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1) An economist who is studying the relationship between the money supply, interest rates, and the rate of inflation is engaged in 2) A basic difference between microeconomics and macroeconomics is that microeconomics 3) The distinction between supply and the quantity supplied is best made by saying that 4) After several years of slow economic growth, world demand for petroleum began to rise rapidly in the 1990s. Much of the increase in demand was met by additional supplies from sources outside the Organization of Petroleum Exporting Countries (OPEC). OPEC, during this time, was unable to restrain output among members in its effort to lift oil prices. What best describes these events? 5)
Price
elasticity
of
demand
is
the:
6) If average movie ticket prices rise by about 5 percent and attendance falls by about 2 percent, other things being equal, the elasticity of demand for movie 7)
tickets
When
labor
is
the
is
variable
input,
the
about:
average
product
equals
the
8) The increase in output obtained by hiring an additional worker is known as 9) 10)
Which Other
of
the things
following being
is
the equal,
best
example
when
of
average
a
long-run productivity
decision? falls,
11) According to economist Colin Camerer of the California Institute of Technology, many New
York
taxi
drivers
decide
when
to
finish
work
by
setting an income goal for themselves. If this is true, then on busy days when the effective hourly wage is higher, taxi drivers will 12)
A
firm's
demand
for
labor
is
derived
from
the
13) Owen runs a delivery business and currently employs three drivers. He owns three vans that employees use to make deliveries, but he is considering hiring a fourth driver. If he hires a fourth driver, he can schedule breaks and lunch hours so all three vans are in constant use, allowing him to increase deliveries per day from 60 to 75. This will cost an additional $75 per day to hire the fourth driver. The marginal cost per delivery of increasing 14)
output
Expected
beyond economic
60 profit
deliveries per
unit
per is
day
equal
to
15) If a firm in a perfectly competitive market experiences a technological breakthrough, 16) A significant 17)
A
monopoly
difference firm
between is
monopoly and
different
from
a
perfect
competition
competitive
firm
is that in
that
18) The difference between a perfectly competitive firm and a monopolistically competitive firm is that a monopolistically competitive firm faces a 19) As long as marginal cost is below marginal revenue, a perfectly competitive firm should 20) Because a monopolistic competitor has some monopoly power, advertising to increase that monopoly power makes sense as long as the marginal 21) In the Flint Hills area of Kansas, proposals to build wind turbines to generate electricity have pitted environmentalist against environmentalist. Members of the Kansas Sierra Club support the turbines as a way to reduce fossil fuel usage, while local chapters of the Nature Conservancy say they will
befoul
the
landscape.
The
Sierra
Club
argues
that
wind
turbines
22) When negative externalities are present, market failure often occurs because 23) A merger between a textile mill and a clothing manufacturing company would be considered a
24) A merger between a baby food company and a life insurance company would be considered a 25) From the point of view of consumer and producer surplus, what problem may be created when a country subsidizes the cost of energy to consumers
to
help
alleviate
the
burden
of
higher
energy
costs?
26) Suppose people freely choose to spend 40 percent of their income on health care, but the government decides to tax 40 percent of a person's income to provide the same level of coverage as before. What can be said about deadweight loss in each case? 27) The U.S. textile industry is relatively small because the US imports most of its clothing. A clear result of the importation of clothing is 28)
Countries
29)
Which
can of
the
expect
to
following
gain is
from an
international
example
of
trade the
as
law
long of
one
as
they price?
30) The fact that U.S. managers' salaries are substantially greater than those of comparable managers in Japan may be related to