11) Which of the following is NOT a major concern of international economic theory? A) protectionism B) the balance of payments C) exchange rate determination D) bilateral trade relations with China E) the international capital market     12) “Trade is generally harmful if there are large disparities between countries in wages.” A) This is generally true. B) This is generally false. C) […]

  31) Changes in which of the following factors do NOT shift the demand curve? A) the price of the good B) buyers’ incomes C) the price of a substitute good D) the number of buyers E) the price expected in the future 32) If the demand for used cars decreases after the price of a new car falls, used cars and new cars are […]

  76) If a producer must pay the cost of his or her pollution because property rights have been assigned, then A) pollution will be completely eliminated. B) the supply curve will shift rightward as the new costs are added. C) the supply curve will shift leftward as the new costs are added. D) consumers will now consume more of the good because the external […]

  Table 7-6   Production and Consumption              Production Without Trade              With Trade   Swords Belts   Swords Belts Estonia 100 50   200 0 Morocco 50 40   0 120   Estonia and Morocco can produce both swords and belts. Table 7-6 shows the production and consumption quantities without trade, and the production numbers with trade.     21) Refer to Table 7-6. If the […]

  11) The relative-wage explanation for the existence of downwardly sticky wages emphasizes A) unspoken agreements between workers and firms that firms will not cut wages. B) the incentive that firms may have to hold wages above the market clearing rate. C) employment contracts that stipulate workers’ wages, usually for a period of one to three years. D) the contention that workers in one industry […]

  31.Whichofthefollowingwouldcausepricetodecrease? a.adecreaseinsupply b.anincreaseindemand c.asurplusofthegood d.ashortageofthegood 32.Whenthepriceofagoodishigherthantheequilibriumprice, a.ashortagewillexist. b.buyersdesiretopurchasemorethanisproduced. c.sellersdesiretoproduceandsellmorethanbuyerswishtopurchase. d.quantitydemandedexceedsquantitysupplied. 33.Asurplusexistsinamarketif a.thereisanexcessdemandforthegood. b.quantitydemandedexceedsquantitysupplied. c.thecurrentpriceisaboveitsequilibriumprice. d.Alloftheabovearecorrect. 34.Ifasurplusexistsinamarket,thenweknowthattheactualpriceis a.abovetheequilibriumprice,andquantitysuppliedisgreaterthanquantitydemanded. b.abovetheequilibriumprice,andquantitydemandedisgreaterthanquantitysupplied. c.belowtheequilibriumprice,andquantitydemandedisgreaterthanquantitysupplied. d.belowtheequilibriumprice,andquantitysuppliedisgreaterthanquantitydemanded. 35.If,atthecurrentprice,thereisasurplusofagood,then a.sellersareproducingmorethanbuyerswishtobuy. b.themarketmustbeinequilibrium. c.thepriceisbelowtheequilibriumprice. d.quantitydemandedequalsquantitysupplied. 36.Whenasurplusexistsinamarket,sellers a.raiseprice,whichincreasesquantitydemandedanddecreasesquantitysupplied,untilthesurplusiseliminated. b.raiseprice,whichdecreasesquantitydemandedandincreasesquantitysupplied,untilthesurplusiseliminated. c.lowerprice,whichincreasesquantitydemandedanddecreasesquantitysupplied,untilthesurplusiseliminated. d.lowerprice,whichdecreasesquantitydemandedandincreasesquantitysupplied,untilthesurplusiseliminated. 37.Supposerosesarecurrentlysellingfor$40perdozen,buttheequilibriumpriceofrosesis$30perdozen.We wouldexpecta a.shortagetoexistandthemarketpriceofrosestoincrease. b.shortagetoexistandthemarketpriceofrosestodecrease. c.surplustoexistandthemarketpriceofrosestoincrease. d.surplustoexistandthemarketpriceofrosestodecrease. 38.Supposechocolate-dippedstrawberriesarecurrentlysellingfor$30perdozen,buttheequilibriumpriceofchocolate-dippedstrawberriesis$20perdozen.Wewouldexpecta a.shortagetoexistandthemarketpriceofchocolate-dippedstrawberriestoincrease. b.shortagetoexistandthemarketpriceofchocolate-dippedstrawberriestodecrease. c.surplustoexistandthemarketpriceofchocolate-dippedstrawberriestoincrease. d.surplustoexistandthemarketpriceofchocolate-dippedstrawberriestodecrease. 39.Thecurrentpriceofbluejeansis$30perpair,buttheequilibriumpriceofbluejeansis$25perpair.Asaresult, a.thequantitysuppliedofbluejeansexceedsthequantitydemandedofbluejeansatthe$30price. b.theequilibriumquantityofbluejeansexceedsthequantitydemandedatthe$30price. c.thereisasurplusofbluejeansatthe$30price. d.Alloftheabovearecorrect. 40.Auniversity’sfootballstadiumisnevermorethanhalf-fullduringfootballgames.Thisindicates a.theticketpriceisabovetheequilibriumprice. b.theticketpriceisbelowtheequilibriumprice. c.theticketpriceisattheequilibriumprice. d.nothingabouttheequilibriumprice.    

  121) Automatic fiscal stabilizers ________ the impact of demand or supply shocks on the economy since government’s net tax revenues ________ during booms and ________ during recessions. A) magnify; increase; decrease B) magnify; decrease; increase C) dampen; increase; decrease D) dampen; decrease; increase E) does not affect; are constant; are constant 122) Suppose the government implements a permanent reduction in the net tax rate […]

  11.4   Comparing Monopolistic Competition and Perfect Competition   1) How does the long run equilibrium of a monopolistically competitive industry differ from that of a perfectly competitive industry? A) A firm in monopolistic competition will earn economic profits but a firm in perfect competition earns zero profit. B) A firm in monopolistic competition will charge a price higher than the average cost of production […]

    21) The labor force is the A) number of employed people plus the number of unemployed people. B) total population divided by the number of employed people. C) number of employed people in the working-age population. D) working-age population minus the number of unemployed people. E) number of employed people minus the number of unemployed people. 22) The labor force includes people who […]

  61.Which of the following is true of significant strategic commitments to foreign expansion made by an international firm?   A. Significant strategic commitments of a foreign firm have little or no influence on the nature of competition in a market. B. The large-scale entry of a foreign firm does not give other foreign institutions considering entry into the market a reason to pause. C. The large-scale entry of […]