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Holt 7525-9 S15_IT

Multiple Choice: ___ 1.

Multiple Choice: ___ 1. An increase in Real GDP: a. is absolute economic growth b. may or may not result in a higher standard of living c. Both of the above d. Neither of the above Answer questions 2. through 4. by referring to the table below for Country Z 1994 2014 RealGDP $3,000,000,000 $5,600,000,000 Population 1,000,000 2,000,000 ___ 2. In 2014, Country Z had per capita Real GDP of: a. $5,600,000,000 b. $5,600,000 c. $5,600 d. $2,800 ___ 3. Between 1994 and 2014, Country Z: a. did not achieve absolute economic growth since per capita Real GDP decreased b. did achieve absolute economic growth c. improved its standard of living d. Both b. and c. above ___ 4. Between 1994 and 2014, Country Z: a. did not achieve per capita economic growth b. did achieve per capita economic growth c. improved its standard of living d. Both b. and c. above ___ 5. Between 1990 and 2010: a. most countries in the world suffered a decrease in per capita Real GDP b. the percentage of the developing world’s population living in extreme poverty increased c. Both of the above d. Neither of the above ___ 6. The six most populous countries in the world: a. contain almost one-third of the world’s total population b. achieved increases in per capita Real GDP between 1970 and 2010 ranging from 102% to 846% c. Both of the above d. Neither of the above ___ 7. The standard of living (per capita Real GDP) in the U.S.: a. increased in every decade from 1930 to 2010 b. increased by more than six-fold between 1930 and 2010 c. Both of the above d. Neither of the above FOR REVIEW ONLY - NOT FOR DISTRIBUTION Economic Growth 14 - 12

___ 8. Which of the following is correct? a. Only countries with abundant natural resources have achieved a great deal of economic growth b. All countries with abundant natural resources have achieved a great deal of economic growth c. Some economists argue that abundant natural resources may be a hindrance to economic growth d. Both a. and b. above ___ 9. If the quantity of labor increases, but there is no increase in capital and no improvement in technology: a. Real GDP will likely decrease b. per capita Real GDP will likely decrease c. per capita Real GDP will likely increase d. None of the above ___ 10. Labor productivity can be increased by: a. an increase in human capital b. an increase in physical capital c. an increase in the quantity of labor d. Both a. and b. above ___ 11. Increases in capital: a. are made possible by saving b. require an initial reduction in consumption c. lead to per capita economic growth d. All of the above ___ 12. Technological advance: a. is the ability to produce more output per resource b. can result from improved capital c. can result from free international trade d. All of the above ___ 13. Technological advance: a. can result only from new technology b. can result from improved production techniques c. is unaffected by international trade d. Both a. and c. above ___ 14. Strong private property rights: a. provide more incentive for resource owners to develop and direct their resources to their most valuable uses b. help a nation’s efforts to achieve economic growth c. Both of the above d. Neither of the above ___ 15. Private property rights can be strengthened: a. by decreasing government corruption b. by increasing government regulation c. by decreasing taxes d. Both a. and c. above FOR REVIEW ONLY - NOT FOR DISTRIBUTION 14 - 13 Economic Growth

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    PRINCIPLES OF ECONOMICS JEFF HOLT S

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    Principles of Economics, 6th Editio

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    16. Study Guide for Chapter 7 17. C

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    11. Appendix: Book Review - “The

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    20. Appendix: The NCAA Cartel 21. S

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    Introduction: A Brief History of U.

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    In the twentieth century, per capit

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    Appendix: The 35 Largest National E

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    Multiple Choice: ___ 1. The Jamesto

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    2. Describe the economic cost of th

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    Chapter 1 Scarcity and Choices The

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    Example 5B: At the end of 1982, the

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    Example 11: When Cindy quits her jo

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    consequences may result in failure

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    An upward sloping curve (as in Exam

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    In making decisions, humans tend to

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    5. ______________________ _________

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    ___ 13. If the value of one variabl

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    Y Point X Y A 0 1 B 3 3 C 6 5 D 9 7

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    Chapter 2 Trade and Economic System

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    Example 4B: The following quantitie

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    1. An increase in the quantity of r

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    3. For whom to produce? This is det

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    The graph below illustrates the shi

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    The two primary economic systems ar

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    ___ 12. The capitalist vision sees

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    ___ 25. According to the book “Ca

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    Chapter 3 Demand, Supply, and Equil

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    . For inferior goods, income and de

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    The same information can be placed

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    Not only does a free market elimina

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    $7 - 6 - 5 - S 3 S1 S 2 Price 4 - 3

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    Example 17: The graph below illustr

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    Questions for Chapter 3 Fill-in-the

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    ___ 12. Assuming a market originall

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    $8 - 7 - 6 - 5 - Price 4 - 3 - 2 -

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    Chapter 4 Inflation and Unemploymen

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    Computing the Rate of Inflation The

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    Full Employment Though unemployment

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    3. Cyclical unemployment - due to d

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    During the Great Depression, the ec

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    Appendix: Think Like an Economist -

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    Answer questions 8. and 9. based on

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    ___ 25. The extension of unemployme

