111.How much the demand for one good changes in response to a change in the price of a different good is measured by: A. price elasticity of supply. B. price elasticity of demand. C. income elasticity. D. cross-price elasticity. 112.If the price of a cup of Dunkin’ Donuts coffee rises, while the price of a Starbucks latte doesn’t, we expect the quantity of lattes demanded to: A. increase […]

  17.12   The Liquidity Trap   1) If a country’s nominal interest rate is zero, then A) the country’s economy is in a liquidity trap. B) exchange rates with other countries are likely to decline. C) exchange rates with other countries are likely to increase. D) monetary policy is likely to be very effective in stimulating the economy. E) the country’s economy has achieved monetary […]

  81) Both the demand for and supply of cars changes in France. You observe that the quantity of cars does not change but the price rises. Thus, which of the following occurred? A) Demand and supply increased by an equal amount. B) Demand and supply decreased by an equal amount. C) Demand increased and supply decreased by an equal amount. D) Demand decreased and […]

    61) Exchange rate changes are A) not very volatile because of offsetting changes in demand and supply. B) very volatile because of government intervention in the market. C) not very volatile because of government intervention. D) very volatile because supply and demand changes reinforce each other. E) infrequent because the exchange rate rarely changes.   62) In the foreign exchange market, the exchange […]

  81) Refer to Figure 15-2. The market for financial capital is initially in equilibrium at E1. A shift of the aggregate investment demand curve from I1 to I2, all other things constant, would A) shift the supply of saving curve to S2. B) change the technology of capital use. C) decrease the equilibrium interest rate. D) increase the equilibrium interest rate. E) reduce the […]

  11) Which of the following statements best describes the study of economics? Economics studies how A) to organize production so that scarcity does not occur. B) firms make profits. C) we make choices in the face of scarcity. D) to create incentives so that scarcity does not exist. E) businesses reach decisions. 12) Which of the following best defines economics? A) Economics teaches how […]

    31) Which of the following is a difference between strategic-level and operational-level decision making? A) Strategic-level decisions involve regular interactions with customers unlike operational-level decision making. B) Unlike operational-level decision making, strategic-level decision making mostly deals with routine transactions. C) Unlike operational-level decisions, strategic-level decisions follow predetermined policies and procedures and are programmed in nature. D) The business intelligence needed to make decisions […]

  51.Tranham, Inc. uses a job-order costing system. It reported the following amounts for March:   Work in process, March 1              $38,000              Finished goods, March 1              $14,000 Work in process, March 31              35,000              Finished goods, March 31              17,500 Cost of goods manufactured              169,000              Raw materials, March 1              12,300 Direct labor used              64,000              Raw materials, March 31              12,000 Selling costs incurred              32,000              Direct materials used              63,000 […]

  56) The “fair results” view of fairness says that a minimum wage law set above the equilibrium wage rate is unfair because the minimum wage A) does not apply to all workers. B) boosts the income of highly skilled workers. C) benefits only those workers who are able to find and keep a job. D) benefits nobody. E) cannot be enforced.   57) Labor […]

