41. Which of the following statements best describes individuals who have had their gallbladder removed? a.The liver stops producing bile. b.They cannot digest food. c.Bile is released directly into the small intestine. d.Bile is not delivered into the small intestine.   42.As fatty acids are absorbed through the intestinal lining for transport through the body, which of the following actions takes place? a.Short-chain […]

    31) The entry and exit of firms in a monopolistically competitive market guarantee that A) marginal revenue equals marginal cost and average total cost is minimized. B) firms can earn economic profits in the long run. C) price equals average total cost in the long run. D) firms can earn economic profits in the short run.   32) When new firms are encouraged […]

  Multiple Choice – Section 03 Three Applications of Supply, Demand, and Elasticity 1. Adecreaseinsupplywillcausethelargestincreaseinpricewhen a.bothsupplyanddemandareinelastic. b.bothsupplyanddemandareelastic. c.demandiselasticandsupplyisinelastic. d.demandisinelasticandsupplyiselastic. 2.Adecreaseinsupplywillcausethesmallestincreaseinpricewhen a.bothsupplyanddemandareinelastic. b.demandiselasticandsupplyisinelastic. c.bothsupplyanddemandareelastic. d.demandisinelasticandsupplyiselastic. 3.Thediscoveryofanewhybridwheatwouldincreasethesupplyofwheat.Asaresult,wheatfarmerswouldrealizeanincreaseintotalrevenueifthe a.supplyofwheatiselastic. b.supplyofwheatisinelastic. c.demandforwheatisinelastic. d.demandforwheatiselastic. 4.Becausethedemandforwheattendstobeinelastic,thedevelopmentofanew,moreproductivehybridwheatwouldtendto a.increasethetotalrevenueofwheatfarmers. b.decreasethetotalrevenueofwheatfarmers. c.decreasethedemandforwheat. d.decreasethesupplyofwheat. 5.Knowingthatthedemandforwheatisinelastic,ifallfarmersvoluntarilydidnotplantwheaton10percentoftheirland,then a.consumersofwheatwouldbuymorewheat. b.wheatfarmerswouldsufferareductionintheirtotalrevenue. c.wheatfarmerswouldexperienceanincreaseintheirtotalrevenue. d.thedemandforwheatwoulddecrease. 6.SupposeresearchersattheUniversityofWisconsindiscoveranewvitaminthatincreasesthemilkproductionofdairycows.Ifthedemandformilkisrelativelyinelastic,thediscoverywill a.raisebothpriceandtotalrevenues. b.lowerbothpriceandtotalrevenues. c.raisepriceandlowertotalrevenues. d.lowerpriceandraisetotalrevenues. 7.Supposethatcornfarmerswanttoincreasetheirtotalrevenue.Knowingthatthedemandforcornisinelastic,cornfarmersshould a.plantmorecornsothattheywouldbeabletosellmoreeachyear. b.increasespendingonfertilizerinanattempttoproducemorecornontheacrestheyfarm. c.reducethenumberofacresonwhichtheyplantcorn. d.contributetoafundthatpromotestechnologicaladvancesincornproduction. 8.Goodnewsforfarmingcanbebadnewsforfarmersbecausethe a.supplycurveforanindividualfarmerisusuallyperfectlyelastic. b.supplycurveforanindividualfarmerisusuallyperfectlyinelastic. c.demandforbasicfoodstuffsisusuallyinelastic,meaningthatfactorsthatshiftsupplytotherightdecreasetotalrevenuestosellers. d.demandforbasicfoodstuffsisusuallyelastic,meaningthatfactorsthatshiftsupplytotherightincreasetotalrevenuestosellers. 9.Ifsoybeanfarmersknowthatthedemandforsoybeansisinelastic,inordertoincreasetheirtotalrevenuestheyshould a.usemorefertilizersandweedkillerstoincreasetheiryields. b.plantadditionalacrestoincreasetheiroutput. c.reducethenumberofacrestheyplanttodecreasetheiroutput. d.Bothaandbarecorrect. 10.Farmprogramsthatpayfarmersnottoplantcropsonalltheirland a.hurtfarmersbyloweringtheirtotalrevenueandhurtconsumersbycausingshortagesofsomefooditems. b.helpfarmersbycuttingcosts,whichhelpsconsumersbyloweringfoodprices. c.helpfarmersbyincreasingtotalrevenueinthemarketbuthurtconsumersbyraisingfoodprices. d.helpfarmersdirectlysincetheyreceivegovernmentpaymentsbuthavenorealeffectsonconsumers.   […]

