11) The international trade effect states that A) an increase in the price level will raise net exports. B) an increase in the price level will lower net exports. C) an increase in the price level will raise exports. D) an increase in the price level will lower imports.   12) Which of the following is one explanation as to why the aggregate […]

  61) Which of the following are the rules for finding the point of allocative efficiency? A) Produce on the PPF and then produce where the marginal benefit and marginal cost are as large as possible. B) Produce on the PPF and then produce where marginal benefit equals marginal cost. C) Produce on the PPF and then produce where marginal benefit and marginal cost are […]

  11) A point on the demand curve shows the A) price and the corresponding quantity demanded. B) marginal benefit from that unit. C) marginal cost to the seller of producing the unit. D) Both answers A and B are correct. E) Both answers A and C are correct.   12) A point on the demand curve shows the A) minimum price that people are […]

  61.Peoplehadbeenexpectingthepriceleveltobe140butitturnsouttobe138.JohnsonFamilyRestaurantsincreasesthenumberofworkersitemploys.Whatcouldexplainthis? a.bothstickypricetheoryandstickywagetheory b.stickypricetheorybutnotstickywagetheory c.stickywagetheorybutnotstickypricetheory d.neitherstickywagetheorynorstickypricetheory 62.Themisperceptionstheoryoftheshort-runaggregatesupplycurvesaysthatifthepricelevelishigherthanpeopleexpected,thensomefirmsbelievethattherelativepriceofwhattheyproducehas a.decreased,sotheyincreaseproduction. b.decreased,sotheydecreaseproduction. c.increased,sotheyincreaseproduction. d.increased,sotheydecreaseproduction. 63.Otherthingsthesame,ifthepricelevelislowerthanexpected,thensomefirmsbelievethattherelativepriceofwhattheyproducehas a.decreased,sotheyincreaseproduction. b.decreased,sotheydecreaseproduction. c.increased,sotheyincreaseproduction. d.increased,sotheydecreaseproduction. 64.Accordingtothemisperceptionstheoryofaggregatesupply,ifafirmthoughtthatinflationwasgoingtobe5percentandactualinflationwas6percent,thenthefirmwouldbelievethattherelativepriceofwhatitproducehad a.increased,soitwouldincreaseproduction. b.increased,soitwoulddecreaseproduction. c.decreased,soitwouldincreaseproduction. d.decreased,soitwoulddecreaseproduction. 65.Accordingtothemisperceptionstheoryoftheshort-runaggregatesupplycurve,ifafirmthoughtthatinflationwasgoingtobe4percentandactualinflationwas2percent,thenthefirmwouldbelievethattherelativepriceofwhatitproduceshad a.increased,soitwouldincreaseproduction. b.increased,soitwoulddecreaseproduction. c.decreased,soitwouldincreaseproduction. d.decreased,soitwoulddecreaseproduction. 66.Themisperceptionstheoryoftheshort-runaggregatesupplycurvesaysthatthequantityofoutputsuppliedwillincreaseifthepricelevel a.increasesbylessthanexpectedsothatfirmsbelievetherelativepriceoftheiroutputhasincreased. b.increasesbylessthanexpectedsothatfirmsbelievetherelativepriceoftheiroutputhasdecreased. c.increasesbymorethanexpectedsothatfirmsbelievetherelativepriceoftheiroutputhasincreased. d.increasesbymorethanexpectedsothatfirmsbelievetherelativepriceoftheiroutputhasdecreased. 67.Supposeworkersnoticeafallintheirnominalwagebutareslowtonoticethatthepriceofthingstheyconsumehavefallenbythesamepercentage.Theymayinferthattherewardtoworkingis a.temporarilylowandsosupplyasmallerquantityoflabor. b.temporarilylowandsosupplyalargerquantityoflabor. c.temporarilyhighandsosupplyasmallerquantityoflabor. d.temporarilyhighandsosupplyalargerquantityoflabor. 68.Otherthingsthesame,theaggregatequantityofoutputsuppliedwilldecreaseifthepricelevel a.islowerthanexpectedsothatfirmsbelievetherelativepriceoftheiroutputhasincreased. b.islowerthanexpectedsothatfirmsbelievetherelativepriceoftheiroutputhasdecreased. c.ishigherthanexpectedsothatfirmsbelievetherelativepriceoftheiroutputhasincreased. d.ishigherthanexpectedsothatfirmsbelievetherelativepriceoftheiroutputhasdecreased. 69.Otherthingsthesame,theaggregatequantityofoutputsuppliedwillincreaseifthepricelevel a.islowerthanexpectedsothatfirmsbelievetherelativepriceoftheiroutputhasincreased. b.islowerthanexpectedsothatfirmsbelievetherelativepriceoftheiroutputhasdecreased. c.ishigherthanexpectedsothatfirmsbelievetherelativepriceoftheiroutputhasincreased. d.ishigherthanexpectedsothatfirmsbelievetherelativepriceoftheiroutputhasdecreased. 70.Whentheactualchangeinthepriceleveldiffersfromitsexpectedchange,whichofthefollowingcanexplainwhyfirmsmightchangetheirproduction? a.bothmenucostsandmistakingapricelevelchangeforachangeinrelativeprices b.menucostsbutnotmistakingapricelevelchangeforachangeinrelativeprices c.mistakingapricelevelchangeforachangeinrelativepricebutnotmenucosts d.neithermenucostsnormistakingapricelevelchangeforachangeinrelativeprices    

    51) What happens in the primary market? A) primary inputs like electricity are sold B) a corporate financial manager will resell previously issued shares of stock C) newly issued claims are sold by the borrowing firm to the initial buyer D) already issued claims are sold from one investor to another     52) The three most widely followed stock indexes in the […]

    11) Compared to a monopolistic competitor, a monopolist faces A) a more elastic demand curve. B) a more inelastic demand curve. C) a more elastic demand curve at higher prices and a more inelastic demand curve at lower prices. D) a demand curve that has a price elasticity coefficient of zero.   12) A monopoly differs from monopolistic competition in that A) a […]

    81.How are changes in long-term assets that result in cash flows reported on the statement of cash flows? A.As investing activities B.As operating activities C.As financing activities D.As non-cash activities   82.Winslow Manor Construction provided the following information during the year:   Proceeds from sale of building              $65,000 Cash paid to purchase inventories              22,000 Proceeds from issuing long-term debt              17,000 Dividends paid to […]

    21) The demand for loanable funds curve shows the relationship between the quantity of loanable funds demanded and A) the real interest rate. B) the price level. C) the capital stock. D) depreciation. E) the expected rate of profit.   22) The demand for loanable funds curve shows the A) negative relationship between the interest rate and the quantity of loanable funds demanded. […]

  1.4   Integrative Questions   1) Suppose you decide to attend summer school and that this is considered a rational choice. When making this choice, A) you must ignore the problem of scarcity. B) you considered the marginal cost and marginal benefit of your choice. C) you have used the ceteris paribus assumption. D) you have made a positive statement. E) you must have considered […]

  91) Refer to Figure 16-4. Once some quantity of this public good is provided, the efficient price to charge for its use is A) approximately zero. B) P1. C) P2. D) P3. E) P4. 92) Why would it be inefficient for the government to charge a price for consuming a public good such as national defence? A) Too much defence will be provided. B) […]