121.Ifconsumersoftenpurchasemuffinstoeatwhiletheydrinktheirlattésatlocalcoffeeshops,whatwouldhappentotheequilibriumpriceandquantityoflattésifthepriceofmuffinsrises? a.Boththeequilibriumpriceandquantitywouldincrease. b.Boththeequilibriumpriceandquantitywoulddecrease. c.Theequilibriumpricewouldincrease,andtheequilibriumquantitywoulddecrease. d.Theequilibriumpricewoulddecrease,andtheequilibriumquantitywouldincrease. 122.Ifconsumersoftenpurchasemuffinstoeatwhiletheydrinktheirlattésatlocalcoffeeshops,whatwouldhappentotheequilibriumpriceandquantityoflattésifthepriceofmuffinsfalls? a.Boththeequilibriumpriceandquantitywouldincrease. b.Boththeequilibriumpriceandquantitywoulddecrease. c.Theequilibriumpricewouldincrease,andtheequilibriumquantitywoulddecrease. d.Theequilibriumpricewoulddecrease,andtheequilibriumquantitywouldincrease. 123.Ifconsumersviewcappuccinosandlattésassubstitutes,whatwouldhappentotheequilibriumpriceandquantityoflattésifthepriceofcappuccinosrises? a.Boththeequilibriumpriceandquantitywouldincrease. b.Boththeequilibriumpriceandquantitywoulddecrease. c.Theequilibriumpricewouldincrease,andtheequilibriumquantitywoulddecrease. d.Theequilibriumpricewoulddecrease,andtheequilibriumquantitywouldincrease. 124.Ifconsumersviewcappuccinosandlattésassubstitutes,whatwouldhappentotheequilibriumpriceandquantityoflattésifthepriceofcappuccinosfalls? a.Boththeequilibriumpriceandquantitywouldincrease. b.Boththeequilibriumpriceandquantitywoulddecrease. c.Theequilibriumpricewouldincrease,andtheequilibriumquantitywoulddecrease. d.Theequilibriumpricewoulddecrease,andtheequilibriumquantitywouldincrease. 125.Ifscientistsdiscoverthatsteamedmilk,whichisusedtomakelattés,preventsheartattacks,whatwouldhappentotheequilibriumpriceandquantityoflattés? a.Boththeequilibriumpriceandquantitywouldincrease. b.Boththeequilibriumpriceandquantitywoulddecrease. c.Theequilibriumpricewouldincrease,andtheequilibriumquantitywoulddecrease. d.Theequilibriumpricewoulddecrease,andtheequilibriumquantitywouldincrease. 126.Whatwouldhappentotheequilibriumpriceandquantityoflattésifthecostofproducingsteamedmilk,whichisusedtomakelattés,rises? a.Boththeequilibriumpriceandquantitywouldincrease. b.Boththeequilibriumpriceandquantitywoulddecrease. c.Theequilibriumpricewouldincrease,andtheequilibriumquantitywoulddecrease. d.Theequilibriumpricewoulddecrease,andtheequilibriumquantitywouldincrease. 127.Whatwouldhappentotheequilibriumpriceandquantityoflattésifcoffeeshopsbeganusingamachinethatreducedtheamountoflabornecessarytoproducethem? a.Boththeequilibriumpriceandquantitywouldincrease. b.Boththeequilibriumpriceandquantitywoulddecrease. c.Theequilibriumpricewouldincrease,andtheequilibriumquantitywoulddecrease. d.Theequilibriumpricewoulddecrease,andtheequilibriumquantitywouldincrease. 128.Saddleshoesarenotpopularrightnow,soveryfewarebeingproduced.Ifsaddleshoesbecomepopular,thenhowwillthisaffectthemarketforsaddleshoes? a.Thesupplycurveforsaddleshoeswillshiftright,whichwillcreateashortageatthecurrentprice.Pricewillincrease,whichwilldecreasequantitydemandedandincreasequantitysupplied.Thenewmarketequilibriumwillbeatahigherpriceandhigherquantity. b.Thesupplycurveforsaddleshoeswillshiftright,whichwillcreateasurplusatthecurrentprice.Pricewilldecrease,whichwillincreasequantitydemandedanddecreasequantitysupplied.Thenewmarketequilibriumwillbeatalowerpriceandhigherquantity. c.Thedemandcurveforsaddleshoeswillshiftright,whichwillcreateashortageatthecurrentprice.Pricewillincrease,whichwilldecreasequantitydemandedandincreasequantitysupplied.Thenewmarketequilibriumwillbeatahigherpriceandhigherquantity. d.Thedemandcurveforsaddleshoeswillshiftright,whichwillcreateasurplusatthecurrentprice.Pricewilldecrease,whichwillincreasequantitydemandedanddecreasequantitysupplied.Thenewmarketequilibriumwillbeatalowerpriceandhigherquantity. 129.Themarketfordiamondringsiscloselylinkedtothemarketforhigh-qualitydiamonds.Ifalargequantityofhigh-qualitydiamondsentersthemarket,thenthe a.supplycurvefordiamondringswillshiftright,whichwillcreateashortageatthecurrentprice.Pricewillincrease,whichwilldecreasequantitydemandedandincreasequantitysupplied.Thenewmarketequilibriumwillbeatahigherpriceandhigherquantity. b.supplycurvefordiamondringswillshiftright,whichwillcreateasurplusatthecurrentprice.Pricewilldecrease,whichwillincreasequantitydemandedanddecreasequantitysupplied.Thenewmarketequilibriumwillbeatalowerpriceandhigherquantity. c.demandcurvefordiamondringswillshiftright,whichwillcreateashortageatthecurrentprice.Pricewillincrease,whichwilldecreasequantitydemandedandincreasequantitysupplied.Thenewmarketequilibriumwillbeatahigherpriceandhigherquantity. d.demandcurvefordiamondringswillshiftright,whichwillcreateasurplusatthecurrentprice.Pricewilldecrease,whichwillincreasequantitydemandedanddecreasequantitysupplied.Thenewmarketequilibriumwillbeatalowerpriceandhigherquantity. 130.Musiccompactdiscsarenormalgoods.Whatwillhappentotheequilibriumpriceandquantityofmusiccompactdiscsifmusiciansacceptlowerroyalties,compactdiscplayersbecomecheaper,morefirmsstartproducingmusiccompactdiscs,andmusicloversexperienceanincreaseinincome? a.Pricewillfall,andtheeffectonquantityisambiguous. b.Pricewillrise,andtheeffectonquantityisambiguous. c.Quantitywillfall,andtheeffectonpriceisambiguous. d.Quantitywillrise,andtheeffectonpriceisambiguous.    

