31) The crowding-out effect describes how a government budget ________ ________ the real interest rate and thereby ________ equilibrium investment. A) deficit; raises; decreases B) deficit; lowers; increases C) surplus; raises; decreases D) surplus; lowers; decreases E) deficit; lowers; decreases   32) Suppose the government’s budget deficit increases by $500 billion. If there is no Ricardo-Barro effect, what occurs? A) The demand for […]

PART I — MULTIPLE CHOICE (20 points)   Instructions:  Designate the best answer for each of the following questions.     1.Danolin Signs is bidding on painting buildings in a large apartment complex. The company has gathered the following information: Estimated wages of 8 painters for the project$14,040 Estimated labor hours for the entire company  16,000 Estimated cost of fringes15% of labor Desired profit margin […]

    Quantity of pizza Total utility from pizza Quantity of Diet Pepsi Total utility from Diet Pepsi 0 0 0 0 1 24 1 14 2 44 2 26 3 60 3 36 4 72 4 44 5 76 5 50 6 79 6 54 7 80 7 56   61) Suppose that you consume only pizza and Diet Pepsi. The table above gives […]

  51.A young couple buys their dream house. After paying their down payment and closing costs, the couple has borrowed $400,000 from the bank. The terms of the mortgage are 30 years of monthly payments at an APR of 6% with monthly compounding. What is the monthly payment for the couple? a.$2,398.20 b.$2,421.63 c.$2,697.98 d.$2,700.00 52.A young couple buys their dream house. After paying their […]

  8.2   Does GDP Measure What We Want It to Measure?   1) The Philippines and Vietnam have roughly the same size population.  Suppose the GDP of the Philippines is $1,000 billion and the GDP of Vietnam is $10,000 billion.  You should conclude A) a typical person in Vietnam is 10 times as well off as the typical person in the Philippines. B) a typical […]

1.2   The Economic Way of Thinking   1) Rational choice A) is a choice that uses the available resources to best achieve the objective of the person making the choice. B) is always efficient. C) is what you must give up to get what you want. D) is made by comparing different incentives. E) provides the answer to only the “how” question. 2) A rational […]

    91) When all other influences on work plans remain the same, the A) lower the real wage rate, the smaller the quantity of labor supplied. B) higher the real wage rate, the greater the quantity of labor demanded. C) lower the real wage rate, the greater the quantity of labor supplied. D) lower the real wage rate, the smaller the quantity of labor […]

    51.              The required sales in units to achieve a target net income is a.(sales + target net income) divided by contribution margin per unit. b.(sales + target net income) divided by contribution margin ratio. c.(fixed cost + target net income) divided by contribution margin per unit. d.(fixed cost + target net income) divided by contribution margin ratio.     52.              For Wickham Co., […]

  51) If the economy moves upward along its short-run Phillips curve, in the AS-AD diagram, this movement is shown by a A) movement upward along the AS curve as a result of a rightward shift of the AD curve. B) rightward shift of potential GDP. C) movement downward along the AS curve as a result of a leftward shift of the AD curve. D) […]

    Exhibit 8-2 A piece of equipment costs $1.2m. The equipment has a useful life of 4 years. In each of the four years, the investment generates a cash inflow of $0.5m. The impact of the investment project on net income is derived by subtracting depreciation from cash flow each year.   11.Refer to Exhibit 8-2. Assume the equipment is depreciated on a straight-line […]