31) Deb and Pete have volunteered to help their favorite charity mail out fundraiser information. The figure above shows their production possibilities frontiers for assembling packets and stuffing envelopes. If Deb spends all her time assembling packets, how many can she assemble? A) 32 B) 40 C) 64 D) 160 E) 22   32) Deb and Pete have volunteered to help their favorite […]

  7.1   The Consumer Price Index 1) The CPI stands for A) Citizens Paying Index. B) Corporate Pricing Index. C) Consumer Paying Index. D) Consumer Price Index. E) Corporate/Consumer Payment Index. 2) The Consumer Price Index is calculated by the A) Bureau of Labor Statistics. B) Department of Labor. C) Department of Commerce. D) Federal Reserve Bank of New York. E) Society for Consumer Protection. […]

    49) A final good is one that A) is used in the production of another good. B) is a natural resource used to produce a good. C) is purchased as an input in the production process. D) is purchased by its final user.   50) How are intermediate goods treated in the calculation of GDP? A) Their value is not counted separately, but […]

  41) Computer chips are a normal good. Suppose the economy slips into a recession so that income falls. As a result, the demand for computer chips ________ so that the price of a computer chip ________. A) increases; rises B) increases; falls C) decreases; rises D) decreases; falls E) decreases; does not change 42) Bagels and cream cheese are complementary goods. Suppose that the […]

  61.Local content regulations provide protection for a domestic producer of parts in much the same way a(n) _____ does, by limiting foreign competition.   A. greenfield investment B. international content requirement C. domestic sales requirement D. import quota E. subsidy 62.Animax Limited got an order to sell 50000 Central Processing Units (CPUs) to Palladia, but the Palladian government stipulated that 15 percent of the component parts of those CPUs must be […]

        13) The above figure shows the U.S. market for chocolate. With no international trade, consumer surplus is equal to A) area A + area B + area C + area D. B) area A. C) area B + area C + area D. D) area C + area D. E) area E. 14) The above figure shows the U.S. market for […]

  Figure 1-5   39) Refer to Figure 1-5.  Calculate the area of the triangle A. A) $8.4 million B) $6.3 million C) $3.15 million D) $2.1 million   Figure 1-6     40) Refer to Figure 1-6.  Calculate the area of the trapezoid X. A) $361 B) $450 C) $1,020 D) $1,140     41) An “omitted variable” is A) a variable which is […]

    31) The figure above shows a ________ where ________ firm(s) produce(s) ________. A) natural oligopoly; 3; 30 units each B) natural duopoly; 2; 45 units each C) natural monopoly; 2; 90 units D) monopoly; 1; 90 units E) natural monopoly; 3; 90 units each   32) The figure above shows that ________ occurs at ________ units and that ________ firms should share the […]

  12.3   Health-Care Markets   1) In the health insurance market, adverse selection occurs when A) chronically ill people buy health insurance. B) insured people go to the doctor unnecessarily. C) patients sue their doctor. D) people with health insurance tend to behave more recklessly. E) chronically ill people are unable to buy health insurance. 2) If a health insurance company offers coverage regardless of […]

