9.3 International Trade Restrictions 1) A tariff is A) a tax imposed on imports. B) any non-tax action used to restrict trade. C) a tax imposed on exports. D) any non-subsidy used to increase trade. E) a subsidy granted to imports. 2) A tariff is a tax A) on an exported good. B) on an imported good. C) imposed on all traded goods. […]
9.4 Deciding Whether to Produce or to Shut Down in the Short Run 1) If, for a given output level, a perfectly competitive firm’s price is less than its average variable cost, the firm A) is earning a profit. B) should shut down. C) should increase output. D) should increase price. 2) A perfectly competitive firm’s supply curve is its A) marginal […]
21) A decrease in individual income taxes ________ disposable income, which ________ consumption spending. A) increases; increases B) increases; decreases C) decreases; increases D) decreases; decreases 22) Tax increases on business income decrease aggregate demand by decreasing A) business investment spending. B) consumption spending. C) government spending. D) wage rates. 23) If the economy is growing beyond potential real GDP, which of […]
Figure 2-2 Figure 2-2 above shows the production possibilities frontier for Mendonca, an agrarian nation that produces two goods, meat and vegetables. 19) Refer to Figure 2-2. What is the opportunity cost of one pound of vegetables? A) pound of meat B) 1.2 pounds of meat C) pounds of meat D) 12 pounds of meat 20) Refer to Figure […]
21.Which of the following is an advantage of the Internet? a.Every individual around the world is connected via the Internet. b.There are hardly any adjustments that need to be made by exporters for each market served. c.Internet diffusion always reaches the targeted customer. d.The Internet provides the opportunity to actually close sales. 22._____ marketing allows the creation of an individual relationship with each customer […]
116.Stress is best described as: A.the physiological disorders we experience from adverse environmental conditions. B.an adaptive response to a situation that is perceived as challenging or threatening to the person’s wellbeing. C.a series of events that cause emotional exhaustion and cynicism towards customers. D.environmental conditions that place a physical or emotional demand on the person. E.a behavior pattern of people with low risk of […]
13.3 Explaining Unemployment 1) An increase in unemployment insurance payments would, in effect, ________ the amount of time spent searching for a job, which would increase ________ unemployment. A) increase; cyclical B) increase; frictional C) decrease; cyclical D) decrease; frictional 2) Which of the following would increase the unemployment rate? A) a law making it illegal to work more than 35 hours per week […]
41.RefertoScenario15-6.Howmuchprofitwilltheconcertpromotersearniftheyengageinpricediscrimination? a.$100,000 b.$125,000 c.$150,000 d.$175,000 42.RefertoScenario15-6.Howmuchadditionalprofitcantheconcertpromotersearnbychargingeachcustomertheirwillingnesstopayrelativetochargingaflatpriceof$150perticket? a.$25,000 b.$50,000 c.$75,000 d.$100,000 43.RefertoScenario15-6.Howmuchadditionalprofitcantheconcertpromotersearnbychargingeachcustomertheirwillingnesstopayrelativetochargingaflatpriceof$50perticket? a.$25,000 b.$50,000 c.$75,000 d.$100,000 44.RefertoScenario15-7.IfBlackBoxCableTVisunabletopricediscriminate,whatpricewillitchoosetomaximizeitsprofit,andwhatistheamountoftheprofit? a.price=$20;profit=$400,000 b.price= $20; profit =$330,000 c.price =$150; profit= $450,000 d.price =$150; profit= $600,000 45.RefertoScenario15-7.IfBlackBoxCableTVisabletopricediscriminate,whatwouldbethemaximumamountofprofititcouldgenerate? a.$500,000 b.$600,000 c.$850,000 d.$925,000 46.RefertoScenario15-7.Whatisthedeadweightlossassociatedwiththenondiscriminatingpricingpolicycomparedtothepricediscriminatingpolicy? a.$375,000 b.$400,000 c.$475,000 d.Itcannotbedeterminedfromtheinformationprovided. Scenario15-8 MegaMediaCableTVisabletopurchaseanexclusiverighttosellapremiumsportschannelinitsmarketarea.Let’sassumethatMegaMediapays$100,000ayearfortheexclusivemarketingrightstothesportschannel.SinceMegaMediahasalreadyinstalledcabletoallofthehomesinitsmarketarea,themarginalcostofdeliveringthesportschanneltosubscribersiszero.ThemanagerofMegaMedianeedstoknowwhatpricetochargeforthesportschannelservicetomaximizeherprofit.Beforesettingprice,shehiresaneconomisttoestimatedemandforthesportschannel.Theeconomistdiscoversthattherearetwotypesofsubscriberswhovaluepremiumsportingchannels.Firstarethe3,000die-hardsportsfanswhowillpayasmuchas$150ayearforthenewchannel.Second,thepremiumsportschannelwillappealto20,000occasionalsportsviewerswhowillpayasmuchas$25ayearforasubscriptiontoit. 