Archives: Quiz

Real GDP per person in Richland is $20,000, while real GDP per person in Poorland is $10,000. However, Richland’s real GDP per person is growing at 1 percent per year, and Poorland’s real GDP per person is growing at 2 […]

Expansionary policies are government stabilization policy actions intended to increase: A. population. B. unemployment. C. average labor productivity. D. planned spending. In a certain economy, the components of planned spending are given by: C = 500 + 0.8(Y – T) […]

When a government increases the cost of international trade, it is: A. helping domestic consumers. B. hurting all domestic producers. C. reducing the total amount of output available to domestic consumers. D. keeping all domestic prices artificially low. Firms that […]

If average labor productivity in two countries is the same, average living standards will be lower in the country with: A. the smaller population. B. the larger population. C. the higher share of population employed. D. the lower share of […]

In the case of either a positive or negative externality, it will always be true that, relative to the social optimum: A. the market price will be too low. B. the market price will be too high. C. the market […]

Refer to the figure above. What is the price elasticity of supply at point A? A. 4 B. 2 C. 1 D. 1/2 Fred purchases a bond, newly issued by the Big Time Corporation, for $10,000. The bond pays $400 […]

Demands for greater government regulations of workplace safety rest on the belief that A. labor market competition is great. B. firms will adopt safety devices on their own. C. left on their own, firms will exploit workers and subject them […]

The reason buffalo were driven to extinction while at the same time cattle were thriving is that: A. cattle were owned by ranchers whereas buffalo were wild. B. demand for buffalo meat was low, discouraging production. C. Western expansion required […]

When the price of hot dogs is $1.50 each, 500 hot dogs are sold every day. After the price falls to $1.35 each, 510 hot dogs are sold every day. At the original price, what is the price elasticity of […]

Suppose that the marginal benefit of having a security camera in the library is given by MB, at the supermarket is given by MB1 and at the museum is given by MB2. All values are per week. Marginal Cost is […]

A fiscal policy action to close an expansionary gap is to: A. increase taxes. B. increase transfer payments. C. increase government purchases. D. increase the marginal propensity to consume. If the Fed wishes to increase nominal interest rates, it must […]

One potential problem with using fiscal policy to close recessionary output gaps is that: A. sustained government deficits can be harmful to long-run economic growth. B. decreased government spending can cause inflationary pressure to build. C. reductions in interest rates […]

A consumer has a reservation price of $90 for a blender. If the local store is offering the blender for $100 with a $10 rebate and he does not make the purchase, one can surmise that: A. his reservation price […]

Refer to the figure above. If the good shown on the graphs is a private good at a price of $4 market demand is __________ units. A. 100 B. 90 C. 70 D. 50 Answer: A consumer expenditure survey reports […]

There are two employers in Bucolic that hire people who do not have a high school degree: a grocery store and a hardware store. The grocery store pays $5.00 per hour and the hardware store pays $6.00 per hour. People […]

Which of the following would increase the investment component of U.S. GDP? A. You purchase a new clothes washing machine produced in the U.S. B. You purchase a new clothes washing machine produced in France. C. A laundry in Seattle […]

In a small town of 100 people, there are 10 children under 16, 10 retired people, 60 people with full-time jobs, 3 people with part-time jobs, 3 full-time students over 16, and 4 full-time homemakers. The remaining people did not […]

In the long run, increases in output per person arise primarily from: A. increases in female labor force participation. B. increases in male labor force participation. C. an increasing proportion of the population retiring. D. increases in average labor productivity. […]

The United States generally has a comparative advantage in the development of technology because of: A. larger amounts of natural resources. B. a high concentration of the best research universities. C. tax incentives. D. the existence of patent law, which […]

Suppose a treacherous stretch of road winds through Deadman’s Canyon for 5 miles. A highway department study estimates that better lighting would reduce the traffic fatality rates as follows: Suppose that experts have estimated the statistical value of a life […]

The reason the marginal benefit of information curve is downward sloping is because A. some information is useless. B. most information is useless. C. information is subject to the law of diminishing marginal returns. D. there is only so much […]

A patch of edible mushrooms growing wild in a national forest is a ____ good. A. public B. private C. pure public D. commons Refer to the figure above. According to this data, marginal utility for apple consumption is A. […]

Smith and Jones comprise a two-person economy. Their hourly rates of production are shown below. Refer to the table above. If Smith and Jones are dividing their time efficiently and producing fewer than 10 computers and more than 120 calculators […]

Refer to the figure above. If this firm were to increase sales from 20 units to 30 units of output, its marginal revenue would be: A. $20. B. $200. C. $0. D. -$20. U.S. firms wishing to purchase European goods […]

Refer to the figure above. The profit-maximizing level of output for the monopolist is ____ and the profit-maximizing price is _______. A. 50; $20 B. 33.33; $13.33 C. 33.33; $26.67 D. 50; $26.67 When actual output equals potential output there […]

