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Chapter 1 1 Which of the following statements is true regarding the textbook used in this course
Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) The basic economic problem is a situation of 1) A) limited incomes and unlimited choices. B) limited resources and unlimited wants. C) […]
Chapter 1 2 Which one of the following is an example of a normative statement
67) Which of the following statements is NOT true? 67) A) Economics is the study of how people allocate their limited resources to satisfy their unlimited wants. B) Economics is a social science. C) Economics does not use theories. D) […]
Chapter 19 1 The range to the right of the midpoint on a linear demand curve is
Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. Pounds of Artisan Jars of Period Income/Week Bread Sold Jam Sold 1 $250 210 2 $500 5 8 1) Use the above table. […]
Chapter 19 2 If the price of a good increases and the total revenue also increases,
72) If the price of a good increases and the total revenue also increases, the good has a(n) 72) A) perfectly elastic demand. B) inelastic demand. C) unit elastic demand. D) elastic demand. 73) A supply curve that is parallel […]
Chapter 2 1 If a country wants to promote future growth, it should
Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Scarcity arises because 1) A) import taxes depress the rate of growth of goods and services production. B) resources are finite and […]
Chapter 2 2 If Vice President Smith is a better typist than his assistant
63) The saying that “You cannot have your cake and eat it too” illustrates the economic concept of 63) A) physical capital. B) a normative statement. C) opportunity cost. D) a positive statement. 64) Opportunity costs arise from 64) A) […]
Chapter 20 1 The reason that all-you-can-eat restaurants can make a profit is due to
Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Based on the material presented in the chapter, can we conclude that people will consume goods until the marginal utility of each […]
Chapter 20 2 Juan wants to go for a pizza and Sophia wants a hamburger
64) Which of the following is FALSE about indifference curves? 64) A) They can shift. B) They intersect. C) They are convex to the origin. D) They are downward sloping. 65) Juan and Sophia have decided to stop studying economics […]
Chapter 20 3 To calculate marginal utility, divide the change in total utility by
108) The consumer optimum (for two goods, a and b) is reached when 108) A) MUa= MUb. B) TUa/Pa= TUb/Pb. C) MUa/Pa= MUb/Pb. D) TUa= TUb. 109) The price of a magazine is $2, the price of a paperback book […]
Chapter 21 1 Economists also refer to the normal rate of return on investment as
Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Suppose that you borrow $10,000 for two years, and at the end of the second year, you must repay $11,664. The interest […]
Chapter 21 2 The interest rate used to bring future sums back to present value is
81) A popular entertainer gives a concert in a 50,000 seat stadium. To give her fans a break, she charges only $50 a seat instead of the customary $75 a seat. At $75 a ticket, there would have been 50,000 […]
Chapter 22 1 Which of the following is TRUE for a firm in the long run
Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) If a firm is experiencing diseconomies of scale, then 1) A) proportional increases in all inputs result in proportional increases in output. […]
Chapter 22 2 If average variable costs are increasing while average total costs are decreasing
69) In the above figure, the long–run cost curve between points A and B illustrates 69) A) diseconomies of scale. B) economies of scale. C) diminishing marginal product. D) constant returns to scale. 70) The planning curve is the 70) […]
Chapter 23 1 Which of the following is true for the perfectly competitive firm
Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Price equals the minimum of long–run average cost 1) A) along a horizontal long–run supply curve, but not along an upward sloping […]
Chapter 23 2 If a perfectly competitive industry is in long-run equilibrium, then
52) Economic efficiency means 52) A) that it is impossible to increase the output of any good without lowering the total value of the output of the economy. B) the same as technical efficiency. C) that high–tech methods of production […]
Chapter 24 1 A monopolist can earn economic profits in the long run because
Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) A monopolist can earn economic profits in the long run because 1) A) a monopoly is by definition large, and this gives […]
Chapter 24 2 The price elasticity of demand for a good produced by a monopolist
61) In the above figure, if the firm is producing Q2 units at a price P2, it should 61) A) not change output or price. B) increase output and decrease price. C) decrease output and increase price. D) shut down. […]
Chapter 25 1 Which of the following is most likely to be a monopolistically competitive firm
Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) In a long–run equilibrium in a monopolistically competitive industry that produces information products, revenues are equal to the ________ costs of developing, […]
Chapter 25 2 A monopolistic competitor finds its profit-maximizing rate of output by
64) A monopolistic competitor finds its profit–maximizing rate of output by 64) A) setting average revenue equal to average total cost. B) equating marginal revenue and marginal cost. C) equating price and marginal revenue. D) equating the marginal revenue from […]
Chapter 26 1 If we observe firms earning zero economic profits in the short run
Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) If we observe firms earning zero economic profits in the short run, we know that 1) A) there must not be any […]
Chapter 26 2 Which of the following is a condition that helps enforce a cartel agreement
64) Cheating in a cartel is more likely to occur if the industry 64) A) has little variation in prices. B) has homogeneous products. C) has a large number of firms. D) has easily observable prices 65) All of the […]
Chapter 27 1 Credence goods are particularly susceptible to the lemons problem because
Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) The federal regulatory agency whose mission is to regulate workplace health and safety is the 1) A) SEC. B) AFL–CIO. C) FTC. […]
