Archives: Quiz

1) The efficiency loss of a tax is the idea that: A.in addition to taking income from the citizenry, taxes also increase the rate of inflation. B.taxes cause a decline in output for which marginal benefit exceeds marginal cost. C.taxes […]

1) Graphically, cost-push inflation is shown as a: A.leftward shift of the AD curve. B.rightward shift of the AS curve. C.leftward shift of AS curve. D.rightward shift of the AD curve. 2) When the level of domestic output is $500 […]

1) To say that the Federal Reserve Banks are quasi-public banks means that: A.they are privately owned, but managed in the public interest. B.they deal only with banks of foreign nations and do not have direct business contact with U.S. […]

1) Assume that, under a system of floating exchange rates, Mexicans decide to increase their investments in the United States. As a result: A.the peso and the dollar will both depreciate. B.the peso and the dollar will both appreciate. C.the […]

1) Refer to the above diagram. If drawn, the long-run aggregate supply curve would include points: A.v, w, and u B.y, w, and u C.t, w, and z D.y, w, and x 2) from 1960 to 2004: a.follower countries such […]

1) The textbook authors apply the metaphor ‘shooting yourself in the foot” to: A.trade wars and trade boycotts. B.fixed exchange rates. C.import quotas. D.voluntary export restraints. 2) (consider this) gross investment is a: a.flow, as is depreciation. b.flow, as is […]

1) if incomes rise rapidly in the united states and u.s. preferences for foreign goods strengthen, we would expect: a.the dollar to appreciate in value. b.the dollar to depreciate in value. c.the dollar price of foreign monies to decrease. d.u.s. […]

1) The critical feature of a monopsonistic labor market is that the employer: A.has a perfectly elastic demand curve for labor. B.can hire any number of workers it chooses at the going wage rate. C.faces an upsloping labor supply curve. […]

1) Refer to the above data. The labor supply curve facing firms is: A.such that it does not intersect the labor demand curve. B.upsloping. C.perfectly inelastic. D.perfectly elastic. 2) Under the gold standard: A.nations can protect their domestic price and […]

1) “Government failure” is a prominent topic in: A.public choice theory. B.Keynesian economics. C.socialist theory. D.behavioral economics. 2) The political technique called logrolling: A.always increases economic efficiency. B.always decreases economic efficiency. C.involves trading votes to secure favorable outcomes that otherwise […]

1) in the above diagram: a.the consumer is indifferent between points a and b, but neither point maximizes his utility. b.the consumer is indifferent between points a and b and either point will maximize his utility. c.any combination of x […]

1) In the above diagram, at $40 million of R&D expenditure, the expected rate of return: A.equals the interest rate cost of funds. B.is greater than the interest rate cost of funds. C.is less than the interest rate cost of […]

1) a decrease in the price of digital cameras will: a.cause the demand curve for memory cards to become vertical. b.shift the demand curve for memory cards to the right. c.shift the demand curve for memory cards to the left. […]

1) Suppose interest rates fall sharply in the United States but are unchanged in Great Britain. Other things equal, under a system of freely floating exchange rates we can expect the demand for pounds in the United States to: A.decrease, […]

1) The following information is for a closed economy: Refer to the above information. If in addition to spending $80 billion at each level of GDP, government imposes a lump-sum tax of $100: A.equilibrium GDP will now be $350. B.equilibrium […]

1) studies of the minimum wage suggest that the price elasticity of demand for teenage workers is relatively inelastic. this means that: a.an increase in the minimum wage would increase the total incomes of teenage workers as a group. b.an […]

1) The following table shows marginal costs and benefits of the optimal quantity of pollution abatement that will occur at a local factory. (a)What is the optimal level of pollution abatement? Why? (b)If the marginal benefit of pollution abatement were […]

1) economic profit in the long run is: a.possible for both a pure monopoly and a pure competitor. b.possible for a pure monopoly, but not for a pure competitor. c.impossible for both a pure monopolist and a pure competitor. d.only […]

1) Answer the next question(s) on the basis of the following table for a particular country in which C is consumption expenditures, Ig is gross investment expenditures, G is government expenditures, X is exports, and M is imports. All figures […]

1) Union workers have higher rates of job turnover than do nonunion workers. 2) we would expect the coefficient of cross elasticity of demand for dvd players and dvds to be positive. Answer: false 3) The Americans with Disabilities Act […]

1) The United States has had significant trade and current account surpluses in recent years. 2) if a good’s production creates substantial negative externalities, then too little of it will be produced unless firms are subsidized. Answer: false 3) Barriers […]

1) The equilibrium world price of a product equates the quantities of exports supplied and imports demanded. 2) the existence of “beaten paths” tends to discourage immigration because of the perception that job prospects have been exhausted. Answer: false 3) […]

1) The average person in the United States generates about 10 pounds of trash per day. 2) The regulation of natural monopolies has been criticized because it creates a tendency for regulated firms to use too much labor and too […]

1) an example of a public good is cable television. 2) a decrease in supply of x increases the equilibrium price of x, which reduces the demand for x and automatically returns the price of x to its initial level. […]

