50) What would happen in the market for knee replacement surgery if insurance companies started to cover a smaller portion of the cost of the surgery, and fewer doctors decide to enter the field of joint replacement surgery? A) Demand will decrease, but this will not shift the supply curve. B) Supply will decrease, but this will not shift the demand curve. C) […]

    25.              Sportech, Inc. acquired a piece of equipment on January 3, 2010. The total cost of the equipment was $77,500. Sportech estimated that the equipment would be used for 9 years before being sold for an estimated $5,500. Assuming the use of straight-line depreciation, the balance in the accumulated depreciation account on January 2, 2014 will be: A)$32,000 B)$34,444 C)$36,889 D)$45,500   26.              […]

    11) Suppose that there are only two types of used cars, peaches and lemons. Peaches are worth $10,000 and lemons are worth $4,000. Without effective signals such as warranties, the owners of peaches cannot sell their cars for $10,000 because the A) owners of peaches cannot convince buyers that their cars are worth $10,000. B) buyers cannot convince owners of peaches to sell […]

  21) For country North, the opportunity cost incurred when 3 tractors are produced is 21 watches. For country South, the opportunity cost incurred when 5 tractors are produced is 100 watches. Which country has the comparative advantage in the production of tractors? A) North B) South C) Both have the comparative advantage in the production of tractors. D) Neither country has the comparative advantage […]

  21) If taxes are collected on the basis of ability-to-pay and there are two taxpayers with the same income who also are identical in all other respects, which of the following is correct? A) Vertical equity is impossible between these two taxpayers. B) Vertical equity exists. C) Horizontal equity exists. D) The tax must be proportional. E) The fair-incidence principle is potentially being violated. […]

  121.Sophiaputsmoneyinthebankandearnsa5percentnominalinterestrate.Iftheinflationrateis2percent,thenafteroneyear, a.Sophiawillhave3percentmoremoney,whichwillpurchase5percentmoregoods. b.Sophiawillhave3percentmoremoney,whichwillpurchase7percentmoregoods. c.Sophiawillhave5percentmoremoney,whichwillpurchase3percentmoregoods. d.Sophiawillhave5percentmoremoney,whichwillpurchase7percentmoregoods. 122.Coreydeposits$1,000inasavingsaccountthatpaysanannualinterestrateof5percent.Overthecourseofayear,theinflationrateis1.7percent.Attheendoftheyear,Coreyhas a.$17moreinhisaccount,andhispurchasingpowerhasincreasedby$10. b.$30moreinhisaccount,andhispurchasingpowerhasincreasedby$50. c.$40moreinhisaccount,andhispurchasingpowerhasincreasedby$33. d.$50moreinhisaccount,andhispurchasingpowerhasincreasedby$33. 123.Rosadeposits$100inabankaccountthatpaysanannualinterestrateof20percent.Ayearlater,afterRosahasaccumulated$20ininterest,shewithdrawsher$120.Rosa’spurchasingpower a.didnotchangeiftheinflationratewas20percent. b.decreasediftheinflationratewas-5percent. c.increasediftheinflationratewas22percent. d.Morethanoneoftheaboveiscorrect. 124.JakeloanedElwood$5,000foroneyearatanominalinterestrateof10percent.AfterElwoodrepaidtheloaninfull,Jakecomplainedthathecouldbuy4percentfewergoodswiththemoneyElwoodgavehimthanhecouldbeforeheloanedElwoodthe$5,000.Fromthis,wecanconcludethattherateofinflationduringtheyearwas a.-4percent. b.4percent. c.6percent. d.14percent. 125.Ms.Laneborrowed$1,000fromherbankforoneyearataninterestrateof10percent.Duringthatyear,thepricelevelwentupby15percent.Whichofthefollowingstatementsiscorrect? a.Ms.Lanewillrepaythebankfewerdollarsthansheinitiallyborrowed. b.Ms.Lane’srepaymentwillgivethebanklesspurchasingpowerthanitoriginallyloanedher. c.Ms.Lane’srepaymentwillgivethebankgreaterpurchasingpowerthanitoriginallyloanedher. d.Ms.Lane’srepaymentwillgivethebankthesamepurchasingpowerthatitoriginallyloanedher. 126.Whichofthefollowingisnotcorrect? a.TheU.S.economyhasneverexperienceddeflation. b.Since1965,theU.S.nominalinterestratehasexceededtheU.S.realinterestrate. c.Since1965,theU.S.economyhasexperiencedrisingconsumerpricesinmostyears. d.Duringdeflation,therealinterestrateexceedsthenominalinterestrate. 127.Whichofthefollowingiscorrect? a.Nominalandrealinterestratesalwaysmovetogether. b.Nominalandrealinterestratesnevermovetogether. c.Nominalandrealinterestratesdonotalwaysmovetogether. d.Nominalandrealinterestratesalwaysmoveinoppositedirections. 128.IntheUnitedStatesinthelate1970s,nominalinterestrateswerehighandinflationrateswereveryhigh.Asaresult,realinterestrateswere a.veryhigh. b.high. c.low,butnevernegative. d.low,andinsomeyearstheywerenegative. 129.IntheUnitedStates,nominalinterestrateswere a.highinthe1970sand1990s. b.lowinthe1970sand1990s. c.high inthe 1970sand lowin the1990s. d.low inthe 1970sand highin the1990s. 130.IntheUnitedStates,realinterestrateswere a.highinthe1970sand1990s. b.lowinthe1970sand1990s. c.high inthe 1970sand lowin the1990s. d.low inthe 1970sand […]

