21) Which of the following illustrates elastic demand? A) A 10% increase in price causes a 5% decrease in quantity demanded. B) A 10% increase in price causes a 20% decrease in quantity demanded. C) a price elasticity of 0.8 D) a price elasticity of 1.0 E) A 10% increase in price causes a 10% reduction in quantity demanded. 22) If per capita income […]

  11) Your neighbor’s 10-year old son has come to your house to collect money for a relief-fund for hurricane victims. You were initially unwilling to contribute but agreed to give when you came to know that he has already collected money from all your neighbors. This is an example of ________. A) pure altruism B) impure altruism C) liberalism D) rationalism 12) ________, in […]

  167 Kwik Delivery Service reports the following costs and expenses in June 2013.   Indirect materials$  8,400Driver’s salaries$14,000 Depreciation on deliveryAdvertising5,100 equipment11,200Delivery equipment Dispatcher’s salary5,000repairs300 Property taxes on officeOffice supplies650 building870Office utilities1,490 CEO’s salary12,000Repairs on office Gas and oil for delivery trucks3,200equipment180   Instructions Determine the total amount of (a) delivery service (product) costs and (b) period costs. 168 For each item listed below, […]

    81) Refer to Figure 19-5. With the tariff in place, the United States produces A) 18 million pounds of coffee. B) 20 million pounds of coffee. C) 26 million pounds of coffee. D) 38 million pounds of coffee.   82) Refer to Figure 19-5. With the tariff in place, the United States A) imports 20 million pounds of coffee. B) imports 12 million […]

  221.Ifthenominalinterestrateis8percentandexpectedinflationis2.5percent,thenwhatistherealinterestrate? a.10.5percent b.20percent c.5.5percent d.3.2percent 222.Whichofthefollowingcombinationsofrealinterestratesandinflationimpliesanominalinterestrateof6percent? a.arealinterestrateof3percentandaninflationrateof2percent. b.arealinterestrateof7percentandaninflationrateof1percent. c.arealinterestrateof5percentandaninflationrateof1percent. d.arealinterestrateof6percentandaninflationrateof1percent. 223.Whichofthefollowingcombinationsofnominalinterestratesandinflationimpliesarealinterestrateof7percent? a.anominalinterestrateof5percentandaninflationrateof4percent. b.anominalinterestrateof4percentandaninflationrateof3percent. c.anominalinterestrateof8percentandaninflationrateof1percent. d.anominalinterestrateof14percentandaninflationrateof2percent. 224.Inwhichcasebelowistherealinterestratethehighest? a.thenominalinterestrate=1%andinflation=3% b.thenominalinterestrate=6%andinflation=4% c.thenominalinterestrate=2%andinflation=-1% d.thenominalinterestrate=2%andinflation=1% 225.Inwhichcasebelowdoesaperson’spurchasingpowerfromsavingincreasethemost? a.thenominalinterestrate=10%andinflation=8% b.thenominalinterestrate=9%andinflation=6% c.thenominalinterestrate=8%andinflation=4% d.thenominalinterestrate=7%andinflation=2% 226.Walterputsmoneyinasavingsaccountathisbankearning3.5percent.Oneyearlaterhetakeshismoneyoutandnotesthatwhilehismoneywasearninginterest,pricesrose1.5percent.Walterearnedanominalinterestrateof a.3.5percentandarealinterestrateof5percent. b.3.5percentandarealinterestrateof2percent. c.5percentandarealinterestrateof3.5percent d.5percentandarealinterestrateof2percent 227.Shawnputsmoneyintoanaccount.Oneyearlaterheseesthathehas6percentmoredollarsandthathismoneywillbuy5percentmoregoods. a.Thenominalinterestratewas11percentandtheinflationratewas5percent. b.Thenominalinterestratewas6percentandtheinflationratewas5percent. c.Thenominalinterestratewas5percentandtheinflationratewas-1percent. d.Thenominalinterestratewas6percentandtheinflationratewas1percent. 228.Katarinaputsmoneyintoanaccount.Oneyearlatersheseesthatshehas6percentmoredollarsandthathermoneywillbuy4percentmoregoods. a.Thenominalinterestratewas10percentandtheinflationratewas6percent. b.Thenominalinterestratewas6percentandtheinflationratewas2percent. c.Thenominalinterestratewas4percentandtheinflationratewas2percent. d.Thenominalinterestratewas10percentandtheinflationratewas4percent. 229.Darlaputshermoneyintoabankaccountthatearnsinterest.Oneyearlatersheseesthattheaccounthas6percentmoredollarsandthathermoneywillbuy7.5percentmoregoods. a.Thenominalinterestratewas13.5percentandtheinflationratewas7.5percent. b.Thenominalinterestratewas13.5percentandtheinflationratewas1.5percent. c.Thenominalinterestratewas6percentandtheinflationratewas-1.5percent. d.Thenominalinterestratewas6percentandtheinflationratewas7.5percent. 230.Banksadvertise a.therealinterestrate,whichishowfastthedollarvalueofsavingsgrows. b.therealinterestrate,whichishowfastthepurchasingpowerofsavingsgrows. c.thenominalinterestrate,whichishowfastthedollarvalueofsavingsgrows. d.thenominalinterestrate,whichishowfastthepurchasingpowerofsavingsgrows.    

