workers
C) increase its variable costs
D) increase its use of raw materials
A United States government patent lasts
A) forever.
B) 50 years.
C) 20 years.
D) 7 years.
Firms that participate in regular open market transactions with ________ are called
primary dealers.
A) commercial banks
B) Treasury banks
C) the Federal Reserve
D) mortgage lenders
Governments grant patents to encourage
A) research and development on new products.
B) competition.
C) low prices.
D) firms to form public enterprises.
Table 11-5
Suzette’s Fancy Packaging subcontracts with Sunshineland Pecans to box dried fruit and
nuts for Suzette’s mail order business. Suzette rents space for her factory for $400 a
week in a nearby strip mall. She can hire temporary workers for $200 a week. Table
11-5 above shows her output and cost data. Use the table to answer questions a-e.
a. Complete the table.
b. In the last week of summer Suzette closes her business to go on a family vacation.
What are her costs during that week?
c. In one week Suzette exactly breaks even. If her revenue for the week is $1,200, how
many boxes of fruit and nuts did she produce?
d. Judging from the marginal product of labor data, would you say that Suzette had to
settle for increasingly unproductive workers? Explain your answer.
e. Suzette has received an order for 1,500 boxes of nuts per week for the next 3 months.
If she expects the trend in the marginal product of labor will continue in the same
direction, what do you think she should do? Should she not commit until she can move
to a larger space or should she just hire more workers? Explain your answer.
The substitution bias in the consumer price index refers to the idea that consumers
________ the quantity of products they buy in response to price, and the CPI does not
reflect this and ________ the cost of the market basket.
A) change; overestimates
B) change; underestimates
C) do not change; overestimates
D) do not change; underestimates
Table 14-5 Ming and
Henri each run one of the two dry cleaning facilities in the town of Scaraby. Both
consider offering free pickup and delivery services. Table 14-5 shows the payoff matrix
containing the expected quarterly profits for each firm.
What is the Nash equilibrium in this game?
A) There is no Nash equilibrium.
B) Ming offers free pickup and delivery, but Henri does not.
C) Henri offers free pickup and delivery, but Ming does not.
D) Both Ming and Henri offer free pickup and delivery.
A firm has successfully adopted a positive technological change when
A) it can produce more output using the same inputs.
B) it produces less pollution in its production process.
C) can pay its workers less yet increase its output.
D) it sees an increase in worker productivity.
According to real business cycle models,
A) the long-run Phillips curve is negatively sloped.
B) the economy is normally operating below the natural rate of unemployment.
C) unexpected changes in monetary policy are the major source of fluctuations in real
GDP.
D) the economy is normally at potential GDP.