1) Edith is buying products X and Y with her money income. Suppose her budget line
shifts rightward (outward). This might be the result of:
A.the prices of X and Y increasing while her money income remains constant.
B.her money income decreasing while the prices of X and Y remain constant.
C.her money income increasing more than proportionately to increases in the prices of
X and Y.
D.none of these.
2) The diversion of surplus labor in agriculture to the production of schools or roads in
developing countries is described as:
A.Land reform
B.The brain drain
C.In-kind investment
D.A capital-using technological advance
3)
Refer to the above graphs. (Assume that the pre-migration labor force in Country A is 0d
and that it is 0u in country B.) Domestic output in country B will, after the emigration of
labor:
A.Increase by area qrs
B.Increase by area qtus
C.Decrease by area qrs
D.Decrease by area qtus
4) Which of the following is assumed to be most limited in scope under a market
system?
A.Entrepreneurship
B.Self-interest
C.Competition
D.Government
5) If two resources are highly substitutable for one another:
A.a decrease in the price of one will increase unit costs of production.
B.an increase in the price of one will increase the demand for the other.
C.an increase in the price of one will reduce the demand for the other.
D.a decrease in the price of one will increase the demand for the other.
6) About what percentage of total health care spending went to doctors and hospitals
(excluding nursing homes) in 2011?
A.67%
B.52%
C.33%
D.21%
7)
Refer to the above table. What is the marginal utility of the fourth unit?
A.36
B.44
C.80
D.116
8) As the economy recovers from a recession, economists expect its:
A.Imports to grow, and therefore its trade deficit would also grow
B.Exports to grow, and therefore its trade deficit would shrink
C.Imports and exports to grow at roughly the same rate, so its trade deficit will stay
constant
D.Imports and exports to start declining, therefore its trade deficit will also decline a
little bit
9)
Refer to the diagrams. Diagram (A) represents:
A.equilibrium price and quantity in a purely competitive industry.
B.the pure monopoly model.
C.an industry in which there is productive efficiency but not allocative efficiency.
D.a single firm operating in a purely competitive industry.
10) When the price of a product falls for a normal good, the:
A.Income and substitution effects will encourage consumers to purchase more of the
product
B.Income and substitution effects will encourage consumers to purchase less of the
product
C.Substitution effect will encourage consumers to purchase less of the product and the
income effect will encourage them to purchase more
D.Substitution effect will encourage consumers to purchase more of the product and the
income effect will encourage them to purchase less
11) Wayne’s Jacket Shop sells Wayne’s jackets for $20 each. Wayne finds that when he
hires different numbers of workers, the corresponding total revenues are as follows:
Refer to the above table. What is the marginal revenue product of the third worker?
A.$600
B.$667
C.$400
D.$6000
12) A single-price monopoly is economically inefficient because, at the
profit-maximizing output:
A.marginal revenue exceeds product price at all profitable levels of production.
B.monopolists always price their products on the basis of the ability of consumers to
pay rather than on costs of production.
C.MC > P.
D.society values additional units of the monopolized product more highly than it does
the alternative products those resources could otherwise produce.
13) Suppose an increase in product demand occurs in a decreasing-cost industry. As a
result:
A.the new long-run equilibrium price will be lower than the original long-run
equilibrium price.
B.equilibrium quantity will decline.
C.firms will eventually leave the industry.
D.the new long-run equilibrium price will be higher than the original price.
14) In the market for a particular pair of shoes, Jena is willing to pay $75 for a pair
while Jane is willing to pay $85 for a pair. The actual price that each has to pay for a
pair of shoes is $65. What is the combined amount of consumer surplus of Jena and
Jane?
A.$10
B.$30
C.$130
D.$215