41) The demand for money is A) positively related to the price level. B) positively related to the nominal interest rate. C) negatively related to the price level. D) negatively related to real GDP. E) positively related to the real interest rate.   42) If the price level increases, the A) demand for money increases. B) demand for money decreases. C) quantity of […]

  9.5   “If Everyone Can Do It, You Can’t Make Money at It”: The Entry and Exit of Firms in the Long Run 1) Which of the following statements is correct? A) Economic profit takes into account all costs involved in producing a product. B) Accounting profit is not relevant in preparing the firm’s financial statement. C) Economic profit always exceeds accounting profit. D) Accounting […]

  31.Evidencefromresearchstudiesbyeconomists a.showsthatincreasedunemploymentbenefitsdecreasethejobsearcheffortsoftheunemployed. b.showsthatincreasedunemploymentbenefitshavevirtuallynoeffectonthejobsearcheffortsoftheunemployed. c.showsthatincreasedunemploymentbenefitsincreasethejobsearcheffortsoftheunemployed. d.isconflictingonwhatincreasedunemploymentbenefitsdotothejobsearcheffortsoftheunemployed. 32.Moregenerousunemploymentinsurancewould a.raisestructuralunemployment. b.raisefrictionalunemployment. c.lowerstructuralunemployment. d.lowerfrictionalunemployment. 33.Economistswouldpredictthat,otherthingsthesame,themoregenerousunemploymentcompensationacountryhas,the a.shorterthedurationofeachspellofunemploymentandthehighertheunemploymentrate. b.shorterthedurationofeachspellofunemploymentandthelowertheunemploymentrate. c.longerthedurationofeachspellofunemploymentandthehighertheunemploymentrate. d.longerthedurationofeachspellofunemploymentandthelowertheunemploymentrate. 34.Unemploymentinsurance a.reducesthehardshipofunemployment,butitalsoincreasestheamountofunemployment. b.reducestheincentivefortheunemployedtofindandtakenewjobs. c.causesworkerstobelesslikelytoseekguaranteesofjobsecuritywhentheynegotiatewithemployersoverthetermsofemployment. d.Alloftheabovearecorrect. 35.Unemploymentinsurance a.mayimprovetheabilityoftheeconomytomatchworkerswithappropriatejobs. b.reducesthejobsearcheffortsoftheunemployed. c.increasestheamountoffrictionalunemploymentintheeconomy. d.Alloftheabovearecorrect. 36.Inthe1990’sIrelandmadeunemploymentbenefitslessgenerous.Thischangewouldlikelyhavereduced a.bothstructuralunemploymentandthenaturalrateofunemployment. b.structuralunemploymentbutnotthenaturalrateofunemployment. c.bothfrictionalunemploymentandthenaturalrateofunemployment. d.frictionalunemploymentbutnotthenaturalrateofunemployment. 37.Whichofthefollowingiscorrect? a.Unemploymentinsuranceraisesstructuralunemploymentbecauseitreducesthejobsearcheffortsoftheunemployed. b.Mosteconomistsareskepticalofthevalueofunemploymentinsuranceprimarilybecausetheybelievethatitresultsinapoorermatchbetweenworkersandjobs. c.Studiesshowthatwhentheunemployedbecomeineligibleforbenefits,theprobabilityoftheirfindingajobrisesmarkedly. d.Alloftheabovearecorrect. 38.Frictionalunemploymentis a.notinevitable;rather,itcanbereducedtozerobywell-designedpublicpolicies. b.notinevitable;rather,itcouldbereducedtozeroifbytheeliminationofunemploymentinsurance. c.inevitable,becauseatanygiventime,jobsarebeingcreatedinsomefirmsanddestroyedinotherfirms. d.inevitable,becauseinsomeindustries,wagesarealwayssetabovethelevelthatbringssupplyanddemandintoequilibrium. 39.Aneconomistclaimsthatchangesininformationtechnologyandunemploymentinsurancehavereducedunemployment.Whichofthesechangesaffectfrictionalunemployment? a.boththechangesininformationtechnologyandunemploymentinsurance b.onlythechangesininformationtechnology c.onlythechangesinunemploymentinsurance d.neitherthechangesininformationtechnologynorthechangesinunemploymentinsurance 40.Whichofthefollowingisnotacauseoffrictionalunemployment? a.thedestructionofmanufacturingjobs b.aworkerleavingajobtofindonewithbetterbenefits c.minimum-wagelaws d.unemploymentinsurance    

  4.1   The Specific Factors Model   1) The Ricardian model of international trade demonstrates that trade can be mutually beneficial. Why, then, do governments restrict imports of some goods? A) Trade can have substantial effects on a country’s distribution of income. B) The Ricardian model is often incorrect in its prediction that trade can be mutually beneficial. C) Import restrictions are the result of […]

