51) A price-discriminating monopoly is a monopoly that A) sells its output at a single price to all of its customers. B) sells different units of a good or service at different prices. C) has control over the resources used to produce the product. D) has a license to sell the product. E) illegally charges different customers different prices for the good it produces. […]

    81) By drawing a demand curve with price on the vertical axis and quantity on the horizontal axis, economists assume that the most important determinant of the demand for a good is A) consumer income. B) consumer tastes and preferences. C) the price of the good. D) the quality of the good. 82) The law of demand implies, holding everything else constant, that […]

  43) Which of the following is an argument against the rational-expectations assumption? A) People expect certain outcomes from the government’s policy actions. B) It requires households and firms to know too much. C) It assumes that unexploited opportunities for profit persist in the economy. D) The costs of formulating rational expectations are very low. 44) According to the new classical theory, if economic policies […]

  91) According to economist George Stigler, the process of regulating firms with market power becomes suspect over time because A) regulators impose additional costs on regulated firms because they are expected to accomplish other social goals. B) regulators shift from protecting the consumer to protecting the regulated firm from competition. C) regulated firms are allowed to expand into other markets and drive out competing […]

  41) Bagels and cream cheese are complementary goods. Suppose that the price for flour, which is used to produce bagels, increases. The equilibrium price of cream cheese ________ and the equilibrium quantity of cream cheese ________. A) rises; decreases B) rises; increases C) falls; decreases D) does not change; does not change E) falls; increases   42) Suppose that people decide riding scooters is […]

  51) In part, the demand for labor depends on the A) supply of labor. B) number of workers available. C) price of the firm’s output. D) worker’s income. E) wage rate at which the labor supply curve starts to bend backwards. 52) If the price of the firm’s output increases, the demand for labor curve A) shifts rightward. B) shifts leftward. C) remains constant. […]

