1) The following factors have boosted farm income per farm household in the U.S.,
except:
A.Consolidation of farms
B.Outmigration from farming
C.Stronger or appreciating dollar
D.Significant government subsidies
2) Which would be an avenue for resolving the inefficiencies associated with majority
voting?
A.The paradox of voting
B.Progressive taxation
C.Proportional taxation
D.Special interest groups
3) In each case below, indicate the effect [increase (+); decrease (-); indeterminant
(ind)] upon equilibrium price (P) and equilibrium quantity (Q) and illustrate the change
graphically. Where you believe the effect is indeterminant, two graphical illustrations
may be necessary to demonstrate your point.
P Q
(a) Increase in demand, supply constant ________ ________
(b) Decrease in supply, demand constant ________ ________
(c) Decrease in demand, decrease in supply ________ ________
(d) Decrease in demand, increase in supply ________ ________
4) Antitrust legislation in the United States in recent decades has:
A.Been vigorously and consistently enforced
B.Been uniformly ignored with respect to enforcement
C.Varied between the extremes of being enforced and being ignored
D.Destroyed the American dream for the nation’s entrepreneurs
5) The basic difference in the economic effects of a tariff compared with a quota is that
a:
A.Quota reduces domestic consumption of the product, but a tariff does not
B.Tariff allows imports to increase if demand increases, whereas a quota does not
C.Tariff raises product prices, but a quota does not
D.Quota raises product prices, but a tariff does not
6) An increase in the price of product X causes a decrease in the quantity demanded for
product X. One basic explanation for this is:
A.The law of increasing opportunity cost
B.The price-elasticity effect
C.The law of supply
D.The law of diminishing marginal utility
7) Which of the following is generally not an effective strategy to promote DVC
growth?
A.Microlending.
B.Human capital development.
C.Fighting wars against neighbors to obtain resources and stimulate aggregate demand
through arms spending.
D.Controlling inflation.
8) Economists would not consider which one of the following to be a productive
economic resource?
A.Land
B.Capital goods
C.Money
D.Entrepreneurship
9) The marginal cost of a productive resource is equal to the price of the resource if a
firm is:
A.A price taker in the output market
B.A price taker in the resource market
C.Able to influence the price of the product by producing more or less of it
D.Able to influence the price of the factor by buying more or less of it
10) In the long run, a profit-maximizing monopolistically competitive firm sets it price:
A.above marginal cost.
B.below marginal cost.
C.equal to marginal revenue.
D.equal to marginal cost.
11)
Refer to the above graph of the market for wheat. The government adopts a price
support program for wheat, and supports the wheat price at P2. The area of Q1ABQ2
would measure the:
A.Total amount received by farmers from selling wheat
B.Total profits of wheat farmers
C.Amount government will pay to wheat farmers
D.Amount buyers of wheat will pay to wheat farmers
12) Use the table below to answer the question for a purely competitive firm.
Refer to the above table. The market price of the product in the short run is:
A.$40
B.$80
C.$120
D.$160
13) In long-run equilibrium, purely competitive markets:
A.minimize total cost.
B.maximize the sum of consumer surplus and producer surplus.
C.yield economic profits to most sellers.
D.inevitably degenerate into monopoly in increasing-cost industries.
14) The table below shows a consumer’s utility schedule.
Refer to the above table. Marginal utility begins to diminish with the consumption of
the:
A.Fifth unit
B.Fourth unit
C.Third unit
D.Second unit
15) The economic perspective entails:
A.irrational behavior by individuals and institutions.
B.a comparison of marginal benefits and marginal costs in decision making.
C.short-term but not long-term thinking.
D.rejection of the scientific method.
16) The PPACA was intended to expand health care coverage to all Americans. Which
of the following was not one of problems with the law in terms of that goal?
A.Firms avoided the employer mandate by cutting worker hours to part-time status.
B.Insurance providers are allowed to deny coverage to those with preexisting
conditions.
C.Many poor workers were ineligible to receive the subsidies necessary to help them
fulfill the personal mandate.
D.States declined to set up the insurance exchanges specified in the act.