1) Chronic budget deficits can be attributed to:
A.unfunded liabilities.
B.voters wanting government programs but not wanting to pay taxes.
C.inappropriate monetary policy.
D.state budget laws.
2)
In a typical graph for a purely competitive firm, at the point where the total cost and
total revenue curves intersect, the firm:
A.Earns some economic profit
B.Suffers some economic loss
C.Earns some normal profit
D.Suffers some accounting loss
3) Which of the following is another way of saying “marginal benefits of an action”?
A.Benefits given up, once the action is taken
B.Unintended gains from taking the action
C.Benefits accruing to others, as a result of one’s action
D.Extra benefits resulting from the action
4)
The graph above shows the production possibilities curve for an economy producing
two goods, X and Y. Which of the points on the graph indicate unemployed resources?
A.D only
B.E and A only
C.B and A only
D.B and C only
5) Which of the following is an activity of government that is not an activity of private
firms?
A.Enforcing involuntary transactions.
B.Paying equitable wages.
C.Creating positive externalities.
D.Pursuing economic efficiency.
6) A topographical map shows successively higher equal-elevation lines, whereas an
indifference map shows successively higher levels of total:
A.utility.
B.revenue.
C.profit.
D.cost.
7) If a nation agrees to set an upper limit on the total amount of a product that it exports
to another nation, then this situation would be an example of:
A.An import quota
B.A revenue tariff
C.A protective tariff
D.A voluntary export restriction
8) Health care spending in the next ten years is projected to grow at an annual rate of
about:
A.2%
B.6%
C.14%
D.20%
9) If the demand for product X is inelastic, a 4 percent increase in the price of X will:
A.decrease the quantity of X demanded by more than 4 percent.
B.decrease the quantity of X demanded by less than 4 percent.
C.increase the quantity of X demanded by more than 4 percent.
D.increase the quantity of X demanded by less than 4 percent.
10)
At point X on the graph above, which depicts a consumer’s indifference curve for goods
A and B and the relevant budget constraint line, we know that:
A.MUA/PA = MUB/PB
B.PA = PB
C.MUA = MUB
D.MUA/PA> MUB/PB
11) The increase in demand for iPad tablet computers can be explained by:
A.An increase in the technology used to produce iPads, making the supply of iPads
increase
B.An increase in the price of laptop computers, making their MU/P decrease
C.The enhanced versatility and storage capacity of iPads, making their MU/P increase
D.An increase in the income of buyers, making the demand for iPads increase
12) A bumper crop of farm products causes:
A.only a slight decline in the price of farm products because the demand for farm
products is income inelastic.
B.a large decline in the price of farm products because the demand for farm products is
price inelastic.
C.only a slight decline in the price of farm products because the demand for farm
products is income elastic.
D.a large decline in the price of farm products because the demand for farm products is
price elastic.
13) The term “other things equal” means that:
A.the associated statement is normative.
B.many variables affect the variable under consideration.
C.a number of relevant variables are assumed to be constant.
D.when variable X increases so does related variable Y.
14) Which of the following is one of the Five Fundamental Questions?
A.Which products will be in scarce supply and which in excess supply?
B.Who should appoint the head of the central bank?
C.How much should society save?
D.What goods and services will be produced?
15)
Refer to the information. Over the $7-$5 price range, demand is:
A.perfectly elastic.
B.perfectly inelastic.
C.elastic.
D.inelastic.
16) Unions prefer:
A.open shops to agency shops.
B.agency shops to closed shops.
C.agency shops to union shops.
D.union shops to agency shops.
17) According to behavioral economics, advertising works because it:
A.provides useful information that improves consumers’ ability to make decisions.
B.exploits the self-serving bias.
C.exploits the recognition heuristic.
D.quickly communicates price changes that exploit the law of demand.
18) The idea in economics that “there is no free lunch” means that:
A.Businesses would go bankrupt if they offered free lunches
B.The thought of a free lunch is often better than the reality of consuming it
C.There are opportunity costs involved even in free lunches
D.Free lunches used by businesses to attract customers is an inefficient marketing ploy
19) Effective usury laws cause:
A.a surplus of money in money markets.
B.the quantity of money demanded to be brought into balance with the quantity
supplied.
C.the quantity of money supplied to exceed the quantity demanded.
D.a shortage of money in money markets.