Archives: Quiz

What is “brain drain”? A) the tendency for highly educated workers in high-income countries to move to low-income countries to volunteer their services B) increased recruiting efforts that attempt to raise the average level of education in developed nations C) […]

All of the following cost curves are U-shaped except one. Which curve is not U-shaped? A) the marginal cost curve B) the average fixed cost curve C) the average total cost curve D) the average variable cost curve Article Summary. […]

Which of the following would you expect to increase the equilibrium interest rate? A) an increase in the percentage of income after net taxes that households save B) an increase in the budget deficit C) a decrease in the profitability […]

Alan Krueger conducted a survey of fans at the 2001 Super Bowl who purchased tickets to the game for $325 or $400. Krueger found that (a) 94 percent of those surveyed would not have paid $3,000 for their tickets, and […]

Which of the following would cause the dollar to depreciate? A) an increase in the demand for dollars B) a decrease in the demand for dollars C) a decrease in the supply of dollars D) a decrease in the demand […]

If a decrease in income leads to in a decrease in the demand for mac and cheese, then mac and cheese is A) a normal good. B) a neutral good. C) a complement. D) a necessity. The aggregate demand curve […]

Suppose there has been an increase in investment. As a result, real GDP will ________ in the short run, and ________ in the long run. A) increase; increase further B) increase; decrease to its initial value C) decrease; decrease further […]

Figure 4-5 Figure 4-5 shows the market for apartments in Springfield. Recently, the government imposed a rent ceiling of $1,000 per month. Suppose that instead of a rent ceiling, the government imposed a price floor of $2,000 per month for […]

The study of economics arises due to A) money. B) scarcity. C) greed. D) resources. Which of the following is a characteristic shared by a perfectly competitive firm and a monopoly? A) Each must lower its price to sell more […]

Jamal, Lawson and Kyle have been standing in line for almost an hour waiting to be served at Kirala, a popular new Japanese restaurant. It is possible that some of the people in line won’t be served at all before […]

DeShawn’s Detailing is a service that details cars at the customers’ homes or places of work. DeShawn’s cost for a basic detailing package is $40, and he charges $75 for this service. For a total price of $90, DeShawn will […]

Baxter International, a manufacturer of hospital supplies, acquired American Hospital Supply, a distributor of hospital supplies. This is an example of A) a conglomerate merger. B) a horizontal merger. C) a vertical merger. D) a two-dimensional merger. Table 2-11 Table […]

Marginal revenue product for a perfectly competitive seller is equal to A) the output price multiplied by the total product of labor. B) the output price multiplied by the number workers hired. C) the change in total revenue that results […]

Table 23-3 Given the consumption schedule in the table above, the marginal propensity to consume is A) 0.1. B) 0.3. C) 0.6. D) 0.9. In economics, choices must be made because we live in a world of A) unemployment. B) […]

Michael Spence proposed the signaling hypothesis. According to this hypothesis, A) workers signal their desire to work for a particular firm by the way they answer questions in job interviews. B) employers signal their preferences for the type of employee […]

Table 15-1 A monopoly producer of foreign language translation software faces a demand and cost structure as given in Table 15-1. What is the marginal revenue from the sale of the 12th unit? A) $75 B) $50 C) $20 D) […]

Jack was unemployed two weeks ago but just started a new job. As a result of this increase in the number of employed workers, which of the following occurred? A) The labor force participation rate increased. B) The unemployment rate […]

Collusion between two firms occurs when A) the firms independently pursue strategies that could hurt each other. B) firms explicitly or implicitly agree to adopt a uniform business strategy. C) announce that each will match its rival’s market price. D) […]

Figure 16-6 In the dynamic model of AD–AS in the figure above, if the economy is at point A in year 1 and is expected to go to point B in year 2, Congress and the president would most likely […]

The cyclically adjusted budget deficit calculates the budget surplus or deficit at A) real GDP. B) potential GDP. C) nominal GDP. D) average GDP. In September 2012, the average price of gasoline in the United States was $3.91 per gallon […]

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 […]

The study of how people make decisions in situations in which attaining their goals depends on their interactions with others is called A) game theory. B) oligopoly. C) competitive analysis. D) strategic analysis. If firms and workers have rational expectations, […]

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 […]

What is the present value of $888 in a one year if the current rate of interest is five percent? A) $4,440 B) $845.71 C) $177.60 D) none of these Macroeconomics, as opposed to microeconomics, includes the study of what […]

The demand for all carbonated beverages is likely to be ________ the demand for Dr. Pepper. A) more elastic than B) perfectly elastic compared to C) less elastic than D) perfectly inelastic compared to The phrase “demand has decreased” means […]

Figure 2-16 One segment of the circular flow diagram in the figure shows the flow of wages and salaries from market K to economic agents M. What is market K and who are economic agents M? A) K = factor […]

