Archives: Quiz

If wages and prices adjust rapidly, we would expect expansionary monetary policy to be A) more likely to reduce the natural rate of unemployment. B) more likely to affect the unemployment rate. C) less likely to affect the unemployment rate. […]

How does the construction of a market demand curve for a private good differ from that for a public good? A) There is no difference; in both cases the demand curve is determined by adding up the price each consumer […]

Which of the following is a positive economic statement? A) U.S. citizens should only buy products which are produced in the United States. B) The government should ban the production and sale of incandescent light bulbs. C) Raising the tax […]

Which of the following characterizes the market that Starbucks competes in? A) All coffeehouses face horizontal demand curves. B) Coffeehouses sell identical products. C) Barriers to entry are low. D) There are a small number of firms. The demand curve […]

Consumers have to make tradeoffs in deciding what to consume because A) not all goods give them the same amount of satisfaction. B) the prices of goods vary. C) they are limited by a budget constraint. D) there are not […]

In order to support an undervalued euro, the European Central Bank must ________ dollars. Over time, this action will cause the rate of inflation in the EU to ________. A) buy; decrease B) buy; increase C) sell; increase D) sell; […]

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 […]

If there is currently a shortage of dollars, which of the following would you expect to see in the foreign exchange market? A) The dollar will appreciate. B) The dollar will depreciate. C) There will be an increase in the […]

Which of the following is a positive economic statement? A) The standard of living in the United States should be higher. B) If the price of iPhones falls, a larger quantity of iPhones will be purchased. C) The government should […]

Allison’s Auto Art is a company that applies pinstripes to vehicles. Allison’s cost for a basic 1-color pinstriping job is $35, and she charges $95 for this service. For a total price of $175, Allison will apply a fancier 3-color […]

When aggregate expenditure = GDP, A) macroeconomic equilibrium occurs. B) the federal budget is balanced. C) net exports equal zero. D) saving equals zero. Adhira buys chocolates and almonds. She has 3 bars of chocolates and 4 bags of almonds. […]

Which of the following has a tendency to raise the unemployment rate? A) implementing a minimum wage in an economy B) reducing unemployment insurance in an economy C) offering wages at the market-clearing rate D) reducing labor unions membership in […]

An implicit cost is A) a nonmonetary opportunity cost. B) a cost unique to sole proprietorships. C) a cost that involves spending money. D) a cost unique to corporations. Economics does not study correct or incorrect behaviors, but rather it […]

Suppose the demand curve for a product is represented by a typical downward-sloping curve. Now suppose the demand for this product decreases. Which of the following statements accurately predicts the resulting decrease in price? A) The more elastic the supply […]

Article Summary. In 2012, Colorado and Washington legalized marijuana for recreational use, and one of the major selling points in each state’s pro-marijuana campaign was the possibility of generating millions of dollars in tax revenue from sales which could be […]

What are the three main kinds of unemployment? A) frictional, seasonal, and cyclical B) temporary, permanent, and volunteer C) cyclical, structural, and temporary D) structural, frictional, and cyclical Brand management refers to A) picking a brand name for a new […]

Table 2-10 Table 2-10 shows the output per month of two people, Fred and Barney. They can either devote their time to making pogo sticks or making unicycles. Which of the following statements istrue? A) Fred has a comparative advantage […]

The CPI in 1990 was 131, and the CPI in 2010 was 218. If you earned a salary of $40,000 in 1990, what would be a salary with equivalent purchasing power in 2010? A) $45,977 B) $66,565 C) $87,200 D) […]

From an initial long-run equilibrium, if aggregate demand grows faster than long-run and short-run aggregate supply, then Congress and the president would most likely A) decrease the required reserve ratio. B) decrease government spending. C) decrease oil prices. D) decrease […]

An implicit cost is A) a nonmonetary opportunity cost. B) a cost unique to sole proprietorships. C) a cost that involves spending money. D) a cost unique to corporations. ________ increases economic efficiency because it forces firms to produce and […]

Allison’s Auto Art is a company that applies pinstripes to vehicles. Allison’s cost for a basic 1-color pinstriping job is $35, and she charges $95 for this service. For a total price of $175, Allison will apply a fancier 3-color […]

If inventories decline by more than analysts predict they will decline, this implies that A) actual investment spending was greater than planned investment spending. B) actual investment spending was less than planned investment spending. C) actual investment spending was equal […]

The marginal revenue of a monopolistically competitive firm A) cannot be negative because the price the firm charges will always be greater than zero. B) can be negative if the firm charges a high price. C) can be negative if […]

Who receives the goods and services produced in the United States depends largely on A) how income is distributed. B) how the goods and services are produced. C) what goods and services are produced. D) government redistribution. If the U.S. […]

Table 4-1 The table above lists the highest prices three consumers, Tom, Dick and Harriet, are willing to pay for a short-sleeved polo shirt. If the price of one of the shirts is $28 dollars A) Tom will buy two […]

