LSU ECON 2030 Final
What makes up Bank Reserves?
Vault cash + Deposits at Federal Reserve
Mark: 16 cookies/hr, 4 brownies/hr Howie: 14 cookies/hr, 2 brownies/hr In the situation above, Howie's opportunity cost of baking one cookie is _____ brownies. a) 1/7 b) 7/8 c) 8/7 d) 2 e) 7
a) 1/7
Suppose labor costs in the jewelry industry ___. Everything else constant, this will cause the ___ jewelry to increase. a) increase; demand for b) decrease; demand for c) decrease; supply of d) increase; supply of
c) decrease; supply of
Suppose Marcy's Medical Machines is a monopolist and is producing its profit-maximizing level of output. Suppose further that at this level of production its average total cost is $2500, average fixed cost is $900, and marginal revenue is $2500. At her current level of production, what is... a) Marcy's average variable cost of producing a medical machine? b) Marcy's marginal cost of producing a medical machine? c) the price of a medical machine? d) Marcy's profit from selling medical machines? Will Marcy continue to produce medical machines in the short run? Will Marcy continue to produce medical machines in the long run?
ATC = 2500, AFC = 900, MR = 2500 a) (ATC - AFC = 1600 = AVC) b) (2500 profit max MR=MC) c) (>2500, monopolist) d) (Positive, P - 2500 > 0) Short Run: Yes (P>=AVC) Long Run: Yes (P>=ATC)
What makes up the Monetary Base?
Currency in circulation + Bank reserves
What makes up the Money Supply (MS)?
Currency in circulation + Checking account deposits Monetary Base x Money Multiplier
Suppose, at a given point in time, Sally's Smoothie Shack operates in a perfectly competitive market and is producing its profit-maximizing level of output. Suppose further that at this level of production its average variable cost (AVC) of producing a smoothie is $2.90, average total cost (ATC) is $4.00, and marginal cost (MC/P) is $3.60. At her current level of production, what is... a) Sally's average fixed cost of producing a smoothie? b) Sally's marginal revenue from selling a smoothie? c) the price of a smoothie? d) Sally's profit from selling smoothies? In the short run, will Sally's Smoothie Shack remain open or shut down? In the long run, will Sally's Smoothie Shack remain open or shut down?
a) (ATC - AVC = 1.10) b) 3.60 (profit maximizing) c) 3.60 (competitive market, P=MC) d) Negative (TR - TC = PQ - ATC(Q) = (P-ATC)Q = (3.60 - 4)Q) Short term: P>=AVC means stay, P<AVC means shut down Long run: P>=ATC stay, P<ATC shut down
Suppose Mimi's Magic Marker Company operates in a perfectly competitive market and is producing its profit-maximizing level of output. Suppose further that at this level of production its average total cost (ATC) of producing magic markers is $0.20, average variable cost (AVC) is $0.15, and marginal revenue is (MR/P) $0.25. At her current level of production, what is... a) the price of a magic marker? b) Mimi's marginal cost of producing magic markers? c) Mimi's profit from selling magic markers? Over time, what will happen to... a) the number of firms selling magic markers? b) the price of magic markers? c) the quantity of magic markers transacted in the market? d) profits of firms operating in the magic marker market?
a) 0.25 (perfectly competitive MR=P) b) 0.25 (profit maximizing level, MC=MR) c) positive (P-ATC = 0.25-0.2) d) increase e) decrease f) increase g) decrease
In which of the following situations MUST the demand for milk be price inelastic. a) A 7% increase in the price of milk causes the quantity of milk demanded to decrease by 4%. b) The price of milk decreases by 50 cents per gallon and the quantity of milk demanded increases by 30 gallons. c) The price of milk increases by 1 dollar per gallon and the quantity of milk demanded decreases by 30 gallons. d) A decrease in the price of milk causes the total revenue from selling it to increase.
a) A 7% increase in the price of milk causes the quantity of milk demanded to decrease by 4%.