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    Chapter 5 Measuring Total Output: G

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    5. Leisure. Leisure time is by defi

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    The U.S. is a high per capita GDP c

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    Example 17: In “An International

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    The simple circular flow diagram be

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    ___ 3. Which of the following would

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    2. Explain what nonproduction trans

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    Chapter 6 The Aggregate Market The

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    Example 2C: Assume the same facts a

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    Example 5B: The price of crude oil

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    Price Level Real GDP SRAS AD 2 AD 1

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    Appendix: Why the Aggregate Demand

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    ___ 3. DEF Company can invest in ne

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    2. List and explain the two factors

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    Chapter 7 Classical Economic Theory

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    Notice that the investment demand c

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    Long-Run Equilibrium If Real GDP is

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    Example 6B: When the economy is in

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    Laissez-faire If the economy is sel

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    ___ 5. According to Say’s Law: a.

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    3. On the graph below, draw an aggr

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    Chapter 8 Keynesian Economic Theory

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    Example 2B: The graph below illustr

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    Example 5: Assume that the table be

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    Notice on the graph on the previous

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    According to Keynesian theory, a ch

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    “The General Theory” also inclu

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    ___ 8. If the consumption function

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    3. If the MPC is .667, and investme

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    Chapter 9 Fiscal Policy The basic e

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    Keynesian Fiscal Policy Theory and

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    Example 5A: The federal government

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    The Laffer Curve What will happen t

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    Appendix: The Importance of Incenti

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    ___ 4. A decrease in government exp

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    2. Explain what automatic stabilize

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    Chapter 10 Money, Money Creation, a

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    Example 4B: The castaways on Gillig

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    Looking at the balance sheet below,

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    Demand-side One-shot Inflation Exam

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    4. Inflation increases uncertainty

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    life; it came into existence not by

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    calculated by using the potential d

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    ___ 12. If the required-reserve rat

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    4. Referring to the balance sheet f

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    Chapter 11 The Federal Reserve Syst

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    5. After Bank X sells the $300,000

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    Low Mortgage Interest Rates Mortgag

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    Relaxed Standards for Mortgage Loan

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    The Bursting of the Housing Bubble

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  • Page 191 and 192: Fed policies caused short-term inte
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  • Page 197 and 198: Chapter 12 Monetary Policy The basi
  • Page 199 and 200: 2. A change in aggregate demand (AD
  • Page 201 and 202: Monetarist Transmission Mechanism C
  • Page 203 and 204: 3. Borrowers do not have to seek ou
  • Page 205 and 206: Appendix: Book Review - “The Age
  • Page 207 and 208: Questions for Chapter 12 Fill-in-th
  • Page 209 and 210: ___ 16. The primary source of incom
  • Page 211 and 212: 7. According to Alan Greenspan, wha
  • Page 213 and 214: Chapter 13 Taxes, Deficits, and the
  • Page 215 and 216: Example 5: In 2015, Taxpayer A had
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  • Page 219 and 220: The complexity of the tax law also
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  • Page 223 and 224: cut of 1964. The top rate was lower
  • Page 225 and 226: ___ 6. Federal excise taxes: a. are
  • Page 227 and 228: 3. How would eliminating the loopho
  • Page 229 and 230: Chapter 14 Economic Growth The basi
  • Page 231 and 232: 2. Labor. Labor can contribute to e
  • Page 233 and 234: estricting international trade (e.g
  • Page 235 and 236: An improvement in technology (e.g.
  • Page 237 and 238: The table below shows the economic
  • Page 239: will increase both Real GDP and per
  • Page 243 and 244: ___ 26. The opinion that economic g
  • Page 245 and 246: Chapter 15 Less Developed Countries
  • Page 247 and 248: Example 8: Countries A, B, C, and D
  • Page 249 and 250: Obstacles to Economic Development f
  • Page 251 and 252: c. Restrictions on international tr
  • Page 253 and 254: Appendix: Book Review - “The Powe
  • Page 255 and 256: Example 25: In Brazil, about half t
  • Page 257 and 258: Study Guide for Chapter 15 Chapter
  • Page 259 and 260: ___ 13. Among the counterproductive
  • Page 261 and 262: 4. List four ways that governments
  • Page 263 and 264: Chapter 16 International Trade The
  • Page 265 and 266: Other Benefits of Free Internationa
  • Page 267 and 268: Example 6: The graph below illustra
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  • Page 273 and 274: Smith was skeptical of government a
  • Page 275 and 276: ___ 4. For Country X, what is the o
  • Page 277 and 278: ___ 18. Frédéric Bastiat’s “P
  • Page 279 and 280: 4. On the graph below: (1) What is
  • Page 281 and 282: Chapter 17 Elasticity We are often
  • Page 283 and 284: Example 4A: What is price elasticit
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  • Page 287 and 288: Example 10A: When the price of Good
  • Page 289 and 290: Example 13B: On the graph below, su
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    $7 - 6 - 5 - Price 4 - 3 - 2 - 1 -

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    In the long run, would the deadweig

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    ___ 7. The factors that determine w

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    3. a. Which price (or prices) from

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    Chapter 18 Utility The basic econom