  16.4   Chapter Figures     The figure above shows a nation’s aggregate demand curve, aggregate supply curve, and potential GDP.   1) In the figure above, the ________ gap is one trillion dollars. To close the gap, the government can change expenditure by ________ one trillion dollars. A) recessionary; less than B) inflationary; exactly C) inflationary; more than D) recessionary; more than E) recessionary; […]

  51) To convert the nominal interest rate to the real interest rate, we A) divide the nominal interest rate by the inflation rate. B) multiply the nominal interest rate by the inflation rate. C) subtract the inflation rate from the nominal interest rate. D) add the inflation rate to the nominal interest rate. E) subtract the nominal interest rate from the inflation rate and […]

    41.The dietary assessment tool that would be most useful for someone that is highly motivated to track changes would be the: a.24-hour recall. b.food frequency questionnaire. c.food diary or record. d.verbal diet history. e.b and d   42._____ is a common source of vitamin D in the diets of adolescents, so an allergy to or intolerance of this food should prompt assessment for […]

  71) Changes in productivity can be analyzed by looking at how GDP per employed worker changes over time or how GDP per hour worked changes over time. Why might one measure be more preferable than the other? A) GDP per hour worked is preferable because it eliminates the need to adjust for variations in productivity between employed workers. B) GDP per employed worker is […]

  41) An appreciation of the Canadian dollar implies A) a fall in the external value of the dollar, such that fewer dollars are required to purchase foreign currency. B) a fall in the external value of the dollar, such that more dollars are required to buy foreign currency. C) a rise in the external value of the dollar, such that fewer dollars are required […]

  51. When nonmanufacturing costs are subtracted from gross margin, the result is called: A. cost of goods sold.B. net income.C. sales.D. nonmanufacturing income. 52. Michael’s Manufacturing, Inc. has the following information available for the month of July:      Beginning Ending   Raw materials inventory $50,000 $62,000   Work-in-process inventory 80,000 55,000   Finished goods inventory 24,000 35,000           Raw materials purchased   $120,000   Direct labor […]

  71. JAX Inc.In early 2012, JAX Inc. had budgeted for the production and sales of 5,000 units at a sales price of $15 per unit. The following information is available regarding the standard cost for each unit:  Direct materials: 1.50 pounds at $2.50 per lb Direct labor: 30 minutes of assembly at $.20 per minute     Actual results for 2012 were determined to be […]

  32) In a housing market with a rent ceiling below the equilibrium rent, apartment seekers spend more time searching for an apartment than they would in a housing market without a rent ceiling. Why does this difference exist? A) In the market with the rent ceiling, renters are searching for the best buy in apartments. B) In the market with the rent ceiling, there […]

    21) Most economists believe that the biases in the consumer price index cause the CPI to overstate the true inflation rate by about A) one-half to one percentage point. B) one to two percentage points. C) one quarter percentage point. D) one and one-half percentage points.   22) Which of the following would be a consequence of substitution bias in the CPI? A) […]