A decrease in the federal excise tax on wine will cause _____ in the economic surplus generated in the wine market, everything else held constant. a) An increase b) No change c) A decrease
a) An increase
Suppose the number of pottery sellers increases. Everything else held constant, producer surplus in the pottery market will _____. a) Be ambiguous b) Remain unchanged c) Decrease d) Increase
a) Be ambiguous
Suppose that apples are the main input in the production of apple cider. Suppose further that the wage paid to apple harvesters decreases. In the situation above, the equilibrium price of apple cider will _____ and the equilibrium quantity of apple cider transacted will _____, everything else held constant. a) Decrease; increase b) Decrease; decrease c) Increase; increase d) Increase; decrease
a) Decrease; increase
Suppose Nathalie, a rational French major and tutor, is considering going to the movies tonight to see My Father's Glory, tickets to which cost $8 each. To do this, she would have to cancel her weekly French tutoring session for which she would have been paid $35. If Nathalie has not purchased her movie ticket yet and she estimates the pleasure from seeing the film is $45, then what will she decide to do tonight? a) Definitely go to the movie. b) Definitely hold her tutoring session. c) Do neither, as both options would be rational.
a) Definitely go to the movie.
Last month Gene increased the price on all the jeans he sells at his local boutique by 15%. If the number of jeans that he sold decreases by 20%, it can be concluded with certainty that the demand for Gene's jeans is price _____ and his revenues for the month _____, everything else held constant. a) Elastic; decreased b) Elastic; increased c) Inelastic; increased d) Inelastic; decreased
a) Elastic; decreased
In the case of a good that generates positive externalities in its consumption, the equilibrium quantity transacted in the market is ____ the socially optimal quantity. a) Less than b) Greater than c) Equal to
a) Less than
The _____ the period of time that a buyer has to make a purchasing decision, everything else held constant, the more price elastic demand will be for the good. a) Longer b) Shorter
a) Longer
"The average cost of a 30-second ad for the Super Bowl crept up to $5 million this year, according to ad buyers, from an estimated $4.8 million last year." The preceding is an example of a statement about a _____ issue. a) Microeconomic b) Macroeconomic
a) Microeconomic
Which of the following concepts is depicted by the numerical slope of the production possibilities frontier (PPF) at a particular point on the PPF? a) The opportunity cost of the good measured on the horizontal axis. b) The degree of attainability of the combination of goods. c) The rate of economic growth in the country. d) The degree of efficiency of the combination of goods.
a) The opportunity cost of the good measured on the horizontal axis.
Suppose Lori aggress to lend her sister Holly $1000 for one year at a fixed nominal rate of interest. Suppose further that, at the time the loan is made, Lori expects the rate of inflation to be 2% and Holly expects it to be 4% over the course of the year. Of the actual inflation rate turns out to be 3%, then Lori will be _____ off than she expected and Holly will be _____ off than she expected, everything else held constant. a) Worse; worse b) Worse; better c) Better; better d) Better; worse
a) Worse; worse
Commercial banks are making the loans Suppose Kristen goes to her bank and deposits $250 of currency into her demand deposit account. Everything else held constant, how will each of the following change (i.e., increase, decrease, or remain unchanged) as the result of Kristen's deposit? a) Currency in circulation. b) Bank reserves c) The monetary base. d) The money multiplier. e) The money supply.