  41.RefertoTable3-8.WecouldusetheinformationinthetabletodrawaproductionpossibilitiesfrontierforEnglandandasecondproductionpossibilitiesfrontierforSpain.Ifweweretodothis,measuringcheesealongthehorizontalaxis,then a.theslopeofEngland’sproductionpossibilitiesfrontierwouldbe­0.67andtheslopeofSpain’sproductionpossibilitiesfrontierwouldbe-0.5. b.theslopeofEngland’sproductionpossibilitiesfrontierwouldbe­1.5andtheslopeofSpain’sproductionpossibilitiesfrontierwouldbe-2. c.theslopeofEngland’sproductionpossibilitiesfrontierwouldbe­.75andtheslopeofSpain’sproductionpossibilitiesfrontierwouldbe-1. d.theslopeofEngland’sproductionpossibilitiesfrontierwouldbe­2andtheslopeofSpain’sproductionpossibilitiesfrontierwouldbe-.5. 42.RefertoTable3-8.WecouldusetheinformationinthetabletodrawaproductionpossibilitiesfrontierforEnglandandasecondproductionpossibilitiesfrontierforSpain.Ifweweretodothis,measuringbreadalongthehorizontalaxis,then a.theslopeofEngland’sproductionpossibilitiesfrontierwouldbe­0.67andtheslopeofSpain’sproductionpossibilitiesfrontierwouldbe-0.5. b.theslopeofEngland’sproductionpossibilitiesfrontierwouldbe­1.5andtheslopeofSpain’sproductionpossibilitiesfrontierwouldbe-2. c.theslopeofEngland’sproductionpossibilitiesfrontierwouldbe­.75andtheslopeofSpain’sproductionpossibilitiesfrontierwouldbe-1. d.theslopeofEngland’sproductionpossibilitiesfrontierwouldbe­2andtheslopeofSpain’sproductionpossibilitiesfrontierwouldbe-.5. Table3-9   AssumethatMayaandMiguelcanswitchbetweenproducingmixersandproducingtoastersataconstantrate.     HoursNeededToMake1 AmountProducedin60Hours mixer toaster mixers toasters Maya 6 3 10 20 Miguel 10 5 6 12     43.RefertoTable3-9.AssumethatMayaandMigueleachhas60hoursavailable.Ifeachpersondivideshis/hertimeequallybetweentheproductionofmixersandtoasters,thentotalproductionis a.8mixersand16toasters. b.3.5mixersand6toasters. c.15mixersand9toasters. d.20mixersand12toasters. 44.RefertoTable3-9.WhichofthefollowingcombinationsofmixersandtoasterscouldMayaproducein60hours? a.5mixersand12toasters. b.6mixersand4toasters. c.7mixersand7toasters. d.8mixersand5toasters. 45.RefertoTable3-9.WhichofthefollowingcombinationsofmixersandtoasterscouldMiguelnotproducein80hours? a.5mixersand6toasters. b.6mixersand5toasters. c.7mixersand2toasters. d.4mixersand8toasters. 46.RefertoTable3-9.WecouldusetheinformationinthetabletodrawaproductionpossibilitiesfrontierforMayaandasecondproductionpossibilitiesfrontierforMiguel.Ifweweretodothis,measuringmixersalongthehorizontalaxis,then a.theslopeofMaya’sproductionpossibilitiesfrontierwouldbe­2andtheslopeofMiguel’sproductionpossibilitiesfrontierwouldbe-2. b.theslopeofMaya’sproductionpossibilitiesfrontierwouldbe­0.5andtheslopeofMiguel’sproductionpossibilitiesfrontierwouldbe-0.5. c.theslopeofMaya’sproductionpossibilitiesfrontierwouldbe­1.67andtheslopeofMiguel’sproductionpossibilitiesfrontierwouldbe-1.67. d.theslopeofMaya’sproductionpossibilitiesfrontierwouldbe­0.6andtheslopeofMiguel’sproductionpossibilitiesfrontierwouldbe-0.6. 47.RefertoTable3-9.WecouldusetheinformationinthetabletodrawaproductionpossibilitiesfrontierforMayaandasecondproductionpossibilitiesfrontierforMiguel.Ifweweretodothis,measuringtoastersalongthehorizontalaxis,then a.theslopeofMaya’sproductionpossibilitiesfrontierwouldbe­2andtheslopeofMiguel’sproductionpossibilitiesfrontierwouldbe-2. b.theslopeofMaya’sproductionpossibilitiesfrontierwouldbe­0.5andtheslopeofMiguel’sproductionpossibilitiesfrontierwouldbe-0.5. c.theslopeofMaya’sproductionpossibilitiesfrontierwouldbe­1.67andtheslopeofMiguel’sproductionpossibilitiesfrontierwouldbe-1.67. d.theslopeofMaya’sproductionpossibilitiesfrontierwouldbe­0.6andtheslopeofMiguel’sproductionpossibilitiesfrontierwouldbe-0.6. Table3-10   AssumethatJapanandKoreacanswitchbetweenproducingcarsandproducingairplanesataconstantrate.     HoursNeededtoMake1 […]