  11.RefertoScenario9-2.Supposetheworldpriceofcardboardis$45.Then,relativetotheno-tradesituation,internationaltradeincardboardproduceswhichofthefollowingresultsforBoxland? a.Itincreasesconsumersurplus,decreasesproducersurplus,andincreasestotalsurplus. b.Itincreasesconsumersurplus,increasesproducersurplus,andincreasestotalsurplus. c.Itincreasesconsumersurplus,decreasesproducersurplus,anddecreasestotalsurplus. d.Itdecreasesconsumersurplus,increasesproducersurplus,andincreasestotalsurplus. 12.RefertoScenario9-2.Supposetheworldpriceofcardboardis$45.ThenBoxland’sgainsfrominternationaltrade a.$88.75. b.$102.50. c.$122.50. d.$135.00. 13.RefertoScenario9-2.Supposetheworldpriceofcardboardis$45.Then,relativetotheno-tradesituation,internationaltradeincardboard a.benefitsBoxlandianconsumersby$721andharmsBoxlandianproducersby$525.00. b.benefitsBoxlandianconsumersby$721andharmsBoxlandianproducersby$598.50. c.benefitsBoxlandianconsumersby$672andharmsBoxlandianproducersby$598.50. d.harmsBoxlandianconsumersby$336andharmsBoxlandianproducersby$525.00. 14.RefertoScenario9-2.Supposetheworldpriceofcardboardis$60.Then, ifBoxlandgoes fromprohibitinginternationaltradeincardboardtoallowinginternationaltradeincardboard, a.domesticproducersofcardboardbecomebetteroffanddomesticconsumersofcardboardbecomebetteroff. b.domesticproducersofcardboardbecomebetteroffanddomesticconsumersofcardboardbecomeworseoff. c.domesticproducersofcardboardbecomeworseoffanddomesticconsumersofcardboardbecomebetteroff. d.domesticproducersofcardboardbecomeworseoffanddomesticconsumersofcardboardbecomeworseoff. 15.RefertoScenario9-2.Supposetheworldpriceofcardboardis$60andinternationaltradeisallowed.ThenBoxland’sconsumersdemand a.110tonsofcardboardandBoxland’sproducerssupply120tonsofcardboard. b.96tonsofcardboardandBoxland’sproducerssupply96tonsofcardboard. c.96tonsofcardboardandBoxland’sproducerssupply115tonsofcardboard. d.80tonsofcardboardandBoxland’sproducerssupply120tonsofcardboard. 16.RefertoScenario9-2.Supposetheworldpriceofcardboardis$60.Then,relativetotheno-tradesituation,internationaltradeincardboardproduceswhichofthefollowingresultsforBoxland? a.Itdecreasesconsumersurplus,increasesproducersurplus,anddecreasestotalsurplus. b.Itdecreasesconsumersurplus,increasesproducersurplus,andincreasestotalsurplus. c.Itdecreasesconsumersurplus,decreasesproducersurplus,anddecreasestotalsurplus. d.Itincreasesconsumersurplus,increasesproducersurplus,andincreasestotalsurplus. 17.RefertoScenario9-2.Supposetheworldpriceofcardboardis$60.ThenBoxland’sgainsfrominternationaltradeincardboardamountto a.$145. b.$160. c.$210. d.$320. 18.RefertoScenario9-2.Supposetheworldpriceofcardboardis$60.Then,relativetotheno-tradesituation,internationaltradeincardboard a.benefitsBoxlandianconsumersby$750andharmsBoxlandianproducersby$660. b.harmsBoxlandianconsumersby$736andharmsBoxlandianproducersby$598. c.harmsBoxlandianconsumersby$704andbenefitsBoxlandianproducersby$864. d.harmsBoxlandianconsumersby$804andbenefitsBoxlandianproducersby$984. Figure9-21 Thefollowingdiagramshowsthedomesticdemandanddomesticsupplyforamarket.Inaddition,assumethattheworldpriceinthismarketis$40perunit.   19.RefertoFigure9-21.Withfreetrade,thedomesticpriceanddomesticquantitydemandedarea.$30and 1,200. b.$40and 800. c.$30and 800. d.$40and 1,600. 20.RefertoFigure9-21.Withfreetrade,domesticproductionanddomesticconsumption,respectively,are a.1,200and 800. b.1,600 and1,200. c.1,600and 800. d.1,200and1,200    

  58) In a graph of a typical firm’s AFC, ATC, and AVC curves, the A) AVC curve lies above the ATC curve. B) ATC curve lies below the AFC curve. C) distance between the ATC curve and the AVC curve equals the AFC. D) distance between the AVC curve and the AFC curve equals the ATC. E) AVC curve crosses the MC curve at […]

  41.Steven converted $1,000 to ¥105,000 for a trip to Japan. However, he spent only ¥50,000. During this period, the value of the dollar weakened against the yen. Considering a current exchange rate of $1=¥100, how many dollars did Steven spend on the trip?   A. $550 B. $523 C. $450 D. $600 E. $500 42.A French company wants to invest 20 million euros for three months. The company found that investing […]

  19.5   Free Trade or Protection?   1) The case for free trade is based on the A) theory of balanced growth. B) theory of absolute advantage. C) argument for a diversified economy. D) theory of comparative advantage.   2) Which of the following statements is NOT true? A) Trade is beneficial because it allows more efficient production. B) Trade is beneficial because it allows […]

  11.2   The Demand for Money   1) At higher interest rates the A) money supply is higher. B) money supply is indeterminate. C) quantity of money demanded is higher. D) quantity of money demanded is lower.   2) Violet’s income is $3,200 a month. She deposits $600 in a saving account, buys $700 worth of government securities, and leaves the rest for daily transactions. […]

    11) Moving along the short-run Phillips curve, if ________ increases, then ________ decreases. A) inflation; unemployment B) inflation; the price level C) inflation; real GDP D) unemployment; the price level E) unemployment; the expected inflation rate   12) Moving along the short-run Phillips curve, a ________ unemployment rate can only be achieved by paying the cost of ________. A) lower; a higher inflation […]