Archives: Quiz

Figure 6-7 Between points a and on the demand curve, demand is A) perfectly inelastic. B) unit-elastic. C) perfectly elastic. D) elastic. Table 9-6 Production and Consumption Production Without Trade With Trade Denmark and Belize can produce both clocks and […]

Table 9-10 Table 9-10 shows the output per week for pens and pencils by Tran and Farah. a. Which person has an absolute advantage in the production of pens? pencils? b. Which person has a comparative advantage in the production […]

Which of the following is the best example of a perfectly competitive industry? A) wheat production B) steel production C) electricity production D) airplane production The rules of accounting generally require that ________ costs be used for purposes of keeping […]

Of the following high-income countries, which has the highest mortality ratio for cancer? A) Canada B) Japan C) the United Kingdom D) the United States Consider the following pricing strategies: a. perfect price discrimination b. charging different prices to different […]

Figure 18-7 Figure 18-7 shows the Lorenz curve for a hypothetical country. The second lowest 20 percent of households A) earn 12 percent of the society’s total income. B) earn 16 percent of the society’s total income. C) earn 28 […]

Figure 4-9 Figure 4-9 shows the demand and supply curves for the almond market. The government believes that the equilibrium price is too low and tries to help almond growers by setting a price floor at Pf. What area represents […]

Figure 3-8 The graph in this figure illustrates an initial competitive equilibrium in the market for sugar at the intersection of D1 and S2 (point B). If there is an decrease in the price of fertilizer used on sugar cane […]

In response to accounting scandals in 2002, the federal government passed legislation requiring that corporate directors have a certain level of expertise with financial information and mandating that chief executive officers personally certify the accuracy of financial statements. What is […]

A reduction in the rate of inflation is referred to as A) unemployment. B) recession. C) disinflation. D) deflation. A standard which came to the market first, such as the QWERTY letter layout in typewriters, can become entrenched (this layout […]

One of your classmates asserts that advertising, marketing research, and brand management are redundant expenditures because a firm can obtain the same information by simply looking at what customers are already buying. Which of the following is not a response […]

If the average productivity of American firms is rising more quickly than the average productivity of Indian firms, which of the following would you expect to see? (India’s currency is the rupee.) A) an increase in the value of the […]

Which of the following statements about the economic decisions consumers, firms, and the government have to make is false? A) Governments face the problem of scarcity in making economic decisions. B) Only individuals face scarcity; firms and the government do […]

Ceteris paribus, a rise in interest rates in the United States will cause the yen price of the dollar in international exchange markets to ________. I.e., the dollar ________ in value against the yen. A) increase; appreciates B) increase; depreciates […]

Congress has divided the authority to police mergers between the Antitrust Division of the U.S. Department of Justice (AD) and the Federal Trade Commission (FTC). How is this authority divided? A) The AD decides whether proposed horizontal mergers will be […]

Table 4-1 The table above lists the highest prices three consumers, Curly, Moe, and Larry, are willing to pay for a bottle of champagne. If the price of one of the bottles is $95 dollars, total consumer surplus will be […]

Suppose the U.S. government encouraged new medical school graduates to take over existing practices from doctors wishing to retire by paying both the new and retiring doctors $100,000. These doctors would be exemplifying the economic idea that A) people are […]

Figure 16-6 Watanabe Sensei operates the only martial arts school in Hartfield. For simplicity, assume that consumers have identical demand curves and that Sensei knows what this demand curve is. Figure 16-6 shows this demand curve. With this pricing scheme€a […]

An example of a seasonally unemployed worker would be A) a software engineer who is laid off because of declining demand for the software he writes. B) a day care provider who quits his job to go back to school. […]

Figure 5-1 Figure 5-1 represents the market for vaccinations. Vaccinations are considered a benefit to society, and the figure shows both the marginal private benefit and the marginal social benefit from vaccinations. At the market equilibrium, A) the marginal cost […]

The existence of the principal-agent problem A) increases the risk of buying stock in a corporation. B) increases the risk of becoming the sole proprietor of a business. C) implies that managers that have the same incentives as the board […]

The branch of economics which studies how households and firms make choices, interact in markets and how government attempts to influence their choices is called A) macroeconomics. B) microeconomics. C) positive economics. D) normative economics. During what period of time […]

Using a broader measure of the unemployment rate where discouraged workers and part-time workers who wished to work full time were counted as unemployed, the BLS estimates the unemployment rate in September 2011 would have ________ compared to the measured […]

A reason why there is more competition among restaurants than among large discount department stores is that restaurants A) have to cater to a variety of consumer tastes while department stores do not. B) unlike department stores, have to abide […]

Which of the following is an advantage of starting a new business as a proprietorship? A) The owner has limited personal liability. B) A proprietorship has few government rules and regulations to comply with. C) Business profits are not taxed. […]

What impact does expansionary monetary policy have on the short-run Phillips curve if consumers and firms expect the expansionary monetary policy to increase inflation? A) The short-run Phillips curve shifts down. B) The short-run Phillips curve shifts up. C) The […]

