Microeconomics For Today 9th Edition Irvin B. Tucker - Solutions

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In order for Ethiopia to increase its future economic growth, it must choose a point that isa. below its production possibilities curve.b. further along on its production possibilities curve toward the capital goods axis.c. further along on its production possibilities curve toward the consumption
Which of the following makes long-term lowinterest loans to less-developed countries (LDCs)?a. The Agency for International Development(AID).b. New International Economic Order (NIEO).c. International Monetary Fund (IMF).d. The World Bank.
Which of the following makes short-term conditional low-interest loans to developing countries?a. Agency for International Development (AID).b. World Bank.c. International Monetary Fund (IMF).d. New International Economic Order (NIEO).
Economic growth and development in LDCs are low because many of them lacka. capital investment.b. technological progress.c. a favorable political environment.d. All of the answers above are correct.e. None of the answers above are correct.
Which of the following is infrastructure?a. International Harvester tractor plant.b. Waste and water system provided by government.c. Airplane.d. Service of postal workers.
Which of the following best defines the vicious circle of poverty?a. The GDP per capita must rise before people can save and invest.b. People cannot save while capital accumulates.c. Increased GDP per capita relates to lower population growth.d. Poverty, saving, and investment are related like a
Which of the following problems do LDCs face?a. Low per capita income and high GDP growth rate.b. Low population growth and low per capita income.c. Rapid population growth and low human capital.d. Low per capita income and high saving rate.
An outward shift of the production possibilities curve representsa. economic growth.b. a decline in economic development.c. a decrease in human capital.d. a decrease in resources.
Which of the following statements is true?a. An LDC is a country with a low GDP per capita, low levels of capital, and uneducated workers.b. The vicious circle of poverty exists because GDP must rise before people can save and invest.c. LDCs are characterized by rapid population growth and low
When the government fixes the exchange rate above market exchange rates,a. international trade falls.b. the infrastructure improves.c. real GDP per capita rises.d. the vicious circle of poverty is broken.
According to the classification in the text, which of the following is not an IAC?a. United Arab Emiratesb. Israel.c. Hong Kong.d. Greece.
LDCs are characterized bya. high life expectancy.b. high adult literacy.c. high infant mortality.d. All of the answers above are correct.e. None of the answers above are correct.
Which of the following is true when making GDPs per capita comparisons between nations?a. The GDP per capita is subject to greater measurement errors for LDCs compared to IACs.b. The GDP per capita does not measure income distribution.c. The GDP per capita is subject to fluctuations from changes in
According to the definition given in the text, which of the following is not an LDC?a. India.b. Egypt.c. China.d. Ireland.
An LDC is defined as a countrya. without large stocks of advanced capital.b. without well-educated labor.c. with a low GDP per capita.d. that is described by all of the above.
Which of the following is an example of foreign private investment?a. Elite government leaders in a less-developed country develop a domestic logging monopoly that proceeds to deforest lands recently cleared of residents by the military.b. The U.S. government provides $10 million in financial
Which of the following represents a problem with using per capita GDP to compare standard of living between less-developed and industrially advanced countries?a. GDP per capita does not take into account differences in population between countries.b. GDP is particularly difficult to measure in
generally results in increases in per-capita GDP.a. Civil warb. High levels of inequality in the distribution of land ownershipc. Investment in human capitald. A stock of natural resources
There is a significant positive relationship between and .a. natural resource commodity exports; high levels of per capita GDPb. investment in capital; high levels of per capita GDPc. high levels of illiteracy; high levels of per capita GDPd. limited government recognition of land tenure and
Which of the following distinguishes industrially advanced countries from less-developed countries?a. GDP per capita.b. Educational attainment of the workforce.c. Extent to which capital is technologically advanced.d. All of the answers above are correct.
Explain the differences among the Agency for International Development (AID), the World Bank, and the International Monetary Fund (IMF).
Why would an LDC argue for "trade, not aid"?
What are some of the problems for LDCs of accepting foreign aid?
Without external financing from foreign private investment, foreign aid, and foreign loans, poor countries are caught in the vicious circle of pov- erty. Explain. How does external financing help poor countries achieve economic growth and development?
Indicate whether each of the following is associ- ated with a high or low level of economic growth and development:
Why is the quest for economic growth and development complicated?
Explain why it is so difficult for poor LDCs to generate investment in capital in order to increase productivity and growth and therefore improve their standard of living.
