41) A technological change ________ and a change in the capital stock ________. A) shifts the productivity curve; shifts the productivity curve B) shifts the productivity curve; creates a movement along the productivity curve C) creates a movement along the productivity curve; shifts the productivity curve D) does not change the productivity curve; creates a movement along the productivity curve E) does not […]

PART I — MULTIPLE CHOICE (30 points)   Instructions:  Designate the best answer for each of the following questions.   *1.              In a JIT cost accounting system, a.              no inventories are kept on hand. b.              no manufacturing overhead costs are incurred. c.              a company strives to have the right amount of materials, parts, and products on hand. d.              conversion costs are eliminated.   2.              The […]

    21) Because there is a ________ relationship between the price level and the quantity of real GDP supplied, the aggregate supply curve is ________ curve. A) negative; an upward-sloping B) positive; a downward-sloping C) positive; an upward-sloping D) negative; a downward-sloping E) positive; a vertical 22) If there is a rise in the price level, there is ________ in the quantity of real […]

  11) Sunk costs A) are costs associated with repairing something you already own. B) are important for optimal decision making. C) are costs that have already been paid and cannot be recaptured in any significant way. D) are costs that firms sink into marketing. 12) Which of the following is a common mistake consumers commit when they make decisions? A) They take into account […]

  31) In the table above, Jill’s opportunity cost for 1 pound of food is ________ and her opportunity cost for 1 pound of clothing is ________. A) 1 pound of clothing; 4 pounds of food B) 1/2 of a pound of clothing; 2 pounds of food C) 1/3 of a pound of clothing; 3 pounds of food D) 2 pounds of clothing; 2 pounds […]

  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) Dan missed class the day the professor covered the circular flow […]

  21) The slope of a production possibilities frontier A) has no economic relevance or meaning. B) is always constant. C) is always varying.   D) measures the opportunity cost of producing one more unit of a good. 22)  ________ marginal opportunity cost implies that the more resources already devoted to any activity, the payoff from allocating yet more resources to that activity increases by progressively […]

  62.A wider span of control is possible if:  A.employees manage themselves rather than being coordinated through close supervision. B.the company has a high degree of formalization and operates in a complex environment. C.the organization has few employees and a tall hierarchy. D.the companies do not rely on self-directed teams. E.very few people report directly to a manager. 63.Flatter organizational structures:  A.tend to reduce overhead […]

  11) How does the supply curve of high-skilled workers compare to the supply curve of low-skilled workers? A) Because skills are costly to acquire, at a given wage rate the quantity supplied of high-skilled workers is greater than that of low-skilled workers. B) Because skills are costly to acquire, at any given wage rate the quantity supplied of high-skilled workers is less than that […]

  41.Mostrecessionsanddepressions a.areaccuratelyforecasted. b.usuallyoccurwithampleadvancewarning. c.causefallingunemployment. d.occurwithlittleadvancewarning. 42.Criticsofstabilizationpolicyarguethat a.“animalspirits”mustbeoffsetbyactivemonetarypolicy. b.activemonetarypolicyisnecessaryforsteadyeconomicgrowth. c.thelagproblemendsupbeingacauseofeconomicfluctuations. d.activefiscalpolicyisrequiredforsteadyeconomicgrowth. 43.Thelagproblemassociatedwithmonetarypolicyisduemostlyto a.thefactthatbusinessfirmsmakeinvestmentplansfarinadvance. b.thepoliticalsystemofchecksandbalancesthatslowsdowntheprocessofdeterminingmonetarypolicy. c.thetimeittakesforchangesingovernmentspendingtoaffecttheinterestrate. d.Alloftheabovearecorrect. 44.Thelagproblemassociatedwithfiscalpolicyisduemostlyto a.thefactthatbusinessfirmsmakeinvestmentplansfarinadvance. b.thepoliticalsystemofchecksandbalancesthatslowsdowntheprocessofimplementingfiscalpolicy. c.thetimeittakesforchangesingovernmentspendingortaxestoaffecttheinterestrate. d.Alloftheabovearecorrect. 45.WhentheFedlowersthegrowthrateofthemoneysupply,itmusttakeintoaccount a.onlytheshort-runeffectonproduction. b.onlytheshort-runeffectsoninflationandproduction. c.onlythelong-runeffectoninflation. d.thelong-runeffectoninflationaswellastheshort-runeffectonproduction. 46.Monetarypolicyaffectstheeconomywithalonglag,inpartbecause a.proposalstochangemonetarypolicymustgothroughboththeHouseandSenatebeforebeingsenttothepresident. b.monetarypolicyworksthroughchangesininterestrates,andtheFeddoesnothavetheabilitytochangeinterestratesquickly. c.changesininterestratesprimarilyinfluenceconsumptionspending,andhouseholdsmakeconsumptionplansfarinadvance. d.changesininterestratesprimarilyinfluenceinvestmentspending,andfirmsmakeinvestmentplansfarinadvance. 47.Macroeconomicforecastsare a.precise;thismakespolicylagslessrelevant. b.precise;thismakespolicylagsmorerelevant. c.imprecise;thismakespolicylagslessrelevant. d.imprecise;thismakespolicylagsmorerelevant. 48.Opponentsofactivestabilizationpolicy a.advocateamonetarypolicydesignedtooffsetchangesintheunemploymentrate. b.arguethatfiscalpolicyisunabletochangeaggregatedemandoraggregatesupply. c.believethatthepoliticalprocesscreateslagsintheimplementationoffiscalpolicy. d.Noneoftheaboveiscorrect. 49.Opponentsofactivestabilizationpolicy a.generallydon’tbelieve,evenintheory,thatfiscalpolicycanstabilizetheeconomy. b.generallyagreethatfiscalpolicyhasnoimpactinthelongrun. c.believesomeeffectsofmonetarypolicymaybelong-lived. d.thinktheFedshouldsimplytrytofinetunetheeconomy. 50.Automaticstabilizers a.increasetheproblemsthatlagscauseinusingfiscalpolicyasastabilizationtool. b.arechangesintaxesorgovernmentspendingthatincreaseaggregatedemandwithoutrequiringpolicymakerstoactwhentheeconomygoesintorecession. c.arechangesintaxesorgovernmentspendingthatpolicymakersquicklyagreetowhentheeconomygoesintorecession. d.Alloftheabovearecorrect.