i. Why, in general, do Americans have higher incomes than Africans?
ii. How much less unemployment is there during an economic expansion?
iii. Why does the United States have a lower unemployment rate than Europe?
a. i and ii d. i, ii, and iii
b. ii only e. i and iii
c. iii only
ANS: D DIF: Moderate REF: 1.2 TOP: II.
MSC: Applying
14. Consider the following model of the labor market from the text:
Labor supply:
Labor demand:
The endogenous variables are
a. and .
b. and the equilibrium wage, w.
c. and the equilibrium wage, w.
d. the equilibrium quantity of labor, L*, and wage, w*.
e. and the equilibrium quantity of labor, L.
ANS: D DIF: Difficult REF: 1.2 TOP: II.
MSC: Applying
15. Consider the following model of the labor market:
Labor supply:
Labor demand:
The values of the equilibrium quantity of labor, L, and wage, w, are
a.
b.
c.
d.
e.
ANS: A DIF: Difficult REF: 1.2 TOP: II.
MSC: Applying
16. Consider the following model of the labor market:
Labor supply: Ls = 1 + w
Labor demand: Ld = 11 ?2- w
The value of the equilibrium quantity of labor, L, and wage, w, are
a. d.
b. e. Not enough information is given.
c.
ANS: C DIF: Difficult REF: 1.2 TOP: II.
MSC: Applying
17. Income per person began at ________ in 1870 and ________ by more than a factor of 15 to ________ in 2018.
a. $2,500; rose; $35,000 d. $44,000; fell; $3,500
b. $2,800; rose; $58,000 e. $40,000; fell; $2,500
c. $3,600; rose; $61,600
ANS: C DIF: Easy REF: 1.3 TOP: III.A.
MSC: Remembering
18. Actual gross domestic product (GDP) is ________ equal to potential GDP.
a. almost always d. rarely
b. always e. Not enough information is given.
c. never
ANS: D DIF: Easy REF: 1.3 TOP: III.A. | III.B.
MSC: Understanding
19. When we look at the ________ run, we are concerned with the ________.
a. short; causes of economic fluctuations
b. long; causes of economic fluctuations
c. short; determinants of economic growth
d. long; causes of inflation
e. long; money supply
ANS: A DIF: Easy REF: 1.3 TOP: III.A. | III.B.
MSC: Understanding
20. When we look at the ________ run, we are concerned with ________.
a. long; the money supply
b. long; the causes of economic fluctuations
c. long; the causes of economic growth
d. long; the causes of inflation