Do you agree with the argument that the rich nations are getting richer and the poor nations are getting poorer? Is this an oversimplification? Explain.
What is the difference between economic devel- opment and economic growth? Give examples of how each of these concepts can be measured.
Assume you are given the following data for country Alpha and country Beta:
Explain why GDP per capita comparisons among nations are not a perfect measure of differences in economic well-being.
What is the difference between industrially advanced countries (IACS) and less-developed countries (LDCs)? List five IACS and five LDCs.
Karl Marx was a (an)a. 19th-century German philosopher.b. 18th-century Russian economist.c. 14th-century Polish banker.d. 19th-century Russian journalist
In Marx’s ideal communist society, the statea. actively promotes income equality.b. follows the doctrine of laissez-faire.c. owns resources and conducts planning.d. does not exist.
How many nations in the world today operate totally according to Karl Marx’s theory of communism?a. None.b. Several.c. Only the United States.d. Many.
Karl Marx predicted which of the following?a. market system would self-destruct.b. “haves” would revolt against the“have-nots.”c. wealthy were entitled to profits as their reward for risk-taking.d. None of the answers above are correct.
According to Karl Marx, under capitalism,a. profits would be shared fairly.b. incomes would be distributed equally.c. workers would be exploited and revolt against owners of capital.d. workers would actually own the factors of production.
Which of the following is not a basic characteristic of capitalism?a. Economic decisions occur in markets.b. Factors of production are privately owned.c. Income is distributed on the basis of need.d. Businesses make their own product and price decisions.
The economic system in which private individuals own the factors of production isa. a planned economy.b. capitalism.c. collectivism.d. socialism.
Adam Smith, in his book The Wealth of Nations, advocateda. socialism.b. an economy guided by an “invisible hand.”c. government control of the “invisible hand.”d. the adoption of mercantilism.
Adam Smith wrote that thea. economic problems of the 18th-century England were caused by free markets.b. government should control the economy with an “invisible hand.”c. pursuit of private self-interest promotes the public interest in a market economy.d. public or collective interest is not
In Adam Smith’s competitive market economy, the question of what goods to produce is determined by thea. “invisible hand” of the price system.b. “invisible hand” of government.c. “visible hand” of public interest.d. “visible hand” of laws and regulations.
The doctrine of laissez-fairea. advocates an economic system with extensive government intervention and little individual decision making.b. was advocated by Adam Smith in his book The Wealth of Nations.c. was advocated by Karl Marx in his book Das Kapital.d. is described by none of the above.
When making economic decisions, Adam Smith urged society toa. follow the principle of self-interest.b. follow the principle of public interest.c. transfer wealth according to need.d. provide equal income for all citizens.
Adam Smith stated that the role of government in society should be toa. provide defense.b. enforce contracts.c. do absolutely nothing.d. Both answersa. andb. are correct.
Command economies typically suffer froma. unemployment, but not underemployment.b. neither unemployment nor underemployment.c. both unemployment and underemployment.d. underemployment, but not unemployment.
The economic system in which all of the basic decisions are made through a centralized authority, such as a government agency, is termed aa. market economy.b. capitalistic economy.c. command economy.d. traditional economy.
The term “capitalism” refers to which of the following?a. A religion based on amassing capital.b. An economic system characterized by private ownership of resources, and decentralized market allocation.c. An economic system characterized by government ownership of resources and centralized
Most of the world’s economies are mixed economies becausea. a cartel of powerful transnational firms demands it.b. the market system of allocation is always best.c. the command system of allocation is always best.d. government intervention in an overall market system exists because markets fail
Which of the following represents key strengths of the market economy as a system of allocation?a. Goods and services are allocated based on willingness and ability to pay, rather than based on need.b. Producers have strong incentives to innovate because successful innovators are rewarded with
Which of the following is a key criticism of the market economy as a system of allocation?a. Goods and services are allocated unequally based on ability to pay.b. Producers have strong incentives to innovate because successful innovators are rewarded with higher profit.c. Consumers can transmit
In a market economy, the three economic questions are answered by which of the following?a. Prices determined by the interaction of the forces of supply and demand.b. A cartel of major transnational corporations, government agencies, and consumer advocates.c. A trilateral commission of major
Suppose you are a factory manager. Describe how you might reach production goals under a system of pure capitalism and under a system of pure socialism.