  11) The capture theory of regulation assumes that regulation benefits A) producers. B) consumers. C) government. D) the general public. E) the regulators.   12) The capture theory of regulation predicts that A) regulation helps producers to maximize profits. B) regulators capture the firm’s economic profit and transfer it to consumers as consumer surplus. C) regulators eliminate the deadweight loss a monopoly can create. […]

  31) A minimum wage that is above the equilibrium wage rate A) increases efficiency within the labor market. B) increases the quantity of labor demanded. C) creates a deadweight loss. D) has no effect on the labor market because it is set above the equilibrium wage rate. E) None of the above answers is correct.   32) A minimum wage A) increases all workers’ […]

    51) If a firm expects that the price of its product will be lower in the future than it is today A) the firm has an incentive to increase supply now and decrease supply in the future. B) the firm has an incentive to decrease supply now and increase supply in the future. C) the firm has an incentive to increase quantity supplied […]

  211.Sometimeago,thenationofRepublicaopenedupitspapermarkettointernationaltrade.WhichofthefollowingresultsofthispolicychangeisconsistentwiththenotionthatRepublicahasacomparativeadvantageoverothercountriesinproducingpaper? a.ThepriceofpaperinRepublicadecreasedasaresultofthepolicychange. b.Republicabeganexportingpaperasaresultofthepolicychange. c.Thedomesticdemandcurveforpapershiftedtotherightasaresultofthepolicychange. d.Thedomesticquantityofpaperdemandedincreasedasaresultofthepolicychange. 212.Domesticproducersofagoodbecomebetteroff,anddomesticconsumersofagoodbecomeworseoff,whenacountrybeginsallowinginternationaltradeinthatgoodand a.thecountrybecomesanimporterofthegoodasaresult. b.theworldpriceexceedsthedomesticpriceofthegoodthatprevailedbeforeinternationaltradewasallowed. c.othercountrieshaveacomparativeadvantage,relativetothecountryinquestion,inproducingthegood. d.totalsurplusdoesnotchangeasaresult. Figure9-18.Onthediagrambelow,QrepresentsthequantityofpeachesandPrepresentsthepriceofpeaches.ThedomesticcountryisIsoland.                                     213.RefertoFigure9-18.IfIsolandallowsinternationaltradeandiftheworldpriceofpeachesis$5,then a.Isolandhasacomparativeadvantage,relativetoothercountries,inproducingpeaches. b.Isolandwillimportpeaches. c.consumersurpluswithtradeexceedsconsumersurpluswithouttrade. d.Alloftheabovearecorrect. 214.RefertoFigure9-18.IfIsolandallowsinternationaltradeandiftheworldpriceofpeachesis$3,then a.Isolandhasacomparativeadvantage,relativetoothercountries,inproducingpeaches. b.Isolandwillexportpeaches. c.producersurpluswithtradeexceedsproducersurpluswithouttrade. d.consumersurpluswithtradeexceedsconsumersurpluswithouttrade. 215.RefertoFigure9-18.IfIsolandallowsinternationaltrade,thenitwillbeanexporterofpeachesifandonlyiftheworldpriceofpeachesis a.above$2. b.below$4. c.above$4. d.below$7. 216.RefertoFigure9-18.IfIsolandallowsinternationaltradeandtheworldpriceofpeachesis$5,then a.producersurpluswillbesmallerthanitwouldbeifIsolandbannedtrade. b.consumersurpluswillbesmallerthanitwouldbeifIsolandbannedtrade. c.thedomesticquantityofpeachesdemandedwillexceedthedomesticquantityofpeachessupplied. d.Isolandwillbeanimporterofpeaches. 217.RefertoFigure9-18.SupposeIsolandchangesfromano-tradepolicytoapolicythatallowsinternationaltrade. a.adecreaseinconsumersurplus. b.anincreaseinproducersurplus. c.anincreaseintotalsurplus. d.Alloftheabovearecorrect. 218.RefertoFigure9-18.SupposeIsolandchangesfromano-tradepolicytoapolicythatallowsinternationaltrade. a.$25decreaseinconsumersurplus. b.$20increaseinconsumersurplus. c.$25decreaseinproducersurplus. d.$20increaseinproducersurplus. 219.RefertoFigure9-18.SupposeIsolandchangesfromano-tradepolicytoapolicythatallowsinternationaltrade. a.$15.00decreaseinproducersurplus. b.$45.00increaseinconsumersurplus. c.$20.00increaseintotalsurplus. d.$12.50increaseintotalsurplus. […]

    11) Holding everything else constant, an increase in the price of raisins will result in A) an decrease in the quantity of raisins demanded. B) an increase in the demand for raisins. C) a decrease in the supply of raisins. D) an increase in the quantity of raisins demanded.   12) A change in which variable will change the market demand for a […]