5.1   The Price Elasticity of Demand 1) The price elasticity of demand is a measure of A) the equilibrium price of a product. B) buyers’ responsiveness to changes in the price of a product. C) the amount of a product purchased when income increases. D) whether a product is a substitute or a complement. E) how much a change in demand affects the equilibrium […]

  81) The “long-run aggregate supply curve,” vertical at Y*, shows that A) potential output will rise as prices rise. B) potential output will fall as prices rise. C) potential output is compatible with any price level. D) potential output is compatible with one particular price level. E) prices will always rise in the long run. 82) Consider the AD/AS model. In the long run, […]

  59) a.What is the defining characteristic of a natural monopoly? b.Should the government break up a natural monopoly into two or more firms to make the industry more competitive? c.Suppose the government wants to ensure that some of the benefits of declining average total cost are passed on to consumers. To achieve this goal, it requires that the natural monopoly set its price equal […]

    81.A country’s newest ruler has decided the country will become self-sufficient and ceases trade with the rest of the world. The likely outcome of this action will be that the country’s citizen’s will be: A. forced to consume less than before if they possessed a comparative advantage in the production of a good. B. better off than before if they possess an absolute advantage in […]

    11) In the above table, for Mary the opportunity cost of producing a dress is ________ and the opportunity cost for Mark of producing a dress is ________. A) 1 1/2 jackets; 2/3 of a jacket B) 1 1/2 jackets; 2 1/2 jackets C) 1 1/4 jackets; 1/2 of a jacket D) 1 jacket; 1 jacket E) 1 dress; 1 dress   12) […]

    11) Booker International keeps employee records, including their national origin and gender, because the firm has overseas customers who are concerned about these issues. This practice by Booker International is a violation of which law? A) Equal Pay Act B) Americans with Disabilities Act C) Immigration and Naturalization Act D) Title VII of the Civil Rights Act of 1964   12) Title VII […]

  13.7   Does Inflation Impose Costs on the Economy?   1) Suppose that in 2014, all prices in the economy double and that all wages and salaries also double. In 2014 you A) are worse off than you were in 2013 as you can no longer afford to buy as many goods and services. B) are better off than you were in 2013 as your […]

    31.An appropriate setting in which to implement an eating disorder prevention program is _____. a.a school b.a health care clinic c.a community education center d.All of the above   32.Characteristics of successful eating-disorder prevention programs include: a.selective targeting of high-risk groups. b.focusing on adolescents 40 with medical complications d.A 16-year-old girl with type 1 diabetes and a BMI in the 90th %tile e.b […]

  31.Alikelyeffectofgovernmentpoliciesthatredistributeincomeandwealthfromthewealthytothepooristhatthosepolicies a.enhanceequality. b.enhanceefficiency. c.increasetherewardforworkinghard. d.Alloftheabovearecorrect. 32.Governmentpoliciesdesignedtoequalizethedistributionofeconomicwell-beinginclude (i)thewelfaresystem (ii)unemploymentinsurance (iii)progressiveincometax a.(i)only b.(ii)only c.(i)and(ii)only d.(i),(ii),and(iii) 33.Governmentpoliciesresultinginreducedefficiencyinclude (i)thewelfaresystem (ii)unemploymentinsurance (iii)progressiveincometax a.(i)only b.(ii)only c.(i)and(ii)only d.(i),(ii),and(iii) 34.Whengovernmentpoliciesareenacted, a.equalitycanusuallybeenhancedwithoutanefficiencyloss,butefficiencycanneverbeenhancedwithoutareductioninequality. b.efficiencycanusuallybeenhancedwithoutareductioninequality,butequalitycanneverbeenhancedwithoutanefficiencyloss. c.itisalwaysthecasethateitherefficiencyandequalityarebothenhanced,orefficiencyandequalityarebothdiminished. d.Noneoftheabovearecorrect. 35.SenatorBrownwantstoincreasetaxesonpeoplewithhighincomesandusethemoneytohelpthepoor.SenatorJohnsonarguesthatsuchataxwilldiscouragesuccessfulpeoplefromworkingandwillthereforemakesocietyworseoff.Aneconomistwouldsaythat a.weshouldagreewithSenatorBrown. b.weshouldagreewithSenatorJohnson. c.agooddecisionrequiresthatwerecognizebothviewpoints. d.therearenotradeoffsbetweenequityandefficiency. 36.Acertainstatelegislatureisconsideringanincreaseinthestategasolinetax.RepresentativeCampbellarguesthatanincreaseinthegasolinetaxwouldharmlow-incomedriversdisproportionately.RepresentativeRichardsrespondsbysayingthatlow-incomedriversownsmallercarsthatuselessgasoline,andthatlow-incomedriversthereforewouldnotbeharmeddisproportionately. a.RepresentativeCampbell’sargumentisbasedprimarilyonefficiency,whileRepresentativeRichards’argumentisbasedprimarilyonequality. b.RepresentativeCampbell’sargumentisbasedprimarilyonequality,whileRepresentativeRichards’argumentisbasedprimarilyonefficiency. c.Bothrepresentatives’argumentsarebasedprimarilyonefficiency. d.Bothrepresentatives’argumentsarebasedprimarilyonequality. 37.SenatorJacksonarguesthatreplacingthefederalincometaxwithanationalsalestaxwouldincreasethelevelofoutput.SenatorFeldmanobjectsthatthispolicywouldbenefittherichattheexpenseofthepoor. a.Bothsenators’argumentsareprimarilyaboutequality. b.Bothsenators’argumentsareprimarilyaboutefficiency. c.SenatorJackson’sargumentisprimarilyaboutequality,whileSenatorFeldman’sargumentisprimarilyaboutefficiency. d.SenatorJackson’sargumentisprimarilyaboutefficiency,whileSenatorFeldman’sargumentisprimarilyaboutequality. 38.Supposethegovernmenttaxesthewealthyatahigherratethanittaxesthepoorandthendevelopsprogramstoredistributethetaxrevenuefromthewealthytothepoor.Thisredistributionofwealth a.ismoreefficientandmoreequalforsociety. b.ismoreefficientbutlessequalforsociety. c.ismoreequalbutlessefficientforsociety. d.islessequalandlessefficientforsociety. 39.Thegovernmenthasjustpassedalawrequiringthatallresidentsearnthesameannualincomeregardlessofworkeffort.Thislawislikelyto a.increaseefficiencyandincreaseequality. b.increaseefficiencybutdecreaseequality. c.decreaseefficiencybutincreaseequality. d.decreaseefficiencyanddecreaseequality. 40.Theopportunitycostofanitemis a.thenumberofhoursneededtoearnmoneytobuytheitem. b.whatyougiveuptogetthatitem. c.usuallylessthanthedollarvalueoftheitem. d.thedollarvalueoftheitem.    

    66.              The first step for time-and-material pricing is to calculate the a.charge for obtaining materials. b.charge for holding materials. c.labor charge per hour. d.charges for a particular job.     67.              The labor charge per hour in time-and-material pricing includes all of the following except a.an allowance for a desired profit. b.charges for labor loading. c.selling and administrative costs. d.overhead costs.     […]