51.Thesticky-pricetheoryimpliesthat a.theshort-runaggregate-supplycurveisupward-sloping. b.anunexpectedfallinthepricelevelinducesfirmstoreducethequantityofgoodsandservicestheyproduce. c.menucostsinfluencethespeedofadjustmentofprices. d.Alloftheabovearecorrect. 52.Menucostshelpexplain a.sticky-pricetheory. b.misperceptionstheory. c.sticky-wagetheory. d.Alloftheabovearecorrect. 53.Otherthingsthesame,anunexpectedfallinthepricelevelresultsinsomefirmshaving a.lowerthandesiredprices,whichincreasestheirsales. b.lowerthandesiredprices,whichdepressestheirsales. c.higherthandesiredprices,whichincreasestheirsales. d.higherthandesiredprices,whichdepressestheirsales. 54.Otherthingsthesame,whenthepricelevelrisesmorethanexpected,somefirmswillhave a.higherthandesiredprices,whichincreasestheirsales. b.higherthandesiredprices,whichdepressestheirsales. c.lowerthandesiredprices,whichincreasestheirsales. d.lowerthandesiredprices,whichdepressestheirsales. 55.Whenthepricelevelrisesmorethanexpected,afirmwithastickypricewillsellitsoutputatapricethatis a.lessthanitdesiresandincreaseitsproduction. b.lessthanitdesiresanddecreaseitsproduction. c.morethanitdesiresandincreaseitsproduction. d.lessthanitdesiresanddecreaseitsproduction. 56.Thesticky-pricetheoryoftheshort-runaggregatesupplycurvesaysthatwhenthepricelevelishigherthanexpected,somefirmswillhave a.higherthandesiredprices,whichleadstoanincreaseintheaggregatequantityofgoodsandservicessupplied. b.higherthandesiredprices,whichleadstoadecreaseintheaggregatequantityofgoodsandservicesupplied. c.lowerthandesiredprices,whichleadstoanincreaseintheaggregatequantityofgoodsandservicessupplied. d.lowerthandesiredprices,whichleadstoadecreaseintheaggregatequantityofgoodsandservicessupplied 57.Otherthingsthesame,ifthepricelevelrisesby2%andpeoplewereexpectingittoriseby5%,thensomefirmshave a.higherthandesiredprices,whichincreasestheirsales. b.higherthandesiredprices,whichdepressestheirsales. c.lowerthandesiredprices,whichincreasestheirsales. d.lowerthandesiredprices,whichdepressestheirsales. 58.Otherthingsthesame,ifthemoneysupplyrisesby2%andpeoplewereexpectingittoriseby5%,thensomefirmshave a.higherthandesiredprices,whichincreasestheirsales. b.higherthandesiredprices,whichdepressestheirsales. c.lowerthandesiredprices,whichincreasestheirsales. d.lowerthandesiredprices,whichdepressestheirsales. 59.Thesticky-pricetheoryoftheshort-runaggregatesupplycurvesaysthatifthepricelevelrisesby5%andpeoplewereexpectingittoriseby2%,thenfirmshave a.higherthandesiredprices,whichleadstoanincreaseintheaggregatequantityofgoodsandservicessupplied. b.higherthandesiredprices,whichleadstoadecreaseintheaggregatequantityofgoodsandservicessupplied. c.lowerthandesiredprices,whichleadstoanincreaseintheaggregatequantityofgoodsandservicessupplied. d.lowerthandesiredprices,whichleadstoadecreaseintheaggregatequantityofgoodsandservicessupplied. 60.Peoplehadbeenexpectingthepriceleveltobe120butitturnsouttobe122.InresponseRobinsonTireCompanyincreasesthenumberofworkersitemploys.Whatcouldexplainthis? a.bothstickypricetheoryandstickywagetheory b.stickypricetheorybutnotstickywagetheory c.stickywagetheorybutnotstickypricetheory d.neitherstickywagetheorynorstickypricetheory    

  11) Automobile manufacturers produce a range of automobiles such as sports utility vehicles, luxury sedans, pickup trucks and compact cars. What fundamental economic question are they addressing by making this range of products? A) How to produce goods that consumers want? B) Why produce a variety of automobiles? C) What to produce? D) Who to produce automobiles for? 12) Consider the following economic agents: […]

  111.Since the early 1970s, developed countries such as Great Britain and the United States have financed their trade deficits by:  A. borrowing from the World Bank. B. borrowing private money. C. selling their gold reserves. D. drawing on grants from the International Monetary Fund. E. increasing their imports. 112.Which of the following is a reason why Great Britain and the United States could finance their deficits by borrowing private […]

  21) A negative income tax A) is a regressive income tax. B) is currently in use in the United States. C) makes the redistribution of income efficient. D) provides every household with a guaranteed minimum annual income. E) cannot be enacted in the United States because it is unconstitutional.   22) With a negative income tax that has a $10,000 guaranteed income and a […]

  Refer to the information provided in Figure 19.1 below to answer the questions that follow.     Figure 19.1   41) Refer to Figure 19.1. Which of the following statements is TRUE? A) The United States has both an absolute advantage and a comparative advantage in the production of soybeans and alfalfa. B) The United States has an absolute advantage in the production of […]

  Exhibit 2-1 The tax schedule for corporate income is shown in the table below:   Taxable Income OverNot OverTax Rate $                0              $       50,000              15.00% 50,000         75,000              25.00% 75,000       100,000              34.00% 100,000       335,000              39.00% 335,000       500,000              34.00% 10,000,000  15,000,00035.00% 15,000,000  18,333,33338.00% 18,333,333……………35.00% 69.Refer to Exhibit 2-1. Pale Rider Corporation reports taxable income of $500,000 in 2004. What was their tax liability for the year? a.$56,100 b.$91,650 c.$170,000 d.$200,000 71.Refer to Exhibit 2-1. […]

  31) A permanent decrease in demand definitely A) shifts a firm’s average total cost curve downward. B) creates diseconomies for individual firms. C) lowers the market price. D) decreases the number of firms in the industry. E) shifts a firm’s average total cost curve upward.   32) The rutabaga market is perfectly competitive. Research is published claiming that eating rutabagas leads to gaining weight […]

  51) Which of the following events would cause a change in the quantity supplied of some agricultural commodity but would not cause a change in the supply of that same commodity? A) a change in factor costs B) a technological change C) a change in the price of the commodity D) a change in the number of suppliers of the commodity E) a change […]

  16.5   Integrative Questions 1) Do automatic fiscal stabilizers eliminate business cycles? A) Yes B) No, because they have no effect if the business cycle is the result of some unanticipated change. C) No, but they do moderate business cycles. D) No, they increase the likelihood that a business cycle occurs. E) No, they make business cycle fluctuations more severe. 2) President Reagan often stated […]

    61.              The density of aluminum is 2.7 g/cm3.  What is the mass of a piece of aluminum foil which is 10.0 cm by 5.0 cm by 0.0018 cm thick? A)  0.090 g    B)  3.3 ? 10-2 g    C)  0.24 g    D)  1.4 ? 102 g    E)  19 g   62.              If the density of a certain alcohol is 0.785 g/mL, what mass of […]