If all real-world economies are mixed economies, why is the U.S. economy described as capitalist, while the Cuban economy is described as communist?
Karl Marx believed the market system was doomed. Why do you think he was right or wrong?
Suppose you are a farmer. Explain why you would be motivated to work in traditional, command, and market economies.
"The schools are not in the business of pleasing parents and students, and they cannot be allowed to set their own agendas. Their agendas are set by politicians, administrators, and various constitu- encies that hold the keys to political power. The public system is built to see to it that the
Suppose a national program of free housing for the elderly is paid for by a sizable increase in income taxes. Explain a trade-off that might occur between economic security and efficiency.
Explain the advantages and disadvantages of any two of the three basic types of economic systems.
Give an example of how a nation's culture affects its economic system.
Which of the following would cause the U.S.dollar to depreciate against the Japanese yen?a. Greater popularity of U.S. exports in Japan.b. A higher price level in Japan.c. Higher real interest rates in the U.S.d. Higher incomes in the U.S.
If the dollar appreciates (becomes stronger), this causesa. the relative price of U.S. goods to increase for foreigners.b. the relative price of foreign goods to decrease for Americans.c. U.S. exports to fall and U.S. imports to rise.d. a balance of trade deficit for the U.S.e. all of the above to
An increase in the equilibrium price of a nation’s money could be caused by a (an)a. decrease in the supply of money curve.b. decrease in the demand for money curve.c. increase in the supply of money curve.d. increase in the demand for money curve.
Which of the following would cause a decrease in the demand for euros by those holding U.S.dollars?a. Inflation in France, but not in the United States.b. Inflation in the United States, but not in France.c. An increase in the real rate of interest on investments in France above the real rate of
Suppose the exchange rate changes so that fewer Japanese yen are required to buy a dollar. We would conclude thata. the Japanese yen has depreciated in value.b. U.S. citizens will buy fewer Japanese imports.c. Japanese will demand fewer U.S. exports.d. None of the above will occur.
The United Statesa. was on a fixed exchange rate system prior to late 1971, but now is on a flexible exchange rate system.b. has been on a fixed exchange rate system since 1945.c. has been on a flexible exchange rate system since 1945.d. was on a flexible exchange rate system prior to late 1983,
If a Japanese radio priced at 2,000 yen can be purchased for $10, the exchange rate isa. 200 yen per dollar.b. 20 yen per dollar.c. 20 dollars per yen.d. None of the answers above are correct.
Which of the following international accounts records the purchase and sale of financial assets and real estate between the United States and other nations?a. The balance of trade account.b. The current account.c. The capital account.d. The balance of payments account.
Which of the following international accounts records payments for exports and imports of goods, military transactions, foreign travel, investment income, and foreign gifts?a. The capital account.b. The goods account.c. The current account.d. The official reserve account.
The figure that results when goods imports are subtracted from goods exports isa. the capital account balance.b. the balance of trade.c. the current account balance.d. always less than zero.
The infant industry argument for protectionism is based on which of the following views?a. Foreign buyers will absorb all of the output of domestic producers in a new industry.b. The growth of an industry that is new to a nation will be too rapid unless trade restrictions are imposed.c. Firms in a
A tariff increases thea. quantity of imports.b. ability of foreign goods to compete with domestic goods.c. prices of imports to domestic buyers.d. All of the answers above are correct.
If the countries in Exhibit 14 follow the principle of comparative advantage, the United States shoulda. buy all of its potatoes from Ireland.b. buy all of its wheat from Ireland.c. buy all of its potatoes and wheat from Ireland.d. produce both potatoes and wheat and not trade with Ireland.
In Exhibit 14, the opportunity cost of potatoes isa. 1/2 ton of wheat in the United States and 2/3 ton of wheat in Ireland.b. 2 tons of wheat in the United States and 1 1/2 tons of wheat in Ireland.c. 16 tons of wheat in the United States and 6 tons of wheat in Ireland.d. 3 tons of wheat in the
In Exhibit 14, the opportunity cost of wheat isa. 1/3 ton of potatoes in the United States and 1/2 ton of potatoes in Ireland.b. 2 tons of potatoes in the United States and 1 1/2 tons of potatoes in Ireland.c. 8 tons of potatoes in the United States and 4 tons of potatoes in Ireland.d. 1/2 ton of
In Exhibit 14, which country has the comparative advantage in the production of potatoes?a. The United States because it requires fewer resources to produce potatoes.b. The United States because it has the lower opportunity cost of potatoes.c. Ireland because it requires fewer resources to produce
According to the theory of comparative advantage, a country should produce anda. import goods in which it has an absolute advantage.b. export goods in which it has an absolute advantage.c. import goods in which it has a comparative advantage.d. export goods in which it has a comparative advantage.