a) decrease b) increase: MB= currency in circulation + Bank reserves no change = decrease + increase part of money controlled by federal reserves c) No change d) Increase: MM = banks intensity of lending part of MS controlled by public banks e) Increase: MS = MB * MM increase = no change * increase
Suppose a hotel is offering a 25% discount on room rates to senior citizens. For this pricing scheme to benefit the hotel, the demand of seniors must be relatively more price ____ than the demand of younger guests, everything else held constant. a) elastic b) inelastic
a) elastic
England: 72 Wine/hr, 8 Cloth/hr Portugal: 49 Wine/hr, 7 Cloth/hr In the situation above, suppose the two countries move from autarky to mutually beneficial trade. Everything else constant, this will cause the number of workers in the English wine industry to a) increase b) decrease c) remain unchanged
a) increase
News about the Euro Zone is a) macroeconomic b) microeconomic
a) macroeconomic
For a common resource, the marginal social cost of the resource is greater than the marginal private cost. In the absence of regulation, too ____ of the common resource will be ____ than is social optimal. a) much; consumed b) Much; produced c) Little; produced d) Little consumed
a) much; consumed
When a government declares a money to be "legal tender for all debts, _____" it is guaranteeing that the money will function as a _____. a) private; standard of deferred payment b) Public; store of value c) Private; means of unilateral payment d) Private; medium of exchange e) Public; medium of exchange
a) private; standard of deferred payment
Suppose a store sells pairs of shoes for $30 each and is running a "buy one, and get one %50 off" sale. Suppose further that you buy four pairs of shoes. The marginal cost of the third pair of shoes purchased is a) $15 b) $30 c) $45 d) $75 e) $90
b) $30
Suppose Rob, a rational decision maker, faces a choice: he can buy a ticket to see Beth Patterson in concert, he can buy a ticket to see Zoe Boekbinder in concert, or he could do neither. The price of a ticket to see Beth is $15 and the price of a ticket to see Zoe is $25. Suppose further that Rob's reservation price for seeing Beth is $5 and his reservation price for seeing Zoe is $20. In the situation above, what would Rob's consumer surplus be if he were to see Beth? a) -$15 b) -$10 c) $5 d) $10 e) $15
b) -$10
Following sale on 12-packs of Pepsi: $5 each or three for $12 Anna's reservation price is $5.50 for the first 12-pack, $3.50 for the second, and $2.50 for the third. How many 12-packs will Anna buy? a) 0 b) 1 c) 2 d) 3
b) 1
An increase in the salaries paid to members of the U.S. Congress (i.e., representatives and senators), everything else held constant, will cause _____ in the government spending component of the U.S. GDP. a) No change b) An increase c) A decrease
b) An increase
Suppose a decrease in the price of good X causes the demand for good Y to increase, everything else held constant. Therefore, the goods are _____ and the cross-price elasticity of them is _____. a) Complements; positive b) Complements; negative c) Substitutes; positive d) Substitutes; negative
b) Complements; negative
Suppose tea and coffee are substitutes in consumption. Suppose further that the price of tea decreases. In the situation above, producer surplus in the coffee market will _____, everything else held constant. a) Increase b) Decrease c) Remain unchanged d) Be ambiguous
b) Decrease
Answer true or false to the following statement. An extraordinary talented person could have the comparative advantage in everything she does. a) True b) False
b) False
Answer true or false to the following statement. If a non-price discriminating monopolist is maximizing its profits, we know that it has equated its marginal cost with the market price. a) True b) False
b) False, they would make the market price higher than the marginal cost price discrimination is charging different per individual, non price discrimination means price increase for everyone
Which of the following is a characteristic of a perfectly competitive market? a) Firms are price makers in the market. b) Firms face no barriers to entering the market. c) There are few firms selling the good in the market. d) The goods sold in the market are differentiated.
b) Firms face no barriers to entering the market.
Suppose Charles spent a total of $350 for the 350 bottles of mineral water he purchased in 2015 and a total of $350 for the 400 bottles of mineral water (same size and brand) he purchased at the same store in 2016. Charles's real consumption of mineral water in 2016 was _____ his real consumption level in 2015. a) The same as b) Greater than c) Less than
b) Greater than
Suppose cheese and eggs are complements in consumption. An increase in the supply of cheese, everything else held constant, will cause the demand for eggs to _____ and the equilibrium quantity of eggs transacted to _____. a) decrease; increase b) Increase; increase c) Increase; decrease d) Decrease; decrease
b) Increase; increase
Money market account balances are included in which of the following measures of the money supply of the United States? a) M1 but not M2. b) M2 but not M1. c) Both M1 and M2. d) Neither M1 nor M2.
