Table 7-2
Madison and Austin own Cafe Ole’. Table 7-2 lists the number of empanadas and tacos
Madison and Austin can each make in one hour. Select the statement that accurately
interprets the data in the table.
A) Madison has an absolute advantage in making tacos and Austin has an absolute
advantage in making empanadas.
B) Madison has an absolute advantage in making empanadas and Austin has an absolute
advantage in making tacos.
C) Madison has an absolute advantage in making empanadas and tacos.
D) Austin has an absolute advantage in making empanadas and tacos.
If the quantity of fishing poles demanded is represented by the equation QD = 60 – P
then the corresponding price of fishing poles is represented by the equation
A) P = 0.6QD + 10.
B) P = 60 – QD.
C) P = -60 + QD.
D) P = QD + 60.
If a firm lowered the price of the product it sells and found that total revenue did not
change, then the demand for its product is
A) perfectly inelastic.
B) perfectly elastic.
C) unit-elastic.
D) relatively elastic.
A perfectly elastic demand curve is
A) vertical.
B) horizontal.
C) curvilinear.
D) upward sloping.
Figure 26-6
In the figure above, if the economy is at point A, the appropriate monetary policy by the
Federal Reserve would be to
A) lower interest rates.
B) raise interest rates.
C) lower income taxes.
D) raise income taxes.
Long-run macroeconomic equilibrium occurs when
A) aggregate demand equals short-run aggregate supply.
B) aggregate demand equals short-run aggregate supply and they intersect at a point on
the long-run supply curve.
C) structural and frictional unemployment equals zero.
D) output is above potential GDP.
If the government finances an increase in government purchases with an increase in
taxes, which of the following would you expect to see?
A) an increase in the exchange rate
B) a decrease in the interest rate
C) a decrease in aggregate demand
D) an increase in net exports
Of the following high-income countries, which has the highest life expectancy at birth?
A) Canada
B) Japan
C) the United Kingdom
D) the United States
Figure 2-8 Figure 2-8 above shows the production
possibilities frontier for Vidalia, a nation that produces two goods, roses and orchids.
Suppose Vidalia is currently producing 20 dozen orchids per period. How many roses is
it also producing, assuming that resources are fully utilized?
A) 30 dozen roses
B) 50 dozen roses
C) 100 dozen roses
D) 150 dozen roses
At the minimum efficient scale
A) all possible economies of scale have not been exhausted.
B) the firm has achieved the lowest possible average cost of production.
C) any increases in the scale of operation will encounter further economies of scale.
D) marginal cost is at its minimum.