An increase in the price of off-road vehicles will result in
A) a smaller quantity of off-road vehicles supplied.
B) a larger quantity of off-road vehicles supplied.
C) an increase in the demand for off-road vehicles.
D) a decrease in the supply of off-road vehicles.
Specializing in the production of a good or service in which one has a comparative
advantage enables a country to do all of the following except
A) engage in mutually beneficial trade with other nations.
B) increase the variety of products that it can consume with no increase in resources.
C) consume a combination of goods that lies outside its own production possibilities
frontier.
D) produce a combination of goods that lies outside its own production possibilities
frontier.
Consider two countries, Alpha and Beta. In Alpha, real GDP per capita is $6,000. In
Beta, real GDP per capita is $9,000. Based on the economic growth model, what would
you predict about the growth rates in real GDP per capita across these two countries?
A) The growth rate of real GDP per capita will be lower in Alpha than it is in Beta.
B) The growth rate of real GDP per capita will be higher in Alpha than it is in Beta.
C) The growth rate of real GDP per capita in Alpha and Beta will be the same.
D) The economic growth model makes no predictions regarding differences in growth
rates of real GDP per capita across the two countries.
An investor is more likely to buy a firm’s stock if the firm’s income statement shows
________ and if its balance sheet shows ________.
A) a large net worth; a large price-earnings ratio
B) a large after-tax profit; a large net worth
C) a large price-earnings ratio; a large dividend yield
D) low opportunity costs; large liabilities
Figure 16-3
Chantal owns a hairdressing salon which caters to two main groups of customers:
residents of “The Chateau,” a retirement community, and other residents in the
neighborhood. Figure 16-3 shows the demand curves for the residents of the retirement
community, labeled Market A, and other residents in the neighborhood, labeled Market
B. The demand curves are not identical.
Suppose Chantal charges all her customers a uniform price of $10 for a haircut. Which
of the following statements is true?
A) Chantal is selling more than the profit-maximizing quantity of haircuts in market B.
B) Chantal is selling less than the profit-maximizing quantity of haircuts in market B.
C) Chantal is maximizing revenue in market B.
D) Chantal will earn a greater profit through uniform pricing than if she practices price
discriminates.
Briefly describe are the 6 main provisions of the Patient Protection and Affordable Care
Act (ACA)?
If people assume that future rates of inflation will ________, they are said to have
adaptive expectations.
A) be higher than inflation rates of the past
B) follow the pattern of inflation rates in the past
C) be lower than inflation rates of the past
D) not be related to inflation rates of the past
A good can serve as money only if
A) government mandates that the good must be accepted in payment of debts.
B) it is declared by authorities to be legal tender.
C) it has intrinsic value or if it is backed by precious metals.
D) citizens accept the good as a means of payment for transactions and debts.
Suppose in the Germany, the opportunity cost of producing a gallon of beer is 5 gallons
of wine. In Italy, the opportunity cost of producing a gallon of beer is 3 gallons of wine.
a. What is the opportunity cost of producing a gallon of wine for Germany?
b. What is the opportunity cost of producing a gallon of wine for Italy?
c. Which country has a comparative advantage in the production of beer?
d. Which country has a comparative advantage in the production of wine?
In early 2008, the housing crisis and rising oil prices increased the risk of recession in
the United States. What fiscal policy action was taken by Congress and the president to
counter these events?
A) The Federal Reserve cut its target for the federal funds rate.
B) There was an increase in government spending on defense and unemployment
compensation.
C) Taxpayers were given rebates on taxes they already paid.
D) Income taxes were raised to reduce the federal budget deficit and reduce interest
rates.
Given the equations for C, I, G, and NX below, what is the equilibrium level of GDP? C
= 1,000 + 0.8Y
I = 1,500
G=1,250
NX = 100 A) $3,080
B) $3,850
C) $6,930
D) $19,250
The marginal rate of technical substitution is
A) the rate at which a firm is able to substitute one input for another, while keeping
total cost constant.
B) the rate at which a firm is able to substitute one input for another, while keeping the
level of output constant.
C) the rate at which a firm is able to institute positive technological changes to its
production process.
D) the rate at which a firm is able to increase its output by replacing labor with
technology.
Table 2-12
Table 2-12 shows the number of labor hours required to produce a canoe and a sailboat
in Guatemala and Honduras.
If the two countries specialize and trade, who should export canoes?
A) There is no basis for trade between the two countries.
B) Guatemala
C) Honduras
D) They should both be exporting canoes.
A decrease in the price of pork will result in
A) a smaller quantity of pork supplied.
B) a larger quantity of pork supplied.
C) a decrease in the demand for pork.
D) an increase in the supply of pork.