b) M2 but not M1. M1 = currency and coins in circulation + checking accounts + travelers checks + demand deposit accounts M2 = M1 + Money Market + Savings + Time Deposits + Retail Money Funds
"Most economists believe that federal government budget deficits are helpful when economies are in recession, but some say that when they are near full employment, as the United States is now, deficits should be kept below 3% of the economy to avoid a drag on investment-or worse, a financial crisis." The preceding is an example of a statement about a _____ issue. a) Microeconomic b) Macroeconomic
b) Macroeconomic
Beth: $25 Robin: $20 Carla chooses Robin. Can it be concluded with certainty that Carla's expected pleasure of seeing Robin was greater than or equal to her expected pleasure from seeing Beth? a) Yes b) No
b) No
In the case of a good that generates negative externalities in its production, the marginal _____ cost is less than the marginal _____ cost. a) social; private b) Private; social
b) Private; social
In the United States, nominal interest rates move _____. This means that in a recession, nominal interest rates decrease, everything else held constant. a) Countercyclically b) Procyclically
b) Procyclically
A good that is excludable and _____ in consumption is _____. a) non-rival; a common resource b) Rival; a private good c) Non-rival; a public good d) Rival; an artificially scares good
b) Rival; a private good
The unemployment rate is _____ variable; nominal GDP is a ____ variable. a) Stock; stock b) Stock; flow c) Flow; flow d) Flow; stock
b) Stock; flow
Suppose that apples are the main input in the production of apple cider. Suppose further that the wage paid to apple harvesters decreases. In the situation above, the wage change will cause the _____ apples to _____. a) Demand for; decrease b) Supply of; increase c) Demand for; increase d) Supply of; decrease
b) Supply of; increase
The price of goods that are substitutes in consumption move a) Opposite of one another b) Together
b) Together
Amber: 3 Croissants/hr, 21 Oranges/hr Jade: 9 Croissants/hr, 27 Oranges/hr In the situation above, can mutually beneficial trade occur? a) No, because Jade is more productive at both activities b) Yes, if Amber specializes in oranges and trades Jade for her croissants c) Yes, if Amber specializes in croissants and trades Jade for her orangers d) No, because Amber is more productive than Jade at both activities
b) Yes, if Amber specializes in oranges and trades Jade for her croissants
Mark: 16 cookies/hr, 4 brownies/hr Howie: 14 cookies/hr, 2 brownies/hr In the situation above, can mutually beneficial trade occur? a) No, because Mark is more productive than Howie at both activities. b) Yes, if Mark specializes in baking brownies and Howie specializes in baking cookies. c) No, because Howie is more productive than Mark at both activities. d) Yes, if Mark specializes in baking cookies and Howie specializes in baking brownies.
b) Yes, if Mark specializes in baking brownies and Howie specializes in baking cookies.
_____ will bear none of an excise tax if _____ is perfectly _____. a) Sellers; supply; inelastic b) buyers; demand; elastic c) Sellers; demand; elastic d) buyers; supply; elastic
b) buyers; demand; elastic
Suppose both buyers and sellers expect the price of gold to decrease next week. Everything else constant, the equilibrium price of gold will ___ today. a) increase b) decrease c) remain unchanged
b) decrease
Market is in equilibrium. Decrease in the number of consumers in the market causes the market demand to ___ resulting in a ___ that will be eliminated as the market price of the good ___ everything else constant. a) increase; shortage; decreases b) decrease; surplus; decreases c) increase; surplus; decrases d) increase; shortage; increases e) decrease; surplus; increases
b) decrease; surplus; decreases
It can be concluded with certainty that a monopolist's economic profits will be _____ zero in the long run. a) greater than b) greater than or equal to c) equal to d) less than or equal to e) less than
b) greater than or equal to P>=ATC
Suppose pens and pencils are substitutes in consumption. Suppose further that demand for pens increases. In the situation above, the equilibrium quantity of pencils transacted will ___, everything else constant a) remain unchanged b) increase c) decrease
b) increase
News about Samsung is a) macroeconomic b) microeconomic
b) microeconomic
When a commercial bank reduces the dollar amount of loans it makes, everything else held constant, the a) money multiplier increases. b) money multiplier decreases. c) monetary base increases. d) monetary base decreases.
