Which of the following statements is true?
a. A monopsony is the only employer of a factor of production.
b. A monopsony will pay workers a higher wage and employ fewer workers than a competitive labor market.
c. A monopsony has a marginal factor cost curve which lies below its supply curve of labor.
d. Unions are becoming a greater influence in American labor markets.
e. All of these.
QUESTION 2Gross domestic product (GDP) figures tend to understate the quantity of goods and services available because:
a. GDP excludes the value of goods produced at home.
b. many items are counted twice or more in the intermediate stages of production.
c. more women are entering the labor force.
d. firms often add less to inventories than they planned to.
e. exports are subtracted from GDP but imports are not added.
QUESTION 3During the 1970s, demand-management policy:
a. continued to be highly successful in curing the economy's economic problems.
b. was found to be highly unsuitable in periods of stagflation such as the decade of the 1970s.
c. was so unsuccessful that economists advised a return to the pre-World War II philosophy of fiscal policy.
d. was unsuccessful because automatic stabilizers no longer influenced the economy.
e. was unsuitable because it affected aggregate supply more than aggregate demand.
QUESTION 4Which of the following will be excluded from the measurement of gross domestic product (GDP)?
a. The market value of automobiles purchased by the federal government
b. The market value of California wine purchased by a Canadian firm
c. The payment of employees' medical insurance
d. The market value of computers purchased by state governments
e. The market value of transactions in the underground economy
QUESTION 5A monopsony owner believes that hiring an additional worker would increase the company's revenue by 150 per day. We can conclude that the monopsony pays its workers:
a. more than 150 per day.
b. exactly 150 per day.
c. less than 150 per day.
d. exactly 75 per day.
QUESTION 6The tax cut of 1964 (proposed by President Kennedy):
a. was the last time fiscal policy was used.
b. was the greatest failure as a demand-management tool.
c. actually increased investment, consumption, and employment.
d. shifted the aggregate demand curve leftward.
e. was the first time the focus moved away from managing aggregate demand to focusing exclusively on aggregate supply.
QUESTION 7The gross domestic product (GDP) of an economy for a particular year is likely to increase if _____.
a. workers go on longer vacations during that year
b. the length of an average work week decreases
c. homeowners hire lawn care services rather than maintaining the lawns themselves
d. people cook food at home instead of buying restaurant meals
e. the sale of illegal drugs increases
Quick Reply
