Archives: Quiz

Negotiation is a mixed-motive enterprise, which refers to the fact that parties: A. manage both economic and psychological dimensions B. have incentives to cooperate as well as compete (p. 8) C. use both deliberate thought and intuition D. balance rewards […]

In negotiation, people often have faulty perceptions. The fixed-pie perception refers to: A. simultaneously improving the outcomes for both parties B. believing that the counterparty’s interests are directly opposed to one’s own interests (p. 73 ) C. a fixed alternative […]

Which of the following should be one of the first steps a negotiator should take to effectively repair broken trust? A. Discuss who was right and who was wrong B. Arrange a personal meeting and let the counterparty vent (p. […]

Negotiator’s evaluations of the fairness of procedures determines their satisfaction and willingness to comply with negotiated outcomes. Procedural justice is best defined as: A. <H1>AAA<P>the promises made to a counterparty to deliver on a contract B. the processes by which […]

When, you are asked about your desired salary in a job interview, what is the best response to use with the prospective employer? A. Make an extreme offer and negotiate your way back down to your acceptable BATNA range B. […]

In negotiation which of the following statements is generally not true when it comes to a negotiator’s BATNA? A. It is dynamic and constantly changing B. It is generally wise to reveal it (p. 15) C. It is determined by […]

The <KT>negotiator’s surplus is</KT> t<P>he positive difference between: A. negotiators’ reservation points B. the settlement outcome and the negotiator’s reservation point (p. 41) C. the bargaining surplus and the settlement outcome D. the best and worst possible economic outcomes A […]

In an effort to reduce the costs of resolving disputes and produce durable resolutions, some organizations use a procedure in which senior executives consider the elements of a dispute. This procedure is known as the: A. wise counselor strategy (p. […]

Different cognitive biases can threaten a negotiator’s effective problem solving and creativity. Of those threats, which of the following scenarios best illustrates the illusory correlation bias? A. A person hears that women living in San Francisco have a higher rate […]

Regarding the interests, rights, and power model of disputing, a negotiator who uses an interests-based approach is characterized by: A. the use of status, rank, threats, and intimidation B. an interest in the counterparty’s underlying needs, desires, and concerns (p. […]

In regard to reestablishing trust, a negotiator’s ability to ________ is directly related to how satisfied the other party feels, independent of the monetary value of the outcome. A. defend their position B. find reasons for failure C. understand emotion […]

Why is the human tendency to satisfice over the long run of a negotiation relationship, detrimental? A. Satisficing creates a competitive negotiation which affects the potential for pie-expansion. B. The satisficing party settles for a mediocre option, or something less […]

Negotiators should assess themselves and their resources before commencing negotiation. One question a negotiator should ask is, “What are my sunk costs?” A sunk cost is best defined as: A. money you have invested, that is for all practical purposes, […]

What are some of the most common errors made by negotiators who are attempting to expand the pie of resources? What are some of the psychological principles underpinning these errors? One of the major shortcomings in negotiation occurs when negotiators […]

Assume net exports are -$220, consumption is $5,000, tax revenues are $1,000, government purchases are $1,500, and 2003 GDP, calculated by the expenditure approach, is $8,000. We can conclude that a. private investment was $1,940 b. public investment was $310 […]

In recent years, each 1 percent drop in output is associated with the loss of more than a. five million jobs b. one million jobs c. half a million jobs d. two hundred thousand jobs e. one hundred thousand jobs […]

Which of the following best describes the history of the U.S. price level from 1970 to 2008? a. The price level increased during the 1970s and 1980s, but decreased during the 1990s. b. The price level increased during the 1970s […]

Economists monitor economic growth by keeping track of a. the stock market b. population growth c. the total quantity of goods and services produced in the United States each year d. the inflation rate e. the distribution of income among […]

The concern of economists with respect to the trade deficit is whether it is a. sustainable at current levels. b. desirable at current levels. c. under-specified. d. overestimated. e. the result of the financial crisis. ]Which of the following would […]

If the percentage change in quantity demanded is smaller (in absolute value) than the percentage change in price, then demand is Which of the following is a potential barrier to entry? Answer: D A decrease in the price of a […]

Money is a. only assets such as gold and silver b. only fiat in nature c. anything that is generally accepted as a means of payment d. acceptable as a means of payment because the government guarantees that it must […]

A profit-maximizing, single-price monopoly must lower its price in order to sell more output. If autonomous consumption is $1,000, the MPC is 0.75, net taxes are $500, investment spending is $800, and government purchases equals $500, and NX = $0, […]

In the classical model, beginning from an equilibrium in which the government is running a budget surplus, an increase in government spending will a. lower the wage rate b. increase the supply of loanable funds c. cause total spending to […]

A pure public good is one that is If the Bank of Japan buys yen to prevent the yen from appreciating, a. it is probably also trying to profit from that operation b. it is probably also trying to maintain […]

