The cyclically adjusted budget deficit calculates the budget surplus or deficit at
A) real GDP.
B) potential GDP.
C) nominal GDP.
D) average GDP.
In September 2012, the average price of gasoline in the United States was $3.91 per
gallon and consumers bought 5 percent less gasoline than they had during September
2011, when the average price was $3.66 per gallon. Based on these numbers, what was
the price elasticity of demand for gasoline from September 2011 to September 2012?
A) -0.33
B) -0.76
C) -2.96
D) -6.75
For each pair of items below determine which product would have the higher price
elasticity of demand (in absolute value).
a. Insulin for a diabetic or aspirin for someone suffering a headache.
b. A new Whirlpool 27 cu. ft. side-by-side refrigerator or electricity to power your
all-electric home.
c. A can of Red Bull or soft drinks in general.
Figure 23-1
If the economy is at point J, what will happen?
A) Inventories have fallen below their desired level, and firms decrease production.
B) Inventories have fallen below their desired level, and firms increase production.
C) Inventories have risen above their desired level, and firms decrease production.
D) Inventories have risen above their desired level, and firms increase production.
The response of investment spending to an increase in the government budget deficit is
called
A) expansionary investment.
B) private dissaving.
C) crowding out.
D) income minus net taxes.
Under which exchange rate system was a dollar redeemable for gold only if the dollar
was presented by a foreign central bank?
A) the gold standard
B) a managed float exchange rate system
C) the Bretton Woods System
D) a fiat system
As foreign investors began to sell off investments they had made in Thailand, they
traded in their baht for dollars. The result of this was
A) pressure for the value of the baht to decline.
B) pressure for the value of the baht to rise.
C) an increase in the equilibrium value of the baht.
D) a decrease in the supply of the baht in foreign exchange markets.
As job opportunities for women and the wages those jobs pay have increased, the
opportunity cost of doing housework has ________, so many families have chosen to
hire specialists in households chores, such as cleaning services and lawn care services,
because the cost of these specialists is ________ than the cost of the wife (or husband)
performing those chores.
A) increased; higher
B) increased; lower
C) decreased; higher
D) decreased; lower
The interest payment on a bond is called
A) the coupon payment.
B) principal.
C) the interest rate.
D) the face value.
The tragedy of the commons was avoided in the Middle Ages by
A) selling common grounds to individuals.
B) the local police who monitored entry into the commons.
C) social pressure to uphold traditionally accepted limits on family use of the commons.
D) the government which imposed a tax for the use of the commons.
Which of the following are necessary condition(s) for successful price discrimination?
a. zero transaction cost
b. a perfectly competitive market structure
c. an imperfectly competitive market structure
d. at least two different markets with different price elasticities of demand
e. at least two different markets with different price elasticities of supply
A) a, b, and d only
B) c and d only
C) a, c, d and, e only
D) a and c only
Figure 7-5 Figure 7-5 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. If consumers paid the full price of medical
services, the price they would pay is
A) $40.
B) $55.
C) $65.
D) >$65.
When ________ in a market, the total net benefit to society is maximized.
A) deadweight loss is maximized
B) a competitive equilibrium is achieved
C) consumer surplus is minimized
D) producer surplus is minimized
As more output is produced, the marginal product of labor declines
A) because of the law of diminishing returns.
B) if firms reduce the wage paid to labor.
C) if the firm’s output supply curve is inelastic.
D) because the firm’s marginal revenue declines.
Figure 13-3
What is the marginal revenue of the sixth unit of output?
A) $4
B) $5
C) $9
D) $54
Which of the following is likely to increase measured GDP?
A) A greater number of women decide to stay at home and provide day care for their
children under age 5.
B) Marijuana becomes legal to grow and sell.
C) Tax rates increase and more people attempt to underreport their income for tax
purposes.
D) More people decide to do their own lawn maintenance and give up using a
professional service.
Table 3-1
The table above shows the demand schedules for loose-leaf tea of two individuals
(Sunil and Mia) and the rest of the market. At a price of $5, the quantity demanded in
the market would be
A) 51 lbs.
B) 63 lbs.
C) 76 lbs
D) 146 lbs.