Exhibit 10-2
At M,
a. TP = TE.
b. TP > TE.
c. TE > TP.
d. the relationship between TP and TE cannot be determined.
Between 1890 and 1914, the gold stock of the world _______________ and world
prices (in general)
a. doubled; increased.
b. tripled; increased.
c. rose by 50%; increased.
d. doubled; decreased.
e. tripled; decreased.
If the unemployment rate drops, then it necessarily follows that some of the people who
were once unemployed are now employed.
a. True
b. False
If the purchase and sale of marijuana becomes legalized
a. the equilibrium price and quantity will both rise.
b. the equilibrium price will fall, but the change in equilibrium quantity depends upon
whether the demand curve shifts rightward more or the supply curve shifts rightward
more.
c. the equilibrium quantity will rise, but the change in equilibrium price depends upon
whether the demand curve shifts rightward more or the supply curve shifts rightward
more.
d. the equilibrium price and quantity will both fall.
To an economist, the terms factor and resource are synonyms.
a. True
b. False
Suppose that for Jim the marginal benefit (MB) of producing is $60 and that the
marginal cost (MC) of producing is $10.Suppose also that his marginal benefit of
stealing is $50 and the marginal cost of stealing is $10.Is Jim currently maximizing
utility in terms of producing and stealing?If not, should he produce more and steal less,
or produce less and steal more to move toward utility maximization?
a. Yes, Jim is maximizing utility.
b. No, Jim is not maximizing utility.Since the MB/MC ratio for producing is less than
the MB/MC ratio for stealing, Jim should produce more and steal less.
c. No,Jim is not maximizing utility.Since the MB/MC ratio for producing is greater than
the MB/MC ratio for stealing, Jim should produce more and steal less.
d. No,Jim is not maximizing utility.Since the MB/MC ratio for producing is greater than
the MB/MC ratio for stealing, Jim should steal more and produce less.
Exhibit 39-5
Low price elasticity of demand for corn coupled with unpredictable weather makes both
price and total revenue in the market for corn extremely volatile. Which of the supply
curves would result in the least volatility?
a. S1.
b. S2.
c. S3.
d. The changes are not dependent upon elasticity of supply.
Exhibit 4-8
If the wheat market is in competitive equilibrium the producers’ surplus will equal
a. area 1 + 2 + 3
b. area 1 + 2 + 4
c. area 3 + 5
d. area 1 + 2 + 3 + 4 + 5
e. area 6
Suppose the economy goes from a point on its production possibilities frontier (PPF) to
a point below that PPF. Assuming that the PPF has not shifted, this could be due to
a. a gain of resources.
b. a loss of resources.
c. technological improvement in the production of both goods.
d. a new law that interferes with economic efficiency.
According to Say’s law, there can be
a. neither a general overproduction nor a general underproduction of goods.
b. a general overproduction but not a general underproduction of goods.
c. a general underproduction but not a general overproduction of goods.
d. both a general overproduction and a general underproduction of goods.
Exhibit 10-7
If government purchases decrease, which of the following is possible?
a. The AD curve shifts leftward from AD2 to AD1, the price level remains constant, and
Real GDP falls.
b. The AD curve shifts leftward from AD4 to AD3, the price level falls, and Real GDP
remains constant.
c. The AD curve shifts rightward from AD1 to AD2, the price level remains constant,
and Real GDP rises.
d. The AD curve shifts rightward from AD3 to AD4, the price level rises, and Real GDP
remains constant.
e. a and b
Exhibit 3-3
Good Y
A movement from point Z to point W would have been the result of
a. a reduction in the price of good Y.
b. an increase in taxes paid by the producers of good Y.
c. a decline in technology in the production of good Y.
d. an increase in the number of buyers of good Y.
Under a gold standard, if the market price of gold is below the official price of gold (set
by the monetary authority) members of the public would likely buy gold
_______________ and sell it __________________, causing the market price of gold
to ____________________.
a. from the monetary authority; in the gold market; fall
b. from the monetary authority; in the gold market; rise
c. in the gold market; to the monetary authority; fall
d. in the gold market; to the monetary authority; rise