For which of the following goods is demand most sensitive to interest rate changes? a. Refrigerators b. Shoes c. Corn d. Textbooks e. Motor oil If minimum average cost is the same over a large range of output, Answer: E […]

If Chris can produce a service using fewer resources than Pat would, then Chris If the Federal Reserve sells $1,000 in bonds and, as a result, the money supply decreases by $2,500, what is the required reserve ratio? a. 0.4 […]

Since World War II, the U.S. economy has been characterized by a. extremely high rates of inflation b. decreases in the price level c. ongoing inflation d. zero inflation e. a continually falling rate of inflation When the Federal Reserve […]

Consider the monopolistically competitive firm whose demand curve and cost structure are illustrated in Figure 11-1. In the short run the firm”s fixed costs are In the hard-landing scenario the ability of the Fed to respond a. is unlimited b. […]

The prices of stocks and bonds move a. in opposite directions to the Fed’s interest rate target b. in opposite directions to the spending patterns of Congress c. in similar directions to the Fed’s interest rate targets d. in similar […]

The natural rate of unemployment a. is a specific unemployment rate that can be a target for the Fed b. changes as the inflation rate changes c. is natural because it does not change from period to period d. is […]

The marginal propensity to consume is always a. a negative number b. larger than 1.0 c. larger than 10 d. greater than zero and less than 0.5 e. greater than zero and less than 1.0 If the reserve requirement is […]

Which of following is an example of fiat money? a. US dollars b. Gold c. Diamonds d. Silver e. Fur The short-run macro model a. is an attempt to explain why the economy tends to perform better in the short […]

According to classical economics, a. the economy moves to full employment in the long run b. the economy is always at full employment in the short run c. the economy is rarely at full employment d. business cycles explain long-run […]

The Classical model a. is now discredited b. was developed by John Maynard Keynes c. has been completely displaced by the short-run macro model d. helps us to understand the performance of the economy in the long run e. is […]

The standard measure of the money stock, M1, refers to a. checking account balances, travelers’ checks, and cash in the hands of the public b. cash in the hands of the public, demand deposits, and small time deposits c. cash […]

In the short run, an increase in the money supply will a. decrease the interest rate, increase real GDP, and decrease the price level b. increase the interest rate, decrease real GDP, and decrease the price level c. result in […]

Referring to Figure 2-13, if you had to choose how to allocated $5 million and your objective was to save the most lives, you would Figure 2-13 Total Lives Saved After an excise tax is imposed on a good or […]

The price/earnings (PE) ratio of a stock is found by Instead of throwing away a worn-out pair of jeans, a cowboy trades them in for $12. The jeans are resold for $45 to someone who likes to project a rugged […]

The incidence of an excise tax A bank can only fail if it is not in good financial health. Answer: B A firm in a monopolistically competitive market is similar to a monopolist in the sense that it Answer: B […]

Ceteris paribus, when households spend less but do not supply of all their additional saving to the loanable funds market, a. total spending will exceed below total income, satisfying Say’s law. b. total spending will drop below total income, violating […]

Which of the following is the best example of a stock variable? a. U.S. GDP in 2008 b. The daily sales of economics textbooks c. Bill Gates’ annual salary from Microsoft Corporation d. The total wealth of the 50 richest […]

When a mall Santa Claus loses his job at the end of the Christmas season, this is an example of a. frictional unemployment b. structural unemployment c. frictional unemployment d. seasonal unemployment e. economic unemployment The total debt includes amounts […]

A new tool that the Fed started using in late 2008 was that it began to pay interest on the reserves banks hold in their federal reserve accounts. The change in cost resulting from producing one additional unit of output […]

Federal subsidies to higher education have the effect of Suppose there are no firms, only the government and households. What would the total demand for funds curve look like in such a world? a. Downward sloping b. Perfectly horizontal c. […]

Even a bank in good financial health can fail if there is a run on the bank. Transfer payments are included in government budgets as spending, but are not included in the government purchases category of GDP. Answer: A The […]

The payments made to shareholders from a firm’s profits are called Figure 2-3 shows the production possibilities frontier for a music processing plant that can produce both compact disks and cassettes. The opportunity cost of moving from point A to […]

If unemployment is above the natural rate, GDP is below potential output. The demand curve facing the firm has been estimated as follows: Which of the following statements about the firm’s total revenue is correct? Answer: D If the marginal […]

In the classical model, a falling demand for labor will a. not cause unemployment because the labor market always clears b. cause a recession with lower employment and a lower real wage c. cause a recession with lower employment and […]

A tariff a. is usually set by domestic producers of a good b. can be either a fixed dollar amount or a percentage of a good’s value c. decreases domestic price for a good, holding all else constant d. improves […]

The Federal Deposit Insurance Corporation helps to reduce the number of bank failures because a. of its rule that individuals cannot make a run on a bank b. it promises to reimburse up to $10,000 of lost deposits in an […]