Practice Econ 2

Investment is an important determinant of economic growth. Suppose that Congress passes an investment tax credit to encourage firms to spend more on investment. The impact of the investment tax credit would be:

In the AD and SRAS model, an increase in the rate of expected inflation causes

An increase in money growth will cause output growth to increase in

Suppose a negative externality exists in a market. If transactions costs are low and parties are willing to bargain, then, according to the Coase theorem

A potential problem with expansionary monetary policy is that banks can

At 8 units of production, the marginal cost is $50 per unit, and average cost is $30 per unit. If the price is $50, what is the profit of producing 8 units?

Mrs. Smith is operating a firm in a competitive market. The market price is $6.50. At her profit-maximizing level of output, her average total cost of production is $7.00 and her average variable cost of production is $6.00.

If government legislation requires businesses to switch to a different method of production that generates 50% fewer greenhouse gas emissions, compliance to this policy (assuming no other changes) can be illustrated in the Solow model by _____ the aggregate production function that leads to a _____ level of real GDP per person

Which of the following counts towards GDP

Which of the following is not an institution?

Compared to private goods, the free market would ______ public goods

Why do some economist think that GDP my overestimate the actual level of economic activity in an economy?

Marcie quit her job as a preschool teacher, which paid an annual salary of $28,000 and became a street food vendor. She used $8,000 out of her savings account that paid a 4% interest rate to buy a street cart to sell food. In her first year of operations, she spend $10,000 on food and supplies and earned revenue of $45,000. Accounting profit: ____ Economic profit:___

In recent years, real GDP in China has grown

The economy's production function relates __________ to output

Which of the following statements is FALSE?

Why does South Korea have a higher level of physical and human capital than NK? 1) Markets consitute much more of the primary organizations of economic activity in SK than in NK 2)Economic incentives are better in SK 3) SK has a different culture from NK

Which of the following best illustrates a product sold in a perfectly competitive market?

Which is always true for monopolies?

After a hurricane, the prices of many items rise. How best might the government help poor people afford to buy goods and services?

the US can make 50 tons of corn or 10 tons of potatoes. Mexico can make 40 tons of corn and 5 potatoes. Assume each country specializes in the production of the good in which they have a comparative advantage. Which identifies the trade price that both countries should find acceptable?

Which of the following would not lead to a decrease in the price of a domestic automobile?

If the conditions of the Coase theorem are met -__- the free market quantity of goods sold will _____.

When a binding price ceiling is in effect, goods and services

A new per unit subsidy for almond production in the US increases the world supply of almonds. If almonds are inelastically demanded, what will happen to total revenues from almond production?

If the elasticity of supply is 1, and the elasticity of demand is 3, then for a tax of $1 buyers will pay:

When the opportunity cost of a choice increases:

in the case of an external benefit, marginal private benefit is _____ marginal social benefit at all quantity of levels.