All else being equal, if the rate of growth in productivity in Spain is greater than the
rate of growth in productivity in the United States, the euro
A) will decrease in value relative the U.S. dollar.
B) will increase in value relative to the U.S. dollar.
C) will nominally appreciate against the dollar, but its real value relative to the dollar
will remain unchanged.
D) will nominally depreciate against the dollar, but its real value relative to the dollar
will remain unchanged.
Without technological advancement, how can a nation achieve economic growth?
A) by producing more high-value goods and fewer low-value goods
B) through an increase in supplies of factors of production
C) by producing more low-value goods and fewer high-value goods
D) by decreasing the size of the labor force
Which of the following accurately describes economic growth and standards of living
between 1,000,000 B.C. and 1300 A.D.?
A) Standards of living in 1300 A.D. were substantially better than what they were in
1,000,000 B.C.
B) Standards of living substantially declined from 1,000,000 B.C. to 1300 A.D.
C) Significant economic growth took place between 1,000,000 B.C. and 1300 A.D.
D) No sustained economic growth occurred between 1,000,000 B.C. and 1300 A.D.
Figure 7-1 Figure 7-1 shows the U.S.
demand and supply for leather footwear. Suppose the government allows imports of
leather footwear into the United States. What will the market price be?
A) >$24
B) $24
C) $30
D) $54
If the U.S. dollar decreases in value relative to other currencies, how does this affect the
aggregate demand curve?
A) This will move the economy up along a stationary aggregate demand curve.
B) This will move the economy down along a stationary aggregate demand curve.
C) This will shift the aggregate demand curve to the left.
D) This will shift the aggregate demand curve to the right.
Figure 2-15 Figure
2-15 shows the production possibilities frontiers for Greenland and Iceland. Each
country produces two goods, snow cones and popsicles. Which country has a
comparative advantage in the production of popsicles?
A) Greenland
B) They have equal productive abilities.
C) Iceland
D) neither country
Both buyers and sellers are price takers in a perfectly competitive market because
A) the price is determined by government intervention and dictated to buyers and
sellers.
B) each buyer and seller knows it is illegal to conspire to affect price.
C) both buyers and sellers in a perfectly competitive market are concerned for the
welfare of others.
D) each buyer and seller is too small relative to others to independently affect the
market price.
Figure 16-6
Watanabe Sensei operates the only
martial arts school in Hartfield. For simplicity, assume that consumers have identical
demand curves and that Sensei knows what this demand curve is. Figure 16-6 shows
this demand curve. With this pricing scheme – a competitive price for the classes and a
one-time membership fee – what amount of producer surplus will Sensei earn?
A) the area A + B + C + D + E.
B) the area E + F.
C) the area H + G + F.
D) the area A + B + C + D + E + F + G + H
All games share three characteristics. Two of these characteristics are rule and
strategies. What is the third characteristic called?
A) competition
B) collusion
C) results
D) payoffs
Ali’s Gyros operates near a college campus. Ali has been selling 120 gyros a day at
$4.50 each and is considering a price cut. He estimates that he would be able to sell 200
gyros per day at $3.50 each. a. Calculate the price elasticity of demand using the
midpoint formula.
b. Calculate the change in revenue as a result of the price cut.
Net foreign investment is equal to
A) capital inflows minus capital outflows.
B) foreign direct investment.
C) the balance of trade.
D) net foreign portfolio investment plus net foreign direct investment.
Figure 14-2
The
government of a developing country plans to award two firms, Gigacom and
Xenophone, the exclusive rights to share the market for high speed internet service.
Gigacom and Xenophone can both provide the service either via television cable lines
or via direct subscriber line (DSL). Suppose the government is considering a proposal
to delay one firm’s entry into the market on the grounds that it wants to prevent
“harmful” competition. Figure 14-2 shows the decision tree for this game. If the
government delays Gigacom’s entry and Xenophone moves first, what is the likely
outcome in the market?
A) Both offer internet service via cable line; Xenophone earns a profit of $6 million and
Gigacom earns a profit of $9 million.
B) Both offer DSL internet service; Xenophone earns a profit of $8 million and
Gigacom earns a profit of $7 million.
C) Xenophone offers DSL internet service and earns a profit of $5 million while
Gigacom offer internet service via cable line and earns a profit of $6.5 million.
D) Xenophone offers internet service via cable line and earns a profit of $4 million
while Gigacom offers DSL internet service and earns a profit of $4.5 million.
An isoquant shows
A) the combinations of two goods that yield the same total satisfaction.
B) the combinations of two inputs that yield the same total product.
C) the combinations of two inputs that cost the same total quantity of money.
D) the combination of two goods that cost the same amount of money.
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.
Figure 5-16 Amit and Bree are the
only two homeowners on an isolated private road. Both agree that installing street lights
along the road would be beneficial and want to do so. Figure 5-16 shows their
willingness to pay for Different quantities of street lights, the market demand for street
lights and the marginal cost of installing the street lights. What is the optimal quantity
of street lights to install?
A) 3
B) 4
C) 6
D) 9
The median voter model implies that
A) many people will be satisfied with the amount of spending on government funded
projects.
B) many people will be dissatisfied with the amount of spending on government funded
projects.
C) people in the political middle will be dissatisfied with the amount of spending on
government funded projects.
D) spending on government funded projects reflects the preferences of only those far
away from the median.
Figure 10-9
If the consumer has $240 to spend on DVDs and CDs, what is the price of a CD if the
budget constraint is BC2?
A) $8
B) $10
C) $20
D) $40
The production possibilities frontier model shows that
A) if consumers decide to buy more of a product its price will increase.
B) a market economy is more efficient in producing goods and services than is a
centrally planned economy.
C) economic growth can only be achieved by free market economies.
D) if all resources are fully and efficiently utilized, more of one good can be produced
only by producing less of another good.
If the required reserve ratio (RR) is 20 percent, the simple deposit multiplier is
A) 2.
B) 5.
C) 10.
D) 20.