1) Which of the following antipollution policies is least likely to make use of
cost-benefit analysis?
A.Creating a market for pollution rights
B.Charging polluters an emission fee
C.Enacting legislation that bans pollution
D.Private bargaining
2) The marginal cost-of-funds curve for a firm shows the:
A.Interest rate that a firm must pay for additional funding
B.Rate of return that a firm gets from its investment projects
C.Amount of funds available to a firm for its investments
D.Sources of funds that a firm has for its various projects
3) Macroeconomics can best be described as the:
A.analysis of how a consumer tries to spend income.
B.study of the large aggregates of the economy or the economy as a whole.
C.analysis of how firms attempt to maximize their profits.
D.study of how supply and demand determine prices in individual markets.
4) The Supplemental Nutrition Assistance Program (SNAP):
A.was previously known as the food-stamp program.
B.added assistance to the food-stamp program by targeting children.
C.was created to supplement the food consumption of low-income Social Security
recipients.
D.has been subject to widespread fraud through the illegal reproduction of paper
food-stamp coupons.
5) Payments that a firm makes to obtain needed resources comprise its:
A.Costs
B.Profits
C.Capital
D.Revenues
6) The marginal rate of substitution:
A.may increase or decrease on a given indifference curve, depending on whether the
substitution or the income effect is dominant.
B.increases as one moves southeast along an indifference curve.
C.is constant at all points on the budget line.
D.declines as one moves southeast along an indifference curve.
7) Neoclassical economics tend to make inaccurate predictions of human behavior in
situations involving:
A.Price changes
B.Financial incentives
C.Firms’ profits
D.Uncertainty and fairness
8) Which of the following is predicted to deliver a Third Industrial Revolution
characterized by low production and transportation costs?
A.New technology in additive manufacturing.
B.New technology in energy production involving fusion reactors.
C.Significant decreases in petroleum prices with the discovery of new oil fields and
new extraction techniques.
D.New transportation technology involving anti-gravitational fields.
9) Economics may best be defined as the:
A.interaction between macro and micro considerations.
B.social science concerned with how individuals, institutions, and society make optimal
choices under conditions of scarcity.
C.empirical testing of value judgments through the use of logic.
D.study of why people are rational.
10) With a tax of $4,000 on $20,000 of income and $6,000 on $30,000 of income, the
average tax rate is:
A.Constant at 10 percent
B.Lower than the marginal tax rate
C.Equal to the marginal tax rate
D.Higher than the marginal tax rate, which is equal to zero?
11)
Assumptions: (1) The demand for labor in Alphania and Betania are as shown by DA
and DB, respectively; (2) Alphania’s native labor force is F and that of Betania is g; (3)
wage L in Alphania is equal to wage m in Betania; and (4) full employment exists in
both countries.
Refer to the given diagram and assumptions. If migration is costless and unimpeded, the
average level of wages will:
A.decrease in Betania but remain unchanged in Alphania.
B.increase in Alphania but remain unchanged in Betania.
C.increase in Alphania and decrease in Betania.
D.increase in Betania and decrease in Alphania.
12) The strategy of establishing a price that prevents the entry of new firms is called:
A.Cartel pricing
B.Limit pricing
C.Price leadership
D.Profit maximizing price
13) A firm that hires labor in a purely competitive resource market is a:
A.”Price maker”
B.”Product taker”
C.”Money maker”
D.”Wage taker”
14) Answer the question based on the table below.
At what quantity would a purely competitive firm cover all of its costs and earn only
normal profits?
A.Q = 5
B.Q = 10
C.Q = 15
D.Q = 20
15) The term “quantity demanded”:
A.refers to the entire series of prices and quantities that comprise the demand schedule.
B.refers to a situation in which the income and substitution effects do not apply.
C.refers to the amount of a product that will be purchased at some specific price.
D.means the same thing as demand.