  71.Which of the following statements is true about scenario planning?  A.It is the unwitting selectivity in the acquisition and use of evidence. B.It is the process of planning a solution based on employee preferences. C.It is a disciplined method for imagining possible futures. D.It is an act of reframing the problem in a unique way and generating different approaches to the issue. E.It is […]

  71.Which of the following is true of the Treaty of Rome?   A.It obliged all European Union members to adopt the euro. B.It committed the European Community to establish common policies in agriculture and transportation. C.It called for the establishment of internal trade barriers. D.It allowed members to determine the level of protection applied to goods coming from outside. E.It called for the abolition of a […]

  13.3   Efficiency, Price, and Value   1) The maximum price a consumer is willing to pay for an extra unit of a good or service when total utility is maximized is known as A) demand. B) marginal benefit. C) quantity demanded. D) total utility. E) marginal utility. 2) Jen consumes 5 CDs and 2 tacos. She receives 500 units of utility from her 5th […]

  151.WhentheFederalReservedecreasestheFederalFundstargetrate,thelowerrateisachievedthrough a.salesofgovernmentbonds,whichreducesinterestratesandcausespeopletoholdlessmoney. b.purchasesofgovernmentbonds,whichreducesinterestratesandcausespeopletoholdlessmoney. c.purchasesofgovernmentbonds,whichreducesinterestratesandcausespeopletoholdmoremoney. d.salesofgovernmentbonds,whichreducesinterestratesandcausespeopletoholdmoremoney. 152.WhentheFederalReserveincreasestheFederalFundstargetrate,itachievesthistargetby a.purchasinggovernmentbonds.Thisactionwillreduceinvestmentandshiftaggregatedemandtotheright. b.purchasinggovernmentbonds.Thisactionwillincreaseinvestmentandshiftaggregatedemandtotheright. c.sellinggovernmentbonds.Thisactionwillreduceinvestmentandshiftaggregatedemandtotheleft. d.sellinggovernmentbonds.Thisactionwillincreaseinvestmentandshiftaggregatedemandtotheleft. 153.IftheinterestrateisbelowtheFed’starget,theFedwould a.buybondstoincreasethemoneysupply. b.buybondstodecreasethemoneysupply. c.sellbondstoincreasethemoneysupply. d.sellbondstodecreasethemoneysupply. 154.IftheinterestrateisbelowtheFed’starget,theFedshould a.buybondstoincreasebankreserves. b.buybondstodecreasebankreserves. c.sellbondstoincreasebankreserves. d.sellbondstodecreasebankreserves. 155.TheFedisconcernedaboutstockmarketboomsbecausethebooms a.increaseconsumptionspending. b.increaseinvestmentspending. c.increasebothconsumptionandinvestmentspending. d.Noneoftheaboveiscorrect. 156.Whichofthefollowingactionsmightwelogicallyexpecttoresultfromrisingstockprices? a.Jimdecreaseshisconsumptionspending. b.Firmssellfewersharesofnewstock. c.Firmsspendmoreoninvestment. d.Noneoftheaboveiscorrect. 157.Ifthestockmarketbooms,then a.aggregatedemandincreases,whichtheFedcouldoffsetbyincreasingthemoneysupply. b.aggregatesupplyincreases,whichtheFedcouldoffsetbyincreasingthemoneysupply. c.aggregatedemandincreases,whichtheFedcouldoffsetbydecreasingthemoneysupply. d.aggregatesupplyincreases,whichtheFedcouldoffsetbydecreasingthemoneysupply. 158.Ifthestockmarketbooms,then a.aggregatedemandincreases,whichtheFedcouldoffsetbypurchasingbonds. b.aggregatesupplyincreases,whichtheFedcouldoffsetbysellingbonds. c.aggregatedemandincreases,whichtheFedcouldoffsetbysellingbonds. d.aggregatesupplyincreases,whichtheFedcouldoffsetbypurchasingthemoneysupply. 159.Ifthestockmarketcrashes,then a.aggregatedemandincreases,whichtheFedcouldoffsetbyincreasingthemoneysupply. b.aggregatedemandincreases,whichtheFedcouldoffsetbydecreasingthemoneysupply. c.aggregatedemanddecreases,whichtheFedcouldoffsetbyincreasingthemoneysupply. d.aggregatedemanddecreases,whichtheFedcouldoffsetbydecreasingthemoneysupply. 160.Ifthestockmarketcrashes,then a.aggregatedemanddecreases,whichtheFedcouldoffsetbypurchasingbonds. b.aggregatedemanddecreases,whichtheFedcouldoffsetbysellingbonds. c.aggregatedemandincreases,whichtheFedcouldoffsetbysellingbonds. d.aggregatedemandincreases,whichtheFedcouldoffsetbypurchasingthemoneysupply.