The price of a ride on the Washington, D.C. metro depends on the time of day you ride.
This is an example of
a. exploitation.
b. inefficiency.
c. political interference with a market.
d. pricing to spread out demand.
The term “random walk” means that stock prices are fairly predictable.
a. True
b. False
According to Baumol and Blinder, the lag between the time a policy is implemented
and the time it affects aggregate demand is
a. longer for fiscal than monetary policy.
b. longer for monetary than fiscal policy.
c. approximately equal for both.
d. influenced mainly by the size of the multiplier.
The typical result of an adverse supply shock is
a. falling output accompanied by accelerating inflation.
b. falling output accompanied by decelerating inflation.
c. rising output accompanied by accelerating inflation.
d. rising output accompanied by decelerating inflation.
Discrepancies in profitability tempt rivals to charge the more profitable consumers
somewhat lower prices in order to lure them away from the firm that is “overcharging”
them. This practice is referred to as
a. collusion.
b. price dealing.
c. skimming.
d. market penetration.
Oligopolies are difficult to analyze because of the interdependent nature of management
decisions.
a. True
b. False
Which of the following statements is correct?
a. Marginal social cost is the share of marginal cost caused by an activity that is paid for
by the persons who carry out the activity.
b. Marginal private cost is the share of marginal cost caused by an activity that is borne
by persons other than those who carry out the activity.
c. Marginal social cost is the sum of marginal private cost and incidental cost.
d. Marginal private cost and incidental cost are one and the same.
Figure 11-7
For the firm in Figure 11-7, an unregulated monopolist, profit-maximizing output is
below the long-run competitive level by how much?
a. 100
b. 75
c. 50
d. 25
If a person who weighs 100 lbs. is riding in an elevator and is joined by a person
weighing 120 lbs., what happens to the average weight of persons on the elevator?
a. It falls.
b. It rises.
c. It stays the same.
For any firm, price always equals
a. average revenue.
b. marginal revenue.
c. marginal cost.
d. marginal profit.
If incomes were equally distributed in the United States, each fifth of the population
would receive ____ percent of the income.
a. 5
b. 10
c. 15
d. 20
Markets are primarily responsible for the rapid rise in productivity during the twentieth
century.
a. True
b. False
For which of the following workers would the substitution effect be more likely to
outweigh the income effect of an increase in wage?
a. air traffic controller
b. marketing manager
c. waitress
d. dentist
In 2012, about _____% of all Americans under the age of 65 did not have health
insurance.
a. 10%
b. 12%
c. 17%
d. 20%
Suppose the U.S. government has an annual budget of about $3.03 trillion. Does the
U.S. government face the problem of scarcity?
a. No, a government with $3.03 trillion faces no real constraints.
b. No, scarcity does not apply to governments.
c. Yes, resources are limited even for the U.S. government.
d. Yes, although the U.S. government can easily obtain more resources.
e. Uncertain-economic theory has no answer to this question.
Which of the following taxes tend to make income distribution in the United States
more equal?
a. sales (i.e., excise) taxes
b. personal income taxes
c. payroll taxes
d. All of the above are correct.
Major contributors to pollution are
a. individuals.
b. firms.
c. government.
d. All of the above are correct.
If the price of a commodity is above marginal cost, then the economy will tend to
a. overproduce the item.
b. underproduce the item.
c. produce the optimal amount of the item.
d. overproduce and underproduce the item cyclically.
A union wants to increase its members’ wages without reducing employment. Which of
the following strategies might achieve that goal?
a. setting a high minimum wage rate for its members
b. increasing the number of members in the union
c. pushing employers not to allow featherbedding of workers
d. training its members to work more productively
Long-run equilibrium under monopolistic competition requires that
a. the demand curve intersect the average cost curve.
b. the demand curve be tangent to the average cost curve.
c. price be equal to marginal cost.
d. quantity produced be at the point where average cost is at a minimum.
A chart of the ratio of national debt to GDP from 1915 to 2014 would show
a. a continuous decline.
b. sharp increases from 1945 to 1975.
c. significant increases from 1983 to 1994.
d. significant decreases from 2003 to 2010.
The productivity speed-up of the 1950s and the 1960s could have been caused by
a. wartime innovations.
b. civilian innovations after World War II.
c. industrial innovations spurred by the Korean and Vietnam conflicts.
d. decreases in the rate of population growth.
The logic of why international trade increases well-being is
a. a major revision of the logic of why trade within a country increases well-being.
b. completely different from the logic of why trade within a country increases
well-being.
c. a narrow, special case of the logic of why trade within a country increases well-being.
d. no different from the logic of why trade within a country increases well-being.
Government spending is a leakage out of the circular flow of income and spending.
a. True
b. False
For a simple economy (no government, no foreign sector), the condition for equilibrium
can be stated correctly as
a. saving equals actual investment.
b. saving equals inventory accumulation.
c. saving equals planned investment.
d. inventory accumulation equals planned investment.
As capital goods depreciate, the growth of labor productivity will increase.
a. True
b. False
The basic idea behind a negative income tax is to
a. help local government agencies deliver more services to the poor.
b. increase the in-kind income of the poor.
c. help the poor get job skills.
d. help the poor without destroying incentives to work.
Opportunity cost is the combined value of all other alternatives that go unchosen.
a. True
b. False
The New York Stock Exchange is the only place where a corporation can sell stocks
and raise money.
a. True
b. False
Labor productivity measures output per hour of work.
a. True
b. False
From the passage of the 16th amendment to the U.S. Constitution, income taxes became
the primary source of income for the U.S.
a. True
b. False
In the mid-1990s, real interest rates fell in the United States. This was the result of
budget deficit
a. increases and tighter monetary policy.
b. increases and looser monetary policy.
c. reductions and looser monetary policy.
d. reductions and tighter monetary policy.
Perfectly competitive markets feature relatively high barriers to entry.
a. True
b. False