macro

Which of the following statements is correct?

If supply increases and demand decreases, equilibrium price will fall.

If two goods are complements:

a decrease in the price of one will increase the demand for the other.

Refer to the diagram. A price of $60 in this market will result in:

a surplus of 100 units

a surplus of a product will arise when price is

above equilibrium with the result that quantity supplied exceeds quantity demanded.

a shift to the right in the demand curve for product A can be most reasonable explained by saying that

consumer preferences have changed in favor of A so that they now want to buy more at each possible price

If X is a normal good, a rise in money income will shift the:

demand curve for X to the right

Deregulation

eliminates regulatory capture and can improve outcomes by increasing competition.

Which of the following would be the be the best example of regulatory capture

executives from the ford General Motors and Chrysler companies write the rules regulating automobile safety and fuel requirements

the idea of government failure includes all of the following except

extensive positive externalities from public and quasi-public goods.

which of the following is a key difference between the economic activities of government and those private firms?

government has the legal right to force people to do things; private firms do not

a market is in equilibrium

if the amount producers want to sell is equal to the amount consumers want to buy

Assume a drought in the Great Plains reduces the supply of wheat. Noting that wheat is a basic ingredient in the production of bread and potatoes are a consumer substitute for bread, we would expect the price of wheat to:

rise, the supply of bread to decrease and the demand for potatoes to increase

an improvement in production technology will

shift the supply curve to the right

If the price of product L increases, the demand curve for close-substitute product J will:

shift to the right

refer to the diagram a price of $20 in this market will result in a

shortage of 100 units

government loan guarantees tend to have the effect of

socializing losses and privatizing gains

in 2007, the price of oil increased, which in turn caused the demand of natural gas to rise. this can best be explained by saying that oil and natural gas are

substitute goods and the higher price for oil increased the demand for natural gas

a market

is an institution that brings together buyers and sellers

in what way, if Any, does the invisible hand affect government resource allocation

it does not help resource allocation as there are no competitive forces within government

a special-interest issue is one whose passage yields

large economic gains to a small number of people economic losses to a large number of people

Government changes in interest rates to regulate the economy are part of

monetary policy

The US federal reserve, the bank of Japan, the Bank of England, and the European central bank are all in charge of what for the countries they represent

monetary policy

When a nation is in a debt crisis, the government's level of debt is so high that:

other countries will be unwilling to buy goods and services from the nation

the demand curve shows the relationship between

price and quantity demanded

the law of demand states that other thing equal

price and quantity demanded are inversely related

in corporation, owners are _______ and managers are_____

principles , agents

the law of supply indicates that, other things equal

producers will offer more of a product at high prices than at low prices

Allocative efficiency is concerned with:

producing the combination of goods most desired by society.

other things equal, if the price of a key resource used to produce product X falls the

product supply curve of X will shift to the right

If the supply and demand curves for a product both decrease, then equilibrium:

quantity must decline, but equilibrium price may rise, fall, or remain unchanged

Camille's Creations and Julia's Jewels both sell beads in a competitive market. If at the market price of $5, both are running out of beads to sell (they can't keep up with the quantity demanded at that price), then we would expect both Camille's and Julia's to:

raise their price and increase their quantity supplied

the pursuit through government of a transfer of wealth at someone else's expense refers to

rent-seeking behavior

Government fiscal policy involves changing which of the following?

taxes and government spending

Productive efficiency refers to:

the use of the least-cost method of production.

a product market is in equilibrium

where the demand and supply curves intersect

Refer to the diagram. The highest price that buyers will be willing and able to pay for 100 units of this product is:

$60

Refer to the diagram. A government-set price floor is best illustrated by:

C

Refer to the diagram. A government-set price ceiling is best illustrated by:

A

Refer to the diagram. Rent controls are best illustrated by

A

which of the following will not cause the demand for the product K to change

A change in the price of product K

which of the following will cause a decrease in market equilibrium price and an increase in equilibrium quantity

an increase in supply

The rationing function of prices refers to the

capacity of a competitive market to equalize quantity demanded and quantity supplied.

when the price of a product increases, a consumer is able to buy less of it with a given money income. this describes the

income effect

a government subsidy to the producers of a product

increases product supply

The government of Southland wants to improve resource allocation in the country. which of the following actions by the southland government is most likely to accomplish this?

taxing polluters and subsidizing firms that are creating significant positive externalities

Monetary stimulus is only helpful to an economy:

that is in recession

which of the following is a source of government failure

the enormous size and scope of government

If there is a shortage of product X, and the price is free to change:

the price of the product will rise

according to some economists, the private sector is more efficient than the public sector mainly because

the private sector has a clear test of performance: profit and loss

when the price of a product rises, consumers with a given money income shift their purchases to other products whose prices are now relatively lower. this statement describes

the substitution effect