1) Some economists claim that unions reduce economic efficiency by:
A.providing a voice mechanism for workers.
B.insisting that promotions be based on ability rather than seniority.
C.imposing restrictions on the kinds of jobs workers may perform.
D.increasing worker turnover.
2) Suppose that the quantity of a certain type of farmland available is 400,000 acres,
and the demand for this land is given in the table below.
Refer to the above information and table. What will be the equilibrium economic rent
per acre?
A.$100
B.$200
C.$300
D.$400
3) According to behavioral economists, self-control problems:
A.are a rare aberration from rational decision making.
B.are often caused by time inconsistency.
C.can be easily overcome by providing decision makers with better information.
D.occur frequently but have no impact on the ability of neoclassical models to predict
economic outcomes.
4) Interest groups result when people:
A.In a certain zip code vote together
B.Who share strong preferences on a choice band together
C.Do not all vote in elections
D.Do not have strong preferences on the issues to be voted on
5)
Refer to the supply and demand data for a certain elective surgical procedure. Without
health insurance, the equilibrium price and quantity would be:
A.$5,000 and 2,000
B.$4,000 and 4,000
C.$3,000 and 7,000
D.$2,000 and 11,000
6) Payout rates for state lotteries:
A.are considerably lower than payout rates from casinos.
B.are considerably higher than payout rates from casinos.
C.are roughly equal to the payout rates from casinos.
D.cannot be compared with casino payout rates because states do not typically disclose
their payout rates.
7) Entrepreneurs in purely competitive industries:
A.have no incentive to innovate because in the long run they will earn no economic
profits.
B.innovate to lower operating costs and generate short-run economic profits.
C.utilize pricing strategies to generate short-run economic profits.
D.rarely try to innovate because of a lack of financial resources.
8) The table below shows the marginal utility a costumer would get by purchasing
various quantities of A, B, and C. The product prices for A, B, and C are $3, $2, and $1
respectively. The consumer has $20 to spend on the three products.
(a)5 units of A, 6 units of B, and 4 units of C.
(b)2 units of A, 5 units of B, and 4 units of C.
(c)3 units of A, 4 units of B, and 3 units of C.
(d)4 units of A, 3 units of B, and 2 units of C.
9) Which of the following demographic groups does not bear a disproportionate burden
of poverty?
A.Households headed by women.
B.Persons 65 or over.
C.Hispanics.
D.Children under 18.
10) If there are ten plants producing the total domestic consumption of the product and
each plant is operating at minimum efficient scale, then each plant accounts for what
percentage of domestic consumption?
A.5 percent
B.10 percent
C.20 percent
D.25 percent
11) Which of the following statements is false?
A.The short run refers to a period of less than one year
B.In the long run, all inputs can vary
C.Firms may continue operating at a loss in the short run
D.In the long run, firms would not continue operating at a loss
12) Answer the question on the basis of the following information. The demand for
commodity X is represented by the equation P = 10 – 0.2Q and supply by the equation P
= 2 + 0.2Q.
Refer to the given information. If demand changed from P = 10 – .2Q to P = 7 – .3Q, we
can conclude that:
A.demand has increased.
B.demand has decreased.
C.supply will increase.
D.supply will decrease.
13) In a two-nation model, the equilibrium world price will occur where:
A.one nation’s export supply curve intersects the other nation’s import demand curve.
B.exports are exactly twice the level of imports.
C.both nations’ export supply curves are horizontal.
D.both nations’ import demand curves are vertical.
14) The demand for a product is inelastic with respect to price if:
A.consumers are largely unresponsive to a per unit price change.
B.the elasticity coefficient is greater than 1.
C.a drop in price is accompanied by a decrease in the quantity demanded.
D.a drop in price is accompanied by an increase in the quantity demanded.
15) If the marginal revenue product (MRP) of labor is less than the wage rate:
A.The firm is making profits
B.The firm is incurring losses
C.More labor should be employed
D.Less labor should be employed
16) The retained earnings that corporations often use to finance R&D are also known
as:
A.venture capital.
B.undistributed profits.
C.dividends.
D.mutual funds.
17)
Refer to the graph above, which shows the supply and demand for British pounds. D1
and S1 represent the initial demand and supply curves. What will be the new
equilibrium point as indicated in the graph if there is an increase in consumer spending
by the British for American products and a decrease in consumer spending by
Americans for British products?
A.A
B.C
C.H
D.J
18) Craft unions have typically been most effective in raising wage rates by:
A.Legislating a minimum wage rate above the competitive equilibrium level
B.Increasing the demand for labor of union members
C.Decreasing the supply of labor through licensing and training requirements
D.Organizing all of the employees in a factory or industry and demanding wage hikes
19) The United States’ most important trading partner quantitatively is:
A.China.
B.Canada.
C.Mexico.
D.Japan.
20) What is the difference between a change in supply and a change in quantity
supplied?
21) Discuss the benefits and downfalls of subsidizing alternative energy.
22) What are two related effects that combine to make a consumer able and willing to
buy more of a specific product at a lower price than a higher price? Explain the logic of
both effects.
23) List nine characteristics of the market system.
24) What is the difference between the demand curve for a resource under pure
competition and under imperfect competition?