13.3   Efficiency, Price, and Value   1) The maximum price a consumer is willing to pay for an extra unit of a good or service when total utility is maximized is known as A) demand. B) marginal benefit. C) quantity demanded. D) total utility. E) marginal utility.   2) Jen consumes 5 CDs and 2 tacos. She receives 500 units of utility from her […]

  Controversy 6 Multiple-Choice Items     71.Your mother is considering changing her diet to include only non-meat proteins to reduce her risk of developing heart disease or cancer. What evidence is available to support her decision? a.vegetarian diets contain greater amounts of heart-protective omega-3 fatty acids b.plant-based diets are usually lower in saturated fat and higher in fiber, which reduces risk of heart disease […]

  61.RefertoFigure34-1.Whichofthefollowingiscorrect? a.Iftheinterestrateis4percent,thereisexcessmoneydemand,andtheinterestratewillfall. b.Iftheinterestrateis3percent,thereisexcessmoneysupply,andtheinterestratewillrise. c.Startingwithaninterestrateof4percent,thedemandforgoodsandserviceswillincreaseuntilthemoneymarketreachesanewequilibrium. d.Noneoftheaboveiscorrect. Figure34-2.Ontheleft-handgraph,MSrepresentsthesupplyofmoneyandMDrepresentsthedemandformoney;ontheright-handgraph,ADrepresentsaggregatedemand.Theusualquantitiesaremeasuredalongtheaxesofbothgraphs.                           62.RefertoFigure34-2.Whatismeasuredalongthehorizontalaxisoftheleft-handgraph? a.nominaloutput b.realoutput c.theopportunitycostofholdingmoney d.thequantityofmoney 63.RefertoFigure34-2.WhatdoesYrepresentonthehorizontalaxisoftheright-handgraph? a.thequantityofmoney b.therateofinflation c.realoutput d.nominaloutput 64.RefertoFigure34-2.Whichofthefollowingquantitiesisheldconstantaswemovefromonepointtoanotheroneithergraph? a.thenominalinterestrate b.thequantityofmoneydemanded c.investment d.theexpectedrateofinflation 65.RefertoFigure34-2.IfthegraphsapplytoaneconomysuchastheU.S.economy,thentheslopeoftheADcurveisprimarilyattributabletothe a.wealtheffect. b.interest-rateeffect. c.exchange-rateeffect. d.Fishereffect. 66.RefertoFigure34-2.AdecreaseinYfromY1toY2isexplainedas follows: a.TheFederalReserveincreasesthemoneysupply,causingthemoney-demandcurvetoshiftfromMD1toMD2;thisshiftofMDcausesrtoincreasefromr1tor2;andthisincreaseinrcausesYtodecreasefromY1toY2. b.AnincreaseinPfromP1toP2causesthemoney-demandcurvetoshiftfromMD1toMD2;thisshiftofMDcausesrtoincreasefromr1tor2;andthisincreaseinrcausesYtodecreasefromY1toY2. c.AdecreaseinPfromP2toP1causesthemoney-demandcurvetoshiftfromMD1toMD2;thisshiftofMDcausesrtoincreasefromr1tor2;andthisincreaseinrcausesYtodecreasefromY1toY2. d.Anincreaseinthepricelevelcausesthemoney-demandcurvetoshiftfromMD2toMD1;thisshiftofMDcausesrtodecreasefromr2tor1;andthisdecreaseinrcausesYtodecreasefromY1toY2. 67.RefertoFigure34-2.Aswemovefromonepointtoanotheralongthemoney-demandcurveMD1, a.thepricelevelisheldfixedatP1. b.theinterestrateisheldfixedatr1. c.themoneysupplyischangingsoastokeepthemoneymarketinequilibrium. d.theexpectedinflationrateischangingsoastokeeptherealinterestrateconstant. 68.RefertoFigure34-2.Ifthemoney-supplycurveMSontheleft-handgraphweretoshifttotheleft,thiswould a.representanactiontakenbytheFederalReserve. b.shifttheADcurvetotheleft. c.create,untiltheinterestrateadjusted,anexcessdemandformoneyattheinterestratethatequilibratedthemoneymarketbeforetheshift. d.Alloftheabovearecorrect. 69.RefertoFigure34-2.Assumethemoneymarketisalwaysinequilibrium.Undertheassumptionsofthemodel, a.therealinterestrateisloweratY2thanitisatY1. b.thequantityofmoneyisthesameatY1asitisatY2. c.thepricelevelisloweratr2thanitisatr1. d.Alloftheabovearecorrect. 70.RefertoFigure34-2.Assumethemoneymarketisalwaysinequilibrium.Undertheassumptionsofthemodel, a.thequantityofgoodsandservicesdemandedishigheratP2thanitisatP1. b.the quantity […]

    90. The seller of a pork bellies futures contract at $0.41 per pound noted that the closing price of pork bellies was $0.44 today. What will happen to this contract, which requires delivery of 40,000 of pork bellies at expiration?  A. A loss of $400 is posted to the account. B. A gain of $400 is posted to the account. C. A loss of $1,200 is posted […]

    31) In a perfectly competitive industry, in the long-run equilibrium A) the typical firm is producing at the output where its long-run average total cost is not minimized. B) the typical firm is earning an accounting profit greater than its implicit costs. C) the typical firm earns zero profit. D) the typical firm is maximizing its revenue.   32) A constant cost, perfectly […]

    59) Holding the price of a firm’s output constant, if the marginal product of labor increases, A) the marginal revenue product of labor decreases. B) the marginal revenue product of labor also increases. C) the marginal products of other inputs also increase. D) the marginal revenue product of labor may increase or decrease.     60) Hotspur Incorporated, a manufacturer of microwaves, is […]

    121) Ceteris paribus when graphing a relationship refers to A) letting all the variables change at once. B) changing the origin of the graph. C) holding constant all but two variables. D) rescaling the coordinates. E) swapping the axes so that the x-axis is the vertical axis and the y-axis is the horizontal axis. 122) When two variables in a graph are related […]

    41) Demand for a product tends to be more elastic the longer the time period considered because A) sellers have more time to expand production. B) buyers have more time to search for substitutes. C) price increases over time make the price larger relative to buyers’ incomes. D) the inverse relationship between the price and the quantity demanded weakens over time. E) buyers […]

  81) With y measured on the vertical axis and x measured on the horizontal axis, the slope of a straight line is defined as A) y/x. B) x/y. C) (change in y)/(change in x). D) (change in x)/(change in y). E) y – x. 82) In a graph, a straight line has a negative slope if the line A) is vertical. B) is horizontal. […]

  91.Maverick Stars Inc., a U.S. based multinational company, applies its home-country standards of employment and production in its manufacturing facilities located in some less-developed host nations. In this context, the company is most likely to be criticized for:   A. applying low standards of business ethics in its host nations. B. exploiting the national differences in factors of production. C. opposing ethnocentrism and righteous moralism. D. nullifying the reasons for […]