If, in the market for oranges, the supply has increased then A) the supply curve for oranges has shifted to the right. B) the supply curve for oranges has shifted to the left. C) there has been a movement upwards […]

Figure 5-6 Figure 5-6 shows the market for measles vaccinations, a product whose use generates positive externalities.What is the market equilibrium output level? A) Q1 B) Q2 C) Q1 + Q2 D) Q2 – Q1 Let D = demand, S […]

Suppose that the federal budget is balanced when GDP is at potential GDP. If equilibrium GDP falls below potential, A) this will result in a current budget deficit. B) the cyclically adjusted budget will be balanced. C) government transfer payments […]

Which of the following accurately describes the impact of the rule of law on a country’s economic growth rate? A) Countries with a strong rule of law have faster economic growth. B) Countries with a weak rule of law have […]

Consider the following actions undertaken by a firm: a. charging the same price for products of different quality b. charging different prices to different consumers for the same product when the variation cannot be explained by cost differences c. charging […]

If the average variable cost curve is above the marginal cost curve, then A) marginal costs must be decreasing. B) average variable costs must be increasing. C) marginal costs must be increasing. D) marginal costs can be either increasing or […]

Monetarism is a school of thought put forth by ________, who argued that the economy would most likely be at potential GDP. A) Karl Marx B) Milton Friedman C) Finn Kydland and Edward Prescott D) Robert Lucas and Thomas Sargent […]

Assume that a 50 percent gasoline tax led to a large increase in its price and only a small decrease in the quantity of gasoline demanded. Economic analysis would lead one to conclude that A) gasoline should be taxed because […]

Which of the following are positive economic statements and which are normative economic statements? a. An increase in the price of gasoline will decrease the quantity of gasoline purchased. b. The government should eliminate the minimum wage. c. All states […]

A persistent shortage or surplus of a currency under the Bretton Woods system was evidence of A) failure to support the existing fixed exchange rate by central banks. B) fundamental disequilibrium in the country’s exchange rate. C) speculation against the […]

________ is maximized in a competitive market when marginal benefit equals marginal cost. A) Deadweight loss B) Marginal profit C) Economic surplus D) Selling price According to the saving and investment equation, if net foreign investment falls by $35 million, […]

A supply curve A) is a table that shows the relationship between the price of a product and the quantity of the product supplied. B) is a curve that shows the relationship between the price of a product and the […]

Figure 13-17 What is the productively efficient output for the firm represented in the diagram? A) Qf units B) Qg units C) Qh units D) Qj units Table 9-19 Looking at the table above, what is the rate of growth […]

If the GDP deflator is less than 100, then for that year nominal GDP ________ real GDP. A) equals B) is greater than C) is less than D) may be greater than or less than The process of rapidly adjusting […]

Figure 2-2 Figure 2-2 above shows the production possibilities frontier for Vidalia, a nation that produces two goods, roses and orchids. If Vidalia chooses to produce 40 dozen orchids, how many roses can it produce to maximize production? A) 30 […]

Table 10-3 The table above shows Lee’s marginal utility per dollar from consuming ice cream cones and cans of Lime Fizz Soda. The price of an ice cream cone is $2 and the price of Lime Fizz Soda is $1. […]

Table 9-6 Mateo and Celeste produce custom saddles and spurs. Table 9-6 lists the number of saddles and pairs of spurs Mateo and Celeste can each produce in one month. Select the statement that accurately interprets the data in the […]

The demand for labor depends primarily on the additional output produced as a result of hiring an additional worker and A) the additional revenue received from selling the output produced as a result of hiring an additional worker. B) the […]

If the price level in the United States is 110, the price level is 135 in Mexico, and the nominal exchange rate is 12.5 pesos per dollar, what is the real exchange rate from the U.S. perspective? A) 8.8 B) […]

Table 9-12 Production and Consumption Production Without Trade With Trade Estonia and Morocco can produce both swords and belts. Table 9-12 shows the production and consumption quantities without trade, and the production numbers with trade. Prior to trade, what was […]

How will the exchange rate (foreign currency per dollar) respond to an increase in preference for imported goods in the United States in the long run? A) Exchange rates will rise. B) Exchange rates will fall. C) Exchange rates will […]

Identify each of the following as (i) part of an expansionary fiscal policy, (ii) part of a contractionary fiscal policy, or (iii) not part of fiscal policy. a. The personal income tax rate is lowered. b. Congress cuts spending on […]

Figure 15-6 Figure 15-6 shows the cost and demand curves for a monopolist. The profit-maximizing output and price for the monopolist are A) output = 62; price = $24. B) output = 62; price = $18. C) output = 83; […]

At macroeconomic equilibrium, total ________ equals total ________. A) spending; production B) investment; inventories C) consumption; production D) taxes; transfers The law of demand implies, holding everything else constant, that as the price of gelato A) increases, the demand for […]

Which type of business is the most difficult to set up? A) sole proprietorship B) partnership C) corporation D) There is no difference in the difficulty of establishment. Workers in industries protected by tariffs and quotas are likely to support […]