  71.Jamestookoutafixed-interest-rateloanwhentheCPIwas200.HeexpectedtheCPItoincreaseto206butitactuallyincreasedto204.Therealinterestratehepaidis a.higherthanhehadexpected,andtherealvalueoftheloanishigherthanhehadexpected. b.higherthanhehadexpected,andtherealvalueoftheloanislowerthanhehadexpected. c.lowerthanhehadexpected,andtherealvalueoftheloanishigherthanhehadexpected. d.lowerthenhehadexpected,andtherealvalueoftheloanislowerthanhehadexpected. 72.Wealthisredistributedfromdebtorstocreditorswheninflationwasexpectedtobe a.highand it turns outto be high. b.lowanditturnsouttobelow. c.lowandit turnsoutto behigh. d.highandit turnsoutto below. 73.Wealthisredistributedfromcreditorstodebtorswheninflationwasexpectedtobe a.highand it turns outto be high. b.lowanditturnsouttobelow. c.lowandit turnsoutto behigh. d.highandit turnsoutto below. 74.Wealthisredistributedfromcreditorstodebtorswheninflationis a.high,whetheritisexpectedornot. b.low,whetheritisexpectedornot. c.unexpectedlyhigh. d.unexpectedlylow. 75.Wealthisredistributedfromdebtorstocreditorswheninflationis a.high,whetheritisexpectedornot. b.low,whetheritisexpectedornot. c.unexpectedlyhigh. d.unexpectedlylow. 76.Ifinflationishigherthanwhatwasexpected, a.creditorsreceivealowerrealinterestratethantheyhadanticipated. b.creditorspayalowerrealinterestratethantheyhadanticipated. c.debtorsreceiveahigherrealinterestratethantheyhadanticipated. d.debtorspayahigherrealinterestratethantheyhadanticipated. 77.Duringthelasttaxyearyoulentmoneyatanominalrateof6percent.Actualinflationwas1percent,butpeoplehadbeenexpecting1.5percent.Thisdifferencebetweenactualandexpectedinflation a.transferredwealthfromtheborrowertoyouandcausedyourafter-taxrealinterestratetobe0.5percentagepointshigherthanwhatyouhadexpected. b.transferredwealthfromtheborrowertoyouandcausedyourafter-taxrealinterestratetobemorethan0.5percentagepointshigherthanwhatyouhadexpected. c.transferredwealthfromyoutotheborrowerandcausedyourafter-taxrealinterestratetobe0.5percentagepointslowerthanwhatyouhadexpected. d.transferredwealthfromyoutotheborrowerandcausedyourafter-taxrealinterestratetobemorethan0.5percentagepointslowerthanwhatyouhadexpected. 78.Duringthelasttaxyearyoulentmoneyatanominalrateof6percent.Actualinflationwas1.5percent,butpeoplehadbeenexpecting1percent.Thisdifferencebetweenactualandexpectedinflation a.transferredwealthfromtheborrowertoyouandcausedyourafter-taxrealinterestratetobe0.5percentagepointshigherthanwhatyouhadexpected. b.transferredwealthfromtheborrowertoyouandcausedyourafter-taxrealinterestratetobemorethan0.5percentagepointshigherthanwhatyouhadexpected. c.transferredwealthfromyoutotheborrowerandcausedyourafter-taxrealinterestratetobe0.5percentagepointslowerthanwhatyouhadexpected. d.transferredwealthfromyoutotheborrowerandcausedyourafter-taxrealinterestratetobemorethan0.5percentagepointslowerthanwhatyouhadexpected. 79.Iftheeconomyunexpectedlywentfrominflationtodeflation, a.bothdebtorsandcreditorswouldhavereducedrealwealth. b.bothdebtorsandcreditorswouldhaveincreasedrealwealth. c.debtorswouldgainattheexpenseofcreditors. d.creditorswouldgainattheexpenseofdebtors. 80.Ifinflationislowerthanwhatwasexpected, […]

  11) An example of the quality change bias, and not a new goods bias, in the calculation of the CPI is a price increase in A) Coke versus Pepsi. B) DVDs purchased on Craigslist, an online classified website. C) a 2013 GPS unit versus a 2008 GPS unit. D) etexts versus used books . E) pants purchased by a first-time shopper at Aeropostale. 12) […]

  21) If the GDP price index is 125 and nominal GDP is $130 billion, then real GDP equals ________ billion. A) $104.00 B) $162.50 C) $96 D) $1.04 E) $9.6 22) Suppose that in 2012, real GDP is larger than nominal GDP. The GDP price index in 2012 is definitely A) negative. B) larger than the GDP price index in 2012. C) less than […]

  2.3   The Circular Flows   1) ________ the owners of the factors of production, while ________ what amounts of those factors to hire. A) Households are; firms determine B) Households are; the government determines C) The government is; firms determine D) Firms are; households determine E) Firms are; the government determines   2) What two groups of decision makers are represented in the basic […]