In perfect competition A) the market demand curve and the individual’s demand are identical. B) the market demand curve is perfectly inelastic while demand for an individual seller’s product is perfectly elastic. C) the market demand curve is perfectly elastic […]

Which of the following is not an example of a government-imposed entry barrier? A) patents B) occupational licensing C) barriers to international trade D) antitrust legislation In the long run, if price is less than average cost A) there is […]

Table 8-17 A very simple economy produces three goods: movies, burgers, and bikes. The quantities produced and their corresponding prices for 2006 and 2013 are shown in the table above. What is nominal GDP in 2013? A) $3,320 B) $3,690 […]

Consumption spending is $5 million, planned investment spending is $8 million, unplanned investment spending is $2 million, government purchases are $10 million, and net export spending is $2 million. What is aggregate expenditure? A) $15 million B) $23 million C) […]

Yield management is the practice of A) determining production functions to minimize production costs. B) forecasting competitors’ responses to price changes. C) using buyer data to rapidly adjust prices. D) using information technology to find the best interest rate. Linesha, […]

The basic cause of deadweight losses from the existence of common resources and externalities is A) a lack of clearly defined and enforceable property rights. B) the self-interested rationality of human beings. C) the use of a market system to […]

Table 2-9 Table 2-9 shows the number of labor hours required to produce a wristwatch and a pound of rice in Japan and Thailand. What is Japan’s opportunity cost of producing one pound of rice? A) 0.04 units of a […]

The Soviet Union consistently increased the amount of capital available to its workers, but found that increases in capital resulted in progressively smaller and smaller increases in GDP per worker. This phenomenon is referred to as A) a rising standard […]

Two stores€Lazy Guy’s and Ralph’s Recliners€are located in the same city. Both stores buy recliner chairs from the same manufacturer at the same price and both stores are about the same size, so that the fixed costs of production for […]

Figure 3-2 A decrease in productivity would be represented by a movement from A) A to B. B) B to A. C) S1 to S2. D) S2 to S1. The reason that the coffeehouse market is monopolistically competitive rather than […]

The substitution effect of a wage increase is observed when A) the higher wage income causes workers to take more leisure and work less. B) leisure’s higher opportunity cost causes workers to take less leisure and work more. C) the […]

Table 9-6 Production and Consumption Production Without Trade With Trade Denmark and Belize can produce both clocks and hats. Table 9-6 shows the production and consumption quantities without trade, and the production numbers with trade. If the actual terms of […]

Table 18-2 The table above lists three policy alternatives that the U.S. Senate will vote on, along with the ranking of these alternates. The Senate must decide which of these alternatives should receive an additional $1 billion of funding, and […]

Table 7-6 Production and Consumption Production Without Trade With Trade Estonia and Morocco can produce both swords and belts. Table 7-6 shows the production and consumption quantities without trade, and the production numbers with trade. If the actual terms of […]

Gross domestic product is generally ________ national income. A) greater than B) less than C) equal to D) unrelated to The level of long-run aggregate supply is affected by all of the following except A) changes in the price level. […]

Suppose your marginal utility from consuming the 3rd slice of cake is zero, then your total utility from consuming cake is A) maximized. B) decreasing. C) negative. D) increasing. The profits a corporation keeps to finance future expansion are known […]

An increase in the demand for green tea raises the price of apples from $16 a pound to $20 a pound. As a result, quantity supplied increases by 30 percent. Using the midpoint formula, calculate the value of the price […]

As a percentage of GDP, imports are greater than exports for which of the following countries? A) Germany B) Japan C) the Netherlands D) the United States If people assume that future rates of inflation will follow the pattern of […]

A tax is efficient if A) individuals with the lowest incomes pay proportionately lower taxes than individuals with the highest incomes. B) it is based on profits earned and not on wages. C) it encourages saving and investment. D) it […]

Which of the following would shift a nation’s production possibilities frontier inward? A) discovering a cheap way to convert sunshine into electricity B) producing more capital equipment C) an increase in the unemployment rate D) a law requiring workers to […]

If the cross-price elasticity of demand for computers and software is negative, this means the two goods are A) substitutes. B) complements. C) inferior. D) normal. One way investment banks differ from commercial banks is that investment banks A) lend […]

Currency traders expect the value of the dollar to rise. What effect will this have on the demand for dollars and the supply of dollars in the foreign exchange market? A) Demand for dollars will increase, and supply of dollars […]

The price elasticity of supply is equal to A) the value of the slope of the supply curve. B) the change in quantity supplied divided by the change in price. C) the percentage change in price divided by the percentage […]

Table 12-2 Table 12-2 lists the various pounds (lbs.) of apples that Margie Stattler can sell. Assume that Margie operates in a perfectly competitive market. What is Margie’s total revenue if she sells 250 pounds of apples? A) $250 B) […]

How would the elimination of a sales tax affect the market for a product that had been subject to the tax? A) The demand for the product would rise and the equilibrium price would fall by the amount of the […]