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36) A firm encountering economies of scale over some range of output will have a:

a) rising long-run average cost curve.

b) falling long-run average cost curve.

c) constant long-run average cost curve.

d) rising, then falling, then rising long-run average cost curve.

37) When a firm doubles its inputs and finds that its output has more than doubled, this is known as:

a) economies of scale.

b) constant returns to scale.

c) diseconomies of scale.

d) a violation of the law of diminishing returns.

38) The larger the diameter of a natural gas pipeline, the lower is the average total cost of transmitting 1,000 cubic feet of gas 1,000 miles. This is an example of:

a) economies of scale.

b) normative economies.

c) diminishing marginal returns.

d) an increasing marginal product of labor.

39) If all resources used in the production of a product are increased by 20 percent and output increases by 20 percent, then there must be:

a) economies of scale.

b) constant returns to scale.

c) diseconomies of scale.

d) increasing the average total costs.

40) Economies and diseconomies of scale explain why the:

a) short-run average fixed cost curve declines so long as output increases.

b) marginal cost curve must intersect the minimum point of the firm's average total cost curve.

c) long-run average total cost curve is typically U-shaped.

d) short-run average variable cost curve is U-shaped.

A decrease in the target for the federal funds rate would be an example of

A)expansionary fiscal policy. B)expansionary monetary policy. C)contractionary fiscal policy. D)contractionary monetary policy.

4- What is it called when the Fed takes actions that result in an increase in the money supply?

A. Contractionary fiscal policy

B. Expansionary fiscal policy

C. Contractionary monetary policy

D. Expansionary monetary policy

5. If the federal government finances a deficit by borrowing, we can expect

A. National debt will decrease

B. More income taxes will be collected

C. Higher interest rates due to the higher demand for loanable funds

D. Higher Inflation in the economy

E. All of the above.

6. Which of the following policies can the central bank do to decrease the money supply?

A: Increase the reserve ratio

B: lower the discount rate

C: buy bonds in the open market

D: raise the fed funds rate

E: increase payroll taxes

Which of the following statements is false? a. The shift factors for the supply curve are: income, preferences, prices of related goods, the number of buyers, and expectations of future price. b. A change in (own) price changes the quantity supplied of a good. c. A change in demand is graphically represented by a shift in the demand curve. d. A change in quantity demanded is represented by a movement along a given demand curve

Choose all of the factors that will cause the supply curve to the right.

Choose all of the factors that will cause the supply curve to the right.

Choose all of the factors that will cause the supply curve to the right.

If Eastland’s consumer confidence rises, what would happen to macroeconomic equilibrium in the short run if the short-run aggregate supply is upward sloping?

a) AD shifts right, aggregate output increases and prices fall
b) AD shifts right, aggregate output increases and prices rise
c) AD shifts left, aggregate output decreases and prices fall
d) AD shifts left, aggregate output decreases and prices rise

For each of the following situations, use an AD/AS model to describe what happens to price levels and output in the United States in the short run. In each case assume the economy starts in long- and short-run equilibrium, and describe the appropriate shifts in the AS or AD curves. Instructions: You may select more than one answer. Click the box with a check mark for correct answers and click to empty the box for the wrong answers. a. A stock market crash reduces people’s wealth. Aggregate demand shifts to the left. Aggregate demand shifts to the right. Aggregate supply shifts to the left. Aggregate supply shifts to the right. Output falls. Output rises. The price level rises. The price level falls. b. The spread of democracy around the world increases consumer confidence in the United States. Aggregate demand shifts to the left. Aggregate demand shifts to the right. Aggregate supply shifts to the left. Aggregate supply shifts to the right. Output falls. Output rises. The price level rises. The price level falls. c. The European economy crashes. Aggregate demand shifts to the left. Aggregate demand shifts to the right. Aggregate supply shifts to the right. Aggregate supply shifts to the left. Output falls. Output rises. The price level falls. The price level rises. d. The United States enters into an arms race with China, resulting in a significant increase in military spending. Aggregate demand shifts to the left. Aggregate demand shifts to the right. Aggregate supply shifts to the right. Aggregate supply shifts to the left. Output falls. Output rises. The price level falls. The price level rises. e. A revolution in Iran results in a significant reduction in the world’s supply of oil. Aggregate demand shifts to the left. Aggregate demand shifts to the right. Aggregate supply shifts to the right. Aggregate supply shifts to the left. Output rises. Output falls. The price level rises. The price level falls. f. Terrorist activities temporarily halt the ability of Americans to engage in certain productive activities such as transportation and finance. Aggregate demand shifts to the right. Aggregate demand shifts to the left. Aggregate supply shifts to the right. Aggregate supply shifts to the left. Output falls. Output rises. The price level rises. The price level falls. g. Intel develops a new computer chip that is faster and cheaper than previous chips. Aggregate demand shifts to the right. Aggregate demand shifts to the left. Aggregate supply shifts to the right. Aggregate supply shifts to the left. Output falls. Output rises. The price level rises. The price level falls. h. A summer of perfect weather in the Midwest leads to record harvests of corn, wheat, and soybeans. Aggregate demand shifts to the left. Aggregate demand shifts to the right. Aggregate supply shifts to the right. Aggregate supply shifts to the left. Output falls. Output rises. The price level falls. The price level rises.

