In Exhibit 7, which of the following points on the production possibilities curve are full-employment production points? a. A, B, C, D b. A, B, C, D, U c. E, U, W d. B, C, D, U e. A, B, C, U

An extreme case in which the demand curve is vertical and the elasticity coefficient equals zero is called _____________. T F Suppose an economist found that total revenues increased for the bus system when fares were raised. The conclusion is that the price elasticity demand for subway services over the range of fare increase is inelastic.

Prior to deregulation, critics argued that airline safety would suffer. Instead, although the Federal Aviation Administration’s budget was cut following deregulation, the accident rate involving fatalities has fallen. Give a rationale for why the critics’ prediction did not come to pass.

Around the world, the minimum wage remains a highly debated issue. In July 2015, 22 out of the 28 European Union Member States had a national minimum wage. While the minimum wage was €194 a month in Bulgaria, it was as high as €1,923 in Luxembourg. Given that the average cost of an apartment in the city center of Luxembourg is €1,235.56, and in the […]

A controversy in many antitrust court cases involves the definition of the relevant market for a firm’s product. How would you argue in the Alcoa case that the government’s claim of the firm’s high market share was in error?   Q445: In the MIT case, which students are harmed by the Ivy League schools’ coordination of scholarship policy? Professional baseball is exempt from antitrust laws. […]

The classical model of the price level is most applicable in a. the United States. b. periods of high inflation. c. periods of low inflation. d. recessions. e. depressions.

The following schedule shows the technology of production at Mahalo Macadamia Nut Farm for 2015: If macadamia nuts sell for $3.50 per pound and workers can be hired in a competitive labor market for $800 per week, how many workers should be hired? What if workers unionized and the weekly wages doubled? (Hint: Create marginal product and marginal revenue product columns for the table.) Explain […]

The M1 definition of the money supply consists of a. coins and currency in circulation. b. coins and currency in circulation, and check-able deposits. c. Federal Reserve notes, gold certificates, and checkable deposits. d. Federal Reserve notes and bank loans.

The pilot light TON timer program of Figure 15-27 is described in the text. Prepare an I/O connection diagram and ladder logic program that will simulate its operation. Utilize field devices found on your ControlLogix installation. Enter the program into the controller, and monitor its operation.

If the demand curve for good X is downward sloping, an increase in the price will result in a. an increase in the demand for good X. b. a decrease in the demand for good X. c. no change in the quantity demanded for good X. d. a larger quantity demanded for good X. e. a smaller quantity demanded for good X.

Assume an economy is in recession and the marginal propensity to consume (MPC) decreases then which of the following is true? a. It takes the same increase in autonomous aggregate expenditures to shift the aggregate expenditure curve upward to the full-employment real GDP level. b. It takes a smaller decrease in autonomous aggregate expenditures to shift the aggregate expenditures curve upward to the full-employment real […]

A change in a third variable not on either axis of a graph is illustrated with a. a horizontal or vertical line. b. a movement along a curve. c. a shift of a curve. d. a point of intersection.

Explain why it is possible that a firm with a production function that exhibits increasing returns to scale can run into diminishing returns at the same time. One of the more recent innovations in computer technology is called “cloud computing.” With cloud computing, information and software are provided to computers on an “as-needed” basis, much like utilities are provided to homes and businesses. At the […]

For cases A through F in the following table, would you (a) operate or shut down in the short run and (b) expand your plant or exit the industry in the long run?

A paper released by the World Bank in 2014 states that while economic growth is essential for reducing poverty rates, growth by itself is not enough, and efforts to reduce poverty must be complemented with programs that devote more resources to the extreme poor. According to the paper, as extreme poverty declines, growth by itself tends to be less successful at lifting additional people out […]

Which of the following defines the “store of value” function of money? a. A common measurement of the relative value of different goods and services. b. The ability of money to hold value over time. c. That the materials used to manufacture money are of medium grade or quality, so that people will not hoard money for its commodity value. d. That money is widely […]

Can you imagine a situation in which water would be more expensive than diamonds? Suppose the price per gallon of water is 1 cent and the price per carat of a diamond is $10,000. Is the total utility of diamonds 10,000 times as great as the total utility received from water?

The following table contains data compiled by the Organisation for Economic Co-operation and Development (OECD). The data reflects the average annual percentage change in real household income by income group from the mid-1980s to the late-2000s for five OECD countries. For each of the listed countries, average annual real income increased for the overall population, as is shown in the “Total Population” column, but the […]

For each of the following statements, do you agree or disagree? Why? a. Economic theory predicts unequivocally that a payroll tax reduction will increase the supply of labor. b. Corporate income taxes levied on a monopolist are likely to be regressive because the monopoly can pass on its burden to consumers. c. If labor supply is relatively elastic, the burden of a payroll tax falls […]

Consider the table below, which lists James’s marginal utility schedule for steak and hamburger meals: Given a budget of $45, how many steak and hamburger meals will James buy per month to maximize his total utility? What is the total utility realized?

Do you agree or disagree with each of the following statements? Explain your answer. a. Nutritional food is a public good and should be produced by the public sector because private markets will fail to produce it efficiently. b. Imperfect markets are inefficient because as price-makers, firms in these markets can guarantee that price will al-ways be less than marginal cost. c. Financial planning service […]

Consider an industry that exhibits external economies of scale. Now suppose that over the next decade, the demand for that industry’s product increases rapidly. Describe the adjustments likely to follow. Use diagrams in your answer.

Which of the following reasons helps explain why the aggregate demand curve is downward sloping? a. The real balances effect: Consumers spend more on goods and services when the price level falls because lower prices increase consumer purchasing power. b. The producer-push effect: At less than fullemployment, increases in quantity demanded will raise price, and thus will motivate sellers to produce more. c. The hidden […]

If the monopolist in Exhibit 11 operates at the profit-maximizing output, it will earn total revenue to pay about what portion of its total fixed cost? a. None b. One-half c. Two-thirds d. All total fixed costs

Any point inside the production possibilities curve is a(an) a. efficient point. b. unfeasible point. c. inefficient point. d. maximum output combination.

Suppose that widgets can be produced using two different production techniques, A and B. The following table provides the total input requirements for each of five different total output levels. a. Assuming that the price of labor (PL) is $2 and the price of capital (PK) is $3, calculate the total cost of production for each of the five levels of output using the optimal […]

A price-discriminating monopoly charges the lowest price to the group that a. has the most elastic demand. b. purchases the largest quantity. c. engages in the most arbitrage. d. is least responsive to price changes.

Suppose the quantity of steak purchased by the Jones family is 110 pounds per year when the price is $2.10 per pound and 90 pounds per year when the price is $3.90 per pound. The price elasticity of demand coefficient for this family is a. 0.33. b. 0.50. c. 1.00. d. 2.00.   Q202: If a 5 percent reduction in the price of a good […]

For the ADD instruction rung shown in Figure 15-41, the value stored in Dest would be a) 1. c) 50. b) 35. d) 15.         For the SUB instruction rung shown in Figure 15-42, the number of shipped parts would be a) 100. c) 600. b) 500. d) 1,700.

As shown in Exhibit 10, total fixed cost for the firm is a. zero. b. $250. c. $500. d. $750. e. $1,000.