4.1   Demand   1) A market is defined as A) a physical place where people buy only goods. B) a physical place where people buy both goods and services. C) a store where people buy physical goods. D) any arrangement that brings buyers and sellers together. E) a place where one good is bartered for another.   2) EBay A) will be considered […]

    31) State and local governments subsidize college students with grants and low-interest loans. The loans and subsidies are examples of A) positive externalities. B) Coase subsidies. C) Pigovian subsidies. D) emission allowances.   32) Which of the following is an example of a Pigovian tax? A) payments by utilities to obtain tradable emissions allowances B) a payroll tax C) payments for licenses to […]

  41. (p. 11) Which of the following is an uncontrollable factor in a domestic environment?  A. Firm characteristics B. Competitive structure C. Channels of distribution D. Price E. Promotion 42. (p. 12) Which of the following is an example of a positive political action that favored international marketing?  A. Abolition of apartheid in South Africa B. Trade ban on Libya C. Trade embargo on Cuba D. Tariff hike for imports established by China E. Coupling human rights issues with foreign […]

  51) Jack Nelson, a supervisor in the hardware department at Sears, received a $3,000 increase in his annual disposable income. Suppose his marginal propensity to consume is 0.80. How much of the $3,000 increase will Jack spend on consumption? A) $2,750 B) $2,500 C) $2,400 D) $2,200 E) $3,000 52) If your MPC is 0.5, then when your disposable income increases by $100, your […]

  21) What two factors are the keys to determining labor productivity? A) the business cycle and the growth rate of real GDP B) the growth rate of real GDP and the interest rate C) technology and the quantity of capital per hour worked D) the average level of education of the workforce and the price level 22) If labor productivity growth slows down in […]

  32) The subprime financial crisis caused a recession because of the ________ in adverse selection and moral hazard problems and the ________ in housing prices. A) increase; increase B) increase; decrease C) decrease; increase D) decrease; decrease   33) Explain the traditional interest-rate channel for expansionary monetary policy. Explain how a tight monetary policy affects the economy through this channel. 34) Explain how expansionary […]

    8.1   Taxes on Buyers and Sellers   1) Tax incidence is the A) burden buyers have to absorb from a tax on goods and services. B) burden sellers have to absorb from a tax on goods and services. C) lost revenue the government endures from goods and services that are not taxed. D) division of the burden of a tax between the buyer […]

  71) In December 2009, currency was $400 billion, traveler’s checks were $5 billion; checkable deposits owned by individuals and businesses were $600 billion, saving deposits were $2,00 billion, time deposits were $1,500 billion; and money market funds were $1,200 billion. What was the M1 in December 2009? A) M1 = $405 billion B) M1 = $1,005 billion C) M1 = $3,005 billion D) M1 […]

  64) If national income is $400 billion, personal income is $350 billion, personal taxes are $100 billion, then disposable income equals A) $450 billion. B) $300 billion. C) $250 billion. D) -$50 billion.   65) Which of the following is added to personal income to get national income? A) retained earnings B) personal interest income C) depreciation D) personal taxes   66) National income […]

  9.5   The Arguments over Trade Policies and Globalization   1) Disagreements about whether the U.S. government should regulate international trade A) began during the Great Depression. B) began after World War I when government officials no longer believed in isolationism. C) date back to the beginning of the country. D) did not occur until the end of the Mexican War in 1848.     […]