a. A college student buys a deck of cards to play solitaire in her dorm room.
b. An elderly woman plants a flower garden on the vacant lot next to her house.
c. An executive purchases a book to read on a business trip.
d. A ten-year-old uses his allowance to buy new Nike shoes.
ANSWER: b
91. Market power refers to the
a. power of a single person or small group to influence market prices.
b. ability of a person or small group to successfully market new products.
c. power of the government to regulate a market.
d. importance of a certain market in relation to the overall economy.
ANSWER: a
92. Which of the following firms is likely to have the greatest market power?
a. A utility company
b. A farmer
c. A grocery store
d. A local electronics retailer
ANSWER: a
93. Productivity is defined as the
a. amount of goods and services produced from each unit of labor input.
b. number of workers required to produce a given amount of goods and services.
c. amount of labor that can be saved by replacing workers with machines.
d. actual amount of effort workers put into an hour of working time.
ANSWER: a
94. The primary determinant of a country's standard of living is
a. the country's ability to prevail over foreign competition.
b. the country's ability to produce goods and services.
c. the total supply of money in the economy.
d. the average age of the country's labor force.
ANSWER: b
95. The slow growth of U.S. incomes during the 1970s and 1980s can best be explained by
a. unstable economic conditions in Eastern Europe.
b. increased competition from abroad.
c. a decline in the rate of increase in U.S. productivity.
d. a strong U.S. dollar abroad, hurting U.S. exports.
ANSWER: c
96. Suppose that in Peru total annual output is worth $750 million and people work 40 million hours. In Oman, total annual output is worth 650 million and people work 20 million hours. Productivity is higher
a. in Oman. Most variation in the standard of living across countries is due to differences in productivity.
b. in Oman. Differences in productivity explain very little of the variation in the standard of living across countries.
c. in Peru. Most variation in the standard of living across countries is due to differences in productivity.
d. in Peru. Differences in productivity explain very little of the variation in the standard of living across countries.
ANSWER: a
97. In a particular country in 1998, the average worker needed to work 25 hours to produce 40 units of output. In that same country in 2008, the average worker needed to work 40 hours to produce 68 units of output. In that country, the productivity of the average worker
a. decreased by 1.7 percent between 1998 and 2008.
b. remained unchanged between 1998 and 2008.
c. increased by 4.75 percent between 1998 and 2008.
d. increased by 6.25 percent between 1998 and 2008.
ANSWER: d
98. A worker in Thailand can earn $12 per day making cotton cloth on a hand loom. A worker in the United States can earn $82 per day making cotton cloth with a mechanical loom. What is the likely explanation for the difference in wages?
a. United States textile workers belong to a union, whereas Thailand textile workers do not belong to a union.
b. There is little demand for cotton cloth in Thailand and great demand in the United States.
c. Labor is more productive making cotton cloth with a mechanical loom than with a hand loom.
d. Thailand has a low-wage policy to make its textile industry more competitive in world markets.
ANSWER: c
99. To improve living standards, policymakers should
a. impose restrictions on foreign competition.
b. formulate policies designed to increase productivity.
c. impose tougher immigration policies.
d. provide tax breaks for the middle class.
ANSWER: b
100. An increase in the overall level of prices in an economy is referred to as