A relationship that depends on the basic behavior of consumers and firms and remains
unchanged over long periods is called a ________ relationship.
A) frictional
B) structural
C) cyclical
D) dynamic
When a firm produces more output using the same inputs or the same output using
fewer inputs we say that the firm
A) experiences an increase in demand.
B) experiences positive technological change.
C) will hire more workers in order to produce more output.
D) is operating in the short run.
Figure 2-4
Figure 2-4 shows various points on three Different production possibilities frontiers for
a nation.
Consider the following events:
a. an increase in the unemployment rate
b. general technological advancement
c. an increase in consumer wealth Which of the events listed above could cause a
movement from Z to V ?
A) a only
B) a and b only
C) b and c only
D) a, b, and c
What type of business is the easiest to set up?
A) sole proprietorship
B) partnership
C) corporation
D) There is no difference in the ease of establishment.
An increase in national income could by caused by which of the following?
A) an increase in depreciation
B) an increase in personal taxes
C) a decrease in personal income
D) an increase in gross domestic product
The branch of economics which studies the behavior of entire economies is called
A) public economics.
B) microeconomics.
C) macroeconomics.
D) normative economics.
Yield management and price discrimination have enabled firms to increase profits and,
at the same time
A) reduce the cost of production.
B) capture some consumer surplus.
C) reduce transactions costs.
D) transfer some producer surplus to consumers.
Which of the following statements about the underground economy is true?
A) The underground economy in developing countries amounts to less than 10% of
measured GDP.
B) Most transactions that occur in the underground economy are included in the
calculation of GDP.
C) Excluding underground economy production from measured GDP causes errors in
GDP growth estimates in the long run.
D) Income that is earned but not reported as income for tax purposes is included in the
calculation of GDP.
How would the equilibrium interest rate respond to a change from an income tax to a
consumption tax?
A) The equilibrium interest rate would rise.
B) The equilibrium interest rate would fall.
C) The equilibrium interest rate would be unaffected.
D) The equilibrium interest rate may rise or fall based on whether the demand or supply
of loanable funds changes.
A monopolistically competitive market is described as one in which there are
A) a few firms producing an identical product.
B) a large number of firms selling similar, but not identical, products.
C) a few firms producing differentiated products.
D) one large firm and many small firms producing identical products.
Figure 3-1
A decrease population would be represented by a movement from
A) A to B.
B) B to A.
C) D1 to D2.
D) D2 to D1.
In recent years unemployment rates in several European countries have been higher
than unemployment rates in the United States. Many economists believe that European
unemployment rates have been higher because
A) of the different methods used to measure unemployment. If similar methods were
used, unemployment rates in Europe and the United States would be about the same.
B) European firms hire many seasonal workers from other countries, and this tends to
inflate unemployment rates in their countries.
C) unemployment benefits are more generous in Europe than in the United States.
D) the size of the military is much higher in the United States and all military personnel
are classified as employed.
Market power refers to
A) the ability of consumers to dictate what products should be produced.
B) the ability of a firm to advertise its product and succeed in selling more output.
C) the ability of a firm to sell at a lower price than rival sellers.
D) the ability of a firm to charge a price higher than the marginal cost of production.
The labor market in Major League Baseball features
A) a monopoly by the League in employing professional baseball players that is offset
by the players’ membership in a labor union.
B) a monopsony by the League in employing professional baseball players that is offset
by the players’ membership in a labor union.
C) an oligopoly by the League in employing professional baseball players that is offset
by an oligopsony by the players in the labor market.
D) monopolistic competition between the teams and professional baseball players.
By the year 2013, health care spending on Medicare, Medicaid, and other U.S.
government programs as a percentage of GDP had reached a level of
A) 2.2 percent.
B) 6 percent.
C) 17.5 percent.
D) 21.5 percent.
Figure 5-3 Figure 5-3 represents the market for
medical services with and without insurance, and the effect of a third-party payer
system on the demand for medical services. The efficient price of medical services is
A) $40.
B) $55.
C) $65.
D) >$65.
The cost of raising beef cattle has risen at the same time as consumer preference for
beef has fallen. In the market for beef, this would be represented by the equilibrium
price ________ and the equilibrium quantity ________.
A) increasing; increasing or decreasing
B) increasing or decreasing; decreasing
C) decreasing; increasing or decreasing
D) increasing or decreasing; increasing