1101

do all of the above

A successful advertising campaign may allow competing monopolists to A sell a greater quantity B charge a higher price C increase its profits D do all of the above

macaroni is an inferior good and price elasticity of supply is infinite

A 10 percent increase in income leads to a 15% decrease in the quantity of macaroni and cheese demanded but no change in the price of macaroni and cheese. From this information, we can assume: A macaroni is a normal good and price elasticity of demand is greater than 1 B macaroni is an inferior good and price elasticity of supply is equal to zero C macaroni is an inferior good and price elasticity of supply is infinite D macaroni is an inferior good and price elasticity of demand is less than 1

productive and allocative efficiency; profits and losses; zero profits

A monopolistically competitive industry does not display ___ in either the short-run, when firms are making ___, nor in the long-run, when firms are earning ___. A allocative efficiency; profits and losses; negative profits B productive efficiency; profits and losses; zero profits C productive and allocative efficiency; profits and losses; zero profits D productive and allocative efficiency; profits and losses; negative profits

total quantity; price level for output

Aggregate supply (AS) denotes the relationship between the __________________ that firms choose to produce and sell and the _________________, holding the price of inputs fixed. A total quantity; price level for output B type of goods; input price of raw materials C price of goods; number of employees D total inputs; types of goods

relatively flat; relatively steep

Aggregate supply curves are ________________________ for low levels of output, and ____________________________ for high levels of output. A relatively flat; remain flat B relatively steep; remain steep C relatively flat; relatively steep D relatively steep; relatively flat

Andy's demand for beer to increase

Andy views beer and pizza as complements to one another. If the price of pizza decreases, economists would expect: A Andy's demand for pizza to increase B Andy's demand for pizza to decrease C Andy's quantity of pizza demanded to decrease D Andy's demand for beer to increase

all else is held equal

Any given demand or supply curve is based on the ceteris paribus assumption that ___________________. A everything is variable B all else is held equal C no one knows which variables will change and which will remain constant D what is true for the individual is not necessarily true for the whole

expansionary fiscal policy; lead to a budget deficit

Assume that laws have been passed that require the federal government to run a balanced budget. During a recession, the government will want to implement _____________________, but may be unable to do so because such a policy would ____________________________. A contractionary fiscal policy; lead to a budget deficit B discretionary fiscal policy; lead to a budget surplus C contractionary fiscal policy; lead to a budget surplus D expansionary fiscal policy; lead to a budget deficit

30

Assuming a country's economy maintains an 8% rate of growth, young adults starting at age 20 would see the average standard of living in their country more than double by the time they had reached age ___. A 30 B 40 C 50 D 60

$0

At the beginning 2010, the government of Norway had no debt and held $180 billion dollars in its sovereign fund. To stimulate its economy during 2011, Norway's government plans to spend $35 billion more than it will collect in tax revenue and in 2012, its spending will exceed tax revenues by $25 billion. What will the total government debt equal at the end of 2012? A 60 billion B 0 C 120 billion D 180 billion

540 billion

At the beginning of 2009, a government had a total debt of $540 billion dollars. It ended 2009 with a $6 billion dollar budget surplus. In 2010, its budget surplus reached $8 billion dollars. What is the total debt of the government equal to at the end of 2010? A) 554 billion B) 540 billion C) 0 D) 14 billion

an asset-liability time mismatch; diversify its loans

Banks can protect themselves against an unexpectedly high rate of loan defaults and against the risk of ___ by adopting a strategy that will ___. A rising interest rates; diversify its loans B rising interest rates; provide loans to a variety of customers C an increased reserve requirement; provide loans to a variety of customers D an asset-liability time mismatch; diversify its loans

a widespread decline in the value of their assets

Banks typically come under financial stress because of: A the money multiplier effect. B a widespread decline in the value of their assets C diversification of loan assets D risks associated with extraordinary economic gains

in accumulated government debt

By June, 2010, the U.S. government owed $13.6 trillion dollars ________________ that, over time, has remained unpaid. A from decreases in excise tax B from decreases in income tax C in accumulated government debt D from decreases in corporate tax

can include both b and c

Command-and-control regulation is a body of law that A) Fails to consider private costs of firms B) Specifies allowable quantities of pollution c) Details which pollution-control technologies must be used D) can include both b and c