In a market economy, those who are willing and able to buy what is produced A) receives what the government allows them to receive. B) receive the most of what is produced. C) receive no more than everyone else in […]

Table 14-3 Suppose OPEC has only two producers, Saudi Arabia and Nigeria. Saudi Arabia has far more oil reserves and is the lower cost producer compared to Nigeria. The payoff matrix in Table 14-3 shows the profits earned per day […]

Figure 18-2 Figure 18-2 shows a demand curve and two sets of supply curves, one set more elastic than the other. If the government imposes an excise tax of $1.00 on every unit sold, the consumer’s burden of the tax […]

What do economists call the situation where a hired manager does not have the same interests as the owners of the business? A) conquest and control B) a financial problem C) a principal-agent problem D) a financial intermediary problem The […]

Figure 19-6 Which of the following would cause the change depicted in the figure above? A) Lack of investment in infrastructure causes Mexican productivity to fall relative to American productivity. B) A possibility of diseased poultry in Mexico causes U.S. […]

Frieda is at her local florist to buy a dozen roses. She is willing to pay $75 for the roses, and buys them for $75. Frieda’s consumer surplus from the purchase is A) $150. B) $75. C) $37.50. D) $0. […]

Figure 2-6 If the economy is currently producing at point E, what is the opportunity cost of moving to point B? A) 13 thousand hammers B) 10 thousand hammers C) 30 thousand wrenches D) 0 wrenches Figure 4-15 Figure 4-15 […]

Dividing the current market price of a stock by the firm’s earnings per share gives the firm’s A) price-earnings ratio. B) year-to-date percentage change. C) dividend yield. D) stock coupon maturity yield. Table 2-10 Table 2-10 shows the output per […]

Golda Rush quit her job as a manager for Home Depot to start her own hair dressing salon, Goldilocks. She gave up a salary of $40,000 per year, invested her savings of $30,000 (which was earning 5 percent interest) and […]

If a firm has excess capacity, it means A) that the firm expends too much of its resources on advertising its product without seeing an appreciable increase in sales. B) that the firm is not producing its minimum efficient scale […]

All centrally planned economies A) have been political dictatorships. B) started out as market economies. C) began as mixed economies. D) have become mixed economies. The Pre-Existing Condition Insurance Plan is a federally administered part of the Affordable Care Act, […]

Which of the following is a reason why it is difficult to estimate the extent of economic discrimination in the labor market? A) Employers who discriminate are likely to do so in overt ways such as awarding some workers with […]

Which of the following statements is consistent with the views of Joseph Schumpeter? A) Research and development by competitive firms is responsible for most technological changes. B) An economy benefits from firms having market power because these firms are more […]

An increase in a fixed exchange rate from $2.00 per pound to $2.10 per pound is called a(n) ________ of the pound. A) devaluation B) depreciation C) appreciation D) revaluation A quota is A) a limit placed on the quantity […]

If nominal GDP rises we can say that A) production has risen and prices remain constant. B) prices have risen and production remains constant. C) production has risen or prices have risen or both have risen. D) production has fallen […]

If a firm expects that the price of its product will be higher in the future than it is today A) the firm will go out of business. B) the firm has an incentive to increase supply now and decrease […]

DeShawn’s Detailing is a service that details cars at the customers’ homes or places of work. DeShawn’s cost for a basic detailing package is $40, and he charges $75 for this service. For a total price of $90, DeShawn will […]

Both monopolistically competitive firms and perfectly competitive firms maximize profits A) by producing where price equals average total cost. B) by producing where marginal revenue equals average revenue. C) by producing where marginal revenue is equal to marginal cost. D) […]

Zane’s Vanes is a service that restores old weather vanes. Zane has just spent $125 purchasing a 1920s era weather vane which he expects to restore and sell for $500 once the work is completed. After having spent $125, Zane […]

Figure 2-2 Figure 2-2 above shows the production possibilities frontier for Mendonca, an agrarian nation that produces two goods, meat and vegetables. If Mendonca chooses to produce 120 pounds of meat, how much vegetables can it produce to maximize production? […]

Figure 26-11 In the dynamic model of AD–AS in the figure above, if the economy is at point A in year 1 and is expected to go to point B in year 2, the Federal Reserve would most likely A) […]

Table 25-3 Consider the following simplified balance sheet for a bank: If the required reserve ratio is 10 percent, the bank can make a maximum loan of A) $2,000. B) $5,000. C) $6,300. D) $45,000. Suppose when the price of […]

Which of the following is true of a typical firm in a monopolistically competitive industry? A) Product differentiation allows a successful firm to emerge as a market leader in the industry. B) All firms have identical cost structures. C) The […]

Firms in perfect competition are price takers because A) one firm determines the price that all other firms in the industry will charge. B) consumers have enough market power to set prices. C) firms accept the price determined by the […]