Question: By how much does producer surplus (PS) decrease if the price ceiling is imposed?
Answer Options:
Numeric
Answer: $350
Question: Considering just the U.S., how are GDP and GNP related?
Answer Options:
GDP = GNP – (output of U.S. citizens living abroad) + (output of foreign nationals living in the U.S.)
GDP = GNP + (output of U.S. citizens living abroad) + (output of foreign nationals living in the U.S.)
GDP = GNP + (output of U.S. citizens living abroad) – (output of foreign nationals living in the U.S.)
GDP = GNP – (output of U.S. citizens living abroad) – (output of foreign nationals living in the U.S.)
Answer: GDP = GNP – (output of U.S. citizens living abroad) + (output of foreign nationals living in the U.S.)
Question: Calculate the marginal product of the first unit of capital (from the production function).
Answer Options:
Numeric
Answer: 1 unit
Question: Calculate the marginal product of the second unit of capital.
Answer Options:
Numeric
Answer: 0.414 units (approx.)
Question: What year or years illustrate definitive business cycle troughs?
Answer Options:
year 1, year 3, year 4, year 5, year 7, year 9
Answer: year 3, year 7
Question: An effective price ceiling is set below the equilibrium price rather than above it because…
Answer Options:
by forcing firms to keep prices low, the government limits profits
only then will the price ceiling prevent price from rising to the equilibrium level
only then will the price ceiling prevent price from falling to the equilibrium level
consumers like prices as low as possible, preferably below equilibrium
Answer: only then will the price ceiling prevent price from rising to the equilibrium level
Question: The Japanese car maker Honda owns production facilities in Marysville, Ohio. If the cars made there are sold exclusively in the U.S., in which category would the cars be counted?
Answer Options:
U.S. imports
U.S. GDP
Japan’s GDP
Japanese exports
Answer: U.S. GDP
Question: Which term is least likely to be useful for comparing the economy of today with the economy ten years ago?
Answer Options:
Nominal GDP
Unemployment
Inflation
Real GDP
Answer: Nominal GDP
Question: What year or years illustrate definitive business cycle peaks?
Answer Options:
year 1, year 3, year 4, year 5, year 7, year 9
Answer: year 4, year 6, year 8
Question: By how much does consumer surplus (CS) increase if the price ceiling on concert tickets is imposed at $40?
Answer Options:
Numeric
Answer: $250
Question: If she is only willing to make a purchase if the price she pays is ≤ her willingness to pay, she is following the ______.
Answer Options:
surplus principle
interdependence principle
rational rule
opportunity cost principle
Answer: rational rule
Question: What is Lacey’s economic surplus if she buys a lawn mower for $550 while her willingness to pay is $900?
Answer Options:
Numeric
Answer: $350
Question: After legalization (of recreational marijuana), consumer surplus will ______, producer surplus will ______, and total surplus will ______.
Answer Options:
(increases/decreases combinations)
Answer: increase, increase, increase
Question: What is the value of the deadweight loss (DWL) associated with this price ceiling?
Answer Options:
Numeric
Answer: $100
Question: What U.S. government agricultural policy might help explain American candy companies opening factories in Mexico and Canada?
Answer Options:
A price ceiling in the U.S. sugar market
A price ceiling in the U.S. candy market
A price floor in the U.S. candy market
A price floor in the U.S. sugar market
Answer: A price floor in the U.S. sugar market
Question: What happens to the marginal product of each additional unit of capital, all else equal?
Answer Options:
It increases
It decreases
It stays constant
Answer: It decreases