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    Nonetheless, society generally assu

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    Example 9: Capital City operates a

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    Marginal rate of substitution - the

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    The diamond-water paradox is the ob

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    Complete the table below to answer

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    4. The graph below shows indifferen

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    Chapter 19 The Firm The basic econo

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    than contributing to team productio

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    1. Difficulty in raising large amou

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    Corporations also use self-financin

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    Example 24: A blacksmith who produc

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    For financing needs, proprietorship

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    ___ 13. Corporations: a. are comple

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    5. List two things that the absence

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    Chapter 20 Production and Costs The

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    In Example 5B, Birdwell finds that

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    variable cost initially decreases,

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    Quantity TC MC AFC AVC ATC 0 240 X

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    If the scale of operation is increa

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    average total cost. Average fixed c

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    ___ 11. Concerning the cost curves:

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    5. Complete the following cost tabl

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    Chapter 21 Perfect Competition The

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    Even though a perfect competitor ca

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    Example 6C: This example builds on

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    At what price will there be neither

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    Appendix: Perfect Competition in th

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    Multiple Choice: ___ 1. A perfect c

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    ___ 17. Perfect competition: a. req

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    Answers for Chapter 21 Fill-in-the-

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    Chapter 22 Monopoly Of the four mar

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    3. Exclusive ownership of an essent

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    maximizing quantity (4 units) creat

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    $22 - 20 - 18 - 16 - 14 - Deadweigh

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    2. Negotiating, beginning at a high

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    Legal barriers are created by gover

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    ___ 8. The slope of the demand curv

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    Price Quantity 3. List some of the

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    Chapter 23 Monopolistic Competition

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    For Percomp (the perfect competitor

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    Example 7A: The graph below represe

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    Example 9: The Organization of the

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    Example 12 illustrates the dilemma

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    its current price and quantity. The

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    ___ 14. Game theory: a. is a method

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    Answers for Chapter 23 Fill-in-the-

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    Chapter 24 Factor Markets The basic

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    $ $240 - 200 - 160 - 120 - 80 - 40

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    Since producers will attempt to equ

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    2. Differences in nonmoney aspects

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    were his strikeouts, walks, and hom

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    ___ 3. To maximize profits, a produ

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    ___ 19. According to the book, “M

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    Multiple Choice: 1. a. 8. c. 15. d.

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    Chapter 25 Labor Unions The primary

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    The elasticity of demand for union

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    Example 4A: Assume that the graph b

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    Notice from the graph in Example 6

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    Wage Factory A Quantity of Labor S

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    As a cartel, a labor union faces a

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    ___ 10. For a monopsony: a. there i

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    3. The graph below represents a lab

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    Chapter 26 Interest, Present Value,

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    An increase in expected rates of re

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    An asset is valuable because we exp

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    Example 13B: General Ordnance prove

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    Appendix: Present Value Table One f

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    ___ 4. An increase in expected rate

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    Problems: 1. List and explain the t

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    Chapter 27 Market Failure The basic

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    External Benefit If a market genera

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    Example 2: To encourage the consump

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    $100 - 90 - 80 - MSC 70 - $ 60 - 50

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    A common good is nonexcludable. Non

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    Study Guide for Chapter 27 Chapter

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    ___ 5. What government policy would

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    4. Based on the information on the

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    Chapter 28 Public Choice and Govern

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    Candidates and the Median Voter Mod

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    Example 8: According to State and F

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    Example 10: When Elvis Presley was

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    4. Pessimistic bias. This is the te

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    ___ 5. An elected official will: a.

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    2. If a certain policy will yield s

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    Chapter 29 Government Regulation of

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    underproduction is the amount that

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    micromanagement results in business

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    market. They may agree with their c

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    Questions for Chapter 29 Fill-in-th

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    ___ 10. The public interest theory

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    4. List the four types of costs imp

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    Chapter 30 Agriculture and Health C

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    weather may cause bumper crops. Bad

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    Security and Rural Investment Act o

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    Example 12: From 1960 to 2013, the

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    1. NHI would provide universal heal

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    d. Insurance providers are not allo

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    Study Guide for Chapter 30 Chapter

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    Answer questions 7. through 10. by

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    ___ 21. If there were no individual

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    Chapter 31 Income Distribution and

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    Income is more equally distributed

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    over a typical career is the accumu

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    Ideal Income Redistribution The ide

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    Poverty - a family whose income fal

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    Appendix: Income Inequality around

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    How is this story an analogy for th

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    ___ 2. In 2013, the Lowest Income 6

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    Problems: 1. Explain the two primar

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    Absolute advantage - when one natio

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    Fiat money - money by government de

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    Nonrivalrous good - a good for whic

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    Absolute advantage, 16-9 Absolute e

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    “Company town”, 25-6 Comparativ

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    Eli Lilly and Company, 22-1 Emergen

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    Houston, Texas, 15-10 Human capital

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    Market, 3-1, 3-8-9 Market basket, 4

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    Political bias, 9-4, 12-7 Political

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    Short run production, 20-2-3 Short-

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    Upturns, 9-4 USDA, 27-9, 30-1-2, 30

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