b) money multiplier decreases. Monetary base is affected by Feds. Includes Bank Reserves and Currency in Circulation Money Multiplier is affected by public and commercial bank behavior. Increase in deposits -> increase in reserves to lend -> increase in loans ; MM increases -> MS increases Decrease in deposits -> decrease in reserves to lend -> decrease in loans ; MM decreases -> MS decreases
Suppose pens and pencils are substitutes in consumption. Suppose further that demand for pens increases. In the situation above, the equilibrium price of pens transacted will ___, everything else constant a) decrease b) remain unchanged c) increase
b) remain unchanged
Suppose rational decision-maker Christine has decided to go to a concert, but she faces a choice: she can see either Zoe Boekbinder or Beth Patterson. Suppose further that tickets to see Zoe are $15 each while tickets to see Beth are $10 each, and she has not yet obtained a ticket to see either performer. In the situation above, what is Christine's sunk cost in making her decision? a) $0 b) $5 c) $10 d) $15 e) $25
c) $10
Following sale on 12-packs of Pepsi: $5 each or three for $12 Anna's reservation price is $5.50 for the first 12-pack, $3.50 for the second, and $2.50 for the third. What is the marginal cost of the third 12-pack? a) $0.50 b) $1.00 c) $2.00 d) $3.00 e) $4.00
c) $2.00
Beth: $25 Robin: $20 Carla chooses Robin. Carla's sunk cost was a) $0 b) $5 c) $20 d) $25 e) $45
c) $20
In the press release following its last policy meeting (14-15 March 2017), the Federal Open Market Committee stated that "the Committee will assess realized and expected economic conditions relative to its objectives of maximum employment and _____ percent inflation. a) 0 b) 1 c) 2 d) 2.5 e) 3
c) 2
Which of the following would decrease the net export component of Canadian GDP? a) A bottle of mineral water produced in Romania is purchased in Louisiana. b) A bottle of wine produced in California is purchased in France. c) An automobile produced in France is purchased in Canada. d) A hockey stick produced in Canada is purchased in Romania.
c) An automobile produced in France is purchased in Canada.
Suppose tea and coffee are substitutes in consumption. Suppose further that the price of tea decreases. In the situation above, consumer surplus in the coffee market will _____, everything else held constant. a) Remain unchanged b) Decrease c) Be ambiguous d) Increase
c) Be ambiguous
Currency in circulation is included in which of the following measures of the money supply of the United States? a) M1 but not M2. b) M2 but not M1. c) Both M1 and M2. d) Neither M1 nor M2.
c) Both M1 and M2. M1 is currency and coins in circulation; checking accounts; travelers checks, demand deposit accounts M2 = M1 + Money Market + Savings + Time Deposits + Retail Money Funds
Suppose your friend Martha has a host stock tip: she tells you that the price of Google stock will be $10 higher tomorrow than it is right now. If you believe her, then what is the most profitable action to take TODAY? a) Wait and take no action today. b) See Google stock immediately. c) Buy Google stock immediately.
c) Buy Google stock immediately.
Canada: 25 coal/hr, 100 potatoes/hr Wales: 20 coal/hr, 60 potatoes/hr In the situation above, the move from trade to autarky will cause employment of Canadian farmers to a) Remain unchanged. b) Increase c) Decrease
c) Decrease
Suppose, at a moment in time, the price at which a monopolist is selling its output is $10 and the marginal revenue from the last unit sold is $6. Suppose further that the marginal cost of producing the last unit of output sold is $8. Everything else held constant, which of the following actions should the non-price discriminating, profit-maximizing monopolist take? a) Increase output and increase price. b) Increase output and decrease price. c) Decrease output and increase price. d) Decrease output and decrease price.
