The figure above shows the market for coffee. Coffee is a normal good. If consumers' incomes fall, the efficient quantity of coffee will ________ and the producer surplus will ________.
A) increase; increase
B) increase; decrease
C) decrease; decrease
D) decrease; increase
Ques. 2The above table describes the accounts for the country of Pacifica. Using this information, net exports for Pacifica equals
A) 100.
B) 900.
C) -100.
D) 650.
Ques. 3Public goods are those for which
A) individuals who do not pay can be excluded from consuming the good.
B) individuals who do not pay cannot be excluded from consuming the good.
C) external costs exist.
D) no external costs exist.
Ques. 4In the above, as the y variable increases
A) the x variable is constant.
B) the x variable increases.
C) the x variable decreases.
D) the x variable at first increases but then decreases.
Ques. 5A Keynesian economist believes that
A) if the economy was left alone, it would rarely operate at full employment.
B) the economy is self-regulating and always at full employment.
C) the economy is self-regulating and will normally, though not always, operate at full employment if monetary policy is not erratic.
D) the economy is self-regulating and will normally, though not always, operate at full employment if fiscal policy is not erratic.
Ques. 6Air pollution caused by lead
A) has never been a pollution problem.
B) is currently a major pollution problem.
C) has mostly been eliminated as a pollution problem.
D) is the number one source of pollution today.
Ques. 7A good has a downward-sloping demand curve and a perfectly elastic supply. Imposing a sales tax of 1 per unit on the sellers of the good
A) raises the price paid by demanders by more than 1.00.
B) raises the price paid by demanders by 1.00.
C) raises the price paid by demanders by less than 1.00.
D) does not change the price paid by demanders.
Ques. 8Based on the table above which shows Chip's costs, if rice sells for 600 a ton, Chip
A) makes an economic profit and should stay open in the short run.
B) makes an economic profit, but should shut down in the short run.
C) incurs an economic loss, but should stay open in the short run.
D) incurs an economic loss and should shut down in the short run.
Ques. 9The velocity of circulation is
A) the relationship between income and spending.
B) the relationship between increases in income and investment.
C) the ratio of currency to demand deposits.
D) the average number of times per year a dollar is spent on goods and services in GDP.
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