Which of the following is true when two countries specialize according to their comparative advantage?a. It is possible to increase their total output of all goods.b. It is possible to increase their total output of some goods only if both countries are industrialized.c. One country is likely to
Free-trade theory suggests that when trade takes placea. both nations will be worse off.b. one nation must gain at the other nation’s expense.c. both nations are better off.d. one nation will gain and the other nation will be neither better nor worse off.
With trade, the production possibilities for two nations liea. outside their consumption possibilities.b. inside their consumption possibilities.c. at a point equal to the world production possibilities curve.d. None of the answers above are correct.
The following table summarizes the supply and the demand for euros:
For each of the following situations, indicate the direction of the shift in the supply curve or the demand curve for dollars, the factor causing the change, and the resulting movement of the equilib- rium exchange rate for the dollar in terms of foreign currency:
Discuss this statement: "Because each nation's balance of payments equals zero, it follows that there is actually no significance to a balance of payments deficit or surplus."
Do you support a constitutional amendment to prohibit the federal government from imposing any trade barriers, such as tariffs and quotas, except in case of war or national emergency? Why or why not?
Consider this statement: "Unrestricted foreign trade costs domestic jobs." Do you agree or disagree? Explain.
Now consider Question 5 in terms of the law's impact on domestic producers that export goods. Does this policy adversely affect domestic produ- cers that export goods?
Suppose the United States passed a law stating that we would not purchase imports from any country that imposed any trade restrictions on our exports. Who would benefit and who would lose from such retaliation?
Would the U.S. government gain any advan- tage from using tariffs or quotas to restrict imports?
Consider this statement: "The principles of special- ization and trade according to comparative advan- tage among nations also apply to states in the United States." Do you agree or disagree? Explain.
Bill can paint either two walls or one window frame in one hour. In the same time, Frank can paint either three walls or two window frames. To minimize the time spent painting, who should specialize in painting walls, and who should specialize in painting window frames?
The countries of Alpha and Beta produce dia- monds and pearls. The production possibilities schedule below describes their potential output in tons per year:
An example of the command-and-control approach to environmental policy isa. requiring electric utilities to install scrubbers to reduce sulfur dioxide emissions(which contribute to acid rain).b. placing a tax on high-sulfur coal to reduce its use and the corresponding sulfur emissions (which
A government policy that charges coal producers a fee per ton of coal produced(an “effluent charge”), where the fee is determined by the amount of pollutants discharged into the air or water will lead to a(an)a. decrease in the market equilibrium quantity of coal produced.b. decrease in the
Which of the following is true about incentive-based regulations?a. They set an environmental goal, but are flexible on how to achieve the goal.b. They obtain more efficiency gains than is obtainable from CAC regulations.c. Effluent taxes are an example of incentive-based regulations.d. All of the
Which of the following is concerned primarily with price discrimination?a. Sherman Actb. Clayton Actc. Celler-Kefauver Actd. Robinson-Patman Act
Some people believe that employees should be paid the same wages when their jobs, although different, require similar levels of education, training, experience, and responsibility. This principle is known asa. the equal-pay-for-equal work doctrine.b. Lorenz equivalence.c. marginal productivity
When the Lorenz curve lies above the diagonal,a. the poorest 20 percent of the population receive more than 20 percent of income.b. the richest 20 percent of the population receive more than 20 percent of income.c. everyone receives the same income.d. the curve is wrong because the curve is drawn
Which of the following most closely represents the share of total U.S. income to the poorest 20 percent of all U.S. families?a. excessive resources devoted to producing a product.b. 50 percentc. 25 percent.d. 10 percente. 5 percent.
As shown in Exhibit 8, what is the socially efficient number of cigarettes?a. 0b. 1c. 3d. 5
As shown in Exhibit 8, if smokers have the right to smoke as many cigarettes as they wish and nonsmokers have the right to negotiate, how many cigarettes will Jack smoke?a. 1b. 3c. 5d. More than 5

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Microeconomics For Today 9th Edition Irvin B. Tucker - Solutions

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