Chapter 27 2 Refer to the above figure. An unregulated natural monopolist would choose
67) Social regulation is focused on all of the following EXCEPT 67) A) ensuring costs are minimized and benefits are maximized. B) a better quality of life through a less polluted environment. C) the impact of production on the environment […]
Chapter 28 1 When Canadian firms outsource accounting services to the United States
Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. Number of Total Number of Total Workers Output Workers Output 0 0 6 945 1 200 7 1000 2 420 8 1025 3620 […]
Chapter 28 2 The additional cost associated with hiring one additional unit of some factor input
65) When the price of labor increases, the substitution effect will ________ the quantity of labor demanded and the output effect will ________ it. 65) A) decrease; increase B) decrease; decrease C) increase; decrease D) increase; increase 66) An increase […]
Chapter 29 1 A company town in the lumber or mining industry is an example of a
Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) In a monopsonistic market, 1) A) employment is higher but wages are lower than in a comparable competitive market. B) both employment […]
Chapter 29 2 A profit-maximizing mon opsonist will hire workers up to the point at which
58) The union wage differential 58) A) varies substantially across employment sectors. B) increases during expansions. C) is greater for private sector employees than for government sector workers. D) has remained fairly constant over the past 30 years. 59) The […]
Chapter 3 1 Refer to the above figure. Which panel demonstrates the law of supply
Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Refer to the above table. There is an excess quantity supplied of 2,000 units at a price of 1) A) $450. B) […]
Chapter 3 2 The equilibrium or market clearing price occurs at the point at which
64) Refer to the above table. At a price of $450, there is an 64) A) excess quantity demanded of 9,000 TVs. B) equilibrium. C) excess quantity demanded of 6,000 TVs. D) excess quantity supplied of 4,000 TVs. Answer: C […]
Chapter 30 1 Which of the following is not a true statement about the Lorenz curve
Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Many argue the poor are getting poorer, at least in a relative sense. Evidence that contradicts this is that 1) A) household […]
Chapter 30 2 When poverty is defined by an absolute real income level,
69) All of the following aim to reduce income inequality EXCEPT 69) A) regressive taxes. B) Social Security payments. C) earned income tax credits. D) food stamp programs. 70) The new federal government’s national health care program imposes the following […]
Chapter 31 1 When the social costs exceed the private costs, economists state that there is
Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Which of the following statements best defines private costs? 1) A) They represent explicit costs incurred by business firms in the private […]
Chapter 31 2 When a polluter has to bear the full social cost of their actions
58) Generally, as levels of pollution are reduced, 58) A) marginal benefits from the reduction decrease. B) marginal cost from the reduction are constant. C) marginal costs from the reduction decrease. D) marginal benefits from the reduction increase. 59) Which […]
Chapter 32 1 Some nations avoid the effects of trade deflection in a trade bloc by enforcing
Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) The World Trade Organization 1) A) was established to settle trade disputes within the European Union. B) was established to resolve disputes […]
Chapter 32 2 Specialization in trade will be economically efficient if it is based upon
61) For the United States since 1950, imports as a percentage of GDP has 61) A) remained constant. B) increased slightly. C) decreased. D) tripled. 62) The argument that with initial protection an industry will eventually become competitive is called […]
Chapter 33 1 Exchanging dollars for euros to pay a computer manufacturer in Belgium
Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) The International Monetary System was established 1) A) during the Great Depression by the League of Nations. B) by the United Nations. […]
Chapter 33 2 If interest rates in Sweden go up relative to the rest of the world
58) The major factor affecting a nation’s balance of payments is 58) A) a change in the productivity of its labor. B) its rate of inflation relative to the rate of inflation of its trading partners. C) an increase in […]
Chapter 4 1 A price floor set below the equilibrium price will cause which of the following
Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) The adverse effects of rent controls include 1) A) excessive construction of new rental housing. B) reduced incentive to construct new rental […]
Chapter 4 2 For which situation would we expect the adjustment speed to be the fastest
67) For which situation would we expect the adjustment speed to be the fastest? 67) A) The demand for office space in downtown Chicago increases. B) A large increase in birth rates leads to an increase in elementary school teachers. […]
Chapter 5 1 Which of the following often involves positive external benefits
Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Which of the following often involves positive external benefits? 1) A) Drunken driving B) Inoculation programs C) Water pollution D) Tobacco smoking […]
Chapter 5 2 equal to the costs of environmental damage caused by a unit of the emissions
71) An important assumption in the theory of public choice is that 71) A) individuals will act within the political process to maximize their individual well–being. B) individuals will only operate outside the political process when their well–being is involved. […]
Chapter 6 1 What happens when the government imposes a unit excise tax on a good
Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) The marginal income tax rate is equal to 1) A) the percent of total income that goes to taxes. B) the total […]
Chapter 6 2 The largest source of receipts for the federal government is
64) Assume a family that earns $30,000 pays $3500 in income taxes, while a family that earns $40,000 pays $3200 in income taxes. In this situation, the income tax system is 64) A) regressive. B) proportional. C) progressive. D) one […]