31) Suppose that, after government imposed an income tax on labor income, the wages paid by employers rose $1.00 and the wages received by employees fell by $0.20. What does that reveal about the elasticities of supply and demand? A) Supply is more elastic than demand. B) Demand is more elastic than supply. C) Supply and demand are equally elastic. D) Both the supply […]
21) Suppose higher prices lead consumers to switch from shopping at Abercrombie & Fitch to shopping at Wal-Mart. If the CPI does not reflect this change, it is referred to as A) a new goods bias. B) a quality change bias. C) an outlet substitution bias. D) a new price bias. E) store bias. 22) If higher prices cause buyers to shop at discount […]
21) Refer to Table 7-1. What is Keegan’s optimal consumption bundle? A) 3 pita wraps and 3 bubble teas B) 3 pita wraps and 4 bubble teas C) 4 pita wraps and 2 bubble teas D) 5 pita wraps and 0 bubble teas 22) Refer to Table 7-1. If Keegan can drink all the bubble tea he wants for free, how many glasses […]
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 no […]
MULTIPLE CHOICE 1.Which of the following is a means of changing corporate control? a.merger b.management buyout c.proxy contest d.all of the above Smart Acquires Snazzy Smart Products plans to acquire Snazzy Snaps, which will create $8 million in incremental cash flows for Smart each year for the first six years. Smart Products plans to divest Snazzy Snaps at the end of […]
11) Which of the following statements is true? A) A decrease in the crime rate increases GDP as people will spend more on security. B) Household production is counted in GDP as it amounts to real production. C) GDP accounting rules do not adjust for production that pollutes the economy. D) GDP growth distributes income equally to people in the economy. […]
11. Which of the following is an advantage of lean production and just-in-time (JIT) manufacturing systems? A. If factory workers go on strike, the company can still deliver the product to the customer on time. B. The quality of the product is often improved. C. Less-skilled employees making a lower wage will replace higher paid employees. D. An increase in the production time to make a product. 12. Which of […]
11) The tradeoff exhibited by the short-run Phillips curve is A) higher inflation with higher unemployment. B) lower inflation with lower unemployment. C) higher unemployment with lower inflation. D) changing inflation with constant unemployment. E) higher price level with lower real GDP. 12) Moving along the short-run Phillips curve, if ________ increases then ________ decreases. A) inflation; unemployment B) inflation; the price […]
51) Consider the income and substitution effects of price changes. The substitution effect is the change in quantity demanded that occurs A) as a result of a change in absolute prices, with real income held constant. B) as a result of a change in relative prices with money income held constant. C) as a result of a change in relative prices, with real income […]
11. A manager who reduces an employee’s pay if the employee comes to work late and refrains from doing so when the employee is on time has: a. positively reinforced the employee’s on-time behavior. b. negatively reinforced the employee’s on-time behavior. c. utilized extinction to reduce the undesirable behavior. d. None of these 12. An employee does not respond to the sarcastic comments of […]
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 to a third, changing the third causes
A) a movement along the curve.
B) a shift of the curve.
C) no change in the curve because the third variable isn't on the axes.
D) either a shift or a movement in the curve but more information is needed to determine which occurs.
E) None of the above answers is correct.
123) On a graph showing the relationship between x and y, the ceteris paribus condition implies that
A) no other variables are related to x and y.
B) the value of x is held constant.
C) the value of y is held constant.
D) other variables not shown are held constant.
E) the value of x and the value of y are held constant.
124) Three variables are related and two of them are plotted in a figure. If the variable that is not measured on either the x-axis or the y-axis changes, then there is
A) a movement along the drawn curve.
B) a shift in the curve.
C) no impact on the curve because the variable is not measured on either of the axes.
D) either a shift in the curve or a movement along the curve but more information is needed to determine which.
E) None of the above answers is correct.
125) The above figure shows how many pounds of peanuts farmers are willing to sell at different prices per pound of peanuts. If the price of a pound of peanuts is $1 and the price of a pound of pecans is $2, peanut farmers are willing to sell
A) no peanuts.
B) 1000 pounds of peanuts.
C) 2000 pounds of peanuts.
D) 4000 pounds of peanuts.
E) more than 4000 pounds of peanuts.
126) In the above figure, while drawing the line showing the relationship between the price of a pound of peanuts and the quantity sold, the
A) price of a pound of pecans does not change.
B) price of a pound of peanuts does not change.
C) the quantity of peanuts that farmers supply does not change.
D) Both answers A and B are correct.
E) Both answers B and C are correct.
127) In the figure above, suppose the price of a pound of pecans is negatively related to the quantity of peanuts that farmers are willing to supply. If the price of pecans increases,
A) the curve will shift rightward.
B) the curve will shift leftward.
C) there is a movement along the curve.
D) the curve will be unaffected.
E) None of the above answers is correct because the graph assumes that the price of pecans does not change.
128) To graph a relationship that involves more than two variables, we use
A) a positive relationship.
B) a direct relationship.
C) a negative relationship.
D) ceteris paribus.
E) movement up along one of the lines showing the relationship between x and y.
129) In the figure above, an increase in z leads to a
A) movement up along one of the lines showing the relationship between x and y.
B) movement down along one of the lines showing the relationship between x and y.
C) rightward shift of the line showing the relationship between x and y.
D) leftward shift of the line showing the relationship between x and y.
E) trend change in both x and y.
130) In the figure above, ceteris paribus, an increase in x is associated with
A) an increase in y.
B) a decrease in y.
C) an increase in z.
D) a random change in z.
E) no change in either y or z.
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