Managed float exchange systems were abandoned with the implementation of the gold
standard.
The marginal product of labor curve is the demand curve for labor.
If Tanisha can audit more tax returns in one hour than Libby, then Tanisha has an
absolute advantage in auditing tax returns.
Public saving equals taxes minus government spending minus transfer payments.
If consumption is defined as C = 2,400 + 0.9Y, then the marginal propensity to consume
is 0.9.
If additional units of a good are produced at an increasing opportunity cost, the
production possibility frontier would be bowed outward (concave).
An decrease in the price level in the United States will shift the aggregate expenditure
line downward.
If the amount you owe on your house is greater than the price of the house, you have
A) no value to your house.
B) a mortgage rate that is too high.
C) negative equity in your house.
D) a reverse mortgage on your house.
A situation in which a country does not trade with other countries is called
A) autarky.
B) self-actualization.
C) autonomy.
D) independence.
Table 7-5
Table 7-5 shows the output per week for pens and pencils by Tran and Farah.
a. Which person has an absolute advantage in the production of pens? pencils?
b. Which person has a comparative advantage in the production of pens?
c. Which person has a comparative advantage in the production of pencils?
Figure 11-11 Figure 11-11
illustrates the long-run average cost curve for a firm that produces picture frames. The
graph also includes short-run average cost curves for three firm sizes: ATCa, ATC and
ATCc.
For output rates greater than 20,000 picture frames per month,
A) the firm will not make a profit because the average cost of production will be too
high.
B) the firm will experience diseconomies of scale.
C) the firm will experience diminishing returns.
D) the short-run average total cost will equal the long-run average total cost of
production.
The size of the underground economy would tend to increase if the government of a
country
A) decreased government regulations on businesses.
B) increased income tax rates.
C) legalized prostitution.
D) legalized marijuana.
A cash withdrawal from the banking system
A) decreases reserves.
B) decreases deposits.
C) decreases excess reserves.
D) All of the above are correct.
Figure 3-4
If the price is $20,
A) there would be a surplus of 600 units.
B) there would be a shortage of 600 units.
C) quantity demanded is zero.
D) the market is in equilibrium.
If diminishing marginal returns have already set in for Golden Lark Woodworks, and
the marginal product of the 6th carpenter is 8 chairs, then the marginal product of the
7th carpenter is
A) negative.
B) less than 8 chairs.
C) more than 8 chairs.
D) zero.
When the demand for a product is more elastic than the supply
A) consumers pay the majority of the tax on the product.
B) consumers pay the entire tax on the product.
C) firms pay the majority of the tax on the product.
D) firms pay the entire tax on the product.
Table 1-2
Julius runs a small tailor shop in the city of Bloomfield. He is debating whether he
should extend his hours of operation. Julius figures that his sales revenue will depend
on the number of hours the tailor shop is open as shown in the table above. He would
have to hire a worker for those hours at a wage rate of $18 per hour. What is Julius’s
marginal benefit if he decides to stay open for three hours instead of two hours?
A) $15
B) $25
C) $65
D) $80
Juanita goes to the Hardware Emporium to buy a new circular saw. She is willing to pay
$120 for a new saw, but buys one on sale for $85. Juanita’s consumer surplus from the
purchase is
A) $35.
B) $85.
C) $120.
D) $205.
Article Summary
In an August 2013 speech from the Lincoln Memorial, President Obama was
expected to emphasize that increased economic equality is needed to improve
racial equality. Economic gaps based on race have endured for 50 years, with the
differences in unemployment rates between blacks and whites remaining virtually
unchanged and the gap in wealth actually increasing. “If you look at 50 years after
the 1960s civil rights movement, the most stubborn and persistent challenge when
it comes to the nation’s racial challenge remains in the areas of economics and
wealth,” said Marc Morial, president of the National Urban League. Source:
Zachary A. Goldfarb, “For Obama, 50 years after historic march, economic
equality the path to racial justice,” Washington Post, August 17, 2013. The article
mentions increased economic equality is needed in terms of wealth. How would a more
equal distribution of wealth differ from a more equitable distribution of wealth?
A) They both mean the same thing, which is a more even distribution of wealth.
B) A more equal distribution of wealth is a more fair distribution, and a more equitable
distribution of wealth is a more even distribution.
C) A more equal distribution of wealth is a more even distribution, and a more equitable
distribution of wealth is a more fair distribution.
D) They both mean the same thing, which is a more fair distribution of wealth.
Figure 10-4
What is the marginal rate of substitution between h and j?
A) cookie.
B) cookie.
C) 2 cookies.
D) 4 cookies.
Federal government purchases, as a percentage of GDP,
A) have risen since the early 1950s.
B) have fallen since the early 1950s.
C) have remained roughly the same since the early 1950s.
D) rose from the early 1950s until the mid-1980s, and then fell.
A bank will consider a car loan to a customer ________ and a customer’s checking
account to be ________.
A) a liability; an asset
B) an asset; a liability
C) a liability; a liability
D) an asset; an asset
E) an asset; net worth
Figure 17-2
Figure 17-2 shows the
marginal revenue product for Becca’s Baubles, a producer of hand-beaded bracelets. If
the wage rate is $20, how many workers should Becca hire?
A) 6
B) 5
C) 4
D) 3
Economic models
A) make no assumptions in order to remain as accurate as possible.
B) are simplified versions of reality.
C) can not be used to analyze real-world issues.
D) magnify the complexity of economic issues in order to provide useful data.
China’s economy has grown tremendously from 1979 to the present. The reason for this
growth is
A) the introduction of the centrally planned economy in 1978.
B) the introduction of market-oriented reforms in 1978.
C) the introduction of the social networking site, Facebook.
D) the total lack of governmental intervention in the economy.
Why might network externalities result in products that contain inferior technologies?
According to the Taylor rule, does the target for the federal funds rate respond
differently for an increase in inflation caused by an increase in aggregate demand and
for an increase in inflation caused by a decrease in short-run aggregate supply? Explain
whether there is or is not a difference in how the target for the federal funds rate
changes.
Two key consequences of asymmetric information are adverse selection and moral
hazard. Define each concept, provide one example of each and explain how the two
concepts differ.
What is a corporate bond and what does it specify?
Table 20-13
Consider a simple economy that produces only three products: tacos, earplugs, and
toothbrushes. Use the information in the table to calculate the inflation rate for 2013, as
measured by the consumer price index.