51) Full employment occurs when A) the unemployment rate is zero. B) the cyclical unemployment rate is zero. C) the frictional unemployment rate is zero. D) the sum of frictional and structural unemployment is zero. E) the structural unemployment rate is zero.   52) Full employment occurs when A) structural unemployment is zero. B) cyclical unemployment is zero. C) frictional unemployment is zero. […]

  21) Diminishing marginal utility means that A) marginal utility decreases as consumption decreases. B) marginal utility increases as consumption increases. C) marginal utility decreases as consumption increases. D) total utility decreases as marginal utility decreases. E) total utility decreases as marginal utility increases.   22) Brenda’s marginal utility per dollar from the second hamburger is 20. Her marginal utility from the third hamburger would […]

        11) The table above shows a nation’s production possibilities frontier. If the nation wants to produce 4 robots and 34 pizzas A) it will shift the production possibilities frontier. B) the opportunity cost is 9 pizzas. C) the nation will be producing inefficiently. D) it will be unable to do so because the production point is unattainable. E) the nation will […]

  25.3   New Keynesian Model   1) The model that assumes that expectations are formed rationally but does not assume complete wage and price flexibility is known as the A) new classical model. B) Keynesian model. C) monetarist model. D) new Keynesian model.   2) Wage and price rigidities created by long-term contracts suggest that an anticipated monetary expansion will have A) no effect on […]

  11) Suppose a tax equal to the value of the marginal external cost at the optimal output is imposed on a pollution generating good. All of the following will result from the tax except A) an increase in the equilibrium market price. B) a decrease in the equilibrium quantity produced and consumed. C) a decrease in market supply of the good. D) an increase […]

    40) Economic surplus is maximized in a competitive market when A) demand is equal to supply. B) the deadweight loss equals the sum of consumer surplus and producer surplus. C) marginal benefit equals marginal cost. D) producers sell the quantity that consumers are willing to buy.     41) ________ is defined as a market outcome in which the marginal benefit to consumers […]

  11) What assets are included in M1? In M2? Is all of M1 and M2 money? If some assets of M1 or M2 are not money, why are they included in M1 or M2? Answer:  M1 is the sum of currency held by individuals and businesses plus checkable deposits owned by individuals and businesses plus traveler’s checks. All the assets in M1 are accepted […]

  111) Consider a simple macro model with a constant price level and demand-determined output. Using this model, if economists want to estimate the effect of a given change in desired investment on equilibrium national income, they would multiply the change in desired investment by the A) average propensity to save. B) marginal propensity to save. C) equilibrium level of national income. D) simple multiplier. […]

    12.1   The Lemons Problem and its Solution   1) Private information is a situation in which A) two parties to an exchange have information that is available to outsiders if they ask. B) one party to an exchange has information that is not available to the other. C) the marginal cost of a person’s obtaining additional information is zero. D) the marginal cost […]

  121.The income statement for 2014 and comparative balance sheets of Daniel Divers for 2013 and 2014 appear below. Dividends totaling $51,200 were paid during the year. Equipment costing $21,500 with a book value of $19,200 was sold for $8,900 cash during the year.        December 31 Assets 20142013 Cash$  56,800$  58,300 Accounts receivable14,50012,200 Merchandise inventories22,60030,000 Equipment112,00098,700 Accumulated depreciation(35,600)     (28,400) Total assets$170,300     $170,800   Liabilities and Stockholders’ Equity     […]