  1.Adecreaseinthesizeofataxismostlikelytoincreasetaxrevenueinamarketwith a.elasticdemandandelasticsupply. b.elasticdemandandinelasticsupply. c.inelasticdemandandelasticsupply. d.inelasticdemandandinelasticsupply. 2.Anincreaseinthesizeofataxismostlikelytoincreasetaxrevenueinamarketwith a.elasticdemandandelasticsupply. b.elasticdemandandinelasticsupply. c.inelasticdemandandelasticsupply. d.inelasticdemandandinelasticsupply. 3.Ifthesizeofataxincreases,taxrevenue a.increases. b.decreases. c.remainsthesame. d.mayincrease,decrease,orremainthesame. 4.Supposethetaxonautomobiletiresisincreasedsothatthetaxgoesfrombeinga”medium”taxtobeinga”large”tax.Asaresult,itislikelythat a.taxrevenueincreases,andthedeadweightlossincreases. b.taxrevenueincreases,andthedeadweightlossdecreases. c.taxrevenuedecreases,andthedeadweightlossincreases. d.taxrevenuedecreases,andthedeadweightlossdecreases. Figure8-19 TheverticaldistancebetweenpointsAandBrepresentstheoriginaltax.   5.RefertoFigure8-19.Ifthegovernmentchangedtheper-unittaxfrom$5.00to$2.50,thenthepricepaidbybuyerswouldbe$7.50,thepricereceivedbysellerswouldbe$5,andthequantitysoldinthemarketwouldbe1.5units.Comparedtotheoriginaltaxrate,thislowertaxratewould a.increasegovernmentrevenueandincreasethedeadweightlossfromthetax. b.increasegovernmentrevenueanddecreasethedeadweightlossfromthetax. c.decreasegovernmentrevenueandincreasethedeadweightlossfromthetax. d.decreasegovernmentrevenueanddecreasethedeadweightlossfromthetax. 6.RefertoFigure8-19.Ifthegovernmentchangedtheper-unittaxfrom$5.00to$7.50,thenthepricepaidbybuyerswouldbe$10.50,thepricereceivedbysellerswouldbe$3,andthequantitysoldinthemarketwouldbe0.5units.Comparedtotheoriginaltaxrate,thishighertaxratewould a.increasegovernmentrevenueandincreasethedeadweightlossfromthetax. b.increasegovernmentrevenueanddecreasethedeadweightlossfromthetax. c.decreasegovernmentrevenueandincreasethedeadweightlossfromthetax. d.decreasegovernmentrevenueanddecreasethedeadweightlossfromthetax. 7.RefertoFigure8-19.TheoriginaltaxcanberepresentedbytheverticaldistanceAB.SupposethegovernmentisdecidingwhethertolowerthetaxtoCDorraiseittoFG.Whichofthefollowingstatementsiscorrect? a.Comparedtotheoriginaltax,thelargertaxwilldecreasebothtaxrevenueanddeadweightloss. b.Comparedtotheoriginaltax,thesmallertaxwillincreasebothtaxrevenueanddeadweightloss. c.Comparedtotheoriginaltax,thelargertaxwilldecreasetaxrevenueandincreasedeadweightloss. d.Bothaandbarecorrect. 8.RefertoFigure8-19.TheoriginaltaxcanberepresentedbytheverticaldistanceAB.SupposethegovernmentisdecidingwhethertolowerthetaxtoCDorraiseittoFG.Whichofthefollowingstatementsisnotcorrect? a.Comparedtotheoriginaltax,thelargertaxwillincreasetaxrevenue. b.Comparedtotheoriginaltax,thesmallertaxwilldecreasedeadweightloss. c.Comparedtotheoriginaltax,thesmallertaxwilldecreasetaxrevenue. d.Comparedtotheoriginaltax,thelargertaxwillincreasedeadweightloss. 9.Asthetaxonagoodincreasesfrom$1perunitto$2perunitto$3perunitandsoon,the a.taxrevenueincreasesatfirst,butiteventuallypeaksandthendecreases. b.deadweightlossincreasesatfirst,butiteventuallypeaksandthendecreases. c.taxrevenuealwaysincreases,andthedeadweightlossalwaysincreases. d.taxrevenuealwaysdecreases,andthedeadweightlossalwaysincreases. 10.Whichofthefollowingideasisthemostplausible? a.Taxrevenueismorelikelytoincreasewhenalowtaxrateisincreasedthanwhenahightaxrateisincreased. b.Taxrevenueislesslikelytoincreasewhenalowtaxrateisincreasedthanwhenahightaxrateisincreased. c.Taxrevenueislikelytoincreasebythesameamountwhenalowtaxrateisincreasedandwhenahightaxrateisincreased. d.Decreasingataxratecanneverincreasetaxrevenue.