If there is a large increase in the price of oil, which of the following would most likely occur in the short run?

A demand shock

If output exceeds its full-employment level, the wage rate will eventually fall, causing a drop in the price level and a drop in real GDP until full employment is restored.

If there is an excess demand for money, there is an excess

If the interest rate dropped, what would be the effect on spending?

5. Which of the following is TRUE about the market for bonds?

a) When Bd < Bs , there is excess demand

b) When there is excess supply, the price will fall

c) When there is excess supply, the interest rate will rise

d) All of the above are true

e) only b. and c. are true

6. Which of the following is TRUE about the demand for bonds?

a) In an expansion with growing wealth, the demand curve for bonds shifts to the right

b) If today people expect higher interest rates in the future, then today’s expected return for long-term bonds will fall, which will shift today’s demand curve to the left

c) An increase in the expected rate of inflation lowers the expected return for bonds, causing the demand curve to shift to the left

d) All of the above are true

e) only a. and b. are true

7. Which of the following is TRUE about the demand for bonds?

a) An increase in the riskiness of bonds causes the demand curve to shift to the left

b) An increased liquidity of bonds results in the demand curve shifting right

c) An increased liquidity of bonds results in the demand curve shifting left

d) All of the above are true

e) only a. and b. are true

8. Which of the following is TRUE about the supply of bonds?

a) In an economic expansion, the supply curve shifts to the left

b) An increase in expected inflation shifts the supply curve for bonds to the right

c) An increase in the budget deficit shifts the supply curve to the right

d) All of the above are true

e) only b. and c. are true

Suppose a stock market crash makes people feel poorer. What are the effects of this decrease in wealth?
a.
a decrease in consumption, which shifts aggregate supply left
b.
a decrease in consumption, which shifts aggregate demand left
c.
an increase in consumption, which shifts aggregate supply right
d.
an increase in consumption, which shifts aggregate demand right

.

When the money market is drawn with the value of money on the vertical axis, in which of the following situations does the price level increase?

Question 1

Which statement is true?

Question 2

As income falls, the demand for inferior goods should

Question 3

As income rises, the quantity demanded for normal goods should

Question 4

Assume that the price of almonds--a principal raw material for producing almond skin oil--rises significantly. What should happen in the market for almond skin oil?

Question 5 (2 points)

Which of the following would not be considered a complementary product/service to a car?

Question 5 options:

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Question 6 (2 points)

If there is advancement in the production technology used to make headphones and production costs fell significantly, this should cause which of the following changes in the headphones market?

Question 6 options:

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Question 7 (2 points)

Which of the following would not change the supply of a particular good?

Question 7 options:

Which of the following would not be considered a complementary product/service to a car?

A movement along the supply curve might be caused by a change in:

A. production technology.

B. input prices.

C. expectations about future prices.

D. the price of the good or service that is being supplied.

When a firm practices perfect price discrimination: Select one: a. Producer surplus is maximized b. Producer surplus is maximized, and demand curve is marginal revenue curve c. The demand curve is the marginal revenue curve d. Producer surplus is minimized e. The demand curve is very elastic

We can say that the allocation of resources is efficient if

Select one:

a. sellers' costs are minimized.

b. producer surplus is maximized.

c. consumer surplus is maximized.

d. total surplus is maximized.

Which of the following changes would not shift the demand curve for a good or service?

Select one:

a. a change in expectations about the future price of the good or service

b. a change in income

c. a change in the price of a related good or service

d. a change in the price of the good or service

Which of the following would NOT shift the demand curve for a good?

Which of the following changes would not shift the demand curve for a good or service?

A) a change in income

B) a change in the price of the good or service

C) a change in expectations about the future prices of the good or service

D) a change in the price of a related good or service

Which of the following changes would not shift the supply curve for a good or service?

A. a change in the price of the good or service
B. a change in input prices
C. a change in production technology
D. a change in expectations about the future price of the good or service

Which of the following changes would not shift the supply curve for a good or service?

Which of the following does NOT cause a shift in the Supply Curve for a good or service?

a. A change in income.

b. A change in the price of that good.

c. A change in technology.

d. A change in taxes A change in the weather.

which of the following changes would shift the demand curve for a good or service?

A. a change in income
B. a change in the price of a related good or service
C. a change in expectations about the future price of the good or service
D. all above

Which of the following will not cause the demand curve to shift: A) a change in income B) a change in price C) a change in the price of a substitute good D) a change in expectations about future prices E) All of the above