1) transfer payments are:
a.excluded when calculating gdp because they only reflect inflation.
b.excluded when calculating gdp because they do not reflect current production.
c.included when calculating gdp because they are a category of investment spending.
d.included when calculating gdp because they increase the spending of recipients.
2) A firm can hire six workers at a wage rate of $8 per hour but must pay $9 per hour to
all of its employees to attract a seventh worker. The marginal wage cost of the seventh
worker is:
A.$9.
B.$10.
C.$15.
D.$21.
3) even though local newspapers are very inexpensive, people rarely buy more than one
of them each day. this fact:
a.is an example of irrational behavior.
b.implies that reading should be taught through phonics rather than the whole language
method.
c.contradicts the economic perspective.
d.implies that, for most people, the marginal benefit of reading a second newspaper is
less than the marginal cost.
4) assume an economy that is producing only one product. output and price data for a
three-year period are as follows. answer the next question(s) on the basis of these data.
refer to the above data. the nominal gdp for year 3 is:
a.125 percent higher than the nominal gdp for year 1.
b.50 percent higher than the nominal gdp for year 1.
c.$120.
d.$30.
5)
Refer to the above table, in which the values for columns (2) through (5) are in acres.
Zero land rent will occur if the relevant columns are:
A.(1), (2), and (3) only.
B.(1), (2), and (4) and (1), (2), and (5).
C.(1), (2), and (5) only.
D.(1), (2), and (3) and (1), (2), and (4).
6) price exceeds marginal revenue for the pure monopolist because the:
a.law of diminishing returns is inapplicable.
b.demand curve is downsloping.
c.monopolist produces a smaller output than would a purely competitive firm.
d.demand curve lies below the marginal revenue curve.
7) Which of the following would call for outpayments from the United States?
A.U.S. exports computer software
B.U.S. purchases assets abroad
C.foreigners purchase assets in the United States
D.foreign tourists spend money in the United States
8) answer the next question(s) on the basis of the following production possibilities
tables for two countries, north cantina and south cantina:
refer to the above tables. suppose that north cantina is producing 2 units of capital
goods and 17 units of consumer goods while south cantina is producing 2 units of
capital goods and 21 units of consumer goods. we can conclude that:
a.north cantina is fully and efficiently using its resources, but south cantina is not.
b.south cantina is fully and efficiently using its resources, but north cantina is not.
c.neither south cantina nor north cantina are fully and efficiently using their resources.
d.both south cantina and north cantina are fully and efficiently using their resources.
9)
Refer to the above table representing Kara’s bank account. Assuming that $2000 was
deposited into her account at the beginning of year 1, and no further deposits or
withdrawals were made, the value for cell B:
A.cannot be determined.
B.is $2,220.
C.is $2,420.
D.is $2,620.
10) Which of the following countries has the smallest percentage of its labor force
employed in agriculture?
A.China
B.Japan
C.Brazil
D.U.S.
11) Other things equal, patents:
A.decrease the expected rate of return on a R&D expenditure.
B.increase the expected rate of return on a R&D expenditure.
C.increase the interest-rate cost of funds used to finance a R&D expenditure.
D.decrease the interest-rate cost of funds used to finance a R&D expenditure.
12)
symbols: q = number of workers demanded; w = wage rate; and vtp = value of the
cumulative total product (output) of the particular number of workers.
assumptions: (1) the current wage in zinnia is $20 and the current wage in marigold is
$12; (2) full employment exists in both countries.
refer to the above data, symbols, and assumptions. the combined number of workers in
the two nations is:
a.2.
b.3.
c.5.
d.4.
13) Which of the following occupations is among the ten projected most rapidly
declining U.S. occupations in terms of percentage increases?
A.medical assistants
B.veterinarians
C.college professors
D.telephone operators
14) Money is destroyed when:
A.loans are made.
B.checks written on one bank are deposited in another bank.
C.loans are repaid.
D. the net worth of the banking system declines.
15) Which attitude or custom is the most conducive to long-term economic growth?
A.focus on group contentment rather than individual achievement
B.the belief there is little or no correlation between an individual’s economic actions
and her or his economic fortunes
C.direct connections between individual efforts (including educational efforts) and
economic rewards
D.use of the majority of resources for religious structures and ceremonies
16) Which of the following groups has the highest poverty rate?
A.age 65 or over
B.foreign-born (non citizens)
C.Hispanics
D.female-headed households
17) The equation of exchange indicates that:
A.MV = PQ.
B.other things equal, an increase in the demand for money will increase P and/or Q.
C.the velocity and the supply of money vary directly with one another.
D.MP = VQ.
18) between 1960 and 2006, u.s. health care spending as percentage of domestic output:
a.more than tripled.
b.more than quadrupled.
c.declined by one-half.
d.remained relatively constant.
19)
Refer to the above table. In a choice between parks and education:
A.no voter decision is possible.
B.a majority of voters would favor education.
C.the outcome would depend on which item was listed first on the ballot.
D.a majority of voters would favor parks.
20) under pure competition in the long run:
a.neither allocative efficiency nor productive efficiency are achieved.
b.both allocative efficiency and productive efficiency are achieved.
c.productive efficiency is achieved, but allocative efficiency is not.
d.allocative efficiency is achieved, but productive efficiency is not.
21) What are the macroeconomic implications from the recent productivity
acceleration?
22) (Consider This) How is strategic behavior illustrated by the competition among
three sellers of native arts and crafts near a national park?
23) In the last four months, GDP has been declining and many sectors have shown a
contraction in business activity. Still, employment has remained constant. We are
currently in a recession. Evaluate this statement.
24) (Consider This) What is a reverse wealth effect? Why did it not have much of an
effect on the U.S. economy during the stock market bubble in the 20002002 period?
25) What two factors could reduce the net economic burden that might be shifted to
future generations from the public debt?
26) The following table shows the price of a specific stereo receiver for a five-year
period. Using year 3 as the base year, calculate the price index for each year.