c) Decrease output and increase price. MR = 6, MC = 8, P = 10, MC > MR
Suppose the government imposes an excise tax of $10 on a market. Suppose further that the price elasticity of demand for the good is 1.0 and the price elasticity of supply is 3.0. In the situation above, the price the sellers receive for the good will _____ by _____ everything else held constant. a) Increase; $3.00 b) Decrease; $3.00 c) Decrease; $2.50 d) Decrease; $7.50 e) Increase; $7.50
c) Decrease; $2.50
Suppose that worker productivity _____ in the bubble bath industry. Everything else held constant, the equilibrium price of bubble bath liquid will _____ and the equilibrium quantity transacted will decrease. a) increases; increase b) Increases; decrease c) Decreases; increase d) Decreases; decrease
c) Decreases; increase
Amber: 3 Croissants/hr, 21 Oranges/hr Jade: 9 Croissants/hr, 27 Oranges/hr In the situation above, ___ has the absolute advantage in picking oranges and ___ has the comparative advantage in making croissants. a) Amber; Amber b) Amber; Jade c) Jade; Jade d) Jade; Amber
c) Jade; Jade
If a 7% decrease in price results in a ____ 7% ____ in quantity supplied, it can be concluded with certainty that supply is price inelastic. a) Less than; increase b) Greater than; increase c) Less than; decrease d) Greater than; decrease
c) Less than; decrease
Suppose the price of pumpkin increase. Everything else held constant, this will cause _____ in the demand for pumpkins. a) A decrease b) An increase c) No change
c) No change Change in price is movement along the curve, so quantity demanded goes down but demand stays the same.
Supposed 15-year-old Joe and his 17-year-old brother Frank are full-time high school students. Supposed further that Joe works 20 hours per week, for pay, at a local fast food restaurant. Frank, on the other hand, does not currently have a job. After constantly hearing about his brother's exciting work adventures, Frank filled out a job application at the same restaurant two weeks ago. While he is eager to being working immediately, Frank has not yet received a response to his application. According to the BLS household survey, Joe would be classified as a) Employed b) Unemployed c) Not in the civilian noninstitutionalized population d) Not in the labor force
c) Not in the civilian noninstitutionalized population
Suppose Wanda purchases two wigs each and every month, no matter what the price of wigs is in a particular month. From this is can be concluded with certainty that Wanda's price elasticity of demand for wigs is a) Perfectly elastic b) Unit elastic c) Perfectly inelastic
c) Perfectly inelastic
If an individual transfers funds from a money market account to a savings account, then the M1 money supply _____ and the M2 money supply _____, everything else held constant. a) Decreases; increases b) Decreases; remains unchanged c) Remains unchanged; remains unchanged d) Increases; decreases e) Increases; remains unchanged
c) Remains unchanged; remains unchanged
In the United States, "federal tax laws allow you to deduct your moving expenses if your relocation relates to starting a new job or a transfer to a new location for your present employer. To qualify for the deduction, your new work location much be sufficient distance from your old home and you must begin working shortly after you arrive." This tax policy is most effective at combating _____ unemployment. a) Frictional b) Seasonal c) Structural d) Cyclical
c) Structural
Suppose Judy transfers $1,000 from her savings account to her demand deposit account. This transfer will cause _____ in the M1 money supply and _____ in the M2 money supply, everything else held constant. a) an increase; an increase b) an increase; a decrease c) an increase; no change d) a decrease; an increase e) a decrease; a decrease f) a decrease; no change g) no change; no change
c) an increase; no change M1 increases, M2 includes savings and M1. M1 includes demand deposit account and M2 does not.
Suppose Petra's Plantain Plantation sells plantains in a perfectly competitive market. Suppose further that at her current level of production, Petra's marginal cost is $2.00 per kilo. If the market price of plantains is $2.25 per kilo, it can be concluded with certainty that Petra's profits are a) positive. b) negative. c) increasing. d) decreasing.
c) increasing.
Suppose Michelle's Mitten Mill operates in a perfectly competitive market and is producing its profit-maximizing level of output. Suppose further that at this level of production its average variable cost (AVC) of producing mittens is $17, average total cost (ATC) is $19, and marginal revenue (MR/P) is $18. In the short run, Michelle should a) maintain her current level of production since she is earning a positive economic profit. b) maintain her current level of production since her economic profit is zero. c) maintain her current level of production since she is minimizing her losses. d) shut down immediately. e) increase production since it will increase her economic profit. f) decrease production since it will increase her economic profit. (Profit is already max)
c) maintain her current level of production since she is minimizing her losses. a) (negative, 18-19, perfectly competitive MR=P) b) (negative, 18-19, perfectly competitive MR=P) d) (P>=AVC, 18>17) e) (Profit is already max) f) (Profit is already max)
Suppose the government imposes an excise tax of $10 on a market. Suppose further that the price elasticity of demand for the good is 1.0 and the price elasticity of supply is 3.0. In the situation above, the amount of tax borne by the buyers will be ____ percent. a) 25 b) 33 c) 67 d) 75 e) 100
d) 75
Suppose 37-year-old Chris is a mom who has become bored with staying at home and raising her two-year-old daughter. As a result, she has placed her child in day care, is available to begin a job immediately, and has been actively seeking employment for the last seven weeks. In this situation Chris would be considered a) Not in the labor force. b) Structurally unemployed. c) Cyclically unemployed. d) Frictionally unemployed. e) Seasonally unemployed.