8.3%; 60%

Craigburg has a working age population of 20 million. Of those, 11 million are employed and 1 million are unemployed. The unemployment rate is _____ and the participation rate is _______. A 5%; 55% B 8.3%; 60% C 8.3%; 55% D 5%; 60%

aggregate demand curve will shift to the right

During a recession, if a government uses an expansionary fiscal policy to increase GDP, the: A) aggregate supply curve will shift to the right B) aggregate supply curve will shift to the left C) aggregate demand curve will shift to the left D) aggregate demand curve will shift to the right

shift to the right

During a severe recession, the government issued food stamps that could only be used to acquire food to a greater number of families. The budget line graph shows food on the horizontal axis and everything else on the vertical axis. The government expects that issuing the food stamps will cause each family's budget constraint line to A pivot out along the horizontal axis B pivot out along the vertical axis C shift to the left D shift to the right

government economic subsidies protect firms from competition to avoid losses

Economies of scale may arise from all but one of the following. Which one is it? A doubling promotional expenses to expand sale more than proportionately B having larger retail space can expand sales more than proportionately C spreading the fixed-costs of administration over more customers holds average costs down D government economic subsidies protect firms from competition to avoid losses

buying marketable emission permits and not re-selling them

Environmentalist groups act to directly reduce of emissions by A allowing a limited amount of pollution to occur B allowing a declining amount of pollution to occur C buying marketable emission permits and not re-selling them D buying, trading, and re-selling marketable emission permits

full-time workers

Even with wage increases, the supply curve of labor is most often inelastic for which of the following? A part-time workers B full-time workers C lawyers D massage therapists

competitors may find a way to adapt and copy the underlying idea without incurring R&D costs

If I'MSmartCo's research and development project succeeds, then A market competition will ultimately discourage commercialization of the new technology B competitors may find a way to adapt and copy the underlying idea without incurring R&D costs C their success will be temporary because they will inevitably fall behind other innovative competitors D they will need to find a less expensive way to add even more desirable characteristics

increase

If a country's GDP decreases, but its debt increases during that year, then the country's debt to GDP ratio for the year will ___ in proportion to the magnitude of the changes. A decrease B increase or decrease C increase D decrease because GDP decreased

variable costs

If a paper mill shuts down its operations for three months so that it produces nothing, its ___ will be reduced to zero? A variable costs B fixed costs C opportunity costs D total cost

each of these firms must act as a price-taker

If a perfectly competitive market involves many firms selling identical products, then, in the face of such competition, A each of these firms must act as a price-maker B each of these firms must act as a price-taker C collusion amongst them sill most often result D demand curves can become kinked in appearance

invention and competition; invention and monopoly

If an alternative policy could encourage both ___, instead of ___, consumers would benefit. A invention and competition; invention and monopoly B invention and monopoly; invention and public funding C invention and monopoly; invention and competition D invention and competition; invention and public funding

automatic stabilizers will cause tax revenue to decrease and government spending to increase

If an economy moves into a recession, causing that country to produce less than potential GDP, then: A automatic stabilizers will cause tax revenue to decrease and government spending to increase B automatic stabilizers will cause tax revenue to increase and government spending to decrease C tax revenue and government spending will be higher because of automatic stabilizers D tax revenue and government spending will be lower because of automatic stabilizers

to minimize recessions

Insofar as government public policy is concerned, the best way to battle unemployment would be ____________. A to minimize recessions B to maximize unemployment payments C to maximize unemployment insurance duration D to minimize labor unions

depend on borrowed money

If loans become far less available, then sectors of the economy that ______________ like business investment, home construction, and car manufacturing can be dealt a crushing blow. A depend on borrowed money B typically generate extraordinary gains C make loans to financial capital markets D failed to diversify risk

will coordinate social costs and benefits

If no externalities of pollution exist in a particular industry, the interaction of demand and supply _______________. A is based on benefits individuals perceive while maximizing utility B is based on choices about production relative to total average costs C will coordinate social costs and benefits D shifts to supply has no relation to social costs

3

If nominal GDP is 2700 and the money supply is 900, what is velocity? A 25 B 13.5 C 3 D .33

divide up the monopoly level of profit amongst themselves.