  111.Supposetheincomesofbuyersinamarketforaparticularnormalgooddecreaseandthereisalsoareductionininputprices.Whatwouldweexpecttooccurinthismarket? a.Equilibriumpricewoulddecrease,buttheimpactonequilibriumquantitywouldbeambiguous. b.Equilibriumpricewouldincrease,buttheimpactonequilibriumquantitywouldbeambiguous. c.Equilibriumquantitywoulddecrease,buttheimpactonequilibriumpricewouldbeambiguous. d.Equilibriumquantitywouldincrease,buttheimpactonequilibriumpricewouldbeambiguous. 112.Whatwouldhappentotheequilibriumpriceandquantityofcoffeeifthewagesofcoffee-beanpickersfellandthepriceofteafell? a.Pricewouldfall,andtheeffectonquantitywouldbeambiguous. b.Pricewouldrise,andtheeffectonquantitywouldbeambiguous. c.Quantitywouldfall,andtheeffectonpricewouldbeambiguous. d.Quantitywouldrise,andtheeffectonpricewouldbeambiguous. 113.Whichofthefollowingeventswouldcauseboththeequilibriumpriceandequilibriumquantityofnumbertwogradepotatoestoincreaseifnumbertwogradepotatoesareaninferiorgood? a.anincreaseinconsumerincome b.adecreaseinconsumerincome c.greatergovernmentrestrictionsonagriculturalchemicals d.fewergovernmentrestrictionsonagriculturalchemicals 114.Beefisanormalgood.Youobservethatboththeequilibriumpriceandquantityofbeefhavefallenovertime.Whichofthefollowingexplanationswouldbemostconsistentwiththisobservation? a.Consumershaveexperiencedanincreaseinincome,andbeef-productiontechnologyhasimproved. b.Thepriceofchickenhasrisen,andthepriceofsteaksaucehasfallen. c.Newmedicalevidencehasbeenreleasedthatindicatesanegativecorrelationbetweenaperson’sbeefconsumptionandlifeexpectancy. d.Thedemandcurveforbeefmustbepositivelysloped. 115.DuringthelastfewdecadesintheUnitedStates,healthofficialshavearguedthateatingtoomuchbeefmightbeharmfultohumanhealth.Asaresult,therehasbeenasignificantdecreaseintheamountofbeefproduced.Whichofthefollowingbestexplainsthedecreaseinproduction? a.Beefproducers,concernedaboutthehealthoftheircustomers,decidedtoproducerelativelylessbeef. b.Governmentofficials,concernedaboutconsumerhealth,orderedbeefproducerstoproducerelativelylessbeef. c.Individualconsumers,concernedabouttheirownhealth,decreasedtheirdemandforbeef,whichloweredtheequilibriumpriceofbeef,makingitlessattractivetoproduce. d.Anti-beefprotestershavemadeitdifficultforbothbuyersandsellersofbeeftomeetinthemarketplace. 116.Whichofthefollowingeventswouldunambiguouslycauseadecreaseintheequilibriumpriceofcottonshirts? a.anincreaseinthepriceofwoolshirtsandadecreaseinthepriceofrawcotton b.adecreaseinthepriceofwoolshirtsandadecreaseinthepriceofrawcotton c.anincreaseinthepriceofwoolshirtsandanincreaseinthepriceofrawcotton d.adecreaseinthepriceofwoolshirtsandanincreaseinthepriceofrawcotton 117.Whichofthefollowingeventswouldunambiguouslycauseanincreaseintheequilibriumpriceofcottonshirts? a.anincreaseinthepriceofwoolshirtsandadecreaseinthepriceofrawcotton b.adecreaseinthepriceofwoolshirtsandadecreaseinthepriceofrawcotton c.anincreaseinthepriceofwoolshirtsandanincreaseinthepriceofrawcotton d.adecreaseinthepriceofwoolshirtsandanincreaseinthepriceofrawcotton 118.Whichofthefollowingeventswouldcausethepriceoforangestofall? a.Thereisashortageoforanges. b.TheFDAannouncesthatbananascausestrokes,andorangesandbananasaresubstitutes. c.ThepriceoflandthroughoutFloridadecreases,andFloridaproducesasignificantproportionofthenation’soranges. d.Alloftheabovearecorrect. 119.Whatwouldhappentotheequilibriumpriceandquantityoflattésifconsumers’incomesriseandlattésareanormalgood? a.Boththeequilibriumpriceandquantitywouldincrease. b.Boththeequilibriumpriceandquantitywoulddecrease. c.Theequilibriumpricewouldincrease,andtheequilibriumquantitywoulddecrease. d.Theequilibriumpricewoulddecrease,andtheequilibriumquantitywouldincrease. 120.Ifmacaroniandcheeseisaninferiorgood,whatwouldhappentotheequilibriumpriceandquantityofmacaroniandcheeseifconsumers’incomesrise? a.Boththeequilibriumpriceandquantitywouldincrease. b.Boththeequilibriumpriceandquantitywoulddecrease. c.Theequilibriumpricewouldincrease,andtheequilibriumquantitywoulddecrease. d.Theequilibriumpricewoulddecrease,andtheequilibriumquantitywouldincrease.    

  17.3   Alternative Monetary Policy Strategies 1) Discretionary monetary policy is defined as policy A) for which the markets make all decisions. B) that is based on the judgments of policymakers. C) that is pursued regardless of the current state of the economy. D) that responds to a changing economy with predetermined rules. E) for which the policymaker always publicizes the policy as extensively as […]

    18.6   Managed Floating and Sterilized Intervention   1) Imperfect asset substitutability assumes A) the returns on foreign and domestic currency bonds are identical. B) the returns on foreign and domestic currency are unrelated. C) the risks of holding foreign and domestic currency are identical. D) the risks of holding foreign and domestic currency are unrelated to returns. E) the returns on foreign and […]

    51.Demand for Snickers bars will decrease if: A. the price of Snickers bars decreases. B. a news story claiming 95% of all geniuses eat at least one Snickers bar a day is released. C. the price of Milky Way bars decreases. D. the price of Milky Way bars increases. 52.We say that goods are substitutes when they: A. serve similar-enough purposes that a consumer might purchase one in […]