d) Frictionally unemployed.
Suppose Rob, a rational decision maker, faces a choice: he can buy a ticket to see Beth Patterson in concert, he can buy a ticket to see Zoe Boekbinder in concert, or he could do neither. The price of a ticket to see Beth is $15 and the price of a ticket to see Zoe is $25. Suppose further that Rob's reservation price for seeing Beth is $5 and his reservation price for seeing Zoe is $20. In the situation above, which concert will Rob choose to attend? a) He will definitely see Zoe Boekbinder. b) He will definitely see Beth Patterson. c) He will see either one, as he is indifferent between the two choices. d) He will not go to either concert, as he is rational.
d) He will not go to either concert, as he is rational.
Mark: 16 cookies/hr, 4 brownies/hr Howie: 14 cookies/hr, 2 brownies/hr In the situation above, ____ has the absolute advantage in baking cookies and _____ has the comparative advantage in baking brownies. a) Howie; Mark b) Mark; Howie c) Howie; Howie d) Mark; Mark
d) Mark; Mark
Supposed 15-year-old Joe and his 17-year-old brother Frank are full-time high school students. Supposed further that Joe works 20 hours per week, for pay, at a local fast food restaurant. Frank, on the other hand, does not currently have a job. After constantly hearing about his brother's exciting work adventures, Frank filled out a job application at the same restaurant two weeks ago. While he is eager to being working immediately, Frank has not yet received a response to his application. According to the BLS household survey, Frank would be classified as a) Employed b) Unemployed c) Not in the civilian noninstitutionalized population d) Not in the labor force
d) Not in the labor force
Canada: 25 coal/hr, 100 potatoes/hr Wales: 20 coal/hr, 60 potatoes/hr In the situation above, the move from trade to autarky will benefit coal consumers in which country? a) Neither Canada nor Wales. b) Both Canada and Wales c) Only Canada. d) Only Wales.
d) Only Wales.
Suppose full employment in the United States is achieved when the unemployment rate is 4.9%. At present, the unemployment rate is 4.7%. This means there is a _____ in the labor market. Over time, labor costs in the country will _____, everything else held constant. a) shortage; decrease b) Surplus; increase c) Surplus; decrease d) Shortage; increase
d) Shortage; increase
Suppose rational decision-maker Christine has decided to go to a concert, but she faces a choice: she can see either Zoe Boekbinder or Beth Patterson. Suppose further that tickets to see Zoe are $15 each while tickets to see Beth are $10 each, and she has not yet obtained a ticket to see either performer. In the situation above, what is Christine's benefit from seeing Zoe perform? a) The expected pleasure of seeing Zoe minus $15. b) The expected pleasure of seeing Zoe minus $5. c) The expected pleasure of seeing Zoe plus $10. d) The expected pleasure of seeing Zoe. e) $10.
d) The expected pleasure of seeing Zoe.
