Of the following high-income countries, which has the lowest number of MRI units per
1 million population?
A) Canada
B) Japan
C) the United Kingdom
D) the United States
Figure 3-6
The figure above represents the market for coffee grinders. Assume that the price of
coffee grinders is $50. At this price,
A) the quantity supplied exceeds the quantity supplied by 100. The price will eventually
fall to $25 where quantity demanded will equal quantity supplied.
B) the supply exceeds the demand by 90. Some producers will have an incentive to
offer to sell coffee grinders at a lower price.
C) there is a surplus equal to 90 coffee grinders that will be eliminated when the price
falls to $25.
D) there is a surplus equal to 90 coffee grinders and the price of coffee grinders will fall
until demand is equal to supply.
If net taxes fall by $80 billion, we would expect
A) the government deficit to fall by $80 billion.
B) household saving to rise by $80 billion.
C) household saving to rise by less than $80 billion.
D) household saving to fall by more than $80 billion.
Auctions in recent years have resulted in higher prices paid for letters written by John
Wilkes Booth than those written by Abraham Lincoln. Which of the following events
would cause the price Differences in these letters to get smaller?
A) The demand for Booth letters decreases.
B) The supply of Lincoln letters increases.
C) The demand for Lincoln letters increases, and the supply of Booth letters increases.
D) The demand for Lincoln letters decreases, and the demand for Booth letters
increases.
Figure 2-15 Figure
2-15 shows the production possibilities frontiers for Greenland and Iceland. Each
country produces two goods, snow cones and popsicles. What is the opportunity cost of
producing 1 popsicle in Greenland?
A) 2/3 of a snow cone
B) 5/6 of a snow cone
C) 1 1/5 snow cones
D) 240 snow cones
Who controls a partnership?
A) the owners
B) stockholders
C) bondholders
D) employees
Figure 3-7
Assume that the graphs in this figure represent the demand and supply curves for frozen
yogurt. Which panel describes what happens in the market for frozen yogurt when the
price of ice cream, a substitute product, increases?
A) Panel (a)
B) Panel (b)
C) Panel (c)
D) Panel (d)
Table 4-12
The equations above describe the demand and supply for Bubba’s Fried Jellybeans. The
equilibrium price and quantity for Bubba’s Fried Jellybeans are $40 and 5 thousand
units. What is the value of consumer surplus?
A) $5 thousand
B) $12.5 thousand
C) $25 thousand
D) $37.5 thousand
Which of the following will shift the demand for the euro to the right?
A) an increase in interest rates in the European Union
B) an increase in incomes in countries that buy goods from the European Union
C) expectations among speculators that the price of the euro will rise in the future
D) All of the above will shift the demand for the euro to the right.
An increase in investment causes the price level to ________ in the short run and
________ in the long run.
A) increase; increase further
B) increase; decrease
C) decrease; decrease further
D) decrease; increase
If the Federal Reserve announces that its target for the federal funds rate is rising from 4
percent to 4.25 percent, how do you expect workers and firms to react?
A) As long as the Fed’s announcement is credible, workers and firms will increase their
consumption and investment spending, which will increase aggregate demand and
inflation.
B) As long as the Fed’s announcement is credible, workers and firms will reduce their
consumption and investment spending, which will reduce aggregate demand and reduce
inflation.
C) If the Fed’s announcement is not credible, workers and firms will not expect inflation
to fall so they will reduce their consumption and investment spending, which will
increase aggregate demand and reduce inflation.
D) Workers and firms will incorporate the increase in interest rates into their
expectations of inflation, and they will expect inflation to rise as a result of Fed’s policy
announcement.
Significant economic growth did not begin in the world until
A) 1000 A.D.
B) 1750 A.D.
C) 1820 A.D.
D) the 20th century A.D.
a. What are the two effects of an increase in the wage rate on an individual’s labor
supply decision? Briefly explain each effect.
b. Explain how a labor supply curve could be backward-bending.
If credit card balances rise in the economy, then M1 will ________ and M2 will
________.
A) increase; increase
B) not change; increase
C) decrease; increase
D) not change; not change
E) increase; decrease
The marginal tax rate is
A) the amount of taxes paid as a percentage of income.
B) the amount of per-capita taxes paid.
C) the amount of taxes paid as a percentage of gross domestic product (GDP).
D) the fraction of each additional dollar of income that must be paid in taxes.
In January, buyers of gold expect that the price of gold will fall in February. What
happens in the gold market in January, holding everything else constant?
A) The demand curve shifts to the right.
B) The quantity demanded increases.
C) The quantity demanded decreases
D) The demand curve shifts to the left.