  31) Japan is Coach’s second largest market, representing about 20% of global sales. All of the following statements are true regarding the market for Coach’s products compared to that in America except: A) Japanese consumers are enormously brand-centric. B) Japanese consumers are not as brand loyal as American consumers. C) American women tend to carry two or three brands while their Japanese counterparts tend […]

    21) In the four-quadrant diagram of the specific factors model, the graph in the upper left quadrant is a country’s A) production function for food. B) production possibility frontier. C) labor allocation constraint. D) production function for cloth. E) labor supply curve.     22) In the four-quadrant diagram of the specific factors model, the graph in the upper right quadrant is a […]

  121.SupposethestateofWyomingpassesalawthatincreasesthetaxoncigarettes.Asaresult,smokerswholiveinWyomingstartpurchasingtheircigarettesinsurroundingstates.Whichofthefollowingprinciplesdoesthisbestillustrate? a.Peoplerespondtoincentives. b.Rationalpeoplethinkatthemargin. c.Tradecanmakeeveryonebetteroff. d.Marketsareusuallyagoodwaytoorganizeeconomicactivity. 122.Governmentpoliciescanchangethecostsandbenefitsthatpeopleface.Thosepolicieshavethepotentialto a.alterpeople’sbehavior. b.alterpeople’sdecisionsatthemargin. c.produceresultsthatpolicymakersdidnotintend. d.Alloftheabovearecorrect. 123.RalphNader’sbookUnsafeatAnySpeedcausedCongresstorequire a.safetyglassinallnewcars. b.seatbeltsinallnewcars. c.airbagsinallnewcars. d.stricterdrunkdrivinglawsinallstates. 124.Followingtheimplementationoflawsrequiringautomobilestohaveseatbelts,whichofthefollowingoccurred? a.Anindividual’sprobabilityofsurvivinganautoaccidentrose. b.Therewasanincreaseinpedestriandeaths. c.Therewasanincreaseinautomobileaccidents. d.Alloftheabovearecorrect. 125.U.S.lawsrequiringthatdriverswearseatbeltshaveresultedin a.areductioninbothdriverdeathsandpedestriandeaths. b.feweraccidentsandfewerdeathsperaccident. c.fewerdriverdeaths,feweraccidentsandfewerpedestriandeaths. d.littlechangeinthenumberofdriverdeaths,butmoreaccidentsandmorepedestriandeaths. 126.Evidenceindicatesthatseatbeltlawshaveledto a.fewerpedestriandeaths. b.fewerautomobileaccidents. c.fewerdeathsperautomobileaccident. d.Alloftheabovearecorrect. 127.Oneeffectofthegovernment-imposedseatbeltlawintheU.S.hasbeen a.adramaticdecreaseinthenumberofpedestriandeaths. b.saferdriving. c.anincreaseinthenumberofaccidents. d.adramaticdecreaseinthenumberofdriverdeaths. 128.Basedontheavailableevidence,whichofthefollowinggroupsbenefitsmostfrommandatoryseatbeltlaws? a.automakers b.pedestrians c.drivers d.ownersofcollision-repairshops 129.Whichofthefollowingcanpolicydo? a.alterincentives b.altertrade-offs c.changeopportunitycosts d.Alloftheabovearecorrect. 130.SupposethestateofIllinoispassesalawthatbanssmokinginrestaurants.Asaresult,residentsofWisconsinwhodonotlikebreathingsecond-handsmokebegindrivingacrossthebordertoIllinoistoeatatrestaurantsthere.Whichofthefollowingprinciplesdoesthisbestillustrate? a.Peoplerespondtoincentives b.Rationalpeoplethinkatthemargin c.Tradecanmakeeveryonebetteroff d.Marketsareusuallyagoodwaytoorganizeeconomicactivity 131.IntheformerSovietUnion,producerswerepaidformeetingoutputtargets,notforsellingproducts.Underthosecircumstances,whatweretheeconomicincentivesforproducers? a.toproducegoodqualityproductssothatsocietywouldbenefitfromtheresourcesused b.toconserveoncosts,soastomaintainefficiencyintheeconomy c.toproduceenoughtomeettheoutputtarget,withoutregardforqualityorcost d.toproducethoseproductsthatsocietydesiresmost 132.Whichofthefollowingprinciplesisnotoneofthefourprinciplesofindividualdecisionmaking? a.Peoplefacetradeoffs. b.Tradecanmakeeveryonebetteroff. c.Peoplerespondtoincentives. d.Rationalpeoplethinkatthemargin. 133.Whichofthefollowingstatementsexemplifiesaprincipleofindividualdecisionmaking? a.Tradecanmakeeveryonebetteroff. b.Governmentscansometimesimprovemarketoutcomes. c.Thecostofsomethingiswhatyougiveuptogetit. […]