Average labor productivity is determined by: A. consumption, investment, government spending, and net exports. B. the number employed, unemployed, and the labor force participation rate. C. the quantity and quality of human capital, physical capital, technology, natural resources, entrepreneurship, and […]

Sven likes to water ski, but can only water ski during the one week that he is on vacation. Therefore, he plans to ski every day, for eight hours a day. The first day, Sven skied for eight hours and […]

In an open economy, the domestic real interest rate is determined by: A. domestic saving, domestic investment, and net capital inflows. B. domestic investment. C. domestic saving and domestic investment. D. domestic saving and net capital inflows. If short-run equilibrium […]

An in-kind transfer payment to the poor is A. made out of kindness. B. a cash payment. C. a benefit in the form of a good or service. D. less costly to provide compared to a cash payment. If the […]

Explanations for the high saving rate in Japan consistent with the life-cycle reason for saving include: A. long life expectancies and large down payments required for home purchases. B. lifetime employment. C. the desire to leave resources to children who […]

Matt has decided to purchase his textbooks for the semester. His options are to purchase the books via the Internet with next day delivery to his home at a cost of $175, or to drive to campus tomorrow to buy […]

Average total cost is defined as A. Total cost divided by output. B. Total cost divided by price. C. Variable cost divided by output. D. Variable cost divided by price. The last time gas prices increased drastically, sales of large […]

Credit card balances are not considered to be money primarily because they: A. are rarely used to make purchases. B. are not part of people’s wealth. C. are an asset used in making transactions. D. do not represent an obligation […]

This graph shows the cost functions of Moe’s mushroom gathering business, which is perfectly competitive. Moe’s short run supply curve is A. Curve C to the right of curve A B. Curve B to the right of curve A C. […]

According to the textbook, the evidence indicates that NAFTA has: A. reduced the wages of skilled workers in the United States. B. reduced the employment of unskilled workers in the United States significantly. C. stopped illegal immigration from Mexico. D. […]

If consumption spending increases by $10 million with no changes in net taxes, then: A. public saving increases. B. public saving decreases. C. private saving increases. D. private saving decreases. Your math professor has assigned 20 homework problems that are […]

According to the textbook, limits on private property rights, e.g., zoning laws, are: A. market interventions that reduce the size of the economic pie. B. generally unnecessary, as people have an inherent incentive to use private property wisely. C. an […]

Refer to the figure above. With no subsidy, what is the producer surplus? A. $0 B. $6,000 C. $7,500 D. $17,000 Refer to the figure above. Based on the figure, if autonomous spending increases from 400 to 600, then the […]

As the dollar exchange rate, e, increases, the quantity of dollars supplied in the foreign exchange market ____, and the quantity of dollars demanded in the foreign exchange market ____. A. increases; increases B. increases; decreases C. decreases; increases D. […]

Refer to the table above. The amount of currency held by the public ______, and the amount of reserves held by banks ______. It must be the case that, in 1932, the Federal Reserve ______. A. increased; also increased; increased […]

The ongoing search by savers for high returns leads the bond and stock markets to direct funds to the uses that appear: A. most likely to be productive. B. least likely to be productive. C. to have the least risk. […]

Moe’s parents frequently tell him how it was back in their childhoods. They had a smaller house, fewer toys, only one car and one black-and-white TV, but they were happy. In fact, Moe’s parents claim that they were happier than […]

Studying how Pat allocates her time between teaching classes and assisting undergraduate students is an example of: A. microeconomics. B. macroeconomics. C. individual economics. D. economic naturalism. When real output decreases, planned aggregate expenditures decrease because: A. autonomous expenditures increase. […]

Moe divides his time between studying Physics and studying Economics. He has discovered that he can earn grades as shown on this production possibilities curve. Moe needs to earn at least an 80 in both economics and physics to keep […]

Data on output and planned aggregate expenditure in Macroland are given below. Based on these data, the short-run equilibrium level of output is _____. A. 2,000 B. 3,200 C. 4,100 D. 5,000 An economy with a trade deficit must also […]

The Federal Reserve discount rate is the rate of interest charged on loans from ______ to _____. A. the Federal Reserve; commercial banks B. the Federal Reserve; the U.S. Treasury C. commercial banks; the Federal Reserve D. the U.S. Treasury; […]

In general, the optimal amount of medical care to receive is A. as much as one can afford. B. enough to get well. C. that quantity for which the total costs of the care equal the total benefits. D. that […]

Pizzas sell for $10 each. Refer to the figure above. When the pizza shop employs 2 workers per day, it will experience a marginal cost of ______ per pizza. A. $15 B. $25 C. $6 D. $3 Answer: D. Costs […]

Lunch in Jamie’s dorm is an all-you-can-eat buffet, served from 11 a.m. until 1 p.m. By noon, the buffet is picked over, and by 12:30, there are very few popular items left. The garbage bins, though, are full of food. […]

European firms wishing to purchase American goods and services are ______ the foreign exchange market. A. suppliers of U.S. dollars in B. demanders of Euros in C. supplied dollars by the European Central Bank for use in D. demanders of […]