Suppose Jeff the Gourmet's price elasticity of demand for restaurant meals is 2. If the price of restaurant meals increased by 8%, everything else constant, then the quantity of restaurant meals Jeff demanded must have _____ by _____. a) decreased; 4 b) decreased; 6 c) increased; 16 d) decreased; 16 e) increased; 4
d) decreased; 16
Suppose pens and pencils are substitutes in consumption. Suppose further that demand for pens increases. In the situation above, the ___ pencils will ___ everything else constant. a) supply of; decrease b) demand for; decrease c) supply of; increase d) demand for; increase
d) demand for; increase
Suppose worker productivity in the steel industry ___. Everything else held constant, this will cause the equilibrium price of steel to ___ and the equilibrium quantity transacted to increase a) increase; increase b) decreases; decrease c) decreases; increase d) increases; decrease
d) increases; decrease
On a production possibilities frontier (PPF) graph, a specific combination of goods is said to be inefficient at a particular point in time if it likes ___ the PPF a) on or outside b) outside c) on d) inside e) on or inside
d) inside
Bertha sold a painting for $300. It is certain that Bertha's reservation price for the painting was ___ $300. a) greater than or equal to b) equal to c) less than d) less than or equal to e) greater than
d) less than or equal to
England: 72 Wine/hr, 8 Cloth/hr Portugal: 49 Wine/hr, 7 Cloth/hr This depicts England and Portugal's ___ each good a) production of b) efficiency at c) opportunity cost of d) productivity at
d) productivity at
Suppose books are a normal good. A decrease in national income will cause the ___ to ___ everything else constant a) quantity of books supplied; increase b) supply of books; decrease c) supply of books; increase d) quantity of books supplied; decrease
d) quantity of books supplied; decrease
If a 5% _____ in price results in a _____ percent decrease in quantity demanded, it can be concluded with certainty that demand is unit elastic. a) Increase; 1 b) Decrease; 1 c) Decrease; 10 d) Increase; 10 e) Increase; 5
e) Increase; 5
Suppose that mac and cheese is an inferior good and national income is decreasing, Everything else held constant, the equilibrium price of mac and cheese will _____ and the equilibrium quantity transacted will _____. a) Decrease; decrease b) Decrease; increase c) Increase; ambiguous d) Increase; decrease e) Increase; increase
e) Increase; increase
Suppose a customer offered Tony, a rational painter, $500 for his painting 'Banana Head' and he sold it. It can be concluded with certainty that Tony's reservation price for his painting was _____ $500. a) Less than b) Greater than c) Equal to d) Greater than or equal to e) Less than or equal to
e) Less than or equal to
The Kapauku people of the mountains of New Guinea used shells in a number of different economic activities, one being that payment in shells was made as an expression of sympathy at the death of a distant relative. Used in this way, shells were performing which of the following functions of money? a) Standard of deferred payment. b) Standard of value. c) Medium of exchange. d) Unit of Account. e) Means of unilateral payment.
e) Means of unilateral payment.
Beth: $25 Robin: $20 Carla chooses Robin. What was Carla's benefit from seeing Beth? a) The expected pleasure of seeing Beth perform plus $20 b) The expected pleasure of seeing Beth perform minus $5 c) The expected pleasure of seeing Beth perform plus $5 d) The expected pleasure of seeing Beth perform minus $25 e) The expected pleasure of seeing Beth perform
e) The expected pleasure of seeing Beth perform
In which of the following situation would it be MOST advantageous to be saving? a) The nominal interest rate is 13% and the real interest rate is 6%. b) The nominal interest rate is 4% and the real interest rate is -2%. c) The nominal interest rate is 7% and the real interest rate is 4%. d) The nominal interest rate is 1% and the real interest rate is 0%. e) The nominal interest rate is 10% and the real interest rate is 8%.
e) The nominal interest rate is 10% and the real interest rate is 8%.
Which of the following would increase the investment component of the U.S. GDP? a) A U.S. citizen purchases a new washing machine produced in the U.S. for use in her home b) LSU purchases a new computer produced in the U.S. for Charles to use in his office. c) A U.S. citizen purchases 100 shares of Walmart (a U.S. company) stock. d) A citizen of Japan purchases 100 shares of Walmart (a U.S. company) stock. e) Walmart (a U.S. company) builds a new store in Oklahoma.
e) Walmart (a U.S. company) builds a new store in Oklahoma.
Amber: 3 Croissants/hr, 21 Oranges/hr Jade: 9 Croissants/hr, 27 Oranges/hr In the situation above, 1/3 ___ is ___ opportunity cost of producing one ___. a) oranges; Jade's; croissant b) oranges; Amber's; croissant c) croissants; Amber's; croissant d) croissants; Jade's; croissant e) croissant; Jade's; orange
e) croissant; Jade's; orange