1) economic profit is found by subtracting accounting costs from total revenue. 2) A curve showing the quintile distribution of a nation’s income is called the Gini Curve. Answer: FALSE 3) A contractionary fiscal policy shifts the aggregate demand curve […]

1) it is possible for a consumer’s indifference curves to intersect. 2) The capricious universe view is the idea that the IACs are exploiting the DVCs. Answer: FALSE 3) wages and salaries are the largest source of household income. Answer: […]

1) It is impossible for a nation to have a comparative advantage in producing everything. 2) A decrease in per unit production costs will shift the aggregate supply curve leftward. Answer: FALSE 3) refer to the above diagram. at any […]

1) In 2002, the United States announced its “Global Climate Change” initiative to reduce greenhouse gases per dollar of GDP by 18 percent by 2012. 2) International trade based on the principle of comparative advantage creates a more efficient allocation […]

1) Commercial banks monetize claims when they sell securities to Federal Reserve Banks. 2) in a competitive market, every consumer willing to pay the market price can buy a product and every producer willing to sell the product at that […]

1) The aggregate expenditures model does not allow for cost-push inflation. 2) the largest source of local government’s revenue is the sales tax. Answer: false 3) If the real outputs per capita of a rich nation and a poor nation […]

1) Right-to-work laws prohibit the formation of labor unions. 2) Total Allowable Catch policies promote economic efficiency better than Individual Transferable Quotas. Answer: FALSE 3) as it relates to public goods, nonexcludability means that nonpayers cannot be barred from obtaining […]

1) specialization may expand total output even though the individuals involved may have identical abilities. 2) the process by which capital goods are accumulated is known as investment. Answer: true 3) unemployment compensation payments are an example of a transfer […]

1) The differences in the per capita incomes of the IACs and the DVCs has diminished sharply since the Second World War because of U.S. aid programs. 2) Monetarists say that fiscal policy, such as a tax cut, will only […]

1) with fixed money income, an increase in the price of one good and a decrease in the price of the other will cause the new budget line to intersect the original budget line. 2) rising health care costs have […]

1) modern economic growth is defined as increases in real gdp over time. 2) When the Fed auctions reserves through the term auction facility, the interest rate is set by the rate offered by the lowest bidder whose bid is […]

1) the medicare prescription drug, improvement, and modernization act of 2003 established a system of national health insurance. 2) because the equilibrium position of a purely competitive seller entails an equality of price and marginal costs, competition produces an efficient […]

1) along a supply curve, product price and producer surplus are inversely related. 2) Noncompeting groups of workers are the result of geographic immobilities. Answer: FALSE 3) Present law forbids all trades or sales of pollution rights. Answer: FALSE 4) […]

1) The per capita public debt doubled between 1990 and 2000. 2) A nation that imports more goods and services than it exports is necessarily realizing an international balance of payments deficit. Answer: FALSE 3) Excess reserves are the amount […]

1) import quotas are taxes or duties on imported products. 2) real gdp = worker-hours labor productivity. Answer: true 3) purposeful behavior implies that everyone will make identical choices. Answer: false 4) The economic benefits of forests include provision of […]

1) Fish in the open ocean are protected by strong property rights. 2) the economy of 1995-2007 was characterized by greater productivity growth and greater economic growth than in the immediately preceding two decades. Answer: true 3) The Consumer Product […]

1) The use of price support programs in agriculture has hastened the exodus of resources from agriculture. 2) The nation that has a comparative advantage in a particular product will be the only world exporter of that product. Answer: FALSE […]

1) an increase in quantity supplied might be caused by an increase in production costs. 2) If the United States and France are both on the international gold standard and U.S. exports to France exceed United States imports from France, […]

1) refer to the above diagram for a nondiscriminating monopolist. the profit-maximizing price for this firm is j 2) Under the international gold standard, exchange rates fluctuate without restraint to correct any international disequilibrium by affecting the relative attractiveness of […]

1) Forestry companies with secure property rights have a greater incentive to harvest and replant in a sustainable manner. 2) a progressive tax takes relatively more from the rich than it does from the poor. Answer: true 3) economic theory […]

1) the smaller the number of good substitutes for a product, the greater will be the price elasticity of demand for it. 2) variable costs are costs that vary directly with output. Answer: true 3) Expansionary fiscal policy is so-named […]

1) Tax revenues automatically increase during economic expansions and decrease during recessions. 2) A firm should undertake all the R&D activity that it can afford. Answer: FALSE 3) Industrial unions are more likely to increase wage rates by restricting the […]

1) When the Fed auctions reserves through the term auction facility, the interest rate is set by the rate offered by the highest bidder. 2) A side benefit of international trade is that it links national interests and increases the […]

1) In the United States and parts of Western Europe, the amount of land covered by forests is increasing. 2) immigration of workers is an example of a goods and services flow: Answer: false 3) If the MPC is .8 […]

1) a linear demand curve has a constant elasticity over the full range of the curve. 2) Checkable deposits are a liability on a bank’s balance sheet. Answer: TRUE 3) market economies use capital goods because they improve productive efficiency. […]

1) Commercial banks increase the supply of money when they purchase either personal IOU’s or government bonds from businesses and households. 2) Because families can afford to have more children, population growth is greater in the IACs than in the […]