47.RefertoScenario15-8.HowmuchprofitwillMegaMediaCableTVearnifitsetsthepriceat$25? a.$350,000 b.$450,000 c.$475,000 d.$575,000 48.RefertoScenario15-8.HowmuchprofitwillMegaMediaCableTVearnifitsetsthepriceat$150? a.$350,000 b.$450,000 c.$475,000 d.$575,000 49.RefertoScenario15-8.IfMegaMediaCableTVisunabletopricediscriminate,whatpricewillitchoosetomaximizeitsprofit,andwhatistheamountoftheprofit? a.price=$25;profit=$575,000 b.price= $25; profit =$475,000 c.price =$150; profit= $450,000 d.price […]
Multiple Choice Questions 30. Which of the following statements is not true? A. Optimal inventory levels involve a trade-off between carrying costs and order costs. B. Carrying costs include the cost of storing goods as well as the cost of capital tied up in inventory. C. Inventory levels will be lower when storage or interest costs are high and will be higher when restocking costs are high. […]
11) A rise in the price level brings a ________ in the buying power of money that ________ consumption expenditures and causes the quantity of real GDP demanded to ________. A) rise; decreases; decrease B) fall; decreases; decrease C) fall; increases; increase D) rise; increases; increase E) fall; decreases; increases 12) When the price level increases there is ________ movement along the aggregate […]
11) A rise in the price level brings a ________ in the buying power of money that ________ consumption expenditures and causes the quantity of real GDP demanded to ________.
A) rise; decreases; decrease
B) fall; decreases; decrease
C) fall; increases; increase
D) rise; increases; increase
E) fall; decreases; increases
12) When the price level increases there is ________ movement along the aggregate demand curve because the buying power of money ________.
A) an upward; decreases
B) a downward; decreases
C) an upward; increases
D) a downward; increases
E) no; does not change
13) Last year the price level increased from 118 to 122. The increase in the price level leads to a decrease in
A) the buying power of money.
B) the real interest rate.
C) the money wage rate.
D) the price of domestic goods and services relative to foreign goods and services.
E) potential GDP.
14) At a price level of 100, John has savings equal to $20,000. If the price level increases to 130, the buying power of John's savings is approximately
A) $12,780.
B) $15,400.
C) $20,000.
D) $26,000.
E) $30,000.
15) A year over year ________ in the buying power of money means that definitely ________ from one year to the next.
A) decrease; the price level increased
B) increase; the price level increased
C) decrease; inflation increased
D) increase; inflation increased
E) Both answers A and C are correct.
16) If the price level doubles, it will
A) increase the quantity of money.
B) have no effect on the buying power of money.
C) decrease the buying power of money.
D) increase potential GDP.
E) decrease potential GDP.
17) When the price level rises and increases the demand for money, the nominal interest rate ________ and the real interest rate ________.
A) rises; rises
B) rises; falls
C) falls; rises
D) falls; falls
E) does not change; does not change
18) In the short run, a rise in the price level brings a ________ in the real interest rate that ________ investment, bringing ________ in the quantity of real GDP demanded.
A) rise; decreases; a decrease
B) fall; decreases ; a decrease
C) fall; increases ; an increase
D) rise; increases ; an increase
E) rise; decreases; an increase
19) A reason why an increase in the price level decreases the quantity of real GDP demanded is that
A) the buying power of money increases.
B) the real interest rate falls.
C) the price of domestic goods and services increases relative to foreign goods and services.
D) the inflation rate decreases.
E) potential GDP decreases.
20) A rise in the U.S. price level brings a ________ in the price of U.S. exports relative to imports that ________ exports of U.S. goods, bringing ________ in the quantity of U.S. real GDP demanded.
A) rise; decreases; a decrease
B) fall; decreases; a decrease
C) fall; increases; an increase
D) rise; increases; an increase
E) rise; increases; a decrease
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