If oligopolistic firms banded together with the intention of acting like a monopoly, it would likely result in their being able to A divide up the monopoly level of profit amongst themselves. B hold down output in the short-run C charge a higher price in the short-run D both b and c above are correct

health injuries and all of the above

If pollutants are emitted into the air and water, what costs might be incurred as a result? A compromised recreation possibilities B decreased property values C loss from destruction of wildlife habitat D health injuries and all of the above

both the money multiplier and supply of money in the economy will decrease

If the central bank increases the amount of reserves banks are required to hold to 20%, then: A the money multiplier will increase and the supply of money in the economy will decrease B both the money multiplier and the supply of money in the economy will increase C the money multiplier will decrease and the supply of money in the economy will increase D both the money multiplier and supply of money in the economy will decrease

increase unemployment, but have little effect on inflation

If the economy is at equilibrium as shown in the diagram above, then a contractionary monetary policy will A increase unemployment, but have little effect on inflation B increase unemployment and decrease inflation C increase output and increase inflation D have no effect on output, but increase inflation

create an inflationary increase in price level.

If the original level of aggregate demand is AD0, then an expansionary monetary policy that shifts aggregate demand to AD1 will only: A create an inflationary increase in price level. B create an increase in unemployment C create an increase in GDP D create a deflationary loss in price level

higher profits will induce expanded production

If the price level of what firms produce is rising across an economy, but the costs of production are constant, then: A the maximum potential GDP will be exceeded B increase in quantity produced won't be large C a majority of industries will start running into limits D higher profits will induce expanded production

the firm could experience a and/or b

If the research and development efforts of a firm have ended in failure, then A the firm could be driven out of buisness B the firm will suffer losses C R&D projects rarely end in total failure D the firm could experience a and/or b

stay the same and the equilibrium quantity to fall

If the supply curve for aspirin is perfectly elastic, then a reduction in demand will cause the equilibrium price to: A stay the same and the equilibrium quantity to fall B fall and the equilibrium quantity to fall C rise and the equilibrium quantity to stay the same D rise and the equilibrium quantity to fall

would be a negative externality

If you are highly asthmatic, then having high levels of industrial air pollutants waft over your house every day A is a voluntary exchange B is positively a voluntary exchange C would be a negative externality D would be an external voluntary exchange

diseconomies of scale

In microeconomics, the term ___ is synonymous with decreasing returns of scale A monopoly B economies of scale C diminishing returns D diseconomies of scale

hyperinflation

In the early 1900's extremely high inflation rates of 2500% were common in Russia. During that time, we can say that as a result of those inflation rates, Russia was experiencing ___. A perpetual inflation B ultra inflation C hypo inflation D hyperinflation

division of labor

In the first chapter of The Wealth of Nations, Smith introduces the idea of the __________, which means the way in which the work required to produce a good or service is divided into a number of tasks that are performed by different workers. A division of labor B interconnected economy C task economy D modern economy

by expanding levels of output and cutting prices

Oligopoly firms acting individually may seek to gain profits ___. A by expanding levels of output and cutting prices B by selling products that are distinctive in some way C by having a mini-monopoly on a particular brand name D by having a mini-monopoly or through tough competition

1.25 million

I'MAStart-UP Corp. issued and sold 2,500,000 common voting shares during its first public stock sale. What is the minimum number of shares needed to be able to elect a new director to the board? A 1.275 million B 1.25 million C 1.225 million D 2.5 million

4

If GDP is 2400 and the money supply is 600, then what is the velocity? A 18.3 B 4 C 4.57 D 12

marginal analysis

Most real-world choices aren't about getting all of one thing or another, instead, most choices involve _________________, which involves comparing the benefits and costs of choosing a little more or a little less of a good. A utility B opportunity cost C benefit analysis D marginal analysis

COLA plus 2.4%

Nancy's union has negotiated a three-year wage contract that provides for a 2.4% increase indexed to inflation. The rates of inflation are forecast to be 1.62%, 1.93% and 2.21% respectively. How will Nancy's wage increase be expressed in the new contract? A COLA plus 1.6% B COLA plus 1.9% C COLA plus 2.4% D COLA plus 2.2%

has risen gradually

For most high-income countries of the world, GDP _________________ over time. A has proven to be stable B has risen gradually C has declined slightly D has sharply risen

store of value

Lance paid $175,000 for his house in 2003 and sold it for $325,000 in 2006. What function did the house serve in the time Lance owned it? A medium of exchange B unit of account C store of value D unit of exchange